Tag: Congressional Budget Process

Instead Of The Nonsense Congress Is Proposing, Here’s What I Suggest To Actually Fix The Budget Debate

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Photo by Rick Bloom.

After my multiple posts ripping (here and here) the Joint Select Committee on Budget and Appropriations Process Reform for proposing totally worthless, utterly nonsensical and transparently self-serving changes in the way Congress considers the budget, a number of people have told me to put up or shut up.

If I’m so adamant that what the committee came up with is such budget tripe, they want to know the changes I would recommend instead.

That’s a totally fair question that, as a budget wonk, I’m ecstatic about being asked, especially because it gives me the opportunity to include my picture above this post with my answers.

The main issue is simple: Despite their continued public protestations to the contrary, members of Congress don’t want to do any of the politically very painful things that responsible budgeting — like tax increases and spending reductions — sometimes require. The current budget process enables this behavior because it doesn’t force the House and Senate either to make those decisions or to take responsibility for not making them.

The only way to correct this is to create several hard-to-waive nudges/penalties. That’s what’s behind my big four proposed fixes.

1. No Budget Resolution, No Other Legislation.

Annual congressional budget resolutions were intended to force Congress to be held accountable on the deficit. Until they were created by the Congressional Budget and Impoundment Control Act of 1974, Congress voted for individual spending and revenue bills but never had to vote on a full budget that compared each year’s total spending with total revenues and, therefore, showed the deficit or surplus.

That worked until the House and Senate realized that the skies didn’t darken, lightning and thunder didn’t come down from the heavens and evil demons didn’t rise from below if they didn’t adopt a budget. There are, in fact, no political or other penalties for Congress failing or refusing to agree on a budget resolution.

My recommendation to deal with this is to change House and Senate procedures so that neither house is allowed to consider any other legislation — certainly not appropriations or tax bills but also no authorizations or even the naming of post offices — until the budget resolution conference report for the coming year is adopted. This requirement could not be waived under any circumstances and the only exceptions would be for bills that could pass with an extra-super majority of, say, 75 percent.

This will create a constituency for passing a budget resolution: every interest group, the White House and every House and Senate committee that wants Congress to do something on any other issue. The pressure on Congress both to do a budget and to do it early in the year would be intense.

I’m not naive. The way around “No Budget, No Other Legislation” will be for Congress to adopt a totally meaningless, pro forma budget that, for example, ridiculously projects a balanced budget with spending cuts and/or tax increases that are never going to be approved and with a wildly optimistic “rosy scenario” economic forecast that’s never going to happen.

If that’s what Congress does, there’s no procedural change that will make any difference whatsoever.

2. An Automatic Continuing Resolution At Half The Rate Of Inflation.

To stop government shutdowns, I suggest a variation on a proposal that has been constantly mentioned whenever the budget process is said to be broken: An automatic continuing resolution that keeps all agencies and departments operating whenever Congress and the president can’t agree on their regular appropriation by the start of the fiscal year.

My variation is the fiscal version of a Solomon-like decision. My automatic CR would fund all departments and agencies at the current level plus half the rate of inflation projected by the Congressional Budget Office. That would increase spending compared to what’s currently expected but reduce it compared to the baseline. That would be a lose-lose for everyone and an incentive to agree on the regular appropriation.

3. Eliminate Having A Separate Vote On The Debt Ceiling.

The federal government’s borrowing limit should be raised automatically to the level projected in the budget resolution. Congress having to vote on a budget that assumes a deficit and, therefore, higher borrowing and to then have to vote again on raising the debt ceiling to allow the government to borrow to that level makes no sense whatsoever. Having periodic threatened defaults over the debt ceiling is even more nonsensical.

4. Fully Fund The Congressional Budget Office.

CBO, the only truly successful part of the congressional budget process, includes the best collection of nonpartisan analysts in Washington. But CBO is understaffed and overworked. Give it the resources it needs to provide Congress with all the information good budget decisions require.

Follow Stan Collender on Twitter by clicking here at @thebudgetguy.

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More Worthless Budget Changes Are Coming From Congress Today

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I posted a few days ago about how a special select joint committee is about to propose a scam-like change to the federal budget process so Congress will only be required to pass a budget every two years instead of the current provision that it be done annually.

