How the Congress Passes a Budget



Fellow readers, please find an educational blog on how the Congress passes a budget.  Right now that process is mostly dead, but finally showing some signs of life.  I encourage all who read this article to share it far and wide.

This blog stems from an interview conducted by Andrea Mitchell of MSNBC.  Ms. Mitchell interviewed Governor Robert  F. McDonnell (R-VA) on her show that airs at 1pm. about the Republican presidential ticket.  During the interview, Governor McDonnell accused the president of not passing a budget in three years.  Ms. Mitchell let the comment slide by without asking a single follow up question.

Our democracy needs educated citizens from all walks of life, but particularly those who are privileged to speak with our elected officials on a daily basis.  Reporters like Andrea Mitchell have a unique obligation in the political world.  They are arguably the most crucial link between the informed and the uninformed in the country.  They have to teach as well as report.  Most reporters I see on TV are simply not up to the task.  When they fail their dual responsibility because of being unprepared or politically biased, the whole country suffers.

Let me set Bob McDonnell straight.  The fact that we have not had a budget passed in three years falls squarely on the shoulders of Congress and both parties, just in different ways.  It is the job of the United States Congress, regardless of what party controls each House, to pass 12 appropriations bills (those bills that fund the government as well as all spending required by law) and send them to the president for his signature.

So how does a new federal budget become law?  The president’s role in the budget process is very simple.  The Chief Executive gives the Congress a funding wish list each February that is put together months in advance through the input of political appointees and civil servants from every agency in government.  Historically, the Congress rejects every president’s budget submission for a simple reason.  The Congress has a 535 political considerations that carry more weight than all the federal agencies combined.  After all, it is the entire House and one-third of the Senate that faces reelection every two years.

Now when the Congress swings into action, the House and Senate Budget Committees first set spending limits that work much like a speed limit sign on our roads.  Each appropriations subcommittee has a set amount of money to split up to fund Federal agencies they cover (discretionary spending) as well as spending mandated by law like Social Security and other retirement programs (non-discretionary spending).  Only the money set aside to fund the Federal government is taken up by the Congress.  Non-discretionary spending can only be changed if the law that created the program is amended.  By a ratio of roughly three to one, it is this spending that dwarfs money spent on Federal programs managed by all agencies (discretionary spending).

The House of Representatives, as mandated by our constitution, must act first on all spending and tax matters.  Therefore, it is each House Appropriations Committee that has the first move to actually initiate all 12 spending bills.  Each subcommittee under the full committee writes their bill.  Done correctly, the legislation crafted by each funding subcommittee usually carries the day in the full House.

Every House spending bill, is sent to the Senate for consideration.  The Senate modifies each House spending bill to suit its political requirements.  The full Senate then passes all 12 appropriations bills.  Differences in each bill are ironed out in a joint House-Senate conference committee.  The resulting compromise is voted on by both Houses of Congress and then sent to the president for his signature by October 1st of each year.  To be clear, the compromise process happens 12 times, once for each appropriations bill.

That is how the process is supposed to work.  How has the train gone off the tracks?

The federal budget is first and foremost a political coalition building exercise.  That calculation is now out of balance for two closely related reasons.  One, the House of Representatives has banned earmarks.  Why is that so important?  Aren’t earmarks, or pork spending, supposed to be evil?

Back in the day when Members of Congress could agree to disagree and still get the people’s work done, earmarks were the glue that built political coalitions.  Political balance between each party and House of Congress was achieved.  When the House of Representatives banned earmarks they gave up the political power needed to craft spending bills.  The Senate, which still allows earmarks, is left out to dry.  Much like when Congress passed the War Powers Act and gave up power to the president, the American people have ended up on the short end of the stick.

For all of who you feel earmarks are bad policy, let me offer a dose of reality for you to consider.  Competition for each federal dollar is intense. Lobbyists, federal agencies, peer-reviewed science committees, and every industry in the private sector are trying to put the fix in.  There is no such thing as fairness.  States must also compete for their share of federal dollars.  When the House bans earmarks, a critical tool of democracy is abandoned.  Citizens should never want their state to contribute more tax dollars to the Federal government than they get back in benefits.  It is imperative for your Representatives and Senators to fight for each dollar.

Some of you will say, but isn’t an earmark an example of out of control federal spending?  The answer is no.  Appropriations subcommittees cannot spend more money than they are allocated.  Remember the speeding limit I mentioned?  Some earmarks are completely inappropriate policy, but that is to be expected as nothing is perfect.  However, the alternative of a gridlocked budget process is far worse.

The second reason why the budget process is frozen involves political considerations.  The budget has become an ideological football.  The House of Representatives is being influenced by the Tea Party in a morality play that has nearly brought down the entire country once already.  Compromise, the lifeblood of our system of government, is viewed with disdain.

If the House of Representatives only sends spending bills to the Senate that are politically dead on arrival, they have no obligation to take it up.  Yet, that is exactly what is occurring today.  Professional legislators of both party, who know what to do, including the Speaker of the House, are thwarted.  Being in charge of the House of Representatives is an awesome responsibility and no time for amateur hour.

The Democrats are playing a passive-aggressive role in this dysfunctional budget process.    It boggles my mind why Democrats do not have a list of shared talking points so when they appear on TV they can set the record straight.  Politicians must also educate their constituents.  Democrats are just laying down and increasing Congressional gridlock.  Surely, there must be someone other than Bill Clinton who can explain complex issues in simple terms.

Speaking of the former president, he is convinced the re-election of President Obama will be an event that forces the Congress get to work.  The budget deficit and federal debt are both serious problems.  When interest rates finally go up, there will be hell to pay.

However, I am less optimistic.  Here is why.  One is when people make moral decisions, typically all creativity ends.  Second, the Congress has shown no interest in tackling the big issues of the day — from the housing crisis to the student loan mess.  Political cooperation is needed to pass more than a budget.

Every person, regardless of party affiliation, needs to confront their elected officials during the next month and tell them to do OUR work.  Time is running out!  One self-imposed fiscal crisis after another looms.  Continuing to wait until the last minute only invites bad policy and costly mistakes.

Author: Robert Katula

What say you, the people?