Fiscal Floundering

David Super

     Our nation continues its transition from congressional to presidential fiscal control.  Retainers of the ancièn regime (“Members of Congress” to you) fumble around looking for something to do as the Administration becomes increasingly assertive.  No single recent event moved me to write, but putting several pieces together reveals a picture that is worth noting.

     The congressional appropriations process is rapidly falling apart.  Lacking the filibuster, House minorities have virtually no independent power when the majority is united.  The House Republican Caucus is vehemently opposed to negotiating with Democrats so House Republican appropriators write extreme bills that can keep their Members on board but have no chance of getting the Senate Democratic votes needed to overcome the filibuster.  This makes House appropriators of both parties increasingly ineffective. 

     For the past several years, then, appropriations bills were effectively negotiated in the Senate.  This may be much more difficult this year because the Senate Appropriations Chair is one of the most endangered Republicans and can neither afford to alienate swing voters nor depress turnout in the MAGA base. 

     President Trump also threw a monkey wrench into the process of writing appropriations bills with his demand for a 44% increase in war spending in a single year.  This half-trillion-dollar increase is far more than the total combined spending of welfare, Supplemental Security Income, nutrition assistance, foster care, child care subsidies, the Earned Income Credit, the Child Tax Credit, and unemployment compensation for next year. 

     To accommodate anything resembling this spending surge, appropriators must either further increase the deficit or wreck the rest of the budget.  One might think that House Republicans would opt for deficit spending, with almost all having thrown fiscal caution to the wind in enacting last summer’s upper-income tax cut legislation.  For the moment, at least, an assortment of fair-weather fiscal hawks are insisting that the defense increase be offset with cuts in domestic spending.  (Reportedly some have already told Republican leaders what favors for their districts would suffice to induce another round of fiscal amnesia.)  But any appropriations bills that transferred anything remotely resembling this amount of money from domestic to defense spending could never get the Democratic votes necessary to surmount a Senate filibuster.  That leaves both House and Senate Republican appropriators stuck.  With many people suspecting that President Trump will veto any appropriations bill that does not contain the voter-suppressing SAVE Act, few have much incentive to take bold, risky decisions to move appropriations. 

     Speaker Mike Johnson has tried to break this impasse by proposing that they move a large part of the defense increase through special majoritarian “reconciliation” procedures.  This is getting to be quite a habit.  Republicans invoked reconciliation to pass their upper-income tax cuts last summer without Democratic votes and then did so again this spring to provide opulent funding with no accountability to the Department of Homeland Security and its immigration enforcement agencies.  Why not go for a hat trick?

     Procedurally, Republicans can indeed return to that well a third time in one Congress.  (The Congressional Budget Act limits how often the majority may invoke reconciliation, but they can make this one work.)  Politically, however, forcing Republicans to cast vote after vote to fund a wildly unpopular, failed war is not very attractive.  Moreover, reconciliation rules give Senate Democrats two separate opportunities to force numerous votes on politically uncomfortable amendments.  Practically, reconciliation consumes a lot of floor time, which is scarce with nervous Members eager to go home to shore up their re-election prospects.  And institutionally, the habit of addressing more and more difficult spending questions through hyperpartisan reconciliation sends the appropriators, particularly the genuinely bipartisan Senate Appropriations Committee, steadily toward irrelevance. 

     House Republicans have been looking desperately for offsets to make a military reconciliation bill look less like the budget-buster that it would be.  Reportedly they tried claiming that an increase in state anti-fraud administrative money would yield savings from fewer fraudulent payments in anti-poverty programs; following longstanding scorekeeping principles, the Congressional Budget Office refused to attribute any savings to this scheme as these programs already have extremely low fraud rates.  At present, Republicans lack the votes even to start the reconciliation process in either chamber.  

     Unable to move either regular appropriations bills or a partial substitute via reconciliation, attention is turning to the “continuing resolution” that will have to be enacted to prevent a partial government shutdown on October 1.  These bills typically freeze funding at the prior year’s nominal-dollar level, which stresses agencies due to inflation.  In crafting continuing resolutions, the parties typically negotiate a modest number of “anomalies”, deviations from the freeze level to reflect unusual funding needs (such as major disasters or the decennial Census). 

     The Administration just submitted its list of proposed anomalies to Congress.  It is instructive.  Not surprisingly, it is trying to smuggle in as much of its military spending request as possible into the anomalies process.  It also seeks retroactive congressional approval of impoundments of domestic programs’ funds that it has already implemented.  It is urgently seeking a $30 million increase in funding for the Department of Justice to pursue “fraud”; since returning to office, the Trump Administration has used vague, unfounded accusations of fraud to justify harassing and defunding blue states that it particularly detests (while ignoring far more serious integrity problems in red states).  The Administration’s request accelerates the availability of disaster response funds, reportedly at the insistence of a North Carolina Republican threatening to withhold his vote from fiscal legislation.  And it seeks an additional $113 million for the National Park System to cover the costs of the President’s 250^th anniversary celebration.  I certainly hope nobody tells the waste-fraud-and-abuse people what the attendance at that celebration was.  (I would not be surprised if there was an Arc d’Trump hiding in that budget request as well.)

     Implicitly signaling that bipartisan agreements on appropriations will be increasingly rare, some senators in both parties are working on legislation to regularize impasses.  Proposals’ details vary, but most would automatically activate a continuing resolution with less money than programs need to continue providing current services.  Making this the default will give those seeking budget cuts even less reason to negotiate appropriations bills and forcing programs’ proponents to make concessions to avoid automatic cuts.  This will set domestic programs’ funding on course to ratchet down over time.  Ending individually negotiated continuing resolutions also will eliminate one of the few vehicles still available for restraining the Administration’s worst excesses, such as its forthcoming rule politicizing the federal grants process.

     Government shutdowns are costly and messy, but they are also our primary means of getting the electorate to adjudicate the parties’ genuine disagreements.  Just as the disappearance of trials deprives civil litigants of benchmarks for valuing their cases, so, too, the absence of verdicts from the electorate on government shutdown would leave the parties with little guidance on how they should limit their demands.  This would make partisan divisions even sharper and more intractable. 

     To end on a positive note, I would encourage those interested in an example of Congress acting fairly forcefully to restrain the Administration’s impoundments of appropriated funds to read my recent op-ed with Cerin Lindgrensavage.

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