The US political system is out of kilter and some major changes are needed to put it back in working order.
Last week we recommended term limits for the members of Congress, possible changes in the scheduling of elections, a different approach to campaign finance laws, and abolition of the Senate filibuster. The goal would to minimize the incidence of partisan gridlock, and thereby make more time available for constructively addressing policy issues.
This week we will suggest some additional ideas, which could prove helpful in attempting to break the chronic deficit habit, plus some closing thoughts on the overall government overhaul that is envisioned.
III. Chronic deficits – At sessions of a joint select committee appointed in 2017 to suggest improvements to the congressional budget and appropriations procedures, participants and witnesses repeatedly characterized the budget system as “broken.” But the symptoms (see below) boil down to a lack of political will, so it might be more accurate to say the political system is broken.
Presidential budget proposals essentially ignored – congressional budget resolutions only adopted about 50% of the time – some 2/3 of total budget outlays viewed as “mandatory” and not specifically authorized on a recurring basis - detailed appropriation bills for “discretionary” outlays rarely approved before the start of the fiscal year (e.g., October 1, 2020, for FY 2021) – major fiscal deficits, even during prosperous economic times – unsustainable commitments for Social Security, Medicare, Medicaid, etc. programs – no credible plans for addressing these issues.
Several changes in the existing ground rules could prove helpful, starting with two constitutional amendments.
#BALANCED BUDGET AMENDMENT – It may sound simple to adopt a constitutional amendment that Congress cannot approve a budget in which outlays exceed revenue, but implementing such a prohibition could prove difficult.
1. What happens if the BBA takes effect but it’s impractical to balance the budget in a single year? With annual deficits running about $1 trillion dollars, some sort of phase-in plan would seemingly be necessary. Our suggestion would be a provision that the political leadership of the country was committed to balancing the budget in five years, with the BBA to become effective at that time if, but only if, they were successful.
2. Shouldn’t there be an exception for wars or national emergencies? Surely no one could expect the government to balance the budget during a world war, for example, but with military actions being waged almost every year where would one draw the line?
3. Note that a BBA would be a two-edged sword, which Side A could cite as justification for big tax increases while Side B was seeking to reduce or at least hold the line on spending. There is no easy escape from this conflict, which has played out repeatedly in DC over the years.
4. A 2/3 majority of both houses of Congress would be unlikely to vote for a BBA, thereby limiting their most cherished power (spending taxpayer money). Accordingly, an Article V convention would almost surely be required; calling for such a convention may be warranted – for this and other purposes – but getting 34 of the 50 states to support such a convention (and 38 of the 50 states to support the recommendations that resulted) would be no mean feat.
Given these points, SAFE has been somewhat measured in its endorsement of a BBA. Spending (budget discipline) page of this website.
A balanced budget amendment to the Constitution, either prohibiting deficit spending except in time of declared war or requiring a 2/3 majority to approve deficit spending in any given year, would be a tremendous help – if it could be adopted.
#TAXES – In some states, including Delaware, the state constitution requires a super-majority vote for tax increases. If a similar provision (say requiring a 2/3 vote of both houses of Congress for tax rate increases or the imposition of new taxes) was added to the US Constitution, this would materially alter the effects of a BBA by making spending discipline the path of least resistance. What’s not to like about that?
For advocacy purposes, a shorthand name for this proposal would be helpful. Responsible Taxing Amendment (RTA) isn’t very catchy, and we would welcome other suggestions.
#DEBT LIMIT – Setting a debt limit may have made sense in the past, but such a limit might be likened to “locking the barn door after the horse is stolen” and its credibility has been exhausted by overuse. Actual debt increases are no longer being voted; instead, Congress simply suspends the debt limit with a proviso that it will snap back as of some future date at whatever level (invariably higher) the debt happens to be at that time.
The Treasury Department’s use of “extraordinary measures” to avoid exceeding its authority while Congress is considering debt limit increases involve real costs. It’s also possible that confusion about the status of the debt limit could spook the financial markets, causing substantial damage.
Accordingly, we would submit that the debt limit serves no useful purpose and urge its abolition.
#BUDGETS – There are two phases of the budgeting process, (a) the establishment of overall revenues and outlays for major sectors of the government, and (b) the detailed appropriation of funds for the numerous units and programs of the government that are to be supported. Step (a) is a logical prerequisite to step (b), as appropriators must know how much money is available before they can decide how to divide it.
