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Budget Resolution: Past meets Present April 20, 2010

Posted by Guest Blogger in Analysis.
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Each Tuesday BFAD features a guest blogger- these are experts from a variety of backgrounds writing about what they know best.  This week features Stan Collender, partner at Qorvis Communications.

by Stan Collender

It’s long been forgotten, but the Congressional Budget Act — the law that created the requirement that Congress pass a budget resolution each year – came close to never being implemented.

It was 1975, Congress was supposed to adopt a budget resolution for the first time, and members of both houses were balking at voting on it because, in effect, they were being asked to approve a deficit. The representatives and senators who voted for the Congressional Budget Act the year before (It’s hard to imagine now but the legislation passed with overwhelming bi-partisan support in the House and Senate) were just realizing what they had actually committed themselves to do…and they didn’t like it a bit.  Serious thought was being given to not doing a budget resolution that first year.

Rep. Richard Bolling (D-MO), the chairman of the House Rules Committee and the self-professed father of the budget act, is the one who supposedly saved the day and the congressional budget process.  Bolling went to House Speaker Tip O’Neill, Jr. (D-MA) and told him he had to decide whether the Congressional Budget Act was really going to happen.  O’Neill then insisted that the House not just consider but pass a budget resolution, the Senate followed the House, and the congressional budget process came into being.

All of this is important today because it is increasingly looking like Speaker Nancy Pelosi (D-CA) will need to get involved Tip O’Neill-style if Congress is going to get a budget resolution adopted this year.  Members of Congress once again are balking at voting on a budget resolution because of the deficit and, like the situation in the mid-1970s, serious thought is being given to not doing one this year.

This may be a little surprising.  Since they took control of the House and Senate in 2006, Democrats have made a budget resolution a priority and have put one in place each of the past three years.  This is in sharp contrast to the GOP attitude toward budget resolutions which, in spite of the legal requirement, treated them as if they were totally discretionary and didn’t pass one when it suited their political needs.

But this year, some Democratic members see a debate on a budget resolution and a vote on the deficit as politically very damaging.

Without a budget resolution, and the discipline it provides, old habits concerning the foreign affairs and defense budgets will likely be exaggerated.  Individual congressional members are less likely to stick their necks out for increases to the international affairs budget, despite calls from Defense Secretary Gates and others to strengthen our civilian institutions.  At the same time, the politically popular defense budget is likely to receive even less scrutiny despite the historically high request.

Beyond the fact that it’s legally required, Congress should adopt a budget resolution this year because a budget resolution could be good rather than bad politics and it would show the markets the budget is being taken seriously.

It could, for example, be used as a referendum on the stimulus and the government’s overall fiscal policy.  That could be important if the currently ongoing rethinking of both as positive rather than negative decisions continues.  And Republicans could be put on the defensive if Democrats use the budget resolution debate to force them to vote against the very controversial plan introduced by House Budget Committee Ranking Republican Paul Ryan (WI) that includes some politically very unpopular cuts in Medicare.

Finally, and in many ways most important, not adopting a budget resolution this year would not be a good message to send to the bond market and international lenders, both of which are important to keeping interest rates at the low levels needed to keep the recovery going.  For this purpose, even a budget resolution without a deficit reduction plan would be better than no budget resolution at all.

There’s no doubt that Republican congressional leaders likely think they’re in a win-win situation.  They’ll criticize Democrats for the budget resolution they may produce or criticize them if they don’t do one at all.  That almost certainly means House and Senate Democrats are going to be split on how to proceed and that the Speaker will have to do what Tip O’Neill did 35 years ago.

Long-time federal budget watcher Stan Collender is a partner at Qorvis Communications, founder of the blog, Capital Gains and Games, and a weekly columnist for both Roll Call and The Fiscal Times.



1. Rebecca Williams - April 26, 2010

An update: On 4/22/2010 the Senate Budget Committee approved the fiscal 2011 budget resolution but it is unclear when it would reach the floor.


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