Kicking the Can (Slightly) Further
BP50 Editor Leo Plumer laments Congress delaying passing a budget, again.
Thursday night, Congress passed yet another continuing resolution (CR) right before the first deadline set by the previous CR, which was yesterday. This sets another two deadlines, March 1st and 8th, with the same split of appropriations to be passed between the two deadlines.
Arianna Fano and Andrew Lautz recapped how we got here in their post featured in December:1
In late September, having failed to enact any appropriations bills before the beginning of this fiscal year, Congress adopted a continuing resolution (CR) to fund the government through November 17 at the prior fiscal year’s level.
Failing again to adopt any appropriations bills by November 17, Congress passed an additional two-step CR, with four of 12 appropriations bills expiring January 19 and the remaining eight expiring February 2.
So, we are now on CR #3. The Fiscal Responsibility Act requires across the board cuts if a budget is not passed by April 30th. They could, as in “Scenario 1” in Fano & Lautz’ post, just pass a fourth CR for the rest of the year, and federal agencies would have to eat a 1% cut.
The FRA put in that sequestration provision to nudge Congress into meeting deadlines. Its efficacy remains to be seen, but doesn’t look great. In a post from June last year, Lautz said:
Recent appropriations activity in the House, however, suggests post-FRA discretionary spending negotiations will still be contentious and time-consuming. …
One near certainty is that any bipartisan deal on appropriations will come down to the wire. Of the nine years in the past 20 where full-year appropriations were completed before January 1, eight were completed in the final two weeks of December.
Forget January 1, now we’re looking at May 1.
Although it is merciful that a shutdown has been avoided for now, we are witnessing classic Congressional budgeting dysfunction. In addition to the headache of two separate deadlines, Congress only meets for a fraction of the extra 6-odd weeks provided. There will be fiery battles over the content of the 12 appropriations bills - a repeat of this week’s events is very possible.
Except for the GOP Freedom Caucus, there appears to be little appetite for actually going ahead with a shutdown - just almost going ahead with one.
There is certainly lots of blame to go around. The problem is structural, but its full analysis is beyond the scope of this post.2 That said, the Deseret News (from Utah, of course) published a recent editorial highlighting the need for compromise and focus from Congress.
They especially focus their ire on policy riders attached to budget bills:
Compromise requires give-and-take from all sides. Holding the nation’s budget hostage, even for the sake of important items such as border security or funding for Ukraine and Israel, rarely accomplishes much. Those things need to be approached deliberately and separately.
The editorial board argues that the topline $1.6 trillion-ish agreement reached last year is “probably the best that can be done under current political conditions.” This is the deal that led to Kevin McCarthy’s ouster, but is ironically almost identical to what his successor agreed to.
I tend to agree with the gist of the editorial. Policy wishlist items like border security or foreign aid are certainly relevant to the nation’s fisc. Yet, including these as make-or-break items in the annual budget is a major part of this mess. Worse, they’re often simply put in for political signaling, with the full knowledge that they’ll accomplish nothing but holding up the process.
The editors state clearly:
The far right simply lacks the votes to enact its agenda. A threat to shut down the government is, frankly, becoming a worn out and ineffective tactic.
I don’t think it’s just the far right, but this is basically true. Playing with shutdowns for signaling makes your colleagues and the voting public blame you. I can sympathize with the dedication to deficit reduction, but this tactic is obviously ineffective.
Speaking of fiscal responsibility, the editors throw this out:
All of this is a distraction from the worst news of all, which is that neither political party has yet to get serious about dealing with the fiscal nightmare that looms unless the nation finds a way to stop its rapidly growing national debt, which just passed $34 trillion, less than four months after it passed $33 trillion.
This problem is far too dire and long-term to use as political football. I agree with the editors that it’s time to get real:
The nation needs a serious bipartisan process aimed at reducing debt — one that most likely includes both cuts and targeted tax hikes — to avoid catastrophe. That won’t happen through threats. It will require hard and difficult work, and enough good faith to agree to compromises.
Unsustainable debt and comical budgeting procedures are an existential threat to the United States’ position in the world, even if it isn’t immediately obvious. The UPenn Wharton School published a report examining a potential Day of Reckoning. The Deseret editors highlight this quote from the report:
Under current policy, the United States has about 20 years for corrective action after which no amount of future tax increases or spending cuts could avoid the government defaulting on its debt whether explicitly or implicitly (i.e., debt monetization producing significant inflation). Unlike technical defaults where payments are merely delayed, this default would be much larger and would reverberate across the U.S. and world economies.
20 years is really not that long. Fiscal sustainability is a prerequisite for all other policy priorities. I will leave readers with a final quote from the Deseret editorial:
Today’s lawmakers should be so focused on avoiding this that they spend every waking hour laboring to get spending in line.
Not a bad idea for readers to revisit this post and compare its predictions with current and imminent developments.
BP50 has featured many deeper analyses of this procedural dysfunction. The Committee for a Responsible Federal Budget’s Better Budget Process Initiative is a good place to start for getting an understanding of deeper potential reforms.