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The budget wreck is Congress’ fault — and yours

A copy of the FY 2022 budget from the Biden administration is arranged for a photograph on July 12
Greg Nash

Despite being in Washington, D.C. for nearly 20 years, I sometimes feel like Alice who has fallen down the rabbit hole into a crazy place where words are used in ways that don’t make sense anywhere else.

Take the word, “budget.” To the average American, it connotes the exercise of tabulating how much money is coming in, and deciding how to spend. Money does not grow on trees, so one just prioritizes. And if John and Jane Q. Public decide to borrow — they try to do so with prudence, because being heavily in hock to others is foolish.

By law, Congress is supposed to do something similar. In January, Congress gets facts and figures from the executive branch and the Congressional Budget Office. Then it draws up a budget resolution which estimates revenues coming in and sets aggregate levels for spending for myriad things, from agricultural programs to veterans’ care. Both chambers pass the budget, and then they approve 12 spending bills for delivery to the president. All of this is to be done by Sept. 30, the last day of the fiscal year. The law also permits Congress to reconcile revenues and spending by adjusting policy should the budget’s figures misalign.

In reality, the budget process does not actually work that way, as this year illustrates spectacularly. 

Congress took until August to agree on a spending plan — about four months after the Congressional Budget Act’s deadline. None of the Democrats who voted for the budget resolution can argue with a straight face that it is a fiscally responsible plan. Like so many budgets in the last 20 years, it is a partisan messaging document that lacks the force of law.

Then there are the spending bills. Democrats failed to send any of the 12 spending bills to the president, so last week, America nearly had another government shutdown. That mess was dodged when legislators passed a bill that says, in effect, “We can’t decide what to do, but maybe we’ll figure it out in a couple of months. So let’s just spend what we spent last fiscal year.” That’s not budgeting — that’s hiding from the decision-making that budgeting demands.

As if that wasn’t bad enough, Team Donkey continues to squabble among itself over whether to use reconciliation to spend an historically unprecedented $1.5 trillion more dollars or an even more outrageous $3.5 trillion dollars. Oh, and by the way, America could default on its obligations and world financial markets could melt down in a couple of weeks if Congress cannot move a law to raise the debt limit.

It would be easy to knock the Democrats for making a hash of things. For sure, their choice months ago to not raise the debt limit via the reconciliation process was a gaffe that is adding to the legislative dysfunction. 

But anyone who spends any time at all watching Congress will attest that Democrats and Republicans have been terrible at budgeting for a very long time. No matter which party has the majority, neither has completed all the steps of the budget process on time since the late 1990s. Both Republicans and Democrats treat reconciliation as a tool for pushing their budget-busting hobby horses. And we must not forget that the looming debt ceiling crisis was fueled by the GOP running up massive deficits that necessitated immense borrowing during the Trump years. That the Elephant Party refuses to vote to borrow the money it spent is a chef’s kiss above this putrid platter. 

Critics often blame the bad character of politicians for the sorry state of budgeting. But the problem is more fundamental: The present budget act was crafted more than 50 years ago when Congress and Washington were different places. The law was flawed from the start, but the politicians’ incentives have drifted away from budgeting over the years. There are no negative consequences for bad budgeting and few rewards for good budgeting. 

To a degree, the fault lies within us all. Ask yourself: when was the last time you have voted against an incumbent legislator because of his behavior during the appropriations process? When was the last time you voted against a majority party when it enacted fiscally reckless policy? As it happens, polls show Americans want the government to spend more and more — although few of them plead to be taxed commensurately.

The broken budget process is a wicked hard public policy challenge: How to craft a budget reform act that incentivizes politicians to budget responsibly and to stop indulging the public’s appetite for free lunches?

Sadly few legislators on Capitol Hill appear to be taking up the matter. But they should — not only is it the right thing to do, but politicians who wreck their nation through fiscal mismanagement seldom are treated gently by voters or history

Kevin R. Kosar (@kevinrkosar) is a senior fellow at the American Enterprise Institute.

Tags economy Finance Reconciliation United States debt ceiling United States debt-ceiling crisis United States federal budget

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