Another budget showdown looms

For the first time since 2009, Congress adopted a timely budget resolution for the coming fiscal year. This was possible because the GOP had won control of the Senate in the mid-term elections; previously a Republican-controlled House and a Democratic-controlled Senate were unable to agree on much of anything re fiscal policy.

Would there now be appropriation bills (covering “discretionary” outlays for traditional functions of government; most entitlement outlays are deemed “mandatory”) by October 1 (start of fiscal year 2016), restoring a semblance of order to the fiscal equation? Perhaps, but we weren’t counting on it. Budget plan passed, now what?
5/11/15.

The House has since passed half of the appropriation bills that are planned, but the Senate output – aside from some activity in committees – has been zero. Appropriations for fiscal year 2016, congress.gov, accessed
8/12/15 (download PDF).

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Currently in recess (aka state or district “work periods”), the members of Congress won’t return to Washington until early September. That will leave only three weeks to wrap things up before October 1. Looks like Congress may once again pass a continuing resolution (CR) to keep the government running, as many observers were expecting all along. What went wrong, and is there any way to achieve a better outcome?

A. Diagnosis – Democrats voted against the budget resolution en masse, maintaining that it was one-sided and misguided. See, e.g., a letter we received from Senator Chris Coons, 5/19/15 (scroll down).

I am disappointed that Congress was not able to come together to craft a bipartisan budget that is responsible, balanced, and fair. We need a budget that preserves our social safety net by building a circle of protection around the most vulnerable among us and protecting the promises we have made to our seniors. A responsible budget would also recognize that investments in infrastructure, research, health care, and education are critical to growing our economy and supporting a strong middle class. Finally, we need a budget that lowers our deficit responsibly in a way that is fair and forward-looking – not on the backs of the middle class and poor, and not in a way that kills jobs and stifles economic growth.

Although there had been no way to prevent Republicans from passing the budget resolution, the president and his party served notice that they would not accept it unless the terms were adjusted to their satisfaction. Budget brinksmanship grips DC, Rebecca Shabad, The Hill, 7/5/15.

Bolstered by veto threats from President Obama, Senate Democrats are vowing to block all GOP spending bills, arguing the legislative work is pointless until Republicans come to the negotiating table.

House Republicans have the votes to pass whatever appropriation bills they want so long as they stick together. Perhaps that helps to explain why the House has passed six appropriation bills to date, although it should be noted (see prior table) that there has been no forward progress since June 9.

In the Senate, 60 votes (a 3/5 super majority) are needed to cut off debate on (or even begin discussion of) most bills. Given only 54 Republican senators, appropriation bills can’t be passed without some Democratic supporters.

Any appropriation bill that reached the president’s desk could be vetoed, thereby necessitating a super-majority (2/3) vote in both houses of Congress to get it across the finish line. If the president blocked too many bills, however, Americans might come to perceive him – rather than congressional Republicans - as obstructionist.

Republicans could change the foregoing by abolishing the filibuster, which is a function of the Senate’s rules rather than the Constitution. Something’s got to give in the US Senate,
2/23/15. Senate Republicans are apparently not prepared to do this, however, and nothing could be done about the president’s veto power in any case.

Barring action to authorize funding for at least part of the new fiscal year, the government will be forced to “shut down” as of October 1. Also, the debt limit of $18.1T will probably need to be raised before yearend. (The Treasury Department is currently employing “extraordinary measures” to avoid issuing unauthorized debt.)

Government shutdowns have occurred before, and here is how the drill goes. “Essential services” continue, the two parties blame each other for the curtailment of nonessential services, and the public (informed by the media, etc.) comes down one way or the other. The losing side (generally Republicans) backs down, the winning side takes a victory lap, and disagreements are papered over until the next time.

That’s basically what happened two years ago, and the Republicans – who were split internally and waged a halfhearted battle – got most of the blame. The government shutdown ends, with unresolved issues aplenty,
10/21/13.

Budget showdowns are risky, and politicians try to avoid them. The typical solution is to pass an omnibus CR to keep the government going until things can be worked out; no wonder the government never seems to get its fiscal affairs in order.

Balance the budget and keep it that way except in time of all-out war or true national emergency, why is that so hard to understand? SAFE letter to Congress,
6/3/13.

