The problem is ... there is no problem

scollender@njdc.com

Most of the congressional budget process is based on the need to reduce a deficit. When there is a surplus-as was the case throughout last year's debate on the fiscal 1999 budget-the current process proves out-of-place and ill-equipped to handle what needs to be done.

Even the basic premise for the budget process is missing when there is no deficit to be reduced. Although the deficit was not the only reason the Congressional Budget Act was adopted in 1974, one of the primary goals for the budget resolutions it created was to force Congress to stand up and be counted on the bottom line.

Until that time, Representatives and Senators never had to vote on total spending and revenues (and, therefore, the deficit or surplus). They were able to state they were against federal red ink at the same time they voted to increase spending and cut taxes. The thought in 1974 was that deficits would be hard for members to support so they would take extra steps to be sure the budget resolutions included policies that would reduce or eliminate them.

This quick trip down memory lane is important for one reason: It means that as far as the federal budget process is concerned, there is no problem facing Congress this year. With another overall budget surplus highly probable in fiscal 1999 and still another likely in 2000, almost all of the major premises on which the process has been based for the past 25 years are no longer true.

Without knowing anything else about 1999 budget politics, this basic fact leads to the almost inevitable conclusion that Congress might do nothing on the budget for the second year in a row. If there is no need for a deficit reduction plan to be adopted, most of the budget process requirements that would allow that to happen, including the budget resolution, are superfluous.

There is, of course, a legal reason for Congress to comply with the provisions of the budget process. The Congressional Budget Act, Budget Enforcement Act, and Balanced Budget and Emergency Deficit Control Act (Gramm-Rudman-Hollings) are all public laws, and most of their provisions are statutory requirements. But there is no legal penalty for not complying. In fact, it is not at all clear that anyone would have the standing to sue Congress for failing to do what these laws seemingly demand be done each year.

More important than any legal predicament, however, is the potential political problem if the fiscal 2000 budget process is not completed. When there is a surplus, a majority of voters so far have not appeared to be troubled by Congress failing to pass a budget resolution or reconciliation bill, or by House and Senate committees not submitting their "views and estimates" reports on time. That surplus-what many consider to be the result of the budget process-seems to be the only evidence voters need that everything is working fine.

The one exception is appropriations bills. Regardless of whatever else does or does not happen on the budget each year, some form of appropriations must be enacted for a partial government shutdown to be avoided. There is little or no consequence if a budget resolution is not adopted as entitlements and other mandatory programs continue to operate and revenues continue to be collected. But if appropriations are not adopted by the start of the fiscal year, there is a demonstrable and virtually immediate result-a partial government shutdown. We know from the experiences in 1995 and 1996 that voters do not like when this happens and tend to hold someone politically responsible when it does.

So as long as surplus projections continue, and as long as there is no other problem (such as an economic downturn) that Congress must address through fiscal policy, the expectation at the start of a year like this should be that the budget process will not be completed. This will make changes in taxes and entitlements more difficult and put increasing emphasis on appropriations. Contrary to budget battles of the past decade, the big bill this year is not likely to be reconciliation but rather a continuing resolution or omnibus appropriation-and this will change legislative strategies all over town.

Question Of The Week

Let's start fresh. Everyone who participated in the question of the week contest last year is eligible to play this year regardless of whether she or he won in the last six months and so technically should be disqualified under the "Blum Rule." (This rule is named for Congressional Budget Office Deputy Director Jim Blum, whose knowledge of the budget was so vast that he had the correct answer for three consecutive weeks and, like a professional gambler at a casino, had to be prohibited from playing for a while.)

This year the prize for answering the question will be the all new "I Won A 1999 Budget Battle" T-shirt. Also, one change in the procedure: if there is more than one correct answer the winner will be selected by random drawing.

This week's question: What was the primary budget process law that was in place before the Congressional Budget Act was adopted in 1974? Bonus points if you know the year that law was enacted. Send your responses to scollender@njdc.com.

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