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Posts in "Budget and Fiscal Policy"
July 15, 2014
Any anniversary divisible by ten, whether of a country, institution or historic event prompts a spate of news articles, speeches and special commemorations that inevitably pose the question: What does it mean today?
The Congressional Budget and Impoundment Control Act, signed into law by President Richard M. Nixon on July 12, 1974, is no exception. The Bipartisan Policy Center (where I am a resident scholar) marked the anniversary this week with a symposium, “The Congressional Budget Act at 40: Midlife Crisis?” I half-seriously suggested amending the title by adding, “or Terminal Illness?” Judging from comments made at a recent congressional hearing on budget reform, the current process is badly broken and in need of either substantial renovation or immediate demolition.
Any reassessment of the Budget Act requires understanding what Congress originally had in mind when it superimposed two new committees, a joint office, and an entirely new process on top of existing authorizing and appropriations processes. We can then determine how well the Act has met those expectations, as well as subsequent demands placed on it, over the last four decades.
As a staffer for a prominent member of the House Rules Committee where the final budget act language was hammered out in 1973-74, I observed two distinct expectations for the process emerging from liberal and conservative ranks. That produced a curious convergence of overwhelming bipartisan support for the Act though both camps would later see their hopes dashed.
Liberals saw the new process as a way to break the stranglehold conservative appropriators had on spending levels so that Democratic majorities in Congress could set their own priorities, independent of the president’s budget. Conservatives, including President Nixon, saw the process as a device for asserting control over the entire budget, making it easier to reduce spending and deficits.
Allen Schick, who helped shape the Budget Act a Congressional Research Service staffer at the time, later came down squarely in the middle of the two camps in his definitive work on congressional budgeting, “Congress and Money” (1980). He correctly points out that the budget law as drafted was fiscally neutral. It had no bias for or against more spending or lower deficits. The process was whatever Congress decided to do with it each year.
But that neutral statutory scheme did not last long as deficits continued to mount through the 1980s and the public became more concerned about where it all was taking the nation. The 1985 Gramm-Rudman-Hollings Balanced Budget and Emergency Deficit Control Act put a definite anti-deficit spin on the Act by establishing a downward glide-path in deficits culminating in a balanced budget. When that didn’t work, the Act was further amended in 1990 by the Budget Enforcement Act to establish discretionary spending ceilings plus a pay-as-you go requirement to offset entitlement benefit increases and tax cuts so they would be deficit neutral.
The brief period of budget surpluses at the turn of the century diverted attention from the necessity of such mechanisms and Congress hasn’t had the will or inclination since to confront the real source of reemerging deficits — the explosive growth in entitlement programs like Medicare, Medicaid and Social Security which comprise 65 percent of the budget. Instead, the two parties argue over appropriate levels of defense versus domestic discretionary spending which account for just 29 percent of the budget. Those are the fights, along with politically charged policy riders, that have so paralyzed Congress that it can’t adopt a final budget resolution or separately enact any of the 12 regular appropriations bills.
One thing the two sides can agree on is that the process must be broken because it is not advancing either party’s causes, outcomes or public reputation. The budget process has always been a convenient whipping boy at such junctures, especially since those wielding the whips are not about to turn them collectively on the real perpetrators of dysfunction.
Don Wolfensberger is a resident scholar the Bipartisan Policy Center, a senior scholar at the Woodrow Wilson Center and former staff director of the House Rules Committee.
June 13, 2014
Walk through the Capitol South Metro station and you’ll pass SoftBank ads that festoon the walls — but you won’t see a campaign for the 3 million people hoping Congress will pass an unemployment insurance extension.
Business groups and most big-money lobbies that typically place such advertising to influence the people working in the Capitol either oppose extending jobless benefits, or they won’t take a position.
That leaves the unemployment extension lobbying mostly to people who are out of work themselves, along with an unusual collection of Washington allies: unions, religious organizations, anti-poverty and mental health groups. Full story
May 21, 2014
In the third installment of The Purple Network’s “Opinion Duel,” Roll Call Editor-in-Chief Christina Bellantoni moderated a discussion with Charles C. W. Cooke, from National Review and The Nation’s Zoë Carpenter over the politically charged topic of increasing the minimum wage.
Carpenter contended that “even Republicans in the South” want the minimum wage raised to $10.10 an hour, but said that hike might not be enough. “There’s a lot of momentum” for legislative action, Carpenter said. Cooke took issue with the idea that raising the minimum wage would “lift people out of poverty” saying that most who currently make minimum wage are not below the poverty line. “When you’re looking at how to help people in need,” Cooke said, minimum wage is “often not the best way to do it.”
