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Rep. Stutzman’s Emergency Spending Accountability Act Aims to Restore Fiscal Discipline to Crisis Spending

by June 10, 2025
June 10, 2025
Rep. Stutzman’s Emergency Spending Accountability Act Aims to Restore Fiscal Discipline to Crisis Spending

Romina Boccia and Dominik Lett

Congress’s ability to respond to genuine national emergencies is essential. But without budgetary guardrails, emergency designations have become a loophole—allowing lawmakers to sidestep agreed-upon spending limits and add trillions to the debt, often without sufficient justification. Our own research shows that Congress is increasingly abusing emergencies as a justification to evade responsible fiscal rules, with the total fiscal impact over the past 30 years amounting to $14 trillion, comprising about half of the public debt.

Rep. Marlin Stutzman’s newly introduced Emergency Spending Accountability Act offers a constructive solution. It would preserve Congress’s flexibility to act in times of crisis while discouraging routine misuse of emergency designations to fund ordinary or unrelated priorities. The legislation is a timely and measured step toward restoring accountability to a spending category rife with irresponsibility.

Limiting Emergency Spending Abuses

Emergency spending can be essential in times of genuine crisis—be it a war, major national natural disaster, or global pandemic. But absent accountability, the emergency designation, originally intended as a safety valve, has morphed into a budgetary loophole. Congress needs a mechanism that allows for decisive action when disaster strikes, without opening the door to routine abuse.

One issue is that Congress has complete discretion in determining what spending qualifies as an emergency. That is despite all major budget legislation since the 1985 Balanced Budget and Emergency Deficit Control Act codifying five criteria that emergency provisions should follow: necessary, sudden, urgent, unforeseen, and not permanent.

Legislators regularly ignore this five-part test. In practice, the emergency designation is often applied loosely and occasionally absurdly. To certain legislators, a war or natural disaster seems to be just as much of an emergency as any other spending priority, such as increasing housing subsidies or boosting FBI salaries.

The results of these open-ended emergency designations have been nothing short of fiscally disastrous. Since 1992, Congress has used emergency designations to add approximately $14 trillion to the debt, which is roughly half the size of the nearly $29 trillion publicly held federal debt (see the graph below). During major emergencies, like the Great Recession and COVID-19 pandemic, the lack of a fiscal offset mechanism encourages an overly excessive and wasteful federal response.

Pandemic spending, for example, included:

$70 million for tourism marketing campaigns in Puerto Rico;
$12 million for renovations to minor league baseball stadiums in New York; and
$6.6 million for golf course irrigation in Colorado Springs.

In years without a major economic or public health crisis, emergency spending is regularly used as a mechanism to evade spending limits and plus-up regular appropriations, adding further to our massive $2 trillion deficit.

The economic costs have also been severe. Following the pandemic spending binge, inflation and interest rates skyrocketed, reaching historic highs. Now and in the years to come, Americans will earn less, face higher costs, and experience a slower, less vibrant economy due to Congress’s profligacy, with excessive government debt dragging down economic growth.

Under conventional budget projections, retirement and health care programs, namely Social Security, Medicare, and Medicaid, are driving the federal government toward fiscal insolvency. By 2054, the debt-to-GDP ratio is projected to rise to 169 percent, assuming the 2017 Tax Cuts and Jobs Act is not extended. Add in the very realistic possibility of any number of new national crises arising over the next few decades, be they recessions, pandemics, or new conflicts, and the fiscal outlook grows dramatically worse.

Preventing a fiscal crisis means pursuing both entitlement reform and responsible fiscal rules that enable necessary flexibility to respond to crises while constraining excessive and inappropriate emergency spending.

Offset Emergency Spending After the Crisis Concludes

Without a process to offset emergency spending, Congress will continue to use emergencies as a pretext to pass budget-breaking spending initiatives with no plan to rein in future spending.

Rep. Stutzman’s Emergency Spending Accountability Act introduces a simple yet powerful idea: Offset new emergency spending, either immediately or with subsequent spending reductions over a five-year period. For example, if Congress were to approve $100 billion in emergency spending in 2025, Stutzman’s bill would automatically schedule $20 billion in spending cuts each year from 2026 to 2030. Similar to PAYGO, the offsets mechanism would distribute these cuts broadly across the federal budget, with key exemptions to Social Security, Medicare, and defense.

This approach encourages Congress to consider trade-offs—just as legislators should for all federal spending—without tying the government’s hands during an actual emergency. It allows for immediate spending to respond to legitimate disasters, while also creating incentives to avoid overusing emergency designations, especially for routine appropriations. And while it is true that legislators can ultimately waive this (and any other) statutory fiscal rule, establishing offsets as the default path and putting Congress on the public record for choosing to inflate deficits with emergency spending creates a real political constraint on what is otherwise an unconstrained spending-prone process.

In addition, Stutzman’s bill implements a common-sense justification requirement: Make congressional sponsors advocating for new emergency designations explain how each designation satisfies the budgetary definition of an emergency (necessary, sudden, urgent, unforeseen, and not permanent). Such a requirement would create a minimal hurdle in the legislative drafting process while promoting good-faith discussion over emergency designations that are otherwise taken for granted. At the very least, it would expose the extraordinary mental gymnastics necessary to justify the more egregious examples of emergency spending abuse.

Unchecked emergency designations erode the credibility of well-intentioned fiscal rules and increase borrowing costs for future taxpayers. With two-thirds of the budget on autopilot, layering wasteful emergency spending on top of current deficits is a recipe for a fiscal crisis. Rep. Stutzman’s Emergency Spending Accountability Act is a key step in the right direction, encouraging Congress to consider trade-offs every time it spends in the name of an “emergency.”

Reflecting growing recognition of emergency spending abuse as a key fiscal problem, Stutzman’s approach draws on important analysis by budget experts, including Veronique de Rugy (Mercatus Center), Kurt Couchman (Americans for Prosperity), David Ditch (formerly Heritage Foundation and now EPIC), the Committee for a Responsible Federal Budget, and us at the Cato Institute, who have increasingly warned about the dangers of undisciplined emergency budgeting.

It’s time to stop the blank checks. Offset emergency spending.

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