Time to End the Budget Brinksmanship in Congress

Sometime today, Congress will pass a bill to keep the government funded through September 2012. It will not reflect a careful and balanced assessment of the nation’s needs and priorities and how well government programs are meeting those needs. It will reflect the fact that government would shut down at midnight if legislators don’t act and the fact that our lawmakers really would like to go home for the holidays. CNN calls 2011 “a year for flirting with government shutdowns” and chronicles a year-long game of chicken played by our policy makers.

It should be a wake-up call. This is a really stupid way to make tax and spending decisions.

The ironic thing is that for the past 37 years, Congress has had a perfectly logical budget process, in theory. Here is a calendar of the way it’s supposed to work, courtesy of budget expert (and my coauthor) Marvin Phaup.

U.S. Budget Calendar

On or about 1st Monday in February The president transmits his budget proposal to Congress.
Congressional committees report budget plans and estimates to Budget Committees.
April 15th Action completed on concurrent congressional budget resolution.
June 15th Action on reconciliation completed (changes in authorizing legislation and tax laws to align projected mandatory spending and revenues with budget resolution).
June 30th Action on appropriations consistent with resolution completed by Congress.
July 15th President transmits midsession review of the budget submitted earlier in the year, with revised projections of revenues, outlays, and deficits for the current and proposed budget years.
October 1st The fiscal year begins.

Imagine if Congress actually followed their timeline. Right after the president submits his budget plan to Congress, committees start working on their own plans for programs under their jurisdiction. They balance out competing priorities and within 6 weeks report to the House and Senate Budget Committees, which spend the next month or so hashing out the issues and putting together an overall plan—called a budget resolution—that will govern Congress’s work for the following two months. The budget resolution should be relatively easy to negotiate. It only requires a majority vote in each body, cannot be filibustered, and doesn’t require the president’s approval.  And, once passed, it’s a powerful tool for getting the actual tax and spending bills passed because as long as they meet the budget resolution’s parameters, they can’t be filibustered in the senate.  That is, unlike most legislation, they can pass with a simple majority.

In 5 of the last 12 years, Congress never got around to passing a budget resolution at all. Sometimes, it’s been partisan gridlock.  Sometimes even with one party in control of both houses (as in 2010), they couldn’t agree. The inevitable result of failure to pass a budget is that the rest of the process breaks down.  More often than not, we end up with a series of stopgap measures before Congress finally gives up and simply extends the previous year’s spending with minor tweaks. Some important priorities fail to get adequate funding. Programs that should be reformed or eliminated limp along. And the public watches the acrimony as each side blames the other for potential shutdown of the government if funding deadlines aren’t met.  No wonder Congress’s approval rating is heading toward single digits.

But here’s the good news. Congress does respond to incentives. Christmas seems to be a powerful one. We just need to create incentives to actually follow the very good process that Congress invented back in 1974.

Here is my proposal. If Congress fails to pass a budget resolution by April 15, every member would be docked $500 a day (including weekends and holidays) in pay until the resolution passes. (If that doesn’t work, we could up the ante by contributing significant money into the campaign war chest of members’ competitors in the next general election.) There could be similar penalties for failure to pass appropriations bills by the end of July.  And Congress should not be allowed to recess for the summer until they finish work on the budget.

The Tennessean reports that Congressman Jim Cooper (D-TN) and Senator Dean Heller (R-NV) have introduced the No Budget, No Pay Act, which would stop pay if Congress hasn’t passed budget and appropriations bills by the end of the fiscal year. According to the sponsors, “Congress has not passed a budget before Oct. 1 since 1997,” which is appalling. Cooper-Heller doesn’t go as far as I would, but it would be a start.

 

An earlier version of this post is on my Forbes blog, The Impertinent Economist.

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