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Sunday, February 26, 2012

Dead On Arrival

When Republican leadership announced that President Obama’s Budget was “Dead On Arrival”, they took upon themselves the full responsibility for whatever budget is put in place.  That’s been true now for some time.  Republicans in Congress have been rejecting outright all budget solutions presented by the President.  By so doing, they cannot rightfully claim that the President is at fault for there being no budget (instead, having to live with Continuing Resolutions).  We are in trouble because of Republican intransigence and their complete negativity.  The “Party of NO” has kept the current budget in limbo since the President first presented it, and now they plan to keep next year’s budget in the same suspended state.

But, the issue is even larger.  Republicans are not just the Party of NO, they are also the Party of “NO TRUTH”.  When it comes to the Constitution, and its provisions, they are likely to twist it to their own version of truth.  For instance, let’s take the issue of budget authority.  Republicans want you to believe that it is the President’s responsibility to present a budget and to shepherd it through the Congress.  While that may be the custom and tradition that has grown over the years, based on Budget law, it is not a constitutional concept.  Who has the prime responsibility for the budget according to the Constitution?  Congress, Congress, Congress.  I say it three times to emphasize the following:

1)  Nowhere in the Constitution is the President given responsibility for the origination of the national budget; let alone of being responsible for “leading” the way on its progress once his budget is delivered to the Congress

The closest the Constitution comes to this is in Section 3 of Article II where it says that the President “shall from time to time give to the Congress Information of the State of the Union, and recommend to their consideration such measures as he shall judge necessary and expedient…”  That’s it.  No mention of budget; no mention of spending plan; no mention of fiscal responsibility.  All the Republican rhetoric about “lack of leadership” and “responsibility for budget” and “no budget from the President” is hollow in terms of the Constitution.

2)  The Congress has the full responsibility for the generation of all legislation that has to do with the operation of the national government (spending plan).

Article I, Section 1 vests all legislative powers in the Congress.  Section 7 of the same Article says clearly that “all bills for raising revenue shall originate in the House of Representatives.”  Then, after enumeration of the many responsibilities and powers granted to Congress in Section 8 of this first Article (including borrowing money, regulating commerce, coining money, raising and supporting the armies and the navy as well as militias, declaring war) there is this sentence giving Congress the charge “to make all laws which shall be necessary for carrying into execution the foregoing powers and all other powers vested by this Constitution…”

3)  The Congress is the progenitor of all appropriation of funds.

In Section 9 of Article I, this appropriation power is made clear: “No money shall be drawn from the Treasury, but in consequence of Appropriations made by Law; and a regular statement and account of the receipts and expenditures of all public money shall be published from time to time.” 

Let us again be quite clear:  there is no mention of “a budget plan” in the Constitution.  The process for the making of a national budget has been arrived at through a combination of custom, rules, regulations, and legislation promulgated over the years. The framework used by Congress to formulate the budget was established by the Budget and Accounting Act of 1921, the Congressional Budget and Impoundment Control Act of 1974, and by other budget legislation.  Prior to 1974, Congress had no formal process for establishing a coherent budget.  The Congressional Budget Act created the Congressional Budget Office and directed more control of the budget to the CBO.  Such a process is necessary, but not sacrosanct or constitutionally mandated, and is therefore quite amendable and changeable. 

The process itself has contributed to the problem of gridlock in Washington.  And that is where a major emphasis should be placed: reforming the process rather than simply ridiculing the substance.  Instead of trying to make “political points” by incorrectly blaming the President for the lack of authenticity in this process, the Republicans (and Democrats) should be concentrating on how to amend the process to make it fluid, efficient and effective.  Even the Heritage Foundation has called attention to the flaws of the budget process, saying: “Created in 1974, the current budget process has been subjected to over 30 years of abuse from lawmakers trying to exploit its structural flaws. Instead of providing an orderly roadmap for determining the nation's annual spending and revenue priorities, the current budget process stifles debate, prevents cooperation, and frequently breaks down.”

Here are some thoughts:

1)  Put budget-making in the hands of a neutral authority , with the power to solicit suggestions from the public, the citizenry (by means of the internet perhaps), the written word, hearings, etc.-- all of which must be public.  There can be no closed-door meetings, except in the case of national security.  Lobbyists, special interests, and organizations should be excluded from any actual budget planning and making, except that all interests should be given the ability to make suggestions to this neutral budgeting authority before a budget is constructed. At the very least, the President and Congress need to be brought together to agree on a basic framework at the beginning rather than at the end of the budget-making process.  Perhaps this neutral authority might contain a combination of members from OMB, the GAO and the CBO.

2) Whatever non-political group might emerge, it must contain ordinary citizens in its membership.  That is what’s missing in most of our governmental operations.  The idea of representation has been taken to a point where the significance of government “of the people, by the people and for the people” is being lost (unless, of course, you consider the powerful 1% as the “people.”).  The Constitution tries to balance the concept of representative government with the power of the people.  As discussed elsewhere on this Blog, Amendments IX and X support the idea that the people have a unique position in the body politic. First of all, the enumeration of rights in the Constitution “shall not be construed to deny or disparage others retained by the people.”  Secondly, Amendment X grants: “The powers not delegated to the United States… nor prohibited by it to the States, are reserved to the States respectively, or to the people.” As much as conservatives would like to deny such power to the people, while strongly supporting power to the elite, the Constitution stands in their way.

