Contributor Post Created with Sketch. After the Budget Agreement, a Budget Process in Shambles

 

shutterstock_269057810Now that the budget agreement has been reached, many in the public may believe that the federal government is starting to work in a way that gets the people’s business done. Wrong. The agreement itself is doing further damage to an already-weakened process by which Congress establishes the budget and enacts the required follow-on legislation to change spending and revenue laws so that they conform to that budget.

Accordingly, House and Senate leaders need to pay heed to Senate Budget Committee Chairman Mike Enzi’s comments on this problem, which appeared on November 3 in U.S. News and World Report, and take steps to restore the process and return to the regular budget order. This process starts by recognizing that the only reform step with enough strength to restore responsible budgeting in Washington is to adopt a debt-limiting, balanced budget constitutional amendment—which is now gaining momentum in the states.

Much of the commentary on the budget agreement describes how it breaks through the caps on discretionary domestic and national security spending and bypasses the process of automatic spending reductions, called sequestration, in the Budget Control Act of 2011. Far less attention has been paid to the fact that the agreement also effectively sets aside the budget resolution Congress adopted earlier this year in 2015 (S.Con.Res. 11) that sets forth the budget for fiscal year 2016 and the appropriate budgetary levels for fiscal years 2017 throughout 2025. S.Con.Res. 11 provides the pathway to a balanced budget by fiscal year 2023—without resorting to either massive tax increases or massive tax cuts. Now, after Congress has spent considerable effort to get back to the regular budget order by adopting the budget resolution, it is highly disappointing that many of the gains stemming from that effort are being lost.

A Procedural Predicament

In fact, the news on the procedural side of the budget is quite disheartening. First, we now know that the recently-enacted legislation from the agreement, the Bipartisan Budget Act, was subject to at least one budget point of order in the Senate. Senator Rand Paul (R–KY) raised this point of order, which was related to Social Security. How many additional budget points of order may have rested against the Act is not known because the Senate responded by adopting a motion that waived all budget points of order. The House went one better by adopting a rule (House Resolution 495) for the consideration of the Act that preemptively waived all points of order.

This procedural predicament does not end with the Bipartisan Budget Act. At least as it relates to fiscal 2016, the agreement still requires the adoption of some sort of appropriation measure or measures. The current continuing resolution on appropriations for fiscal 2016 expires on December 11. It is likely that Congress will move to fulfill this aspect of the agreement by enacting an omnibus appropriations measure that funds all the appropriated accounts for the remainder of this fiscal year. What budget points will rest against this omnibus bill can only be speculated because it has yet to be drafted. It is a virtual certainty, however, that Congress will look to an escape hatch, probably by some combination of adopting a rule that waives applicable points of order in the House, one or more waivers of applicable points of order in the Senate, and the interpretation of one or more provisions in the language of the budget resolution.

Finally, the Bipartisan Budget Act contains a provision (Section 102) that provides a mechanism to bypass the normal concurrent resolution budgeting process for fiscal year 2017, serving to indicate that Congress will likely not even attempt to draft a budget resolution next year. Needless to say, bypassing the budget process in its entirety is the worst kind of damage that can be imposed on the process.

Restoring Integrity to the Budget Process

So, given the present circumstance, what should congressional leaders do? The starting point is provided by the Terms of Credit Act (H.R. 3771) sponsored by Representative Bill Flores (R–TX) on behalf of the House Republican Study Committee. Fiscal conservatives should think of H.R. 3771 as the preferred alternative to the Bipartisan Budget Act, and now a rich source of ideas on how to restore integrity to the budget process. Congressional leaders could make use of these ideas in many cases by applying them in an informal way. Let’s examine some of the most useful ones:

Idea #1: Bring before each house an array of legislation on or related to balanced budget constitutional amendments. The most promising of these is a resolution (House Concurrent Resolution 26), sponsored by Representative Paul Gosar (R–AZ), which will advance a specific balanced budget amendment that is advancing in the states through a compact. Given how severely weakened the budget process has become over the last six years, a constitutional amendment is the only step that is strong enough to restore its integrity on a sustained basis.