(“Required” is total nonsense. As is the case with the current need to do it every year, if this becomes law there will be no penalties if/when Congress fails to enact a budget every other year.)

But now there’s more. Under the guise of better budgeting, when the committee marks up a bill today it will propose two other changes that will accomplish…wait for it…absolutely nothing.

First, the committee is going to recommend that the deadline for Congress to adopt a budget resolution be changed from April 15 to May 1. Second, it’s going to propose eliminating the current limit on the number of terms a House member may serve on the budget committee.

A little history will be helpful in understanding just how inconsequential these two proposed changes would be.

The original deadline for adopting a budget resolution set by the Congressional Budget and Impoundment Control Act of 1974 was May 15th. That was changed to April 15th in 1986 because Congress wanted more time to debate and pass appropriations so continuing resolutions would be less likely.

To say the least, it hasn’t worked out as planned. Over the last 20 years (congress.gov only has data going back to 1998), Congress has only adopted a budget resolution by April 15 only three times (2000, 2001, 2004).

But that doesn’t mean May 1 will be any better. In many of the other 17 years, Congress either completely failed to agree on a budget resolution or adopted it after — and some years well after — May 1. Including the 3 years it met the April 15 requirement, over the past two decades Congress would have complied with the new May 1 deadline only 5 times.

During these two decades, all of the appropriations for the coming year were NEVER enacted by October 1st.

In other words, moving the budget resolution deadline back to April 15 had no positive impact on the budget debate and pushing it forward to May 1 will be just as meaningless.

The House Budget Committee’s term limits were originally put in place for two reasons. The utopian view was that getting more people to serve for a short time on the budget committee would increase awareness about the fiscal situation within the House and make responsible decisions more likely.

The more political (and probably more accurate) stance was that the House Appropriations and Ways and Means Committees were worried about a powerful budget committee and insisted on term limits to prevent its members from staying too long and becoming too influential.

It’s hard to see what doing away with the term limits now will accomplish.

Budget expertise doesn’t win any points in today’s hyperpartisan, take-no-prisoners, ideology-over-facts world of Washington, and being a long-tenured member of the budget committee won’t give representatives any additional influence when the question is tax increases or Social Security reductions.

In addition, the budget committees proved long ago that they have little-to-no real power.

As I said in my previous post, these changes, which no doubt will be announced with great fanfare, won’t do anything to make U.S. fiscal policy any better. They are only designed to do one thing: make budget politics easier for representatives and senators.

Follow Stan Collender on Twitter by clicking here at @thebudgetguy.

GOP Congress Is About To Scam The U.S. On The Budget

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(NOTE: Please don’t @ me with something to the effect of “This is not news, you moron” until you read the next three paragraphs.)

A special joint select committee that has been meeting since March supposedly to propose improvements in the way Congress considers the budget each year is about to recommend changes that will actually make the budget process much worse.

Rather than proposing reforms that will make federal fiscal policy better and the debate more transparent and on schedule so that government shutdowns, fiscal cliffs, continuing resolutions and debt defaults are less likely, the committee is about to recommend procedural changes that just make the federal budget a much less difficult vote for representatives and senators.

In other words, under the pretense of better budgeting, the committee is going to recommend changes that will do nothing other than make Congress’s political life much easier.

Keep in mind that Congress doesn’t actually need a budget process. If they choose to use it, the House and Senate already have all the power they need under Article I of the U.S. Constitution to do whatever they want.

And, contrary to what most members of Congress will tell you, the existing budget process actually works exceptionally well whenever the House and Senate want to do something. Over its 44 year history, the budget process has been successfully used to decrease and increase taxes, spending and the deficit.

But the key in the two previous paragraphs is the word “want.” When it comes to the budget, neither the U.S. Constitution nor the Congressional Budget and Impoundment Control Act, Gramm-Rudman-Hollings or any other law have been able to force members of Congress to do anything — like spending cuts and tax increases — they don’t want or simply refuse to do. There are no effective enforcement mechanisms or penalties for not complying so representatives and senators have ignored the Constitution and laws with absolute impunity.

Enter the Joint Select Committee on Budget and Appropriations Process Reform.

Rather than focus on enforcement, the committee is going to markup a bill with one major recommendation: Instead of the current requirement that Congress adopt a budget every year, the new process will only require that a budget be passed every other year.