We need ordinary citizens to be a part of the national budget process to keep that process oriented to the needs of the people, and not just to the needs of an elite or those of special interests. How they are to be chosen, and their length of tenure, needs to be decided based on qualifications, kinds of experience required, ties to the electorate needed, etc.  

3)  Chief complaints revolve around the complexity, duplication, and time-consuming nature of the budgetary process. For example, spending policy is now made in three distinct phases: budget, authorization, and appropriation. Each requires a separate set of hearings, reports, votes, and procedures, and the Congress must act several times on each spending proposal. The result is a system so confusing that it is difficult to identify responsible individuals, key votes, or actual policy direction, according to the Joint Economic Committee Report of 1997.

The President, according to the Budget and Accounting Act of 1921, must submit a budget to Congress each year. In its current form, federal budget legislation law (31 U.S.C. 1105(a)) specifies that the President submit a budget between the first Monday in January and the first Monday in February. In recent times, the President's budget has been issued in the first week of February.  The President's budget contains detailed information on spending and revenue proposals, along with policy proposals and initiatives with significant budgetary implications.  The President's budget proposal includes volumes of supporting information intended to persuade Congress of the necessity and value of the budget provisions. In addition, each federal executive department and independent agency provides additional detail and supporting documentation to Congress on its own funding requests.

This Executive budget, with some changes in current law, could be part of the process of submitting budgetary information to a neutral authority (along with all other budgetary information from other sources), which entity would then have the responsibility of crafting a budget for the Congress.  Currently, each year in March, the Congressional Budget Office (CBO) publishes an analysis of the President's budget proposals.  CBO computes a current law baseline budget projection that is intended to estimate what federal spending and revenues would be in the absence of new legislation for the current fiscal year and for the coming 10 fiscal years.  This CBO responsibility could easily be continued as it is, or could become part of the responsibility of a unified neutral budget-making entity.

4) The authorization process used by the Congress seems to me to be duplicative and unnecessary.  Wikipedia explains it this way:  “In general, funds for Federal Government programs must be authorized by an ‘authorizing committee’ through enactment of legislation. Then, through subsequent acts by Congress, budget authority is then appropriated by the Appropriations Committee of the House. In principle, committees with jurisdiction to authorize programs make policy decisions, while the Appropriations Committees decide on funding levels, limited to a program's authorized funding level, though the amount may be any amount less than the limit.  In practice, the separation between policy making and funding, and the division between appropriations and authorization activities are imperfect. Authorizations for many programs have long lapsed, yet still receive appropriated amounts. Other programs that are authorized receive no funds at all.  In addition, policy language—that is, legislative text changing permanent law—is included in appropriation measures.”

The authorization process is an opportunity for Congressional oversight, if done properly. All departments/divisions of the federal government could be brought before appropriate congressional committees and subcommittees to present (or, to submit in writing) their mission plans for the next year (or more) including goals, objectives and action steps required to meet their overall mission.  Attached to each goal could be the estimated amount of money needed to accomplish that goal, broken down beside each objective and action step for each goal.  The committees would have the opportunity to question all aspects of the plans, and to question past spending. Then they could decide to authorize the plan, not authorize the plan, or authorize with conditions.  In the latter case, there could be room for negotiations, compromises, changes, and a return hearing.   The Congress would be responsible for submitting their written findings and authorizations of such plans to the budgeting authority before it crafts a final budget.

The Heritage Foundation has suggested: “The most promising budget reform would be to cap federal spending increases at the inflation rate plus population growth (economic growth rates could be another, albeit more loose, target). Lawmakers could allocate federal spending however they wish as long as total government growth does not exceed this predetermined rate.”

While I disagree with the Congress placing spending caps on all programs individually, because a conservative Congress can thereby reduce spending on discretionary and entitlement programs and eventually starve them out of existence, I do believe an  independent budget entity could propose a universal inflation-rate increase cap to Congress for each upcoming fiscal year, based on inflation, population growth, economic growth, GDP, and whatever else is pertinent.  However, such a growth rate cap should be presented to Congress for passage before a budget is crafted, and department/division budget plans should be based on that rate.  Exceptions to that rate could be allowed for certain exigencies that exist within departments, but the universal growth rate for the overall budget should be maintained except in national emergencies.

However, in my estimation, it is more important to craft a budget based on another starting point.  Since every department or division of government already has a budget in existence, should every department/division begin crafting its next year’s budget based on what was authorized last year, what was appropriated last year, or on what was spent last year?  OR, should every department/division start all over at zero and craft an annual  budget based only on what is absolutely necessary for the coming year?   The latter would involve several conditions: oversight of spending plans and actual spending by Congress, justification of every line item, a spending plan from every department/division with clearly defined mission, goals, objectives and action steps with corresponding budget amounts assigned to each goal, objective and action, as stated above, and perhaps a pay-as-you-go strategy.  I believe this concept of zero-based budgeting is worthy of re-consideration, but with the added feature of a mission plan as described.

With these few thoughts upon which to ruminate, let us return to this topic at another opportune time.