People around the country of all political stripes have expressed the concern that Presidential power has been expanding beyond its constitutional scope in recent years. Our guest on Facing the Future this week, Molly Reynolds, a senior fellow in governance studies at the Brookings Institution, says a big culprit is the political polarization that leads to dysfunction in Congress. Reynolds has been studying how Congressional rules and procedures affect policy outcomes, with specific focus on the filibuster and the breakdown of the federal budget process. Joining me for the conversation was Concord’s chief economist Steve Robinson, who has worked on the staff of both the U.S. Senate and House Budget Committees.
Reynolds wrote a book five years ago, entitled Exceptions to the Rule: The Politics of Filibuster Limitations in the U.S. Senate, that explored the origins and consequences of the budget reconciliation process. One of her main conclusions is that an over-reliance on temporary funding measures – continuing resolutions – is doing long-term damage to federal agencies and investment in economic innovation, costing taxpayers hundreds of billions of dollars more annually than if Congress followed federal law and put forward an overall budget resolution.
“Budget resolutions don’t get done anymore for the original intended purpose of them, which was to force everyone to sit down and think at a pretty high level about revenue and spending in various categories, and think about the appropriate level of the public debt,” said Reynolds. “The goal of the concurrent resolution on the budget in the minds of the folks who put together the Congressional Budget Act of 1974 was to provide the unified picture – to have this chance for folks to come to an agreement on what the big picture should look like. Even when we see a budget resolution today, that is not what the goal of the document really is. The goal of the document now when it happens is – in periods of unified government – to unlock the ability to do budget reconciliation legislation which is so powerful because it can move without the threat of a filibuster in the Senate.”
This pattern of narrow partisan majorities abandoning cooperation with the opposition on a joint budget resolution in order to push through budget reconciliation bills over the last twenty years has affected policy outcomes and resulted in trillions of dollars added to the national debt. Reynolds says there are other consequences as well.
“Using reconciliation to achieve policy change also has really profound consequences for how we design the policies that we are enacting,” said Reynolds. “When Republicans attempted – first unsuccessfully and then eventually successfully – to repeal the Affordable Care Act’s individual mandate, we see that sometimes you try to go in through the front door with a policy choice, and then the Senate Parliamentarian says you can’t go through the front door, you have to go through some side door. In the case of the mandate, rather than repealing it outright, they set the penalty for not complying with the mandate to zero. Anyone interested in good policy design would say that’s not the way to do this. If you want to get rid of something, just get rid of it. Don’t play around.”
Reynolds also contends that the partisan polarization and paralysis coupled with the breakdown in the Congressional budget process and over-reliance on temporary spending bills has led to growing executive power through unilateral actions that infringe on Congress’ constitutional authority to appropriate federal funds and makes effective congressional oversight more difficult.
“One place where we also say the administration’s becoming more powerful vis a vis Congress is with this increasing reliance on continuing resolutions and omnibus appropriations bills,” said Reynolds. “When there is just the one big bill that everyone is working towards, it makes it harder for Congress to use the appropriations process as a mechanism to push back against the executive branch. If there is something the executive branch is doing that Congress doesn’t agree with, when we’re talking about just one big bill, you have to be willing to shut things down – basically the whole government – to have this fight, whereas when Congress was doing individual appropriations bills sometimes we would see those for a particular agency were a part of the conflict around particular administration priorities. But it’s harder for Congress to do that when the cost to Congress of not acting on an omnibus appropriations bill is so high.”
Expanded executive actions and authority also help create an uncertain policy environment, Reynolds adds. An administration may take action, and then a new administration from the other party reverses it.
In our later segment, chief economist Steve Robinson took a look at the latest economic numbers, including a stronger than expected jobs report plus a reduction in the year-over year inflation rate, and what impact that might have on the Fed as they contemplate more interest rate hikes to fight inflation.
“We’re in a very uncertain environment,” said Robinson. “How much of inflation is due to monetary policy? How much of it is due to the war in Ukraine, and COVID lockdowns in China? There are multiple factors affecting inflation, and the Fed only has one tool. The interest rate tool works better on monetary policy than it does on broader economic supply-side issues. The last three times the Fed met, they increased the federal funds rate by three quarters of a percent, so the rate is now in the range of about 4%. So last week, the Fed announced that they’re going to do only another half a percentage point increase. The markets are taking that as good news, that perhaps the Fed is coming to the end of its cycle of tightening and raising interest rates. Chairman Powell has suggested that the end is not yet in sight, that while they’re slowing the rate of their increases, they may keep the rates higher longer than they originally had anticipated last year.”
Hear more on Facing the Future. I host the program each week on WKXL in Concord N.H., and it is also available via podcast. Join our guests as we discuss issues relating to national fiscal policy with budget experts, industry leaders, and elected officials. Past broadcasts are available here. You can subscribe to the podcast on Spotify, Pandora, iTunes, Google Podcasts, Stitcher, or with an RSS feed. Follow Facing the Future on Facebook, and watch videos from past episodes on The Concord Coalition YouTube channel.