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“Spending Spree: Return Unwanted Federal Funds”

Jun 27, 2011 | Blog

Recently, I introduced the Returned Exclusively For Unpaid National Debt (REFUND) Act, which would allow states to return unwanted federal funds to the federal Treasury in order to help pay down our staggering national debt.

The REFUND Act would end the age-old “use-it-or-lose-it” mentality that encourages states to accept money from a deeply indebted federal government for projects that are wasteful, unnecessary or that come with too many strings attached. In essence, it would empower state legislatures to help curb Washington’s spending spree.

Even without this power, many fiscally responsible states have been making the tough decisions to reject federal dollars. They’ve done so because these funds often come with Washington-concocted strings requiring higher spending or higher taxes — or both. And these states’ leaders understand that once federal funds dry up, they will be left on the hook to cover overruns and other unexpected expenses. In other words, they don’t believe in using a one-time, taxpayer-funded bonus to finance long-term projects.

Governors in states such as Texas and Alaska rejected funds from the president’s stimulus bill in 2009 that came with unaffordable mandates that ultimately would have led to higher taxes. In the same year, the Virginia General Assembly also rejected stimulus funds. And just last month, the New Hampshire House of Representatives voted to return federal money the state would have received to implement President Obama’s job-destroying health care law.

Here in Florida, Gov. Rick Scott declined $2.4 billion designated for a needless high-speed rail project to link Tampa and Orlando.

Unfortunately, all this rejected, debt-financed money did not go toward paying down the debt. It was simply shipped to other states that were happy to partake in Washington’s profligacy.

The REFUND Act would fundamentally reform this flaw of federal spending by ending the practice of forcing states to spend federal money. Rather, states would have the ability to reject federal dollars while simultaneously redirecting that money back to the Treasury.

As my partner in this effort, Rep. Denny Rehberg, R-Mont., says, “If a responsible state tightens its belt to save tax dollars, we shouldn’t be rewarding irresponsible states by adding those savings to their take. We’ve got to put an end to the Washington system that subjects state lawmakers to partisan attacks for having the audacity to save the taxpayer money.”

Of course, this bill is not a magic bullet to avert our looming crisis. Our government is borrowing $4 billion per day, or 40 cents of every dollar it spends, and recently surpassed its legal borrowing limit of $14.3 trillion. Recently, Standard & Poor’s, one of our nation’s leading credit-rating institutions, downgraded its rating of the United States because of the unfortunate reality that leaders in Washington do not seem to have the fortitude to confront our debt crisis.

That’s why tackling our debt must also include entitlement reform, spending and debt caps, a balanced-budget amendment, and pro-growth measures that will grow the private sector and get Americans back to work. These components will be the pillars of restoring our nation’s fiscal sanity, but the REFUND Act is an important tool in this same battle.

Every day that politicians delay action on our debt, Americans feel the pain. And to be sure, growing the economy and cutting our debt won’t be easy. It requires a sense of urgency that is in short supply in Washington. But we must find a way. This is our defining moment. If this president and Congress fail to address these great challenges of our time, our children and grandchildren will never forgive us.

You can also read this op-ed here.