New Rules Show Process Changes Aren’t Enough

Posted January 24, 2011 at 5:32pm

I hear this question in some form at least once a week: If Congress and the president are unable or unwilling to comply with the current budget rules and procedures, why not just change the process so it is harder to evade and actually accomplishes something?

The question supposes two things that are anything but true. First, it assumes that there is an agreement on what the federal budget process should accomplish in terms of spending, revenues, the deficit and government borrowing. Second, it takes for granted that House Members and Senators would risk implementing a system that would force them into policies they don’t support.

As the controversial rules changes recently put in place in the House demonstrate, there currently is anything but a consensus on what the federal budget process should do. The changes include allowing the deficit to grow because of tax cuts and prohibiting the House from considering legislation that would increase spending above a certain level, even though the Senate may not have agreed to anything close to those same limits. Both of these procedures are surrogates: The real goals are to make it easier to cut taxes and to slash appropriations below current levels. Those who supported the rules changes at least hinted at a lower deficit as well. Many did the equivalent of shouting that from the House floor.

But there was absolutely no agreement about any of these changes with the Senate or White House. In fact, it’s not at all clear that there’s enough support among House Republicans for the specific spending cuts their own rules changes will require. Because of this, there’s very little chance the changes will come close to accomplishing the promised effects on spending, taxes or the deficit. Indeed, it’s very possible that the rules changes made in the opening days of this Congress will be the highlight of the year for those who want the policies they’re designed to accomplish. The actual results — tax cuts, spending cuts and deficit reduction — likely will be far more modest than the proponents of the process promised. 

Why? In all probability the Senate will refuse to impose the House rules on itself because its Members have different policy goals. That means the new budget procedures unilaterally adopted by the House reduce the chances of a budget agreement of any kind this year. House Republicans heavily criticized Democrats last year for not adopting a budget resolution; because of the rules changes, it looks at least as unlikely this year.

The successful budget processes of the past 35 years have come only after a consensus developed about what should be done on the budget. The Congressional Budget Act was adopted in 1974 after there was a broad agreement, following two years of debate, that Congress needed a process to deal with the White House on budget issues. That was revised by the Gramm-Rudman-Hollings Balanced Budget Act in 1985 when general opinion held that the outcome-neutral process created in 1974 had to be changed so that deficit reduction was the goal. GRH was tweaked in 1987 and then replaced by the Budget Enforcement Act in 1990 when it became clear that the deficit reduction procedures weren’t working and needed to be revised.

Ironically, the federal budget process as it exists today began to crash and burn in 1998 when the deficit turned into a surplus and the consensus about what the process should do now broke down. Even Senate Budget Chairman Pete Domenici (R-N.M.), one of the budget process’ strongest supporters, argued that its strictest procedures were unnecessary because they were only intended to reduce a deficit. Domenici essentially argued that, even though the law didn’t suspend the procedures when a surplus was recorded (actually, it’s not clear anyone ever imagined that a surplus in 1998 was possible), the consensus about the process disappeared when the budget was balanced.

I defy anyone to argue that a consensus exists today that could lead to a budget process with even a minimal chance of success. In addition to the GOP recommendations embodied by the new House rules, the co-chairmen of the Bowles-Simpson commission on fiscal responsibility suggested that eliminating the deficit is far less important than reducing federal debt as a percentage of gross domestic product. In fact, the co-chairmen’s plan wouldn’t have eliminated the federal deficit until fiscal 2037. Others say that the goal should be to eliminate the deficit while excluding interest on the national debt, or Social Security. Still others insist that economic growth or creating jobs is what’s important.

As House Republicans have demonstrated, it doesn’t take long to come up with a federal budget process to do any number of things. But coming up with a process that won’t be evaded and actually accomplishes something — what those who ask me the question say they want — will require much more than just procedural changes.

Stan Collender is a partner at Qorvis Communications and founder of the blog Capital Gains and Games. He is also the author of “The Guide to the Federal Budget.”