Carpenter and Cooke discussed whether labor unions and their influence have affected the debate and how the mid-term elections will affect any change this year.
January 7, 2014
No one expects a boom in the lobbying business this year. But out of the dysfunction and stalemate of 2013, K Streeters see signs of potential work in select areas, including a revival for an old standby: appropriations.
The bipartisan budget deal (tiny as it may have been) from late last year has given lobbyists cause for hope that a return to regular order on appropriations bills will offer them a legislative vehicle to work on behalf of clients.
Still, for any Hill staffers or soon-to-be-ex-members of Congress eyeing a gig downtown, the hiring scene on K Street will continue to be tight and the competition fierce.
Lobbyists are also trying to woo lawmakers to extend 55 lapsed tax credits. A patent bill, immigration matters, a farm bill, regulatory work and trade policy may also drive business. And K Streeters are looking to set the stage for longer-term overhauls of the nation’s tax code and housing finance system. Full story
December 23, 2013
The first session of the 113th Congress — the least productive in modern times — will be remembered for what it did, and did not, accomplish.
An immigration overhaul, gun control and health care mixed with “calves the size of cantaloupes,” “Alice in Wonderland” and cocaine. Together, it is the best and worst of the year that was, wrapped into one.
December 9, 2013
House Budget Committee Chairman Paul Ryan, R-Wis., and Senate Budget Chairwoman Patty Murray, D-Wash., are grown-ups, and it looks as though they are reaching a deal to avoid another government shutdown crisis — provided superpartisans don’t block it.
That said, it’s sad — and bad for the country — that the best they could do was avoid immediate disaster. What they could not do, apparently, is make the slightest dent in the long-term disaster that the federal debt represents.
If the Washington Post lead story Monday is right, their deal will also — to their credit — partially repeal the budget sequester that is strangling federal agencies and give them slightly more money to spend in fiscal 2014 and 2015.
It’s not clear, but one hopes they will also provide Cabinet officers with the ability to move money around and not continue having to slash every program across the board.
But it’s a grave disappointment that they could not even begin to shave the government’s $17.6 trillion national debt — more than 100 percent of GDP, now higher than at any time since World War II. Full story
November 12, 2013
Face it: Both the Republican and Democratic parties are in trouble. Neither can be sure which is in worse shape. So it behooves them both to do something right for a change.
What? Reach a budget deal that ends threats of government shutdowns and debt defaults, restores confidence among both foreign and domestic investors, and convinces the public that federal politicians can govern.
Will it be hard to get a deal — especially by the mandated deadline of Dec. 15? Of course. But both sides know what needs to be done — reform entitlements to get the country’s long-term debt under control, reform taxes to make the economy more productive, and lift the budget sequester’s stranglehold on domestic spending and defense. Full story
November 5, 2013
It might just be the ultimate insiders’ strategy: When pressing a client’s cause, try to catch the ear of the two offices that Congress most cares about to spread your message.
This duo of influential outposts isn’t the House and Senate leadership. Rather, Hill staffers’ most valuable sources of information are the Congressional Research Service and the Congressional Budget Office.
That’s according to research done by ex-K Streeter David Rehr, who holds a doctorate in economics and is now an adjunct professor with George Washington University’s graduate school of political management.
If you’re a lobbyist and you’ve never tried to cultivate the CRS or the CBO, you might be missing out, Rehr says. Just don’t expect it to be easy.
“I’m a little surprised that people don’t naturally think of CRS or CBO as part of the process,” Rehr said recently. “And I think the one thing the research said to me: They’re more important in the process than we probably realized.”
Rehr’s survey of bipartisan aides on Capitol Hill found that 55 percent rated the CRS’ information as “very valuable,” the most of any source. They ranked the CBO third — after academic and issue experts — at 32 percent.
These findings don’t match up with the sources that lobbyists think Hill aides find most important, Rehr’s research showed. Neither the CRS nor the CBO even registered among lobbyists’ top 5.
“It’s a little harder in the culture of advocacy because if you’re not used to doing it, you do what’s easier for you,” Rehr said. “If you were a Hill staffer, now you lobby staff and members.”
Michael Fulton, a longtime lobbyist who is with the Arnold Agency, recently heard Rehr’s pitch and said the idea clicked with him because he relied on CRS reports when he worked on Capitol Hill.