Idea #2: In the future, do not let Congress adjourn unless and until it has completed its fiscal work. This includes work on appropriations and authorization bills.

Idea #3: Require the authorizing committees to recommend permanent changes in law that are required for balancing the budget in 10 years. This will serve as a handle on curbing the rapid growth in future spending on programs that fall outside the annual appropriations bill. These programs are effectively on autopilot until the laws that govern them are changed.

Beyond the three specific ideas from the Terms of Credit Act, described above, House and Senate leaders can take more immediate and less formal steps to repair the damage the budget agreement has done to the budget process:

Step #1: Commit to drafting a budget resolution for fiscal year 2017. The Speaker of the House and the Senate Majority Leader should make it clear that they do not intend to depend on the back-up mechanism for bypassing the budget process in fiscal year 2017 found in Section 102 of the Bipartisan Budget Act; and should instruct the House and Senate Budget Committees to start work on a budget resolution for fiscal year 2017 and beyond this winter. They should announce this step now.

Step #2: Change the way the rules governing legislation are drafted in the House of Representatives. The House has grown too accustomed to adopting rules governing the floor procedures that waive budget points of order, as was done for the Bipartisan Budget Act under House Resolution 495. Accordingly, the Speaker of the House should work toward an informal arrangement with the House Rules Committee. This informal arrangement could include three components applicable to the Rules Committee’s work. First, the Rules Committee could make a habit of pointing out that no budget points of order rest against qualifying legislation. Second, the Rules Committee could as a matter of general practice not issue rules for legislation that the Chairman of the House Budget Committee determines are subject to one or more budget points of order. Third, the Rules Committee could as a matter of general practice not waive serious budget points of order against applicable legislation, but establish procedures where each of these points of orders, as applicable, will be waived by the House under controlled circumstances.

Step #3: Bar “global” budget waivers in the Senate. The Senate Majority Leader could pursue an informal arrangement with members of his conference to ensure that they will vote against motions for indiscriminate waivers of budget points of order against pending legislation. He could work toward establishing as standard practice in the Senate that budget points of order identified by the Chairman of the Senate Budget Committee as applicable against pending legislation and raised on the Senate floor will be waived only on an individual basis.

Unfortunately, the congressional budget process is now in shambles; and the recent budget agreement contributes to this dire state of affairs. Congressional leaders need to take both permanent and less-formal steps to restore this process. Absent a dramatic change in the way Congress behaves, it will require the states to take charge and advance a debt-limiting, balanced budget amendment to the Constitution. Otherwise, fiscal calamity will be the inevitable outcome.

There are 8 comments.

  1. The Reticulator Member

    So who would enforce a balanced budget amendment?

    • #1
    • December 1, 2015, at 8:57 PM PST
    • Like
  2. Baker Spring Contributor
    Baker Spring Post author

    This amendment, when adopted, would be enforced like all the other provisions of the U.S. Constitution. It is a combination of the mechanism internal to the amendment (which in this case is the states), the public’s negative reaction to actions that violate the Constitution, Congress’ own enforcement of the Constitution in its deliberations, and ultimately the courts. There is no stronger step available to achieve a balanced budget than an amendment to the Constitution.

    • #2
    • December 2, 2015, at 5:26 AM PST
    • Like
  3. I Walton Member

    If you want to turn the Democrats into a perpetual war party, then pass a balanced budget amendment. There would have to be a security exception and the Democrats would drive a bloated budget through that exception. They’d also want a recession exception, so that the Amendment would become absolutely meaningless, if not worse. If we must impose a rule that controls spending and taxing, it should be gold, and in the mean time just take away the Fed’s regulatory responsibility and give them one goal, price stability. A BBA is a way to kick any cutting down the road, a long road at that. What we need are deep cuts and tax and regulatory reform. The deficit matters because we don’t save enough to pay for it. We don’t save enough because of our tax and regulatory code. It’s the spending that matters not the deficit.

