The Outsider’s Guide To The Federal Budget

“Until we fix the way Washington funds the federal government, more often than not, we will have to say we cannot afford it.”- Senator David Perdue

Since the passage of the Congressional Budget and Impoundment Control Act, or 74 Budget Act, Congress has seen the budget process as prescribed in the 74 Budget Act work to completion only four times. Spending continues to rise unabated and the national debt has been growing at a steady rate since 2002. The disconnect between budgeting, authorizing, and appropriating is a major reason the process has only worked to completion four out of the last 42 Figure 1years. While several changes to the process have been made over the years, Congress should instead take a clean page approach to developing a process that funds the government in a more routine and timely manner.

Why The Budget Process Is Not Working
The current budget process has dysfunction and disorder built into the process. Unlike authorizing and appropriating legislation, the budget resolution’s privilege status allows passage with a 51-vote majority. The budget resolution’s status compels the majority to force their views down the throat of the minority, encouraging the creation of a political, rather than a governing, document.

In early 2015, the budget process began under a new majority. The FY 2016 budget unveiled on March 18, 2015 set out an ambitious goal of cutting $7 trillion from the President’s budget request. This majority proposal was forced upon the minority and eventually passed without a single minority vote. This budget was nothing more than a political statement that lasted for exactly 180 days. As the minority party was cut out of the budget resolution process, they complicated the authorization and appropriations process by preventing the consideration of appropriations bills and forced a short-term continuing resolution. Forced with the prospect of another continuing resolution or a possible shutdown, on November 2, 2015, the Bipartisan Budget Act, also known as the Grand Bargain, waived the FY 2016 budget agreement and re-imposed the same excessive spending that the majority party fought to prevent.

Figure 1, shows the deep disparity between the now defunct budget and the status quo (continued spending as expected by the Grand Bargain). Further, this chart shows Washington will be back to trillion dollar deficits in just six years and will add $9 trillion to the federal debt in the next 10 years alone.

Figure 2If the grossly excessive spending agreed to in the Grand Bargain is not bad enough, the savings it claims are only speculative, occurring mostly in the last year of the 10 year budget window. It should be noted this 10 year window was imposed by the 74 Budget Act.

Figure 2, provides a picture of the Grand Bargain in terms of spending and savings. The academic exercise of “spend now, save later” becomes a reality very quickly when you front load spending and back load savings to a notional future date.

Unfortunately, this chart is not unique to the Grand Bargain. This is how Congress has done business for far too long. While the “spend now, save later” approach is one of the reasons for our $19 trillion debt, it is not the only way our budget process has failed.

August 1, 2016: | Page 1 Page 2 Page 3 Page 4 Page 5



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