Five Things That Are Right with the Congressional Budget Process

Yesterday the Wall Street Journal’s Washington Wire blog published a listicle by public affairs consultant John Feehery (once a spokesman for former Speaker of the House Dennis Hastert, the moderate, more timid successor to revolutionary Newt Gingrich), opining on the messy federal budget process. My attempts to reach Reid Epstein, the blog’s editor, to offer a counterpoint were fruitless, so here are five reasons we should be thankful for the current federal budgeting process.

1. The Anti-Impoundment and Budget Control Act of 1974 reinforced separation of powers.

The United States Constitution tells us next to nothing about federal budgeting!* Article I, Section 8, Clause 1 says that Congress “shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States,” but it doesn’t say who draws up the accounts, or who decides what constitutes “general Welfare,” or who decides and defines when, where, and how we have reached a threshold of sufficient “Defence.” The document leaves a lot of wiggle room as to who’s responsible for setting national agendas. That’s because, in James Madison’s wisdom, he Framers pitted the branches against each other and deliberately made policy creation difficult, to protect liberty. If branches of government were fighting with each other for agenda-setting power, or if Congress and the states were fighting each other for agenda-setting power, there would be less chance either could do something to hurt us, the governed. Every time we underscore or reinforce our separation of powers, it’s good for liberty.

The Progressive Era, too, foisted on America a number of chief executives, FDR the worst among them, who attempted to reshape how we understand our constitutional framework and, in the case of FDR, pushed such broad national agendas so aggressively that a cowering Congress effectively wound up outsourcing its lawmaking powers to the executive branch. This was exceptionally easy to do during the Great Depression and during two world wars, as everyone was too scared to think straight. Congress would pass shell legislation, and the Roosevelt administration would fill in the blanks with administrative law in the regulatory state. But with the Anti-Impoundment and Budget Control Act of 1974, which defines the process we use today to draft, adopt, and enact a federal budget, Congress reasserted its power of the purse through federal statute after four decades of abdication, and stopped President Nixon from impounding funds and using rescission to divert appropriated funds to wherever he thought they’d be best spent. This was a breath of fresh air and, again, was good for human (or at least American) liberty.

2. The process is highly political.

“Politics is contentious. It ought to be, there are big things at stake,” said my former Cato Institute colleage Gene Healy in Cato’s annual response to the president’s State of the Union address in 2011, deriding a bipartisan agreement to treat that year’s event like the high school prom, with Republicans agreeing to sit next to a Democrat and vice versa.

It’s worth stating over and over and over again until it sinks in everywhere in America that making policy is supposed to be hard. We do things this way literally by design! We could probably do a lot more with simple majority rules, or direct democracy. But the Framers were, rightly I would argue, highly skeptical of both. In the immortal words of Nobel laureate Milton Friedman, “I just shudder at what would happen to freedom in this country if government were efficient in spending our money.”

What’s at stake in our annual federal budgeting process? Around a trillion dollars of discretionary spending, that’s what, roughly a quarter of all money the federal government will spend in an upcoming fiscal year. That’s nothing to sneeze at. So Congress tries to figure out how to divvy up about a trillion dollars by batting about competing ideas in a deliberative process every spring and summer, and it’s that very deliberative process the Framers baked into the legal framework to protect liberty. There are closed rules, reconciliation instructions, and other parliamentary tricks. There are subcommittee reports, amendments, mark-ups, and conference committees. Inevitably there are hurt feelings and bruised egos. It sounds like a lot of inside baseball, but it’s all healthy for the republic. The fact that the federal budgeting process is political, in other words, is a feature of our system, not a bug.

3. Adoption of a budget resolution is just the beginning of a process with many layers and steps.

When Feehery says the Congressional budget process is “non-binding,” he’s talking about the budget resolution, not the whole federal budget process. Adopting a budget resolution is but one small event in a much larger process of creating, adopting, and enacting a federal budget. It’s simply an agreement in principle among Members on discretionary spending levels. But then we have two rounds of deliberations, authorizations and actual appropriations, that are legally binding. Budget authorizations may (and frequently do) change spending levels from the budget resolution. But that’s okay! The authorizations (which is like Congress’s pre-approval if it was buying a house) are what matter. And even more than that, how much money Congress appropriates for the executive branch to spend (which would be like the total amount they borrow from a bank to spend on the new house) is what matters most. Both authorizations and appropriations carry the full force of law, if the budget resolution doesn’t.

4. The process is highly partisan.

The median voter theorem tells us that by the time we reach the conclusion of an election cycle, candidates left in the race all love Mom, apple pie, fireworks, and baseball, and they oppose “bad stuff.” They become virtually indistinguishable from each other as they try to appeal to the largest cross-section of a normal ideological distribution of voters. As Congress goes through this rigorous, multi-layered process to create and enact the federal budget, the process compels them to finally lay down markers. They sponsor, cosponsor, amend, and vote on spending legislation. They seek earmarks for their districts. They logroll, meaning they break promises, or “compromise principles” for some favor down the road. And they do it all on the record where the public can see it. In some cases, this is highly valuable political currency for Members. Just ask Rep. Justin Amash, who wasn’t supposed to survive his reelection bid last year. In all cases, though, this is incredibly valuable information for voters. An incumbent’s record in Congress is the yardstick by which voters measure campaign rhetoric, and the federal budget process shows us who a candidate really is.

5. It gives back-bench Members a place to lay down markers.

It’s really hard for a freshman Member of the House or junior Senator to advance major national legislation on pet issues, unless by some miracle of political circumstances (like the Republican Revolution of 1994) leadership in the chamber decides to eschew the tradition of selecting committee chairmen by seniority, and appoints a rank-and-file colleague to a position of power. But if they play their cards correctly with leadership, Members without much cachet or influence can still make credible, public expressions of their beliefs and their district’s or state’s interests through the federal budget creation process. Libertarians should support this as pro-liberty candidates start to penetrate the ranks of elected officials in the major parties. They’re going to need to build on their electoral wins to get to a point where they’ve been around long enough to start scoring some real policy touchdowns. But you don’t get seniority or a leadership position if you can’t hold on to your seat.

*Update: Article I, Section 9, Clause 7 of the U.S. Constitution does say “No money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of Receipts and Expenditures of all public Money shall be published from time to time.” However, this language still leaves a considerable amount of ambiguity in the execution of the process.

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