Republicans Blowing Chance for Real Budget Change

Republicans Blowing Chance for Real Budget Change

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The ongoing struggle to finish the 2011 budget and implement significant spending cuts is occupying almost all of Congress’s attention – with no end in sight. A stopgap funding bill containing $4 billion in cuts has just been approved, which prevents a government shutdown. But this temporary measure runs out in just two weeks, so most of the next 14 days will be spent devising what will probably be yet another stopgap bill – and there have been five already over the past five months. While Republicans are busy patting themselves on the back, the clock is running out and, ironically, preventing action on a serious long-term budget fix.

All appropriations bills for fiscal year 2011, which began last Oct. 1, should have been finished last summer. Ordinarily, there are 12 separate appropriations bills that Congress considers: Agriculture; Commerce/Justice/Science; Defense; Energy/Water Development; Financial Services and General Government; Homeland Security; Interior/Environment and Related Agencies; Labor/HHS/Education; Legislative Branch; Military Construction/Veterans Affairs; State/Foreign Operations, and Transportation/HUD. Last year, Congress didn’t finish a single one of these.

The Senate got most of its work done, but the House was negligent about its duties. In order to prevent a government shutdown on Oct. 1 – the start of the new fiscal year – Congress passed a continuing resolution, which permitted departments and agencies to keep operating temporarily. The first of these ran through Dec. 3, the second through Dec. 18, the third through Dec. 21, the fourth through March 4, and the latest, passed this week, runs until March 18.

Continuing resolutions are like omnibus appropriations bills. They simply say that departments and agencies may continue operations at the previous year’s appropriations level, or they may allow spending at a higher level to account for inflation, or they may have detailed instructions for changes in appropriations levels. The C.R. passed this week contains $4 billion of cuts in a $1.3 trillion budget.

Total spending, of course, is much greater than $1.3 trillion; this is just the portion appropriated annually to run the government’s core functions. The rest – another $2.5 trillion – is on automatic pilot, so to speak. This is spending for entitlement programs such as Social Security and Medicare, as well as interest on the debt, which have, in effect, permanent appropriations. Spending for such things cannot be cut simply by spending less each year; the law governing benefit formulas and eligibility would have to be changed.

It’s hard to see the battle over the
2011 budget being resolved any time soon.

One reason Congress is so far behind schedule on its basic work: It failed to pass a budget resolution last year. This sets overall limits on spending and revenues for the year and is a guide for appropriators. Without that guidance, the work of the appropriations committees is greatly slowed. One reason is that they’re operating on different trajectories, so it’s harder for them to reconcile priorities.

Instead of fooling around with legislation that should have been finished months ago, Congress ought to be developing a budget resolution for fiscal year 2012, working from President Obama’s budget proposal released in February. The Budget Act of 1974 says the House and Senate should have a budget resolution to consider no later than April 1, with final action no later than April 15.

There is just no possible way these deadlines are going to be met. The House Budget Committee, in particular, is deeply involved in the 2011 budget negotiations because its chairman, Rep. Paul Ryan of Wisconsin, was given extraordinary powers to set spending levels for appropriations that should have been established by the budget resolution.

Given the impasse between House Republicans, Senate Democrats, and the White House, it’s hard to see the fight over the 2011 budget being resolved any time soon. Newly elected Republicans in the House, many of them elected with Tea Party support, are still committed to slashing spending this year even though almost half of 2011 outlays have already been spent. Every day that goes by reduces the amount of money available in this year’s budget to cut.

Chance for Agreement:  Slim to None
It’s also hard to see how the House and Senate are going to agree on a budget resolution for 2012; funding for 2011 is still in flux. Though the White House plays no formal role in the congressional budget process, the fact that the Senate is still controlled by Democrats means that House Republicans, who often talk as if they control the entire government, need to compromise. Their reluctance to do so – viewing the word “compromise” as equivalent to “surrender” or “sell-out” — means that budget negotiations are going to take time to complete, if they can be completed at all.

This creates two serious problems. First, the appropriations committees are almost certainly going to be very, very late completing action on next year’s appropriations. And if debate over the continuing resolution for 2011 is any guide, floor debate on the 2012 appropriations bills is likely to be protracted. And unless Congress completes action on a budget resolution, the House and Senate are going to be far apart, which will require longer than usual conference committees to hammer out differences between House- and Senate-passed appropriations bills. So it’s very likely that, for a second year in a row, we’ll end up with another continuing resolution to fund 2012 spending when the end of September rolls around and no appropriations bills have been enacted.

Second, and perhaps more importantly, unless Congress comes together on a budget resolution, it’s almost impossible to make significant progress on cutting entitlement programs such as Medicare and Medicaid. The reason? A completed budget resolution is necessary to enable a special legislative procedure called reconciliation.

Reconciliation allows Congress to force itself to cut spending. In the budget resolution, congressional committees must report legislation that would cut spending or raise revenues, neither of which they like to do. If they fail to act, however, the Budget Committee can circumvent them. This tends to force the hands of the traditional committees of jurisdiction.

The Budget Act provides for expedited procedures in both the House and Senate for consideration of legislation that arises through reconciliation. The legislation may not be filibustered in the Senate. There is a fixed time available for debate, established by law, and the final legislation only requires a simple majority. This is critical, given that Republicans routinely filibuster everything in the Senate and it requires 60 votes to limit debate.

Almost every expert in Washington thinks
Republicans are being extraordinarily foolish
in wasting Congress’s time on the 2011 budget.

Needless to say, it would be a simple matter for Senate Democrats to play the Republican game and filibuster any big budget-cutting bill sent over by the House even if Democrats didn’t control the Senate. So reconciliation is absolutely essential if Republicans expect to make good on their promises to slash spending and balance the budget. That’s why it’snecessary to have a completed budget resolution agreed to by both the House and Senate; both must agree on spending levels and reconciliation instructions.

And this is why almost every budget expert in Washington believes that Republicans are being extraordinarily foolish, even childish, in wasting so much of Congress’s precious time on the 2011 budget. The potential for significant savings is inherently limited when almost half the fiscal year is past and two-thirds of total spending is off-limits.

Is Simple Ignorance to Blame?
If they had any sense, Republicans should have accepted that it was too late to do much of anything about the 2011 budget the day Congress reconvened in January and put all of their energy into the 2012 budget, including a binding budget resolution with reconciliation instructions. But because they’re still finishing leftover business from last year, they are going to be severely behind the 8-ball in terms of doing what needs to be done to both finish the 2012 appropriations on time or do anything about entitlements.

I think it’s mostly simple ignorance about how the budget process works that is preventing House Republican freshmen from accepting that they simply can’t do everything they promised they would to rein in spending right now. House veterans know that the freshmen have bitten off more than they can chew, but are too frightened of retaliation by the Tea Party to say so. In a few months, when the freshmen have finally exhausted themselves with futile efforts to balance the budget instantly, they’re going to greatly regret that they didn’t develop a long-term plan and properly use the budget process, which was created to do exactly what they claim they want to do: get the nation’s finances in order.

Six months from now, as voters grow weary of constant wrangling over relatively small budget cuts and at the same time,  become more aware of how those cuts affect them personally, those opposed to the Republican agenda will find their voice and begin to fight back. In retrospect, I think Republicans will see that they had one bite at the apple to enact significant budget cuts – and that they blew it.

Related Links:
GOP Aims to Tame Benefits Programs (WSJ)
If Government Shuts Down Because of Budget Wrangling, Medicare Likely to Pay Claims (Medscape Today)