Performance of step (a) has grown increasingly sloppy in recent years. Although budget proposals from the president and his budget staff (Office of Management and Budget, or OMB) are entitled “Budgets,” developed in a comprehensive form, and generally submitted on time (April in the first year for a new president, otherwise in February), they have no official standing under the congressional budget rules. After being delivered, they are often dismissed as “dead on arrival.”
According to their own rules, the House and the Senate are supposed to pass budget resolutions that can be used to produce a unified congressional budget resolution by around May 1. Compliance with this deadline, however, is sporadic at best. Often the two houses don’t pass budget resolutions at all, let alone agreeing on a unified congressional budget resolution.
Absent a budget resolution, baseline spending projections of the Congressional Budget Office carry considerable weight. The CBO projections assume spending growth in all sectors as opposed to considering no spending as the default position (“zero based budgeting”).
In sum, existing procedures have proven woefully inadequate for managing a nearly $5 trillion annual budget. OMB efforts are largely wasted – congressional budget work is neither rigorous nor timely – need for spending discipline is not properly emphasized. No wonder so many observers have described the budget system as broken.
The simplest way to improve matters would be to revoke the congressional budget rules that were passed during the Nixon era and restore the primacy of presidential budget proposals (PBPs). As the Constitution gives Congress “the power of the purse,” however, such a change would be hard to justify at this point.
Congress might take its responsibilities more seriously, however, if the congressional budget rules were amended to provide that the PBP would take effect as the congressional budget resolution unless Congress adopted its own resolution within 60 days after the PBP was delivered.
#APPROPRIATION BILLS – Under the congressional budget rules, detailed appropriation bills are supposed to be enacted before October 1 (the first day of the new fiscal year), but this rarely happens in practice. The normal pattern is a series of continuing resolutions (CRs), which serve to keep the government open until such time as Congress gets around to passing the appropriation bills.
Typically in December, but sometimes even later, omnibus appropriation bills – loaded with extraneous “riders” on subjects that could not conveniently be taken up and passed on their own merits – are introduced and passed at warp speed to avert or end a government shutdown. See, e.g., More shutdown drama, mediocre results, 2/12/18.
Such chaotic handling of consequential legislation makes no apparent sense, but everything happens for a reason. Strategically located members of Congress probably relish the opportunity to further their legislative priorities and personal power.
To achieve more satisfactory results, and also provide administrative managers (especially those in the Department of Defense) with more timely information concerning the funding for their respective operations, timely completion of appropriation bills should be encouraged.
Abolishing the Senate filibuster rule would be a big help, as this action (recommended in last week’s entry) would prevent the effortless delay of appropriation bills by minority vote. We would also suggest some sort of sanctions for late completion.
One possibility would be to automatically extend spending authority into the new fiscal year to avert a government shutdown, but do so at the current (versus proposed, and probably higher) levels without any possibility of a catchup adjustment later.
Taking another tack, House and Senate appropriators could be required to stay in Washington in August until their respective bills were completed and ready for floor action in September.
IV. Subcontractors – Maybe the functions of government wouldn’t be so involved if our political leaders would heed SAFE’s smaller, more focused, less costly government mantra, but it’s hard to undo things that have been done. Face it, the federal government is large, offers a cornucopia of programs/ benefits, and spends a great deal of money.
Members of Congress often lack the time, energy or expertise to craft all the rules that are required and review all the issues that arise. Accordingly, it’s not uncommon for Congress to delegate many of its legislative and oversight responsibilities to other entities.
Properly used, such subcontracting can enhance the effectiveness of our national legislature. But if the subcontractors get out of control, like the brooms carrying water did in the Sorcerer’s Apprentice (episode in the Disney film Fantasia), watch out.
We’ve already discussed the need for Congress to ride herd on administrative agencies to which it has delegated rulemaking authority. Now here are some suggestions for two other categories of subcontractors.
#JOINT SELECT COMMITTEES – JSCs have been used occasionally as a vehicle for congressional review of defined problems, e.g., deficit reduction in 2011, and budget/appropriation procedures in 2018. Both of these JSCs were bipartisan (equal number of Democrats and Republicans), bicameral (equal number of House and Senate members), and had a specified reporting deadline.
The deficit reduction “supercommittee” deadlocked because the Republican members wanted to consider spending cuts and the Democratic members were only interested in raising taxes. The budget/appropriations JSC heard some interesting testimony about the defects of the current budget system, but failed to muster a majority for any actionable recommendations.
