Budget Battles: Fiscal physics

Budget Battles: Fiscal physics


One of the questions that has tormented physicists and philosophers through the ages is what happens when an irresistible force meets an immovable object. That same question is about to be addressed by federal budgeteers.

The irresistible force is Congress. The budget resolution conference report (H. Con. Res. 68) that the House and Senate passed last week included a provision (S. 211) that allows an "on-budget" (essentially everything but Social Security) surplus to pay for a tax cut. This is in direct contradiction to the pay-as-you-go rules of the Budget Enforcement Act, which require that legislation reducing revenues below the baseline be offset with increases in other revenues or decreases in mandatory spending so that there is no net budget impact.

The immovable object is the Clinton administration. On April 6, ten days before the budget resolution was adopted, Office of Management and Budget Director Jack Lew wrote to House Budget Committee ranking Democrat John Spratt, D-S.C., stating that OMB believes "PAYGO does apply when there is an on-budget surplus." This is the first time the administration has expressed itself this directly on this issue. (Former CBO Director June O'Neill long ago said essentially the same thing.)

The budget resolution conference report specifically rejected that opinion. The explanatory statement accompanying the report states, "a reduction in the on-budget surplus is not considered [to be the same as] an increase in the on-budget deficit."

Does this mean the coming confrontation will enable fiscalists (budget specialists who toil in the area of fiscal physics or "fiscalics") to answer the question that has confounded physicists all these years?

Probably not.

The budget resolution conference report does not amend the Budget Enforcement Act. As a concurrent resolution, it is nothing more than a promise Congress makes to itself about what it is going to do the rest of the year on spending and taxes. Regardless of what the budget resolution says Congress can do, the actual controlling authority continues to be the Budget Enforcement Act. And OMB is the final arbiter of how BEA is implemented.

Therefore, in this case the irresistible force does not appear to be equal in strength to the immovable object. Legally at least, it absolutely is not.

Nor does it seem that this seemingly inevitable confrontation is something that Congress expects to win. The fact that the provision was included in the budget resolution is a virtual admission that the votes do not exist to override an almost certain presidential veto of a budget process change to allow a surplus to offset tax cuts.

A process change would make the irresistible force and the immovable object far more equal in strength, the result far more definite and, therefore, the confrontation far more interesting in both a physical and philosophical sense.

But unlike the situation in physics, a definitive fiscalics answer may not be necessary for the battle to be instructive. If the confrontation produces a campaign issue for both sides, the irresistible force could continue to move forward, the immovable object could continue to stay put, and both could contend they won the encounter. What mountain or rock was ever able to say that?

Budget Countdown

For the record, the House passed the fiscal 2000 budget resolution conference report on the statutory deadline of April 14, while the Senate passed it on April 15.

As of today, there are 82 potential legislative days until the start of the coming fiscal year. If Mondays and Fridays, when Congress frequently does not conduct legislative business, are excluded, there are only 52 potential legislative days left.

None of the fiscal 2000 appropriations for the coming year have been passed by either the House or Senate.

Question Of The Week

Last Week's Question. Actually, it was from the last "Budget Battles," which was two weeks ago rather than one. The question was, "On what date is CBO statutorily required to update its economic and budget outlook?" The answer? It isn't. Section 202 of the Congressional Budget Act states that CBO is only legally required to submit an outlook report on or before February 15. Updates of that report can be submitted any time CBO thinks it's appropriate or when the budget committees request it. The August CBO update is just a tradition. (Note: Section 211 of this year's budget resolution, however, requires CBO to update its report for fiscal 2000 by July 1.)

The winner of the "I Won A Budget Battle" T-shirt, who was chosen at random from all of the correct answers, is long-time Budget Battles reader and frequent Question Of The Week player Chris LeGrand, a legislative assistant with Rep. Peter Hoekstra, R-Mich.

This Week's Question. Art Sauer of the House Budget Committee, who suggested this week's question, gets an "I Won A Budget Battle" T-shirt for his help. The question: Because of House rules, Art's boss (John Kasich, R-Ohio) must step down as chairman of the House Budget Committee at the end of this Congress. If the Republicans retain control of the House, who will succeed Kasich as chair of the budget committee? Send your responses to scollender@njdc.com and you too could get an "I Won A Budget Battle" T-shirt to impress your neighbors while watering your lawn. The winner will be chosen by random drawing if there is more than one correct answer.