B. Prognosis – Both sides have had ample time to develop their respective positions on the 12 appropriation bills, so finalizing matters in September would seem doable. It won’t happen, however, due to unresolved differences of opinion. Indeed, we would be surprised to see any of the pending appropriation bills become law by October 1.

WHAT DIFFERENCES OF OPINION?

#If there is disagreement about the aggregate deficit for fiscal year 2016, it’s not a big deal. With the current and near-term deficit picture improving, this statistic isn’t likely to attract much attention. CBO lowers deficit projected for 2015, Rebecca Shabad, The Hill,
8/7/15.

The budget deficit for [fiscal year] 2015 is expected to drop to roughly $425 billion, according to a report released Friday by the nonpartisan Congressional Budget Office (CBO) . . . down from the $486 billion the CBO projected in March . . . would be a seven-year low for the government’s annual budget shortfalls.

And while there are substantial differences between the 10-year budget projections of the president and Congress, the differences for 2016 (which would be reflected in the appropriation bills) seem relatively minor.

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1. As submitted to Congress in February 2015.
2. OMB mid-session update,
7/14/15.
3. As agreed in conference,
May 2015.

#A bigger question is whether previously enacted budget caps (sequestration) will be abandoned, as Democrats have demanded, thereby permitting more domestic spending in coming years. Harry Reid to block spending bills, Rachael Bade & John Bresnahan, Politico, 6/4/15.

At a closed-door Democratic leadership meeting Tuesday night, Reid (D-Nev.) vowed that his caucus wouldn’t allow a single spending measure to get a floor vote, sources familiar with the meeting say. And on Thursday at noon, his top lieutenants announced their party’s intentions to filibuster and prevent Republicans from even calling up the spending measures.

#Democrats yearn to hike taxes on affluent individuals and some businesses, invoking the tax reform label as a smokescreen, and use the revenues to fund additional spending versus deficit reduction. Some Republicans harbor similar aspirations, creating the potential for a bipartisan deal, but the official GOP mantra remains “no tax increases.” Fixing the Highway Trust Fund (part C), 8/13/15.

#Unable to muster 60 Senate votes for any conservative proposals of note, Republicans have taken to inserting unrelated riders into appropriation bills and other “must pass” legislation – thereby giving the other side added reasons for opposition. White House slams GOP bank reform bill, Joseph Lawler, Washington Examiner,
8/5/15.

[Budget director Shaun] Donovan took aim at the inclusion in the appropriations bill of a banking reform bill authored by Senate Banking Committee Chairman Richard Shelby, R-Ala. *** "Attempting a wholesale rollback of Wall Street reform by way of ideological riders on an appropriations bill is a cynical abuse of the government's funding process," Donovan wrote in a letter to Senate Appropriations Committee Chairman Thad Cochran, R-Miss.

Donovan’s outrage was excessive (Democrats have done similar things when it suited their purposes), but such “log rolling” does have a pernicious effect on the legislative process. One more reason, it seems to us, that the US Senate should do away with the filibuster: permit controversial proposals to be openly considered instead of forcing proponents to use sneaky tactics. Fixing the Highway Trust Fund (part D), 8/3/15.

TIME FOR ANOTHER BATTLE?

In 2013, the impending GovCare launch fueled demands to defund the implementation of this program. Although not convinced that such an effort could succeed, SAFE concluded it was worth a shot. GovCare was bad legislation – polls showed Americans had a bad opinion of it – unlike other fiscal issues, e.g., let’s stop running up the debt, this one might carry an emotional punch. The next budget battle takes shape,
7/29/13.

If people want to accomplish anything in this world, there comes a time when they must make a commitment. Cross the Rubicon – set sail for the new world - sign the Declaration of Independence – or let the world know (to borrow a line from Network) that “I’m mad as hell, and I’m not going to take it any more.”

The battle over GovCare implementation was lost, and future efforts will necessarily be directed to fixing rather than blocking this program. Are other issues pending, however, that would arguably warrant another government shutdown? There are several candidates from a conservative perspective, but we think the answer is “no.”

#A concerted effort to block the president’s executive amnesty program might have made sense earlier. Many Americans see this program as lawless, and there is growing concern about a seemingly uncontrolled influx of immigrants who take low paying jobs and require government support. Adios America, Ann Coulter,
2015.

