The topic of today’s episode is, “How does the budget process work and not work?” My guest is Tori Gorman, the Policy Director for The Concord Coalition. It is a non-partisan, grassroots organization dedicated to educating the public about federal budget issues, and their consequences for the future. Tori spent 16 years on Capitol Hill where she held director level positions, advising senior members of the budget, appropriations, and tax writing committees in both the House and the Senate. Prior to her career in the federal legislative branch, she was the economist for the Maryland General Assembly.
Tori, welcome to the program.
Tori Gorman:
Thanks, Kevin. It’s great to be here.
Kevin:
So this episode is devoted to the Congressional Budget Process. It was established in 1974, and Congress has modified it a little since that time. In the simplest terms, how is the budget process supposed to work?
Tori Gorman:
The “supposed to work,” nice emphasis there. It starts with the President, actually. I know it’s called the Congressional Budget Process, but it starts with the President. And the President submits his budget to Congress every year, usually around the first Monday in February, then Congress begins to hold oversight hearings on agency requests.
Tori Gorman:
Those committees then send their input to the budget committee called Views and Estimates, basically. Then the budget committee gets to work drafting a budget resolution, a budget blueprint, just like a household creates a budget, Congress is supposed to create a budget for itself.
Tori Gorman:
Congress then passes its own budget resolution, the House and the Senate, that establishes enforceable levels of spending in revenue for the next fiscal year. Once those levels have been determined, the authorizing committees and the appropriation committees are given their homework and they set out, they get to work passing legislation that fits within the parameters established by the budget resolution.
Tori Gorman:
Your appropriation committees, pass appropriation bills, discretionary appropriation bills that fund the government, and your authorizing committees get busy drafting legislation pertaining to the programs that fall within their own jurisdiction.
Tori Gorman:
And once those funding bills and those authorizing bills have completed the legislative journey in the House and the Senate, they are sent to the President for his or her signature. With respect to the appropriation bills, the bills that fund the agencies within government, we hope to get all of that done before the start of the next fiscal year, which always begins on October one. And that in a nutshell, is how the process is supposed to work.
Kevin:
Very good. So just to be clear, budget resolution, that’s the blueprint, that’s supposed to be done in April, is that correct?
Tori Gorman:
Yes. The Senate usually completes its job by April one, but they like to have both chambers… The way the process is set out in legislation, the goal is to have a budget resolution completed by mid April.
Kevin:
And all the spending bills known as the appropriations bills, those are supposed to be completed by the end of the fiscal year, which you said September 30th. Right?
Tori Gorman:
Right. That’s the end of the fiscal year. The new one starts on October 1st. Correct. And the idea is to obviously have your homework done before it’s due.
Kevin:
Now, just to step back for a second from that large and complicated process, what are the goals of the budget process?
Tori Gorman:
Sure. At it’s most basic fundamental level, the goal is to pass all 12 appropriation bills before the next fiscal year begins. That is something that Congress absolutely, and the President, must do each year is to fund the government.
Tori Gorman:
Now on top of that, a budget resolution may include additional tasks for committees. For example, there may be instructions to certain committees to produce legislation in a process known as reconciliation.
Tori Gorman:
So if there are committees that receive those instructions, then presumably they would complete their work according to a deadline, and Congress in addition to passing the 12 appropriation bills would also pass the ancillary reconciliation bills as well.
Kevin:
And you know, when Americans think about their own budgets one of the goals that they have in mind is, “Well, I want to rationally allocate where I spend my money. Let’s not spend all of it on fun stuff, and forget to put money aside if the roof is leaking,” for example, but also there’s the interest in trying to have some rough balance between the revenues coming in and the money going out the door. Are those also goals of the budget process or not so much?
Tori Gorman:
So that’s kind of a tough question to answer. I mean, the goal of the budget process is to make sure that Congress moves forward and achieves it’s end goal, which is to pass the annual appropriation bills.
Tori Gorman:
Whether we pass a budget resolution that equates revenues with spending, that’s a policy decision that’s made by members of Congress. That’s not necessarily an explicit goal of the budget process.
Tori Gorman:
Now the budget process does involve looking out a number of years. In the most recent past, the typical budget window has been to look at the upcoming fiscal year, as well as nine years beyond that. So giving yourself a 10 year budget window.
Tori Gorman:
And by doing that, it enables members of Congress to look at trends in spending and revenues, and identify if we have a problem. You know, if you’re spending and revenues are grossly out of whack, and you’re running huge deficits, which will to bank debt, the budget process enables members the opportunity to spot that ahead of time and then move forward with legislation to perhaps correct that, or head that off.
Tori Gorman:
I think we all know, however, that sometimes running a deficit is a good thing to do. And sometimes running a deficit is a bad thing to do. So I wouldn’t say necessarily that the goal of the budget process is to eliminate deficits, but it is to inform members of trends in revenue and spending that could be problematic if not addressed.
