April 15th is known by most as Tax Day. But it also marks a day of significance in the federal budget process. The Congressional Budget and Impoundment Act of 1974 sets April 15th as the deadline for Congress to pass its annual budget resolution. The consequences for tax delinquents are penalties, liens, garnishments, seizures, and even criminal prosecution. The consequences for Congressional budget delinquency is, well, nothing.
The budget resolution is supposed to be the first step in Congress’ funding process that ends with Congress passing 12 spending bills by September 30th of each year. We’ll save you the time to Google “Congress passes budget.” It didn’t happen. It’s not just that Congress did not pass a budget resolution on time. They did not even attempt to draft one.
For years when Democrats were in charge during the Obama administration, Republicans excoriated the Democrats for failing to do a budget resolution. Now that Republicans are in charge, they are taking a pass. As Politico reported in January, Congressional leadership did not think that they could put together the votes to pass a fiscally responsible budget resolution. They did, however, manage to get the votes for a massive spending blow-out.
This year will tack on to a long and ignoble history of budget process failures. Since 1977, there have only been four instances when all 12 appropriations bills have passed by the start of the fiscal year. That is a 10 percent success rate. The last successful year was 1997. Its no wonder that the Chairman of the Senate Budget Committee is seriously considering abolishing his own committee.
“Though the scourge of dysfunction has spread to many corners of the federal government, nowhere is it more evident than in the federal budget process. From start to finish, the budget process is riddled with delays, demagoguery, and dereliction of duty. The quality of results, or lack thereof, Congress has reaped from the budget process reflects what it has sewn. However, this affliction need not be permanent. But assuredly, the first step in the road to recovery must be to recognize a problem exists.”
Senator Paul’s budget resolution would balance the federal budget in five years, forcing real discussion and debate about America’s priorities. The budget resolution would also put teeth in the budget enforcement mechanisms and bring about a more transparent and effective budget process that would help reduce waste and duplication. Here is an overview:
Guns and Butter
To set up his spending proposals, Senator Paul uses the classic guns vs butter debate, an illustration about how our limited resources can be used for domestic priorities (butter) or military priorities (guns). But Congress has eschewed this choice – by using debt “to trade future guns and butter for higher levels of both…in the present.” In turn, we are choosing “guns and butter” or “warfare and welfare.” And a whole lot more debt. $21 trillion of it.
Last month’s $1.3 trillion spending bill included massive increases in both defense and non-defense spending – the former to appease Republicans and the latter to appease Democrats. But as Senator Paul points out, these massive funding increases were not necessary and could have come from prioritizing existing resources. On the guns side, the Department of Defense (DoD) budget for 2018 was already projected to be more than the apex of the Reagan Cold War buildup and the DoD ignored a plan to save $125 billion through personnel reforms. On the butter side, Senator Paul notes that “since 1962, payments to individuals (which do not include Social Security or Medicare) have increased by a whopping 2678.7 percent in constant dollars, while the U.S. population has only increased 175.8 percent over that time period.” Again, he outlines the way that Congress has ignored studies showing the need to reform and eliminate domestic programs such as Upward Bound that would allow for priorities to be met within a lower budget. Instead, every program gets a plus-up.
The Penny Plan
Senator Paul’s budget resolution primarily achieves balance in 5 years through the “penny plan.” The penny plan calls for every program to receive a 1 percent decrease in spending each year for the next five years (not including social security) from last year’s levels (i.e. before the recent spending blowout). The bill would also provide reconciliation instruction to every committee to achieve savings.
Senator Paul states the driving force behind the penny plan is to achieve balance through shared sacrifice. While some will have legitimate quibbles with across-the-board cuts – namely that they arbitrarily cut good and bad program the same – as Paul shows with his guns and butter analogy- this is much better than the current norm where Congress increases spending on every program regardless of merit.
Paul’s budget resolution adds real teeth to his budget numbers by increasing the threshold of budget points of order. Currently, if the Senate is considering a bill that violates a budget rule, a point of order can be raised by a member. But that point of order can be waived with 60 votes – which is the same amount that is needed to pass the bill in the Senate. In other words, there is no difference in passing a bill that adheres to the budget rules and one that does not – it takes 60 votes regardless. To put more teeth in the hollowed-out budget enforcement rules – Senator Paul would require five-eighths of the Senate (63 if all are present) to waive the point of order.
Another feature of Paul’s budget resolution is that it cuts back on Congress’ usage of emergency designations to skate the budget rules. In order for Congress to designate spending within bills as an emergency, they have to do so through an amendment on the floor rather than just including it in the bill text. This would require affirmation from the entire body that it is indeed a legitimate emergency – rather than the current state where it would take an amendment and affirmation to remove it (which does not happen).
The Government Accountability Office (GAO) has been releasing annual reports on duplication, overlap and fragmentation in federal programs since 2011. Just to name a few examples, GAO has found 200 STEM education programs, 47 job training programs, 20 financial literacy programs across the federal government. 115 of GAO’s recommendations have not been addressed– which could save tens of billions of tax dollars. The Paul budget resolution would address this problem in two ways – the aforementioned penny plan would require more scrutiny by Congress to find cost savings to meet the lower spending levels. The budget resolution would also require the Congressional Budget Office (CBO) to include a duplication analysis when it scores new legislation.
Other Ideas to Chew On
Senator Paul’s budget also includes several proposals in its narrative document for Congress to consider. This includes ideas to control wasteful spending through points or order to strike spending on duplicative programs or programs that are not authorized ($300 billion of them!). It also includes an overhaul of the dog-and-pony show that is the budget resolution vote-a-rama and creating a point of order against Congress recessing when the full year spending bills are not complete on time.
One Way or Another, Consequences are Needed
Our nation faces serious problems with our long term-debt – one that is continuously and rapidly building yet is pushed to the back burner in the current political debate. This is an all-hands-on-deck crisis that must be addressed to save future generations from an abysmal outcome. The fact that a budget from a single Senator’s office is the only one in Congress this year shows just how much our leadership in Washington is lacking.
The budget process needs to change to provide the transparency and the tools to incentivize a transformative effort to proactively tackle major reforms in the absence of chaos. In addition to Senator Paul’s changes, Congress should also consider biennial budgeting, government shutdown preventions, and eliminating egregious budget gimmicks. But nothing will be more effective than ensuring that there are consequences on Congress for failing to do their job.
The difference in compliance of the two deadlines on April 15th is due to the differences in the costs of failure. Either Congress must create legitimate internal mechanisms that force them to spend our tax dollars wisely through a transparent and orderly process or the American people should use the external mechanism to do so, the ballot box.