Introducing the Sustainable Budgets Act (Steady-State Style)

by Brian Czech

Let’s forget about the Department of Government Efficiency (DOGE) and its questionably qualified quant for a moment. Regardless of their recklessness, getting to a sustainable budget is long overdue. Deficit spending adds to the public debt, a threat to the solvency of the United States. That’s why steady staters have long advocated for balanced budgets.

Furthermore, more spending requires a heavier ecological footprint. That’s something the U.S. can no longer afford. We can think of overspending—public and private combined—as a form of ecological insolvency.

But that’s about the only thing we have in common with the cost-cutting DOGE. Reckless budget slashers like Elon Musk and his cronies aren’t thinking about the monstrous ecological footprint of American GDP. Rather, their budget-reduction efforts are ultimately designed to increase spending. They want to slash and burn the hard-won regulatory framework in order to “free” the private sector and grow the economy faster.

Unsustainability of the Federal Budget

Federal receipts are estimated at $5.5 trillion for 2025, with outlays expected to reach $7.3 trillion. That means we are headed for a deficit of $1.8 trillion, the second largest “regular” deficit in American history. That’s not counting the COVID-caused deficits of 2020 ($3.1 trillion ) and 2021 ($2.8 trillion). The only higher non-COVID deficit was in 2024 ($1.9 trillion ).

In other words, we are in the midst of back-to-back years of record-setting regular deficits, close on the heels of backbreaking COVID deficits. The intervening 2022 and 2023 weren’t much better. Skyrocketing deficits have led to a country-crushing debt that may very well exceed $30 trillion dollars by the end of the fiscal year. Interest on this debt has itself become a substantial outlay, rapidly approaching a trillion dollars per year.

Any way you slice it, there is nothing sustainable about the American budget, physically or fiscally, ecologically or economically. To top it off, Trump fans are in for a rude awakening if they think the tax-cutting, Musk-empowering “King of Debt” is the answer to runaway deficits.

Principles of Sustainable Budgeting

 

Limits to Growth are Ecological and Economic

Economic sustainability is a meaningless concept without recognizing the ecological limits to growth. Limits to growth—for every species in the economy of nature, including Homo sapiens—is a central concept of ecology. Unfortunately, not a single member of Congress is an ecologist or even a biologist.

With even the basic principles of ecology unknown to Congress, the Sustainable Budgets Act (SBA) is entirely infeasible politically at the time of this writing. Yet this only points out the need to circulate a draft SBA, to familiarize Congress with the relevant principles and get the conversation started. It also explains why the SBA will include a lengthy preamble; a mini-lesson of sorts in ecological macroeconomics.

Balance of Outlays and Receipts

The most conventional principle of sustainable budgeting is that expenditures (outlays) not exceed revenue (receipts). Yet this principle often gives way to deficit spending for several reasons.

First, “stuff happens.” No one (that we know of) could have forecasted the COVID pandemic, much less the extent of its economic impact. COVID at once crippled productive capacity (by shrinking the labor force and shuttering Main Street) and created emergency demands for federal spending, particularly pursuant to the CARES Act. A crisis like COVID causes a near-instant deficit, dramatically increasing the debt.

Pork-barrel politics happens, too. Most members of Congress—especially those up for reelection—can’t resist stuffing the larder with bacon, whatever the cost to other districts and states.

Yet another reason is that everyone in government from the President to the GS-7 plumber expects the economy to grow. Therefore, few of them worry about this year’s expenses, because next year’s revenues will grow to cover them. Furthermore, old-school Keynesians in government service believe that deficit spending itself can spur such growth.

Gradualism and Frugality

Gradualism and frugality stand in contrast to shock and austerity. Anyone can draft politically infeasible legislation and pray for a day of feasibility. However, a more viable approach is to carefully envision political feasibility—simultaneously working toward it—and to draft legislation that will tend to maintain, not undermine, that feasibility.

While we need widespread cuts in federal spending, indiscriminately swinging the meat axe of austerity is likely to backfire politically. And it should, because it causes tremendous social stress and labor market shock.

States Rights — and Responsibilities

A constant source of political tension in the United States is the balance of power between states and the federal government. (Tribes figure prominently in the power struggle, too.) States often fight to keep the federal government at bay, all the while competing for federal grants and subsidies.

A reasonable approach for sustainable federal budgeting is to leave certain aspects of social welfare more thoroughly to the states, individually or in regional coalitions. Why should American taxpayers from Alaska to Florida be paying for a Northern Border Regional Commission, which serves the well-heeled states of Vermont, New Hampshire, New York, and Maine?

Yes, those states include some impoverished counties, especially rural counties. Yet taken as a whole, they have higher incomes, tax revenues, and in-kind resources than most of the country. They have the means to assist their own, and rural voters themselves tend to oppose a federal welfare state.