“My daughter works on the Hill, and she lives by them, and I used to live by them when I was on the Hill,” Fulton said. “I think if a CRS report has any inaccuracies or is leaning away from your client’s perspective, it would be valuable to correct that sooner rather than later.”
When it comes to dealing with the numbers-driven, wonky CBO, lobbyists caution that if you don’t have the data to back up a client position, it’s probably not worth the stop.
“It’s not really lobbying, it’s educating,” said one veteran health care lobbyist. This K Streeter noted that the CBO, which “scores” how much each piece of legislation will cost, is less interested in meeting with lobbyists or the Washington representatives of corporations and instead wants high-level executives, actuaries or economists who speak their language.
“People don’t approach them lightly or approach them ever without an outside numbers run or solid policy arguments that would shape a score,” this lobbyist said. “They’re going to dig, and they’re going to find the answer.”
A spokeswoman for the CBO referred me to its website, which explains that in preparing its cost estimates and other analysis, “CBO uses data and other information from a wide variety of sources, including federal agencies, state and local governments, and industry groups, among others. CBO closely follows professional developments in economics and related disciplines, encourages open discussion of analytic issues, and consults with outside experts in a broad range of relevant fields for guidance on ongoing work.”
Lobbyists who’ve worked with the CRS, a branch of the Library of Congress, say it can at times seem more shrouded in mystery and potentially more difficult to navigate as an outsider with an agenda. Many of the CRS reports are private and come only at the request of a member of Congress.
“I think the better way to go is to have a congressional champion who then writes to the CRS,” Rehr said. It’s also crucial to identify the researcher who handles the topic your clients care about.
“You’ll see who wrote the CRS report, and you find out you knew them from GW or American [University],” Fulton said.
Then, you can make the connection directly.
“CRS experts use available information from a wide variety of sources, on all sides of issues, enabling them to serve Congress with comprehensive, authoritative, objective and nonpartisan research and analysis,” CRS Communications Specialist Cory Langley wrote in an email.
Rehr said the research service is “less numerical” than the CBO, “so they’re even more open to data and empirical studies that help them do their job better.”
Still, said Rehr, the former head of the National Beer Wholesalers Association, it’s not as if you could hand a CRS researcher a study on beer taxes and they’ll include it in one of their reports. “But it might influence the report,” he said.
And a CRS or CBO mention that isn’t negative means ready-made talking points, one-pagers and potential fodder for issue advertising.
“Sometimes you get some favorable paragraphs or a reference, then you can pull that out and create lobbying material,” Rehr said. “It gives you a little more oomph.”
October 16, 2013
Assuming that the U.S. economy survives its latest near-death experience, significant credit ought to go to Senate GOP leader Mitch McConnell.
President Barack Obama ought to realize this is the second time this year that McConnell has been the key player in resolving a terrifying fiscal crisis — and start talking to him regularly.
This time, it is the Kentucky Republican’s negotiations with Majority Leader Harry Reid of Nevada that (apparently, hopefully) are saving the country from a catastrophic debt default and are ending the costly close-down of the federal government.
In January, it was McConnell and Vice President Joseph R. Biden Jr. who figured out how to prevent the country from falling over the “fiscal cliff”— avoiding tax increases on all but the richest Americans.
McConnell “gave” on what had been a key GOP demand: keeping tax rates on the rich from rising to 39 percent.
In July 2011, McConnell invented a plan B to avoid an earlier default by giving Obama authority to raise the debt limit subject to congressional veto.
Obama evidently detests McConnell, regarding him as hopelessly partisan. It took Obama a full 18 months at the outset of his presidency to have a one-on-one meeting with the GOP leader.
But McConnell has proved to be a statesman. He’s risking the fury of the Senate Conservatives Fund and its allied tea party extremists, who are running a primary candidate against him in Kentucky.
Obama ought to take notice. The Reid-McConnell agreement, assuming it passes Congress and saves the day, merely puts off new days of reckoning on spending and debt.
But it also creates the opportunity for serious negotiations on entitlement and tax reform. If Obama wants to avoid a repeat of the current crisis, he’d best start talking — secretly, if necessary — with Republican grown-ups such as McConnell and House Budget Committee Chairman Paul D. Ryan, R-Wis.
House Speaker John A. Boehner obviously has to be part of the mix, but he has fallen far short — so far — of showing McConnell’s courage and legislative acumen. Even though the Ohio Republican obviously knows that his tea party brethren are irrevocably tarnishing the GOP brand, he’s yielded to them time after time.