The most immediate impact of this change will be that the House and Senate will now only be able to be criticized once every two years either for failing to pass a budget at all (which will still be the most likely legislative outcome) or for voting for a budget with a trilion-dollar-plus deficit.

Representatives and senators will consider either of these a political positive because it will cut in half the number of nonvotes or tough votes they have to take before the next election. But it will be terrible for federal fiscal policymaking.

The two-year budget Congress adopts is very likely to be widely out-of-date by the second year. Congress will then have the choice of adopting an interim budget to reflect the new circumstances and, therefore, making a mockery of the original two-year budget; not approving a new interim budget and having to live with a fiscal plan that is acknowledged to be inappropriate; or ignoring the two-year budget with a jury-rigged process that gets far less scrutiny.

Even worse is that this will make the president’s budget even less relevant than it is already. For example, if the two-year budget requirement were in effect now, the budget the Trump administration is supposed to submit to Congress in February 2019 would have to propose spending and taxes policies that will continue to be in effect until October 1, 2022, that is, almost three years from now.

Still to be decided is whether appropriations would also be changed from one to two years.

The answer is probably, or almost certainly, not. While it would make sense from the perspective of federal agencies and department for which assured, on-time funding would be a boon to better management, it would make no political sense for the appropriations committees because it would cut their power in half.

On top of everything else, there still won’t be anything to force Congress to adopt a budget regardless of whether it is for one or two years.

Of course, the joint select committee won’t say any of this. It has already talked in lofty, holier-than-thou tones about the current budget process being broken.

As with most scams, this is misdirection. The real goal is not better federal budgeting; it’s reducing the political pain for members of Congress.

Follow Stan Collender on Twitter at @thebudgetguy.

2018 Is The Year Of Federal Budget Debauchery

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I am not being hyperbolic or using click bait with the headline you see above.

I have been involved with the federal budget in some capacity for over 40 years and, based on that experience, it’s actually quite easy for me to conclude that 2018 has been the worst year in U.S. history for anything and everything related to the federal budget.

Consider this.

Big Permanent Increases In The Deficit. The numbers are indisputable regardless of whether you’re a budget traditionalist that hates red ink or a political or economic denier that thinks the federal deficit doesn’t matter. The U.S. budget deficit is going to be close to or exceed $1 trillion in fiscal 2019 and is projected by both Donald Trump’s Office of Management and Budget and the Congressional Budget Office to keep rising. A $1.5 trillion deficit in the near future is very likely and, if there’s an economic downturn, $2 trillion is definitely possible.

The blame for this year’s fiscal debauchery belongs squarely on the House and Senate Republican majorities and the GOP president.

What did Trump and the Republican Congress do this year when faced with these unprecedented-in-a-good-economy numbers? They ignored them and attempted to increase the deficit even further.

  • Trump still wanted $5 billion for his wall between the United States and Mexico
  • Trump proposed a new Department of Defense space force that will cost billions more than we’re currently spending.
  • Just before it recessed last week, the GOP-controlled House passed yet another tax cut that will add hundreds of billions more to the deficit and national debt if it’s enacted.
  • The fiscal 2019 appropriations that were enacted last week included billions of dollars in additional military and domestic spending.
  • There was also the $12 billion bailout for farmers to offset the impact of the Trump tariffs.
  • And there was the Trump $1.5 trillion infrastructure proposal.

About the only thing that occurred this past year that should be considered deficit positive was the decision to reconsider/reschedule/cancel the military parade Trump wanted to stage this November because its projected cost was much higher than expected. But, for the record, the deficit impact of cancelling Trump’s parade wasn’t even a rounding error in terms of the total deficit and national debt.

Two things made this all so much worse.

First, the spike in the deficit was due to enacted changes in law rather than the short-term tax decreases and spending increases that happen during an economic downturn. Contrary to the temporary trillion-dollar deficits that occurred during the Obama administration because of the Great Recession, these GOP deficits are permanent.

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Second, this huge deficit increase was put in place when the U.S. economy was in comparatively good shape and smart fiscal policy dictated the opposite of what was done. We’re already starting to see the impact of this with high interest rates.

The End Of The Congressional Budget Process. Congress’s decision to ignore the process this year effectively means that the Congressional Budget Act has been abandoned.

