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Another Temporary Budget Deal: Don’t Blame a “Broken” Process

Posted By Patrick Louis Knudsen On August 1, 2012 @ 11:19 am In Economics | Comments Disabled

The stopgap spending agreement reached by House and Senate leaders may be the only way Congress will escape a post-election “lame duck” showdown over funding government agencies. It also presumably helps clear the agenda so Congress can focus on Taxmageddon [1] and the scheduled defense-devastating sequestration [2]—two other major fiscal problems lawmakers keep putting off.

But no one should rationalize it as inevitable and necessary to overcome political gridlock or a “broken” budget process. It is a choice—and a concession to the intransigence of the Senate leadership. While perhaps expedient in the near term, it will have longer-range drawbacks that threaten Congress’s ability to manage the immense fiscal challenges looming ahead. Lawmakers should weigh these matters carefully when they take up the measure in September.

The continuing resolution (CR) agreed to [3] by House Speaker John A. Boehner (R–OH) and Senate majority leader Harry M. Reid (D–NV) displaces the 12 annual spending bills that provide roughly one-third of the government’s funding. The six-month measure will run at the Senate’s spending level—$19 billion higher than the House budget resolution [4]—as Reid demanded. Supposedly the new Congress will be free to adjust spending levels in the new year if it chooses. The Senate, which has neglected to pass a budget resolution the past three years, has been writing its spending bills to the $1.047 trillion level of the Budget Control Act [5], a product of last year’s debt ceiling debate.

Prior to the agreement, the House had passed seven of its 12 regular appropriations for fiscal year (FY) 2013, with another four ready for floor consideration (shown in the Heritage Foundation Appropriations Tracker [6]). The Senate Appropriations Committee had delivered nine of its bills, and is scheduled to move two more this week. But Reid refused to allow floor votes without an up-front acceptance of the Senate’s excessive discretionary spending level. Hence the process stalled.

Though frequent, CRs and lame-duck sessions were once considered a sign of defeat; they reflected an embarrassing failure of Congress to manage the budget. In the past decade or so, however, lawmakers have employed the tactic frequently and by design, often to put off difficult spending decisions or leverage other policy choices in an eleventh-hour rush.

Lawmakers no longer miss deadlines; they deliberately ignore them. They have rendered the fiscal year irrelevant. They have degraded budgeting into a jumble of ad hoc, spend-as-you-go measures nagging lawmakers’ attention year-round. In the end, a few leaders from each chamber heap together massive spending bills without meaningful review, amendment, or participation by committees and rank-and-file Members.

While this agreement might help avoid a lame-duck session—where nothing good ever happens—it extends the willful breakdown of congressional budgeting, which has other negative consequences:

  • It stifles the economy by adding to the uncertainty among investors and employers, making them reluctant to pursue growth-producing, job-creating activities.
  • It erodes public confidence. Congress’s repeated failure with such routine matters as annual spending bills breeds cynicism about how lawmakers are handling more than $3.5 trillion of the economy’s resources each year.
  • It weakens Congress’s ability to budget at all. Each repetition makes fiscal mismanagement the norm. Past vices become present-day habits, and the chance of Congress restoring stable budgeting practices grows more remote. Without them, Congress will be unable to address the huge entitlement spending challenges that are growing larger and more imminent.
  • It risks an economic breakdown sooner than expected. Former Senator Judd Gregg (R–NH) has warned [7] that “once reality sets in that there is going to be no improvement in leadership, whether on the fiscal cliff or on long-term deficits and debt, people and markets will react. They will not wait until January. Historically, September has been a good time for such a reaction.”

The appropriations process is entirely under lawmakers’ control; they have chosen to sacrifice it. If Congress has given up on the regular order of budgeting for now, lawmakers should firmly recommit themselves to restoring coherent procedures next year. It is no exaggeration to say that Congress’s ability to budget—and hence to govern—is at stake.


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2012/08/01/another-temporary-budget-deal-dont-blame-a-broken-process/

URLs in this post:

[1] Taxmageddon: http://www.heritage.org/issues/taxes/taxmageddon?query=Taxmageddon

[2] sequestration: http://www.heritage.org/research/reports/2012/07/fix-defense-sequestration-without-tax-increases

[3] agreed to: http://www.politico.com/news/stories/0712/79197.html?hp=l1

[4] House budget resolution: http://www.gpo.gov/fdsys/pkg/CRPT-112hrpt421/pdf/CRPT-112hrpt421.pdf

[5] Budget Control Act: http://www.gpo.gov/fdsys/pkg/PLAW-112publ25/pdf/PLAW-112publ25.pdf

[6] Appropriations Tracker: https://thf_media.s3.amazonaws.com/2012/jpg/special-appropriations-tracker-FY-2013-750.jpg

[7] warned: http://thehill.com/opinion/columnists/judd-gregg/239387-opinion-heading-toward-a-sept-surprise

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