Reducing Market Distortion

Many special interest groups exist to steer federal funding their way. Trade organizations, industry groups, contractor associations, retail federations, benefits councils, business coalitions, and chambers of commerce strive to influence federal policy to increase their income and the profits of their members. Many of them—the National Association of Manufacturers, for example—employ economists who preach the gospel of free markets.

But what’s good for the public goose is good for the private gander. Laissez-faire capitalism means no subsidies, no welfare, no government grants or loans. Ironically, ridding the government of these market-distorting tools and programs fits nicely with a steady state economy and sustainable budgeting. The principle of free markets leads us to eliminate, for example, roughly half of the Department of Commerce.

Government as an Ecosystem

Agencies of the federal government are related to all others, directly or indirectly. They are like species in an ecosystem. Some are keystone species essential for basic government functioning. The Bureau of the Fiscal Service, for example, pays the bills. Some agencies are essential for national security, like the Army. Some are so politically entrenched, like the Social Security Administration, that they are virtually untouchable.

Yet there are dozens of agencies with overlapping niches. All the major Interior, Agriculture, and Energy agencies conduct science, for example. Much of the science overlaps, and each of these agencies have policy-relevant pipelines to the White House. How essential, then, are agencies such as the Office of Science and Technology Policy?

Steady Statesmanship

Finally, not every agency with pro-growth programs should be disbanded. Prudent steady statesmanship requires fighting poverty in some areas while limiting consumption in wealthier areas. Unlike the Northern Border Regional Commission, the Appalachian Regional Commission boosts struggling communities in a major region of deeply entrenched poverty.

Internationally, the Millenium Challenge Corporation promotes economic growth in carefully selected, poverty-stricken countries. If the ethical rationale doesn’t move all citizens, the economic prerequisites of international stability and national security should.

A Constitutionally Thorny Problem

The central pillars of a Steady State Economy Act (SSEA) will be its fiscal policies; in particular the Sustainable Budgets Act (SBA) and a Sustainable Taxes Act. These two bills are packaged as Section 5 of the SSEA. They may be introduced independently, as “feeder bills” toward the broader SSEA.

Note that the SBA is intentionally put in plural terms; that is, “Budgets.” The SBA is not a budget per se, for 2025 or any other year, but rather establishes conditions Congress must apply to the process of budgeting. These conditions are designed to help the United States transition from unsustainable growth to a sustainable, steady state economy.

A thorny problem, immediately encountered, is that any form of SBA is limited by the Constitution. One congress cannot mandate a subsequent congress’s spending (or lack thereof). Therefore, the SBA is limited to the principles of sustainable budgeting, plus perhaps some procedures, rather than any actual budgeting, short- or long-term.

Ideally, Congress would pass a balanced-budget constitutional amendment. That would give us a significant leg up on the SBA. Unfortunately, such efforts have a dismal track record. Only when we have a polity fully on board with limits to growth—and the need for a steady state economy—can we expect Congress to get serious about balanced and sustainable budgets.

Ironically, the principles and practices of sustainable budgeting could end up looking like Constitutionality 101 in the wake of Trump’s impoundment, Musk’s DOGE, and myriad other unconstitutional offenses of recent administrations. When challenged in court, then, the SBA could benefit from a “kinder and gentler” jurisprudence.

Introducing the Sustainable Budgets Act

The Sustainable Budgets Act comprises nine sections. The focus is on outlays; that is, procedures for limiting and lessening spending. The SBA will be complemented in the next edition of the Herald by a Sustainable Taxes Act, describing a progressive, fair approach to taxation sufficient to balance out the spending steered by the SBA.

The SBA is a bill “to establish sustainable Federal budget principles and processes.” As a matter of formality, Section 1 is reserved for identifying the short title; that is, “Sustainable Budgets Act.”

Section 2 is reserved for the findings and declarations of Congress; aka preamble. In many ways, this is the most important section, as it must make a clear and compelling case for transitioning from growth to a steady state, in concert with a stabilized federal budget—the aforementioned “public goose.”

Parts of Section 2 overlap substantially with the original preamble of the overarching Steady State Economy Act. However, Section 2 also pulls the general principles of ecological macroeconomics into the context of budgeting.

In section 2(a)(5), for example, Congress finds that “current GDP is not sustainable in the long term, as it entails the degradation and often the liquidation of economically essential natural capital such as soils, minerals, timber, fisheries, rangeland resources, and coastal and marine resources.” This finding is based “upon the best available science, as summarized by the Commission on Economic Sustainability.” Readers may recall the organic legislation for the Commission (CES). Bringing the CES back into play for SBA purposes illustrates the iterative, interactive process of developing a comprehensive Steady State Economy Act.

