Published May 4, 2010. By Chuck Conlon and Greg Vadala.
An Appeal to Accountability
As House Democrats continue to ponder whether they will — or can — do a budget resolution this year, the nonpartisan Concord Coalition on Monday beseeched Congress to fulfill its annual budgeting responsibility.
“Failure to adopt a budget resolution when fiscal ‘resolution’ is needed most would send the worst possible signal,” Concord wrote in an issue statement. Noting projections of growing deficits and debt about which “the public is increasingly, and justifiably, concerned,” the group that advocates responsible budgeting says that not doing a budget “would say to investors in Treasury securities, foreign and domestic, that the federal government is still in denial about its fiscal problems and has no plan to address the situation anytime soon. It would say to the public that their leaders are incapable of leading or unwilling to do so.” Concord says, “Neither signal is likely to provide ‘political cover’ ” for Democrats who may not want do a budget to avoid a politically difficult vote. “Any temporary political relief [afforded by avoiding a budget vote] would soon be overtaken by the shame of having failed to enact a budget in the face of record deficits and rising debt.”
The group’s statement appears to include an appeal to House Blue Dogs to back off from their demands and to support a budget resolution with somewhat higher spending than they would otherwise like. “Those who want tougher spending restraint and lower deficits are unlikely to get their wish by simply refusing to vote for a budget. All they will get is criticism for ducking hard choices,” Concord writes. “Appropriations bills eventually have to pass or the government will shut down. Without a budget, Congress would likely ‘deem’ spending limits for 2011. There is no reason to believe that such a cap would be any tighter than a cap passed through the regular budget process. On the other hand, adopting a budget resolution would allow Congress to demonstrate a more serious approach to fiscal restraint by including multi-year spending caps as recommended by the Senate Budget Committee,” its statement said. The Senate’s budget plan (S Con Res 60) would cap discretionary spending through fiscal 2013, enforceable by a 60-vote point of order, and it assumes a freeze on non-security discretionary spending. Blue Dogs, however, want that non-security spending cut by 2 percent for each of the next three years.
Concord also argues a budget is needed to provide reconciliation protection to legislation that “could prove crucial in enforcing the new pay-as-you-go law” — an issue on which Concord and the Blue Dogs have been strongly aligned in the past. Noting that offsets will likely be needed for a new jobs bill, as well as for longer-term extensions of AMT relief and estate tax legislation, Concord writes, “This will require new revenues or substantial spending cuts that will be easier to pass in the Senate through the filibuster-proof reconciliation process. The Senate plan acknowledges this reality. If some House Democrats now find the prospects of living up to the realities of PAYGO too daunting, they should not have voted for it in the first place.” The Senate’s budget achieves greater deficit reduction than President Obama’s budget through 2015, largely by assuming that the costs of extending AMT relief and estate tax rates will be offset the last three years — as is assumed under the statutory pay-as-you-go law (PL 111-139). House Budget Chairman John M. Spratt Jr., D-S.C., has said he may do the same in his budget to produce lower deficits. Failure to bring to the House floor a budget that essentially endorses the pay-as-you-go law, however, could indicate some unease among House Democrats regarding the reality of having to comply with the rules and offset such policies.FEINGOLD ‘VIEWS’ SENATE PAY-AS-YOU-GO CHANGES UNFAVORABLY: The Senate Democrats’ budget resolution would reconcile the Senate’s own pay-as-you-go rules with the statutory law enacted in February, but not all Democrats support the change.
“As we start the difficult task of cleaning up the fiscal mess left to us by the last administration, weakening our budget rules is precisely the wrong thing to do,” said Wisconsin Democrat Russ Feingold in a set of “additional views” filed along with the committee report on the Senate’s budget resolution. The Senate’s pay-as-you-go rules currently require the cost of all legislation that would increase mandatory spending or reduce taxes to be fully offset unless 60 senators vote to waive the requirement, while the new pay-as-you-go law does not require offsets for four specified policies: the permanent extension of middle-class tax cuts; a five-year extension of legislation to prevent scheduled cuts to Medicare physician payment rates; or two-year extensions of an AMT “patch” and the federal estate tax rates at 2009 levels. The Senate’s budget resolution would effectively grant the same pay-as-you-go exceptions as are in the law, so the Senate wouldn’t be forced to come up with the 60 votes needed to waive its own rules to consider such legislation.
Feingold, the only Senate Budget Democrat to vote against the budget resolution at committee markup, called the rules change “fiscally reckless” and said it will permit new tax and entitlement policies that will add nearly $2 trillion to deficits. He wrote that “far more modest changes” could have been made “without undermining the essential mission of the PAYGO rule, namely, to make it harder to enact measures that aggravate our budget deficit.” Feingold said the current 60-vote requirement is very useful in determining the merits of a proposed tax or spending policy. “It recognizes that while the default position of our budget rules should be that we not add to the deficit, there may be occasions where it may be necessary or unavoidable,” he said, adding, “Instead of seeking to build exemptions into the PAYGO rule for certain policies, supporters of those policies should be seeking ways to pay for them.” He also pointed out that GOP majorities during the Bush administration had previously modified Senate pay-as-you-go rules so that “every policy assumed in the budget resolution was exempted from PAYGO discipline” — which allowed the enactment of the Bush-era tax cuts without an offset. “We are now living with the legacy of that approach, namely the worst fiscal mess in our Nation’s history,” he wrote, calling the Democratic budget changes to pay-as-you-go rules “reminiscent” of the GOP approach. “It would be a huge mistake to venture down that path again.”