In the meantime, Senate Republicans, led by McConnell, have isolated extremists Ted Cruz of Texas and Mike Lee of Utah to the fringe and encouraged tea party favorites like Rand Paul of Kentucky and Marco Rubio of Florida to behave.
If his leadership causes the radical right — the radio talkers, Heritage Action, the Fund for Growth, etc. — to make McConnell a key primary target in Kentucky, it’s an opportunity for sane Republicans to counter them in force.
Most of all, this whole dismal exercise ought to lead Obama, Reid, McConnell and House GOP leaders to understand that they will put the country through crisis after crisis — and allow other legislative priorities to die — unless they finally reach a long-term fiscal deal.
It’s time for a grown-ups’ weekend retreat at Camp David.
October 9, 2013
House Rules Committee Chairman Pete Sessions, R-Texas, surprised even his own party caucus colleagues Tuesday by introducing a bill to create a Bicameral Working Group on Deficit Reduction and Economic Growth, then calling it up in his committee an hour later.
Predictably the bill was roundly denounced by Budget Committee ranking Democrat Chris Van Hollen, D-Md., and all four Rules Committee Democrats. Their main criticisms were: Supercommittees are proven failures; the bill doesn’t allow for closing corporate tax loopholes; and it replicates what the Budget committees already should be doing.
Under the terms of the bill, the working group would consist of 10 members from each chamber — six majority and four minority. It would be charged with making recommendations on the overall levels of discretionary spending, changes in the statutory limit on the public debt, and reforms in direct spending programs. The group would be appointed no later than one calendar day after enactment, would work every calendar day thereafter until it reaches an agreement (unless excused by both co-chairs) and would report its recommendations, including any legislative language, within three calendar days of adopting them. It would then go out of business.
While it is easy to dismiss the latest gambit as just another gimmick, there’s something about this effort that holds promise. First and foremost, it was introduced as a bill when a concurrent resolution, requiring adoption only by the two houses, would have sufficed.
Why a bill that necessitates a presidential signature to become operative? The most obvious reason is to assure presidential buy-in with the concept, even though he wouldn’t be a direct party to the group’s negotiations. Moreover, the special rule on the measure incorporated language from a joint resolution that immediately restores the pay of federal workers not furloughed.
But the more intriguing prospect for such a bill is that it allows the Senate to amend it with provisions that would require statutory enactment, namely a short-term continuing resolution and debt limit increase — say, to mid-November or December.
Wouldn’t such a linkage violate the president’s resistance to tying any conditions to a CR or debt bill? Not necessarily. President Barack Obama has now indicated he could support a short-term CR and debt increase to allow time for further negotiations on other matters. The key would be whether the ultimate recommendations for reducing the deficit would be directly tied to a longer-term government reopening and debt ceiling increase.
They need not be. They could be presented by the working group as separate sidecar agreements to be taken up and voted on before the CR and debt limit measures are considered.
As to the criticism that the bill wouldn’t authorize tackling tax reform, the fact is that it doesn’t prohibit it. And that’s certainly something else the Senate could also add in the form of a timetable for reporting tax reform measures in both chambers. One could even interpret the bill’s term “direct spending programs” to include tax loophole plugging, since such provisions are referred to in the Budget Act as “tax expenditures,” while the act’s term for mandatory spending programs like Social Security and Medicare is “entitlement authority.”
As to the criticism that the working group would usurp the Budget Committees’ responsibilities: yes and no. Budget Committees do recommend overall discretionary spending limits and changes in entitlement, revenue and debt levels. But they can’t directly report bills implementing those recommendations. The working group is authorized to do so.
Sessions may actually have come up with a plausible first step in an expedited exit strategy from the mess his party has wrought. Let’s see if the Senate has the good sense to build on it.
October 8, 2013
Faint glimmers are appearing that Republican grown-ups have decided to reclaim the schoolyard, but there’s a long way to go for the party to avoid long-term disaster.
Even Speaker John A. Boehner’s defiant-sounding statements Sunday demanding concessions from President Barack Obama can be interpreted as an appeal for face-saving help from the president, giving him permission to rely on Democratic votes to reopen the government and temporarily lift the U.S. debt ceiling to avoid a catastrophic default on the national debt.
Reportedly, other grown-ups — House Ways and Means Chairman Dave Camp, R-Mich., and Budget Chairman Paul D. Ryan, R-Wis. — are working on a GOP negotiating position that might lead to a “grand bargain” with President Barack Obama on entitlement and tax reform. Full story
October 1, 2013
The new Quinnipiac poll’s findings on public attitudes on the crucial upcoming debt limit fight ought to give serious pause to Republicans. They thought voters were on their side, but the latest evidence shows they aren’t.