Section 2 also establishes new perspectives for Congress that will be applicable across a wide swath of governance. For example, Section 2(b)(1) calls for managing budgets “with sufficient attention to their long-term effects.” As Peter Seidel amply pointed out in Uncommon Sense, the United States suffers from a lack of big-picture, long-term thinking.

But what, exactly, qualifies as “long-term?” Section 3 defines it as “a period of time sufficient to include lengthy and complex ecological, social, demographic, and economic processes and trends.” All the major processes, in other words, that determine economic capacity. For federal planning purposes, including budgeting, it “implies a period of 150 years.”

Not that Congress will ever produce a 150-year budget, but rather must consider the cumulative effects of federal spending on truly long-term ecological and economic capacity. This alone constitutes a paradigm shift in fiscal policy, bringing it more in line with the science and planning of natural resources management, biodiversity conservation, and climate change mitigation.

Section 4 provides for the purposes of the federal budget, including mandatory and discretionary spending. Part (c), though, is what distinguishes the SBA from prior legislation: “The Federal budget shall not include appropriations for non-mandatory programs that would threaten, undermine, or compromise the essential conditions for the long-term health and wellbeing of the Nation, including environmental protection, economic sustainability, social stability, National security, and international diplomacy.”

In principle, at least, who could argue with that? Yet it needs to be stated and made the law of the land. As with the National Environmental Policy Act, it may not directly force any particular outcomes, but it will require Congress to stop and think before funding unsustainable activities. While Congress typically has sovereign immunity, Section 4 would also crack the door a bit further open for lawsuits to prevent the U.S. government from environmentally destructive activities or support.

Section 5 calls for no net gain in demand for government outlays. In particular, “Congress shall not mandate programs, policies, and procedures requiring additional Federal outlays without concurrently identifying antiquated or unnecessary programs, policies, and procedures which are thenceforth terminated, thereby maintaining a steady state of Federal outlays.” This is hardcore steady statesmanship in a form that will resonate with conservatives—true ones at least.

In Section 6, the core gets harder yet. It calls for caps on mandatory spending. No, the detailed procedures for capping mandatory spending can hardly be stuffed into one section of an eight-page bill. Nearly 30 years ago—in somewhat simpler times—the balanced budget act proposed by Ohio’s John Kasich was 537 pages of fine-print legalese. And that was only for balancing the budget; nice but not sufficient for sustainability.

For starters, though, in Section 6 the Commissioner of the Social Security Administration is called on to “produce for the President…three viable options for stabilizing the aggregate level of social security payments.” Some general guidelines are provided. The President is then required to “adopt and commence administering one of the three options.” It may sound like passing the buck, yet who other than the Commissioner is in a better position to identify such options?

Medicare and Medicaid may be handled similarly, as provided for in Section 6(b), with some elbow grease of the Administrator of the Centers for Medicare and Medicaid Services. In Section 6(c), the rest of the heavy lifting (or lightening) on other mandatory spending is left to the Congressional Research Service, and thenceforth the President.

Section 7 identifies 33 agencies for which the budget may not be lessened. These are the agencies most directly “tasked with assessing, protecting, and maintaining the Nation’s stocks of natural capital.” These agencies tend to be small and chronically underfunded, so maintaining them is not prohibitive of a balanced, sustainable budget. Conversely, accomplishing their missions is crucial for ecological and economic sustainability for the well-defined long term.

Section 8 calls for caps on discretionary spending, with a handful of starting points (Defense, Commerce, Education) provided. Unlike the rest of the SBA, this section will entail annual incorporation in the federal budget, per se, to remain effective. The constitutionality may be challenged, yet the section could be upheld because it does not establish specific appropriations. Rather, it limits appropriations on a percentage-of-budget basis. Future congresses could amend the percentages, but the deliberations in Congress—and media coverage—would turn to the rationale for limiting these departmental expenditures.

Section 9 identifies 57 agencies to be sunsetted by the end of fiscal year 2027. Many of them are pro-growth agencies incongruent with the spirit of the law. The rest tend to be either redundant with other agencies, clearly inessential, or better left to the States.

Section 9 is a somewhat abrupt way to end the SBA, but the SBA is an act of Congress, not a bed-time story. Too, the SBA is plenty to chew on for now, given its nascent and paradigm-shifting nature.

The SBA adheres to each of the criteria identified in “Principles of Sustainable Budgeting” above.  It is, assuredly, politically infeasible at this point in history. Yet, without it, our envisioning of federal policy congruent with a steady state economy would be vague, dim, and incomplete.

With the Sustainable Budgets Act in hand, online, and available for potential amendment, let the conversation toward sustainable federal budgeting begin in earnest.

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Brian Czech is Executive Director of CASSE.