Feingold also called for the costs of the Iraq and Afghanistan wars to be offset, a position also taken by West Virginia Democrat Robert C. Byrd in his own set of additional views. “It is long past time that we find the revenues necessary to pay for these wars,” Byrd wrote, while Feingold said he was “pleased” the Budget Committee had accepted his amendment calling for the war costs to be offset. Byrd also urged that the budget reconciliation process be used to find “real savings” in the budget. “That’s what the expedited procedures are there for. Reconciliation instructions to achieve $2 billion in savings over five years are inadequate,” said Byrd, referencing the Senate budget’s existing instructions.
Virginia Democrat Mark Warner, meanwhile, warned that he intends to vote on the Senate floor for a GOP amendment that would make it more difficult in the future to increase discretionary spending. In his own views, Warner noted that to ensure the Democrats’ budget resolution would be approved in committee he had voted against an amendment by Alabama Republican Jeff Sessions. That amendment would require a two-thirds Senate vote to later increase discretionary spending above the five-year levels included in the Democrats’ fiscal 2011 budget resolution. “However, I would support Sen. Session’s amendment should he decide to offer it on the floor of the Senate,” said Warner. “I strongly support imposing discipline on the appropriations process in order to control spending and make sure that we do not waste money on inefficient or unnecessary programs,” he wrote.BUDGETERS USE UNFUNDED ‘FUNDS’ TO PUSH DEFICIT REDUCTION, TAX RELIEF: Senate Budget’s fiscal 2011 spending blueprint continues the escalating trend of lawmakers including placeholders, or “reserve funds,” in the budget resolution to advocate for changing a host of federal programs without deciding how to pay for them.
Budget resolutions typically use “deficit-neutral reserve funds” to encourage Congress to address certain concerns of budget writers. The “use of the term reserve fund is actually a misnomer, since a Budget Resolution ‘reserve fund’ does not provide any funds,” explains the Bipartisan Policy Center’s Charles S. Konigsberg in his book, “America’s Priorities: How the Government Raises and Spends $3,000,000,000,000 (Trillion) Per Year.” Instead, these funds give the chairmen of the Budget committees the authority to make changes in committee allocations once some condition or conditions have been met, according to the Senate Budget Web site. “Since a budget resolution establishes a binding ceiling on aggregate budget authority and outlay levels and a binding floor on revenues, budget resolutions frequently include reserve funds for deficit-neutral legislation that would otherwise violate the budget resolution and be subject to a point of order under the Budget Act,” says a glossary posted on the Senate Budget site.
Senate Budget’s fiscal 2011 resolution contains more than 30 reserve funds, including one to ensure that any savings resulting from recommendations by President Obama’s fiscal commission will be used to reduce deficits and debt. The “deficit reduction reserve fund” for the fiscal commission stipulates that those savings could not be spent to offset the cost of subsequent legislation. The resolution also contains reserve funds for changing the tax system and for additional tax relief beyond that already called for in the budget (including the permanent extension of middle-class tax cuts), as long as tax overhaul legislation is deficit neutral and any additional tax relief is wholly offset. It also includes reserve funds for legislation on job creation, education and energy.
Only once did Congress include more than 10 reserve funds in a budget resolution from fiscal 1976 to 2006, while 37 were included in fiscal 2009, according to the Congressional Research Service. The fiscal 2010 blueprint (S Con Res 13) included 34 reserve funds, CRS found. If Senate Budget’s fiscal 2011 measure goes to the floor, the number of reserve funds included in the legislation likely will escalate during the hourslong “vote-a-rama” that has become part of considering the budget resolution each year. And while it is still unclear whether the House will produce a budget, its version likely will have its own share of reserve funds.
Critics argue that reserve funds, with their lack of dollar amounts and spending thresholds, have become nothing more than vehicles for making political statements. “Basically, the proliferation of [deficit-neutral reserve funds] calls into question the relevance of the budget resolution at all,” the Senate Budget Committee’s Republican staff wrote in an April 2009 issue of “Budget Bulletin,” their online newsletter. “In effect, [deficit-neutral reserve funds] have become the latest incarnation of sense of the Senate amendments — non-binding, throwaway, hand-waving provisions.” The aides argued that lawmakers are using the reserve funds “to claim that committees will be able to move certain legislation without facing a point of order, as long as increasing taxes are part of the equation in coming up with sufficient offsets.”
Reserve funds often see little resistance from lawmakers when it’s time to vote. During its markup last month, Senate Budget adopted 13 of 15 amendments calling for reserve funds addressing a wide range of issues, including potential tax increases and ineffective government programs. The panel adopted an amendment by Charles E. Grassley, R-Iowa, that would create a deficit-neutral reserve fund for legislation that would push back tax increases related to the health care overhaul law to Jan. 1, 2014. It also adopted a proposal by Warner that would create a deficit-reduction reserve fund for legislation that would end funding for discretionary programs recommended to be terminated in fiscal 2009-2011 by the administrations of President Obama and former President George W. Bush. The measure already included reserve fund for investments in infrastructure, and another for legislation that renewable energy, conservation or green jobs.