The GOP and its outside supporters were emboldened on Sept. 26 by a Bloomberg poll showing that by 61 percent to 28 percent, voters said it would be “right to require spending cuts when the debt ceiling is raised, even if it risks default” on the government’s debts.
It was seen as a repudiation of President Barack Obama’s stance that bills previously contracted by the government had to be paid and that he would not negotiate about it.
Republicans thereupon decided they could load nearly their entire agenda onto the debt vote, including delay or repeal of Obamacare, fast-track authority for tax reform, a rollback of EPA regulations on greenhouse gases and coal ash emissions, medical malpractice caps and restrictions on the new Consumer Financial Protection Bureau.
They also took encouragement from an NBC/Wall Street Journal poll showing that the public, by 44 percent to 22 percent, opposed raising the debt limit.
And any number of polls, of course, have shown a decline in Obama’s approval ratings.
The Quinnipiac poll out Tuesday also shows Obama’s approval somewhat under water — 45 percent positive, 49 percent negative.
But the results were devastatingly negative on GOP tactics on both the government shutdown and the debt limit. By 77 percent to 22 percent, the public opposed the GOP tactic of shutting down the government to block implementation of Obamacare.
And by 64 percent to 27 percent, voters opposed blocking an increase in the debt ceiling to stop Obamacare.
They are split on Obamacare — 45 percent pro, 47 percent anti — but they opposed cutting off its funding 58 percent to 34 percent.
Undoubtedly hardliners on the Republican side — maybe leaders, too — will say, forget Quinnipiac and believe Bloomberg.
But there’s other evidence that the public understands that not raising the debt ceiling and not being able to pay the government’s bills is a bad idea.
The Washington Post/ABC poll on Sept. 18 showed that by 73 percent to 22 percent, voters believe that not raising the limit would cause “serious harm” to the economy. It’s true that voters favored raising the limit by only 46 percent to 43 percent. But, on the question of which side — Obama or the Republicans — was doing too little to compromise with the other, it was 49 percent, Obama, and 64 percent, the Republicans.
The bottom line is that Republicans are risking both political and economic disaster if they persist in loading multiple conditions onto the debt limit vote later this month.
A government shutdown, if it doesn’t last too long, will cause pain, but not risk the fundamental health of the economy. Defaulting on the national debt well might — and the latest evidence is that the GOP will get (and deserve) the blame.
September 25, 2013
Today’s Washington Post compellingly traces the case of Yuntao Wu, a pioneering AIDS researcher at George Mason University whose funding has been cut off owing to across-the-board spending cuts imposed by Congress and President Barack Obama.
Unfortunately, the article was at the bottom of Page A6, below a story on the capital’s latest fixation, Sen. Ted Cruz’s political showboating around Obamacare. The crisis in research funding — which I wrote about last week — deserves to be Page 1 once in awhile and to be addressed specifically as Congress considers how (I mean, whether) to keep the government operating.
As The Post and I related, the budget sequester has taken a 5.5 percent bite out of funding at the National Institutes of Health and all the other research programs of the federal government. Full story
September 23, 2013
The health of the U.S. economy depends on the legislative skill — and the courage — of Speaker John A. Boehner, R-Ohio.
It’s up to him to prevent a shutdown of the U.S. government at the end of this month and, a little later, the first-ever default on the national debt.
If he succeeds, he can prevent the economy from slipping back into recession — or, if we do default, possibly triggering a catastrophic new financial crisis.
But in the process, he will have to prove himself to be Master of the House — and may have to risk being toppled from office by furious tea party conservatives and their allied outside claques. Full story
September 18, 2013
When I was 4 years old, two kids ages 10 and 12 invited me to play castle. They instructed me to stand still in the middle of the living room, arms at my sides, while they erected four walls using large, cardboard building blocks. When the walls were well over my head, they asked whether I could get out. I lifted my arms straight out from my sides and began pivoting back and forth, bringing the walls tumbling down to my squeals of delight.
I remembered that little game shortly before Congress left town for its August recess. The House was in particular disarray that final week. The leadership pulled the transportation-HUD appropriations bill midstream because there weren’t enough votes on the majority side to pass it: Half thought it too harsh, and half thought it didn’t go far enough. No Goldilocks solution was in sight. Full story