Is Federal Budget History About To Repeat Itself?

Is Federal Budget History About To Repeat Itself?

Just as in 1975, some members of Congress are balking at a budget resolution because of the deficit

When a federal budget resolution was before Congress for the first time in 1975, some members of both houses balked because, in effect, they were being asked to approve the federal deficit. Although the Congressional Budget Act, which created the budget process, had passed the year before with overwhelming bipartisan support in the House and Senate, there was serious thought about not complying with the requirement for an annual budget and letting the law die. House Speaker Thomas P. (Tip) O’Neill, Jr., D-Mass., insisted that the House pass a budget resolution. It did. The Senate followed the House, and the congressional budget process came into being.

We may be about to witness a repeat of history. It looks like Speaker Nancy Pelosi, D-Calif., will need to use O’Neill’s tactics if a budget resolution is going to be adopted this year. They won’t talk about it publicly, but some members of Congress again are balking at a budget resolution because of the deficit. According to senior congressional staff from a variety of factions and caucuses, there is serious consideration of eschewing this year’s resolution. Although the budget act requires Congress to have a budget resolution in place by April 15, neither the House nor Senate Budget Committee has begun to mark up a bill, or even publish a markup schedule. This is surprising since Democrats have voted for the budget resolution every year since they took control of the House and Senate in 2006. It was in sharp contrast to Republicans, who in spite of the legal requirement did not pass one in either fiscal 2006 or 2007, when they were in the majority.

Why should Congress adopt a budget resolution this year, since it can approve spending bills to run the government with or without it? Start with the basics: it’s the law. That may not have stopped the Republican congressional majority when they considered a budget resolution difficult, painful, time consuming, or just distasteful, but that’s not an acceptable excuse. With the right strategy, the Democrats could cite their ability to put a budget resolution in place for four straight years as an example of their willingness to do the people’s business and be transparent about the process.

Beyond the legal requirement, a budget resolution is good politics. It helps to set the ruling party’s priorities and is essential if congressional leaders plan to use special procedures like reconciliation to enact complicated measures to address the deficit.

As the economy continues to recover, the $700 billion stimulus plan put in place in 2009, which was so heavily criticized in its first year, now seems to be increasingly viewed as having had a positive effect. A vote on a budget resolution projecting continued economic growth could, therefore, be positive rather than negative. And Republicans could be put on the defensive if the debate forces them to vote against the controversial plan introduced by House Budget Committee Ranking Republican Paul Ryan, which includes substantial reductions in Medicare.

In addition, a budget resolution could be the only way the Democratic majority will be able before the next election to extend tax cuts put in place in 2001 and 2003 that are set to expire on Dec. 31. With Senate Republicans threatening to filibuster any tax cut that doesn’t include everything they want, the only way to enact the extension may be through the reconciliation process, which can only happen pursuant to instructions included in a budget resolution. No budget resolution could mean no tax cut.