The GOP threw in the towel, however, by allowing a bill that would have defunded implementation of the executive amnesty program by the Department of Homeland Security to be successfully filibustered in the Senate. A busy fortnight in DE offers valuable reminder (part 2),
3/9/15.

If Republicans weren’t willing to shut down the DHS then, why would they be willing to shut down the entire government over the same issue now?

#SAFE has urged Congress to block the EPA’s Clean Power Plan on grounds that the CPP (a) is ill advised from a policy standpoint, and (b) goes far beyond the authority delegated to the EPA under the Clean Air Act. Letter to Congress,
6/16/14.

For the record, we have also conveyed these thoughts to the agency. Letter to EPA re the proposed (since finalized) CPP,
11/26/14.

The EPA bureaucrats will steam ahead, however, so long as the president has their back. And while Congress would surely not approve the CPP if it were asked to do so, there is limited support for forthrightly clipping the agency’s wings. Taking clear-cut stands on issues is simply not what politicians like to do.

More subtle legislative restrictions won’t be readily accepted either, as was demonstrated by a recent bit of political theater in the Senate. Democrats walk out on heated vote on power plant rule, Zack Colman, Washington Examiner,
8/5/15.

Democrats walked out of [a] hearing of a Senate Environment and Public Works Committee, preventing a vote on a bill that would allow governors to exempt their states from an Environmental Protection Agency climate change rule, which was finalized Monday, if they found it posed economic harm, significantly raised electricity rates or threatened the reliability of the power system.

The upshot: many members of Congress will complain about the CPP, but wind up doing nothing to stop it. Meanwhile, this regulation will be challenged in the courts with the objective of either blocking it or delaying implementation until a new president is in the White House. Climate fight shifts to courts, Timothy Cama, The Hill, 8/9/15.

#There has been an intense reaction to undercover videos that purportedly show Planned Parenthood’s involvement in the sale of body parts from aborted fetuses, fueling demands that all government funding be ended. Top 12 reasons to defund Planned Parenthood now, sba-list.org,
August 2015.

But a bill to this effect fell short in the Senate (53-46 majority, not enough to overcome a filibuster). Senate vote to defund Planned Parenthood fails, Deirdre Walsh, cnn.com,
8/4/15.

Furthermore, much of the government funding for Planned Parenthood (currently some $0.5B per year) takes the form of Medicaid reimbursements for family planning services, etc. Substantive legislative changes would be required to end such reimbursements, which might play into the narrative of a Republican “war on women.”

As for defunding Planned Parenthood at the state level, the administration claims this could violate federal law. US warns states against defunding Planned Parenthood, Megan Cassella, reuters.com,
8/12/13.

C. Observations – It’s only the middle of August, and panic is already setting in about the expiration of spending authority at the end of the fiscal year. There is a downward spiral of dysfunction in Congress, Ted Kaufman, News Journal, 8/16/15.

I fear we are in for another cliffhanger this fall, one that is likely to be even more costly and damaging [than] the 13-day shutdown in October 2013.

The solution generally mentioned is for Congress to pass a CR, but we see another possibility. Why don’t the members (and their staffs) get busy and hammer out the detailed appropriation bills by October 1? The sticking point is not the magnitude of the task, but rather the need for some attitude adjustments.

Having lost the mid-term elections, Democrats should acknowledge that Republicans have a right to set reasonable spending ceilings. And we don’t think Republicans are guilty of being stingy with taxpayer dollars; to the contrary, overall spending should be cut more deeply than they have proposed. The key is to stop thinking in terms of across the board budget cuts, and start shutting down wasteful government units, programs and activities. There are many potential targets! Postelection update: Deficits & debt (part B),
11/24/14.

For their part, Republicans should stop trying to use “the power of the purse” to force policy changes. Shame on the GOP for burying a regulatory overhaul for the financial services sector in an appropriations bill; Senator Shelby’s bill should be proposed and considered on its own merits. Including an Export-Import Bank reprieve and various other extraneous matters in the DRIVE Act was equally reprehensible. Fixing the Highway Trust Fund, 8/3/15. To minimize the temptation for such chicanery, it’s time to bin the Senate filibuster.

Based on the foregoing, there’s no reason Congress couldn’t finish up with all or at least most of the appropriation bills by October 1. SAFE urges the members to take a deep breath and get to work.

**********FOLLOWUP**********

A letter based on this entry was sent to the Delaware members of Congress, 8/18/15.

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