Semi-Daily Journal Archive

The Blogspot archive of the weblog of J. Bradford DeLong, Professor of Economics and Chair of the PEIS major at U.C. Berkeley, a Research Associate of the National Bureau of Economic Research, and former Deputy Assistant Secretary of the U.S. Treasury.

Tuesday, November 28, 2006

The Budget Process Gets More Deranged

Stan Collender:

BUDGET BATTLES : Punt, Pass And Kick By Stan Collender, NationalJournal.com Tuesday, Nov. 28, 2006: After the House and Senate passed their own versions of a FY07 budget resolution earlier this year, they made virtually no attempt to compromise and come up with a conference report. Instead of developing a budget plan, the leadership decided not to do anything. In other words, they punted.

Congress punted again on the budget after Labor Day when there was no push to get any appropriations other than Defense and Homeland Security to the White House before the election.... Therefore, it is hardly surprising that after the election Congress has again decided to punt. The decision apparently made by the House and Senate leadership last week not to consider any of the remaining FY07 spending bills is completely in line with what it has done all year.

Instead of trying to enact even some of the remaining appropriations, Congress will adopt a continuing resolution that will keep the government funded until sometime in January or February. In other words, the Republican leadership has decided to pass the budget decisions to next year's Democrat-controlled Congress.... [I]t still seems strange that rather than try to take advantage of their final days in power, congressional Republicans would pass the decisions to the other team.

There is talk that this is actually a deliberate plan by some Republican fiscal conservatives in the Senate to strengthen their party’s budget credentials. By not voting for any individual appropriations and instead only going on record in favor of a continuing resolution with a spending level that is way below what will be approved in the individual bills, they supposedly believe that Democrats will be blamed for the increase in spending in the individual bills even though it likely would have been approved by a Republican majority anyway.... Their assumption is that the narrow Democratic majorities in both houses will make a veto override extremely unlikely, forcing Democrats to lower the appropriations while the White House and congressional Republicans get credit for forcing the reductions.

The Republican "punt, pass and kick" budget strategy points to a number of things happening early next year. First, there will probably be a big confrontation between the White House and Congress on the budget early in the year. The fighting and rhetoric could be vicious. No matter what spending levels are approved by the Democrat-controlled Congress, the White House and congressional Republicans will try to label them as excessive... this could easily be the first real battle between the new Congress and the White House next year.

Second... a government shutdown early next year is possible. The best way for Democrats to take away the advantage the veto will give the president will be to... combine the remaining FY07 appropriations into a single omnibus bill and to send it to the White House just hours before the continuing resolution expires.

That would force the White House either to agree with the spending levels or to take the blame for shutting down almost all federal domestic departments and agencies. That proved to be politically devastating in 1995 for a group of congressional Republicans who were far more popular, had a higher job approval rating and better fiscal credentials and spokespeople than the current administration. It's hard to imagine how a government shutdown in 2007 would turn out any better.

Third, the "punt, pass and kick" budget strategy is almost guaranteed to eliminate any possibility of increased political comity...

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