Budget Shell Games Are Contrary to Law
By Michael W McConnell
July 14, 2011
After sending up a budget in February that would only add to government spending and deficits, President Obama has now come around to the view that "it is a moral imperative to tackle our debt and deficits in a serious way." Both sides have to make sacrifices, he says. It is time to "eat our peas." The president's evident purpose is to put the blame on Republicans for failing to come to an agreement.
But the absence of any written budgetary documents and the closed-door nature of the negotiating sessions make it impossible to tell which side is being "serious" and which side is being intransigent. Instead of specific proposals, scored by the Congressional Budget Office (CBO) and open to examination by press and public, we get vague generalities about "trillions" of dollars in supposed savings based on who-knows-what changes in policy.
It is insane to think that tax and spending proposals of this complexity can be negotiated at this level of generality and put into statutory language in a matter of weeks. Didn't the health-care fiasco teach us anything about the importance of transparent and responsible legislative process?
Wise or foolish, this budgetary game of chicken is contrary to law. In 1974, Congress enacted the Congressional Budget and Impoundment Control Act, which sets specific deadlines and procedures for raising revenue, setting spending priorities, and adjusting the debt limit--all in the sunshine of public scrutiny, with objective evaluation of all plans by the CBO.
The president must submit a proposed budget "on or before" the first Monday in February. The CBO then has until Feb. 15 to score the proposal in accordance with criteria set by the statute. Those criteria are somewhat arbitrary, but their virtue is to apply the same metric to all competing proposals.
President Obama met the deadline, but his proposed budget was so out of touch with economic and political realities that the Senate rejected it by a vote of 97-0. In April, the president changed course and made a speech in which he proposed a new "plan" he claimed would decrease the deficit. The terms were so vague that CBO Director Douglas Elmendorf told Congress he could not score it. In effect, then, the process started off without the presidential budget required by law.
The Budget Act requires the Budget Committees of both the House and the Senate to hold hearings on the proposal, allowing testimony on the budget from the administration, "national organizations" and the "general public." This guarantees transparency and democratic accountability, which have been sorely lacking in the recent closed-door negotiating sessions.
By April 1, according to the Budget Act, the House and the Senate must either adopt the president's budget or put forward an alternative. They cannot just hide in the weeds. The House and Senate reports must detail any differences from the president's budget and explain the "economic assumptions" underlying them. By April 15, Congress must adopt a concurrent resolution embodying a congressional budget. Appropriations bills must stay within this budget or be subject to a point of order.
The House of Representatives complied with the law, passing a budget that would reduce spending by an estimated $5.8 trillion over 10 years (according to the CBO). The Senate has not passed a budget. In fact, the Senate has not passed a budget since 2009.
This defiance of the Budget Act is responsible for the current blamefest in Washington. The law was intended to bring transparency and timeliness to debates over taxing and spending. All proposals are public, and all are scored by the CBO according to the same metric. This makes it difficult for politicians to shift blame. This year, without a genuine presidential budget, or any Senate budget, the negotiations are shrouded in fog. The president may tell press conferences that he proposed $3 trillion in spending reductions, but there is no way to know what that means without a budget.
To give some pertinent examples: We have no way of knowing whether the president's claimed reduction in deficit spending is based on current spending or on projected spending. The difference is probably about $1.8 trillion over 10 years.
Likewise, we have no way of knowing whether the proposed spending cuts are real. All too often in past budget deals, the "spending cuts" were based on gimmicks, or on promises of future cuts that never actually were made. For example, Congress has promised to pay doctors, hospitals and drug companies less for performing the same services. This never really happens.
The House budget contains a specific proposal for reducing the future cost of Medicare. The administration prefers an expert commission that will supposedly find hundreds of billions of dollars in painless savings from undisclosed changes. A real budget would specify the changes so that the public could compare the two alternatives.
Some observers claim the president has simply offered his own April plan as a "compromise" and told the Republicans to take it or leave it. The public has no way to know.
The Budget Act was designed to force all competing plans to be disclosed publicly and evaluated according to the same baselines and criteria. It is too late to meet the Act's deadlines, but our leaders could still comply with its spirit.
If the president would put his plan into budgetary language, as the House already has done, and make it available to the CBO, the public could readily see who is being serious in the negotiations. We would know whether we have been offered a bracing helping of peas, or a misleading mess of pottage. As it is, the president has put a covered dish on the table and, thanks to noncompliance with the Budget Act, we do not know what it contains.
Mr. McConnell was assistant general counsel of the Office of Management and Budget from 1981-83 and is now a professor of constitutional law at Stanford University and a senior fellow at the Hoover Institution.