August 31, 2014

Washington Budget Report: April 30, 2013

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Budget Distractions and Creative Accounting

Despite all the serious budget work facing Congress, lawmakers in both parties continue to distract themselves, fritter away time and confuse the public with proposals that serve no useful purpose. Last week provided two good examples.

House Republicans were busy with a bill that would set priorities for payments on federal obligations if Congress irresponsibly allows the debt limit to be reached later this year.

“There’s understandable confusion and disagreement over what exactly the bill would do, but the general idea seems to be that the federal government could somehow limit the damage of a default by presenting itself to the world as only a partial deadbeat,” writes Concord Coalition Communications Director Steve Winn in a new blog post.

The legislation, approved Wednesday by the House Ways and Means Committee, would instruct the Treasury to continue making payments on principal and interest on U.S. debt obligations – and keep Social Security checks going out.

Winn notes, however, that the nation’s creditors and global financial markets “are under no obligation to embrace lawmakers’ unconventional notions about what constitutes a government default.” And Republicans should not be threatening to let the United States default anyway.

As for the Democrats, Senate Majority Leader Harry Reid introduced a bill that presents previously planned reductions in war spending as a new exercise in frugality. This would supposedly enable the government to avoid real spending cuts that are scheduled to take place later this year under sequestration.

While Washington needs to find a good alternative to sequestration, phony savings from military draw-downs are not the answer. Robert L. Bixby, Concord’s executive director, has previously referred to such tactics as “the mother of all budget gimmicks.”

Instead of wasting time trying to find new ways to avoid old problems, why don’t elected officials just fix the problems?

For Once, Congress Works at Jet Speed

While Congress last week rushed through a measure to ease the effects of its automatic spending cuts on air travel, it unfortunately failed to fix the damage the budget sequester is inflicting on many other government programs and services.

Rather than addressing the larger problems they have created, elected officials have simply demonstrated that they can move with unusual speed to protect powerful constituencies – and themselves – from the unpleasant consequences.

The automatic spending cuts were designed to be so problematic that the prospect of them taking effect would force Congress to approve a more responsible plan to curb the growth of the federal debt. Congress failed to come up with an alternative, however, and allowed the automatic cuts to finally take effect March 1.

As Rep. Steny Hoyer (D-Md.) explained in voting against last week’s quick-fix legislation: “We ought to address the entire impact of the sequester by replacing it with a balanced mix of targeted spending cuts and additional revenues.”

Across the political spectrum, there have been pleas for selective relief from the sequester for everything from defense spending to safety net programs to other possible Federal Aviation Administration cuts. There was even an outcry in Congress over the suspension of White House tours, with some of the loudest complaints coming from some lawmakers who claim to be great champions of austerity.

Congress and President Obama, having provided selective relief from the sequester for federal meat inspections last month and now for air traffic control, can expect many more requests for special treatment in the weeks ahead. Instead of slapping budget Band-aids on here and there, however, they should focus on a more thoughtful and comprehensive approach to fiscal reform.