    • #3
    • December 2, 2015, at 7:59 AM PST
    • Like
  4. Baker Spring Contributor
    Baker Spring Post author

    I Walton:

    There are two issues here. The first is the matter of the exceptions for security matters and recessions. Some BBAs include one or both of these exceptions. The amendment that is being advanced by the states under the Compact does not include either. See the text of the amendment in Article II, Section 7 of the model legislation that states are enacting to join the Compact at: http://www.compactforamerica.org/#!legislation/c36o.  The other issue is the need for immediate steps to restore fiscal responsibility. This is a good and important point. This is why my posting lists several such steps for Congress to pursue, short of the ultimate solution of the constitutional amendment.

    • #4
    • December 3, 2015, at 6:24 AM PST
    • Like
  5. I Walton Member

    Baker Spring:I Walton:

    There are two issues here. The first is the matter of the exceptions for security matters and recessions. Some BBAs include one or both of these exceptions. The amendment that is being advanced by the states under the Compact does not include either. See the text of the amendment in Article II, Section 7 of the model legislation that states are enacting to join the Compact at: http://www.compactforamerica.org/#!legislation/c36o. The other issue is the need for immediate steps to restore fiscal responsibility. This is a good and important point. This is why my posting lists several such steps for Congress to pursue, short of the ultimate solution of the constitutional amendment.

    it won’t happen, there will be exceptions, but my point is also broader. Spending is the problem, deficits just follows and borrowing is not as harmful as additional taxes would be. A BBA kicks the problem down the road, is the kind of solution our political establishments like to talk about because at best it takes too long.

    • #5
    • December 3, 2015, at 2:30 PM PST
    • Like
  6. Baker Spring Contributor
    Baker Spring Post author

    I Walton:

    I point out that my piece talks about both legislative steps and the constitutional amendment, so I am attentive to the need to take at least some steps sooner. Today, Congress is going in the wrong direction by blowing through the existing spending caps. This is because the congressional budget process is in a shambles. Any progress on spending restraint cannot be made absent a budget process. There is no means for proceeding. Congress is going on six years now since it has adopted and implemented any budget at all. So I pose the question, what process are you looking at for proceeding with effective spending restraint?

    • #6
    • December 4, 2015, at 8:04 AM PST
    • Like
  7. The Reticulator Member

    Baker Spring: This is because the congressional budget process is in a shambles. Any progress on spending restraint cannot be made absent a budget process. There is no means for proceeding. Congress is going on six years now since it has adopted and implemented any budget at all. So I pose the question, what process are you looking at for proceeding with effective spending restraint?

    I’m not sure why you’re so focused on the process. The process doesn’t do any good if Congress doesn’t want to reform anything.

    • #7
    • December 4, 2015, at 2:22 PM PST
    • Like
  8. Baker Spring Contributor
    Baker Spring Post author

    Reticulator,

    This is a important question, with a good answer. In Congress, legislative procedure drives substantive outcomes. As the congressional budget process, established in 1974, weakens, Congress is effectively returning to the process that existed prior to 1974. Then Congress passed spending and revenue legislation on an ad hoc basis, with no real consideration of the cumulative fiscal impact. Questions of deficits, debt and the cost of debt servicing had no significant impact on these decisions. Accordingly, Congress imposed no restraints on spending. This procedural circumstance, while dangerous enough then, is immensely more dangerous now because such a large share of federal spending is on auto-pilot. The budget process is the only effective means for getting a handle on this problem. Looking ahead, I believe there is a good chance that fiscal liberals will force a debate on this by explicitly demanding that the budget process be junked in favor of returning to the unrestrained spending procedures that existed prior to 1974. If so, fiscal conservatives will need to be prepared for this debate.

    • #8
    • December 7, 2015, at 6:19 AM PST
    • Like