Rightly or wrongly, we infer that the main reason for creating a JSC is to “kick the can down the road” on a troublesome problem. If inconclusive discussion is better than action, that may be the way to go – otherwise, don’t bother.
#COMMISSIONS – This type of body is typically set up with presidential involvement, has outside (as well as congressional) members, and is allotted a year or two to conduct its review. Important examples include the Hoover Commission (government organization), Grace Commission (government savings opportunities), Greenspan Commission (fixing Social Security), the 9/11 Commission, and most recently the Bowles-Simpson Commission (deficit reduction) in 2010.
There were two Hoover Commission studies, one after World War II and the second after the Korean War. The goal in each case was to recommend structural changes to government agencies, and many of the recommendations were implemented. Writeup, britannica.com, accessed 2/29/20.
The Grace Commission recommended hundreds of billions in spending cuts during the Reagan administration. Its recommendations were largely ignored, but Citizens Against Government Waste was founded to continue this line of advocacy.
The most fiscally consequential commission was the one chaired by Alan Greenspan. Implementation of its 1983 recommendations (primarily tax increases, followed by an eventual increase in the retirement age) shored up the finances of the Social Security program for several decades. Social Security is back in the red now, however, because the actions taken deferred the problems without fixing them.
The 9/11 Commission recommended various organizational changes (appointment of a Director of National Intelligence, creation of the Department of Homeland Security) in the wake of a deadly terrorist attack that had caught the nation off guard.
The co-chairs of the Bowles-Simpson Commission, Erskine Bowles and Alan Simpson, proposed “balanced” (tax increases & spending cuts) recommendations for deficit reduction. Their plan failed to receive the required supermajority (14/18) vote of the Commission, however, and President Obama made no effort to support it.
While the creation of commissions is hardly a panacea, similar studies might be helpful to review the current and projected status of the major entitlement programs, e.g., Social Security, Medicare, Medicaid, etc. The problems are very large, public opinion is fractured, and the members of Congress don’t have the expertise, time or will to review these issues through the normal congressional processes.
Our sense that a judicious use of commissions might be helpful is supported, among other things, by a recent discussion with Senator Tom Carper in which he suggested a rerun of the Bowles-Simpson Commission. A conversation about the fiscal problem, 10/28/19.
Let’s suppose, said Carper, that we could have another Fiscal Commission like the Bowles-Simpson commission that nearly succeeded in brokering a “grand bargain” on fiscal issues in 2010, which would be ready to start work after the president was inaugurated in 2021. Wouldn’t that be a nice idea?
Either President Trump or a Democratic contender will be inaugurated in 2021, and we didn’t ask what outcome Senator Carper was envisioning. The idea of a fiscal commission has some appeal, however, and it will be interesting to see if anything comes of it.
We’re also hopeful that the president will offer some proposals for addressing the fiscal problem as the 2020 presidential race develops. And if the upshot is two competing plans, may the best plan win!
Rather than making a single commission responsible for reviewing the entire federal budget, however, we would favor a hybrid approach. The members of Congress would be challenged to get serious about reviewing departmental budgets and making significant cuts in wasteful discretionary spending. Further, high priority would be placed on enhancing tax revenue by eliminating special interest tax breaks and speeding up economic growth.
Meanwhile, commissions would be created to review the status of the major entitlement programs. One commission might review Social Security as the Greenspan Commission did during the Reagan administration, while the other reviewed healthcare plans.
Maybe one or both of the special studies would offer ideas for putting the entitlement programs on a sustainable basis. Without any preconceived conditions as to the solutions, we would support appointing first rate people to the commissions and seeing what they came up with.
V. Closing thoughts - Opinions will surely differ as to the foregoing ideas, and the results might turn out differently than envisioned. But the current path appears to be leading this country to assured disaster, so what would be the harm in a carefully considered and logical course correction?
In charting the path forward, here are three principles to keep in mind:
PLANNING - “The surest way to miss the best solution to a problem is not to consider it in the first place.” – Decision & risk analysis consultant, Kenneth Oppenheimer
LEADERSHIP – “There is no limit to what can be accomplished if it doesn't matter who gets the credit.” – Ralph Waldo Emerson, quoted by Ronald Reagan and others
GRIT - “It always seems impossible until it is done.” – Nelson Mandela, quoted by Bernie Sanders in a recent Democratic primary debate (SC)