Kevin:
Excellent. Thank you very much for that. Now I’ve been in Washington, D.C. for 17 years and I’ve yet to meet anyone who thinks that the budget process is working well. Most people who think about the budget process, think it’s not working as it was intended and are very unhappy with it.
Kevin:
There are a lot of reasons. There are a lot of different types of criticism. Let’s break into pieces and start with the budget resolution, the blueprint as you called it. Why has Congress so seldom passed a budget resolution in recent year? And is this a big deal? Are there negative effects from not passing a budget resolution?
Tori Gorman:
Good question. When it comes to the budget resolution itself, the process for passing a budget resolution through the House, and especially the Senate, is really an unattractive process. It is laborious. It consumes a lot of time on the Senate floor, for example, and it doesn’t have many rewards.
Tori Gorman:
The budget can pass with a simple majority. It really jams the minority party. It leads to really over partisanship. It consumes 50 hours of debate in the Senate, plus some. So it really takes a lot of time.
Tori Gorman:
And then there are some just arcane procedural things associated with the baiting a budget resolution, including something called vote-a-rama, which just really makes a mockery of the budget process altogether, and makes it wholly unattractive for members to participate.
Tori Gorman:
And then you add into that the fact that Congress has figured out other ways to accomplish the same goals that a budget resolution is supposed to accomplish, in ways that require less time and less hassle.
Tori Gorman:
So instead of going through the budget resolution process, in order to establish these enforceable levels of spending in revenue, Congress has figured out how to do that using things like deemers and two year budget agreements. So sort of front-loading their work in a different way.
Tori Gorman:
And it’s gotten to the point now that only under very certain specific circumstances is a budget resolution even required. And so as a consequence, we really just haven’t seen a budget resolution very often.
Kevin:
One of the things I’ve heard about the budget resolution is that it’s not simply a dry exercise and accounting where a list of figures about how money will be spent and revenues collected get put forward. But rather it’s become a kind of vehicle for partisan messaging.
Kevin:
And as such, it’s very unattractive for either party in the minority to go along with a budget resolution, and moreover the budget resolution itself, there are some sort of weaknesses where it’s not entirely binding, there’s ways to get around it. Are those criticisms accurate?
Tori Gorman:
Yeah, that is accurate. One of the interesting attributes of a budget resolution is it doesn’t have the force of law. Okay? A budget resolution is a planning document. It’s a joint agreement between the House and the Senate. It’s not something that is sent to the President for his signature or her signature.
Tori Gorman:
So it doesn’t have the force of law. There are ways to enforce the budget on the floor of the House and the Senate. There are certain procedural mechanisms, but they’re pretty easy to override if you have enough votes. So Congress goes through this big, huge Herculean effort to pass a budget resolution, and then the first piece of legislation out of the gate, once the ink on the budget resolution is barely dry, is something that exceeds the spending limits that are in the budget resolution, and then members of Congress just override it with a super majority vote.
Tori Gorman:
So you look at that and there’s a level of unseriousness that starts to seep into the budget process. And when that unseriousness tends to overtake the system in a process that is inherently partisan, because especially in the Senate, the filibuster does not apply to a budget resolution, they can pass it with a simple majority. Your budget resolution becomes less and less of a planning document, and more and more of just a policy statement, sort of a messaging document.
Tori Gorman:
And I think this has taken on a greater role recently as the ten-year forecast of deficits and debt have continued to grow beyond a place where we can actually do something about it within the 10 year window.
Tori Gorman:
So as lawmakers are trying to posture themselves as being fiscally responsible and trying to balance the budget within the 10 year window, knowing that the revenue and spending decisions that need to be made in order to make that happen are just politically wholly impossible. The budget resolution becomes something that’s just a messaging device, because the revenue and spending parameters, the contours that underlie it, they’re not founded in reality.
Kevin:
So the resolution sounds like it’s become a bit of an anachronism as far as the actual budget process and what the nation decides to do spending wise, which brings us to the spending bills, the appropriations. We seem to see fewer and fewer appropriations being passed by both chambers and then sent on to the President as individual bills.
Kevin:
Instead, we see Congress rolling multiple bills into omnibus legislation, or simply enacting a continuing resolution, which essentially says, “We’ll just keep funding government the way we did last year,” rather than reassess where to put the nation’s wealth. Why is this happening? Why is it so hard to just pass 12 appropriations bills?
Tori Gorman:
So depending upon who you talk to, I mean, you’re going to get lots of different answers. And there are, there are several explanations, but I’ll give you what I think is my opinion here.
Tori Gorman:
And I think first is just a delay in completing last year’s work. Okay? So if we don’t get our fiscal 2020 bills done on time, then it’s going to delay the start of the 2021 bills, and then that happens a lot. Even right now, for example, we’re already two months into fiscal 2021, we haven’t done our homework yet. It’s quite possible that the 12 appropriation bills won’t be approved until possibly well into next year. Which obviously will delay the start of the 2022 cycle.
