Green shoots of bipartisanship are sprouting on Capitol Hill. A lengthy government shutdown or worse — a default on paying our debt — has been avoided with the two-year budget agreement.
Congress must now fill in the account-level details to fulfill the $1.2 trillion spending “agreement” before the current continuing resolution runs out on March 23. Combining this year’s final appropriation actions with the president’s March 5 deadline for the Deferred Arrivals for Childhood Arrivals program will give new meaning to “March Madness.”
But even as final appropriations for fiscal 2018 remain to be completed, a new budget season is upon us. President Donald Trump on Monday issues his budget plan for the next fiscal year beginning this October. Will it receive any more respect from Congress than the proposal he submitted last May? Will it reflect the just-negotiated fiscal 2019 spending figures for defense and domestic programs? How will it address the other 70 percent of government spending not covered in the recent agreement?
Congress is to review the president’s request, and then adopt it or produce its own blueprint by tax filing day, April 15. In the last budget cycle, Congress adopted a blueprint more than six months after the deadline, with the singular goal of setting up a process to consider a tax bill under expedited procedures to avoid the Senate’s 60-vote threshold. This is not what the drafters of the Budget Act had in mind for how the budget process is supposed to work.
Looking at the economy today, some would say it is the best of times, so why worry about producing a budget at all? But for budgeteers, this may be the worst of times.
Unemployment is at a 17-year low. The stock market is volatile and may be adjusting but is still up 15 percent from last year. Individual 401(k) plans have expanded along with equities. Those fortunate to own stocks have felt wealthy again and businesses are reporting solid earnings. As the president proclaimed in Davos recently, “There never has been a better time to hire, to build, to invest and to grow in the United States.” Why worry, let the good times roll!
Others, however, do not share his optimism. Deficit watchers see a budget process in shambles, despised by the very members who have manipulated it for partisan purposes.
Debt and deficits are expanding rapidly, but neither elected officials nor the public seems to care. Rising interest rates, to some a sign of economic growth, also ensures that the fastest growing area of the federal budget will be interest payments on our debt.
While the unemployment rate is down, labor force participation remains at stubbornly low levels. Personal savings have dropped to their lowest levels since the 2000s. Only recently have real wages shown some signs of growth.
But even if the economy could grow indefinitely at the president’s stated goal of 3 percent per year, it would not eliminate the mounting debt burden and reduced standard of living being placed on future generations. While some individuals — particularly those in the upper-income brackets — may benefit from the recent tax cuts, most Americans will find little long-term solace in them, and the spread between the rich and poor will only grow greater.
Worst of all, trust in government and its leaders is at an all-time low. At the same time, some congressional leaders are attacking the credibility of their own institutions, such as the Congressional Budget Office, which strives to provide them with objective analyses.
Having a sustainable fiscal path for a country’s future is a fundamental responsibility of any government. Given predictable demographic trends, a realistic long-term assessment in budgeting is extremely important. Governing is budgeting and, conversely, budgeting is governing. No one said either would be easy. But Congress has failed in this most basic responsibility. In fact, it has failed to adopt a real spending and revenue blueprint seven out of the last eight years.
Will this year be any different? Or will Congress once again simply defer its responsibility to even produce a real balanced budget plan? We can hope members will take their fiduciary responsibilities to the public seriously, but hope doesn’t seem to hold much promise in Washington these days.
A presidential budget submission Monday that recognizes the political trade-offs necessary in a closely divided country, followed by a bipartisan congressional budget resolution reported on time would be a good start in restoring some credibility to the federal budget process. Now that could be the best of times.
G. William Hoagland is a BPC senior vice president, helping direct and manage fiscal, health, and economic policy analyses. He previously served as vice president of public policy for CIGNA Corporation, staff director at the Senate Budget Committee, and director of budget and appropriations in the office of former Senate Majority Leader Bill Frist.
The Bipartisan Policy Center is a Washington, D.C.-based think tank that actively promotes bipartisanship. BPC works to address the key challenges facing the nation through policy solutions that are the product of informed deliberations by former elected and appointed officials, business and labor leaders, and academics and advocates from both ends of the political spectrum. BPC is currently focused on health, energy, national security, the economy, financial regulatory reform, housing, immigration, infrastructure, and governance. Website | Twitter | Facebook