CongressLine: The Budget

The Constitution provides for a number of functions that are primary reserve of congress, three of the more famous ones are: the power to declare war, manage the affairs of Indians, and appropriate money to be spent by the Federal government.

The first two are stories all by themselves. Congress hasn’t declared war since 1941 but the country has definitely been at war many times since then. Congress’ management Indian affairs is a depressing topic, perhaps should be left for another monthly column. Appropriations however, have always been an annual extravaganza for Congress, a role Congress appears to have relished, up to now.

The past few years, Congress appears to have grown weary of the gigantic task of appropriating money for the Federal government. It is the only thing Congress really has to do every year, everything else could wait. It seems however, that even appropriations has become too much of a chore for the great legislature.

The Republican Congress in 2006 decided to give up on the appropriations bills late in the year and just passed a continuing resolution funding the government on autopilot. In 2007, the new Democratic Congress did the same thing, passing a Continuing Resolution for the whole year. When time came for the new budget to start last September, Congress wasn’t even close to passing the appropriations bills. They did so, after much acrimony, at the very end of the year. This year, things seem to be starting off on the same footing. There is even talk of another Continuing Resolution to tie things over to after the election and an even newer Congress.

Almost like a small child becoming tired of a favorite toy, the appropriations bills have become too much to handle. Remember, Congress really only does things when it has to do so. If there is an option to punt, it is a good bet they will punt. That has always been the nature of the institution. The appropriations process, never a efficient process, has usually ground on and, on occasion, took several months longer than planned, but it normally got done. Long term Continuing Resolutions were simply not bandied about as serious options, which is quite a change from the present practice.

I have written about the process in previous articles, the appropriations process, the corresponding authorization process, now I would like to highlight what may be happening to the appropriations process and describe the budgeting process that is happening now.

On the first Monday of February, the president normally submits his budget to Congress. It is a timeworn process full of pictures of forklifts delivering giant bound copies of the budget to congressional offices. Today it is mostly electronic, but still the important opening of the budget and the following appropriations process for Congress.

The Constitution requires that only Congress can appropriate money to be spent by the government. The President can veto an appropriations bill but that doesn’t mean he can just spend as he sees fit. In order for money to be spent, Congress must have appropriated it first. The president however starts the process by submitting his budget for all the departments. Then congress examines it and makes changes as it sees fit and creates its own budget. Ironically, despite all the bluster between the two branches of government, the enormity of the budget and because the majority of it is automatically appropriated, the vast majority of the President’s budget is appropriated as he asked. Congress only has the time and energy to attack the budget in selected areas.

With the President’s budget in hand, Congress then proceeds to write a Budget Resolution which outlines the basic parameters of how money should be appropriated and gives the Appropriations committees its marching orders for the specific appropriations bills. The House and Senate have specific Budget Committees to accomplish this one task of creating this one resolution. The Budget Resolution is supposed to be completed by May 15. It is does not have the force of law, it is not signed by the President, but it does set out the guidelines on how the appropriations committees should use to fashion an appropriations bill. Most of the time a Budget Resolution is completed, but on occasion they just can’t do it. If they don’t, the process still continues, without instructions. The appropriators then take over and write the appropriations bills for the various departments; starting with the Presidents numbers they then make any changes.

Each chamber has an Appropriations Committee and each committee is divided into subcommittees that mirror the various appropriations bill groups, for example the Department of Health and Human Services and Departments of Labor and Education are lumped together to form the Labor-HHS Appropriations bill, created by the Labor-HHS Subcommittee. The bill is written by the subcommittee and then finalized by the full committee. The bill then makes its way through both chambers as any other bill. But since there are 13 of them it can take a while. All of them are supposed to be done by October 1, this is often not possible. Thus, the concept of a Continuing Resolution, which funds the government at the current rate, comes into play. Even additional time is not enough to go through each bill, and an Omnibus or Consolidated Appropriations bill is created, which combines all of the unpassed bills into one giant bill.

One element of the process that I have written about before, the earmark, may be one of the factors affecting the current Congressional malaise about appropriations. The earmark is now common knowledge throughout the land and even though there are some good reasons for them, they are not popular overall. The publication of earmarks can be downright embarrassing. There are now rules for earmarks, and certification forms must be filed for each one. They are now much more public and scrutinized in great detail. In a way, the bad earmark publicity has taken some of the allure out of the process. Earmarks are put into the appropriations process as it winds through the appropriations committees, and can also added at the very end when both chambers reconcile their different bills. The earmark was one factor that gave Congress the will to presevere through the appropriations process, if they become embarrassing or perhaps even go away, then the process looks less politically useful.

A second factor that is affecting the appropriations process is money itself. With the national debt approaching nine trillion dollars, there is little room to just spend borrowed money. In a way, the national credit card is becoming maxed out. If you want to increase spending, there are now rules that require you to find the extra money somewhere else, either by cuts in spending or instituting new taxes. Both of these are difficult, hence the process grinds to a halt. A good staffer on Capitol Hill who knows where to find untapped money is worth his/her weight in gold. Some programs that were once ignored are now on the hit list, because if they are cut, money could be spent elsewhere. The appropriations bills spend money for non-entitlement or discretionary programs. If there is very little money, appropriating becomes very tedious, not very interesting, for Congress.

There is a fatigue factor involved here, too. The appropriations process is tough enough; the decisions are hard, the quantities of money are huge and the solutions to the problem are almost intractable. Who can blame Congress for punting? The federal budget is by all accounts, (I have never heard of anyone dispute this) a disaster. In very short order, all of the discretionary budget will be consumed by Medicare and interest payments. Solving the problem will involve opening the biggest Pandora’s box in the country’s fiscal history.

Ironically, in an article about the appropriations process, the problem of Medicare and interest on the debt is not about the process at all. Medicare and interest payments are not part of the appropriations process; the money for this is automatically appropriated. If my mother and father need medical care, the money must be spent. Congress can change the rules, but the spending keeps going. Medicare, created in the 1960s, started this march of “entitlement spending” of automatic appropriations, but it is not that new. Alexander Hamilton started at the very beginning of the nation’s history by setting interest payments on autopilot two hundred years ago. No one would loan our little Republic any money if they thought they would have to wait for Congress to appropriate it, would they?

Now Congress has started the process for the year that begins October 1, 2008. It is almost an absolute certainty that the appropriations bills will not be finished by then. On top of this, there are Supplemental Appropriations for this year that need to be considered for all the emergency spending that always happens every year, such as floods, fires and of course a war in Iraq and Afghanistan. The most important function of Congress, the responsibility to appropriate funds, something enshrined in the constitution and in fact can be traced back to the Magna Carta, has become problematic. Don’t despair however; Congress may take its time, but when they have to, they always figure out a way, at the very last minute, to do what needs doing to keep the money flowing. Death and taxes are not the only certain things in life!

Posted in: CongressLine