Tori Gorman:
So that’s one reason, is just we’re not getting our stuff done on time. I think that the breakdown in commonty, the partisanship, the lack of statesmanship, is making it hard to agree on the top line parameters.
Tori Gorman:
I won’t blame divided government because we’ve passed appropriation bills in divided government before. It’s just the inability of members to come together and cooperate.
Tori Gorman:
And when you think about why that’s happened, for several years now we’ve had thin majorities in both chambers, both the House and the Senate. There’s always another election two years away. Party leaders want to protect their members, and that includes avoiding tough votes on amendments.
Tori Gorman:
So you stir this up into a pot and you can see how shoving everything into one bill up against a hard deadline, creates political pressure to pass bills that perhaps might not happen under the normal process. That’s my take on why we’re seeing this.
Kevin:
Yes, those very large bills that happen at the very last minute certainly make for high political drama. And it’s all too frequent that after they get passed and then signed by the President, everybody disses them and says, “Well, we didn’t really want to do that,” but you did it anyway.
Tori Gorman:
Well, let me just say, people say this tongue in cheek about Congress, but there is an element of truth here, and that is they don’t act unless there’s a crisis.
Tori Gorman:
And so if you need to get funding bills passed, what do you do? You artificially create a fiscal crisis, or a fiscal cliff. And I would argue that majority leaders of both parties have done a really good job of doing that.
Kevin:
Yeah, it’s a forcing mechanism. It creates a very stark choice. So we’ve heard about the resolution, which isn’t doing so great. We’ve heard about appropriations, which are not following the model laid out in the 74′ law. What else is not working with the budget process we have?
Tori Gorman:
In thinking about this I went immediately to accountability. When I was a staffer in the Senate on the budget committee, we always used to joke about how the fact that there wasn’t any budget jail. If you didn’t follow the budget process, there wasn’t any consequence. So I think there’s a lack of accountability. There needs to be some sort of accountability in the process.
Tori Gorman:
Also enforcement. We talked about how the budget resolution doesn’t have the force of law, it’s just a joint planning agreement. But even beyond that, Congress has found a ways around other budget guardrails. We have something courtesy of The Budget Control Act of 2011, for 10 years we had discretionary spending caps that were enforced by a sequester. If Congress violated the discretionary spending caps and appropriated money above and beyond what was allowed in law, then a sequester would happen.
Tori Gorman:
But Congress figured out pretty quickly that all they had to do to avoid the sequester was to delay the report from the Office of Management and Budget, the OMB report, that would carry the mandatory sequester order. So that’s one way of quickly circumventing the enforcement process.
Tori Gorman:
Same thing with mandatory spending. You know, we have a PAYGO sequester, so if you pass entitlement or tax laws that violate the budget agreement and increase the deficit, for example, that overage, if you will, can trigger a PAYGO sequester at the end of the year.
Tori Gorman:
But Congress has figured out, all they have to do is pass legislation that wipes the PAYGO scorecard clean, and they often bury that in an omnibus spending bill or some other piece of legislation.
Tori Gorman:
So the problem has been in forcing the work of the budget committees in Congress. Even if we have enforcement written into law, Congress has figured out cheap ways, crafty ways, sneaky ways to avoid the consequences of enforcement. So those are sort of the two areas where I think that the budget process really sort of falls down.
Kevin:
Budget reform, fixing the process, is notoriously difficult to achieve. But what the heck, let me ask as my last question, should Congress keep the 74′ Congressional Budget Process? Or should we make a few tweaks to it? Or do we need to go bigger and scrap it and start afresh?
Tori Gorman:
I think depending on what day of the week it is you’ll get a different answer. I think what’s clear is that we need a process that works in today’s hyper partisan atmosphere.
Tori Gorman:
We need to simplify the process. We need to reward bipartisanship and statesmanship in the process, and we need to penalize inaction or taking shortcuts.
Tori Gorman:
Now, whether that means scrapping the system altogether, or tinkering around the edges, that really depends on what the legislative process will bare. I mean, it’s fine for me, or anybody else, to stand up and say, “Hey, we should scrap this process and start all over again.”
Tori Gorman:
But if the legislative process won’t support that effort, then that’s just wasting time. So you start to think about, okay, well what will the process bare? And perhaps right now in a time of divided government and hyper-partisanship maybe it’s small adjustments, initially, that will help build trust and lay the groundwork for future bigger changes.
Tori Gorman:
There are small things that we can do just to tinker around the edges that I think might make the budget process just more fruitful, rewarding, and enjoyable without scrapping the entire budget process. But it’s clear that there needs to be change.
Kevin:
Well as the old chestnut goes, politics is the art of the possible. Thank you for helping us understand how the budget process works and does not work.
Tori Gorman:
Thanks for having me, Kevin.
Stay in the know about our news and events.