The biggest example of that abandonment started with the GOP leadership deciding early that, even though it was legally required, Congress would not adopt a budget resolution this year. The reasoning was quite cynical: they didn’t want the Republicans running for reelection to have to go on record in favor of the trillion-dollar budget deficits their tax and spending policies created.

Accountability for the deficit was one of the main reasons the Congressional Budget Act was adopted. The act created budget resolutions specifically to force representatives and senators to vote on a single piece of legislation that compared total revenues and spending o they could be held accountable for the deficit or surplus.

This year, House Speaker Paul Ryan (R-WI) and Senate Majority Leader Mitch McConnell (R-KY) unilaterally decided that the budget act didn’t need to be implemented specifically because that accountability could hurt the GOP’s chances of retaining its majorities.

It’s hard to see the Congressional Budget Act ever being fully implemented again because of the Ryan/McConnell ploy. While Congress has not adopted budget resolutions in other years, those failures were mostly the result of an inability or unwillingness to compromise rather than a willful disregard of the law.

The second biggest example of the budget process being abandoned was the House’s and Senate’s failure to oversee Trump’s repeated efforts to impound, transfer and reprogram funds away from congressionally mandated priorities. Appropriations were frequently used by the White House very differently from they way they were supposed to be used and Congress did nothing.

The blame for this year’s fiscal debauchery belongs squarely on the House and Senate Republican majorities and the GOP president. Their policies and decisions all made the federal budget situation much much worse.

It won’t be getting better any time — as in years or even decades — soon.

Follow Stan Collender on Twitter @thebudgetguy

Ryan And McConnell: #Lock’em Up

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Over at Politico, Burgess Everett has a story this morning that says Congress deserves credit for doing routine things like passing some (but not all) of the appropriations for the coming year.

I have a very different take: House Speaker Paul Ryan (R-WI) and Senate Majority Leader Mitch McConnell (R-KY) should be arrested and jailed for not even trying to comply this year with the budget laws that apply to Congress.

The chairmen of the two budget committees — Senator Mike Enzi (R-WY) and Rep. Steve Womack (R-AR) — should be jailed for the same reason.

And I’d have every member of Congress talk about this at the start of every speech they give in their state or district and every candidate raise it prominently at their campaign rallies so their audiences can rhythmically chant “Lock’em up.”

The congressional budget process is not supposed to be optional. It’s a law created by the Congressional Budget and Impoundment Control Act of 1974 that Congress is required to implement every year.

This is Conspiracy to Commit Budget Noncompliance in the First Degree

(Before you think this was an initiative enacted by Democrats in 1974 to embarrass the GOP in 2018, keep in mind that the budget act passed more than four decades ago with a level of bipartisanship that today is both unimaginable and quaint. It was approved unanimously in the Senate, with just six no votes in the House and signed into law by a Republican president.)

But led by Ryan, McConnell, Enzi and Womack, the GOP-controlled Congress this year isn’t complying with the budget act. To the contrary, the Republican congressional leadership intentionally decided not to do the most important thing the law requires — adopting a budget resolution for the coming fiscal year.

The budget resolution is the only part of the annual budget-spending-tax process that Congress is legally required to do. Appropriations and tax legislation is completely discretionary.

Ryan and friends decided to break the law and not do a budget resolution for totally political reasons. The revenue and spending policies the GOP has put in place since the last budget was adopted have ballooned the budget deficit and national debt. Not doing a fiscal 2019 budget resolution meant that House and Senate Republicans avoid having to vote in favor of those deficits before the election and stops them from handing a very-tough-to-explain issue to their Democratic opponents.

The Congressional Budget and Impoundment Control Act was adopted to prevent this exact thing from happening. Until it was put in place, representatives and senators voted for the tax cuts and spending increases that spiked the deficit and debt but were never required to vote on a single bill that showed the impact of those votes.

An annual budget resolution was supposed to be the answer to this problem. For the first time in American history, members of Congress were legally required to go on record on the deficit and debt so their constituents would know where they stood and could vote accordingly.

Compounding the crime of no budget resolution is the fact that this was an intentional decision by Ryan, McConnell, Enzi and Womack rather than, as has happened in the past, an inadvertent byproduct of the House and Senate or Republicans and Democrats not being able to come to an agreement.

That makes this a far more serious — Conspiracy to Commit Budget Noncompliance in the First Degree — and its leaders should be locked up immediately.

 

Follow Stan Collender on Twitter @thebudgetguy