Budget Negotiations: Will Showmanship or Statesmanship Prevail?

The term "shutdown" is being tossed around in Washington as much as "Cinderella" has been on ESPN as of late. With the current continuing resolution (CR) funding the federal government expiring on April 8th and the appetite for more stopgap measures waning, current negotiations over federal spending for the rest of the fiscal year are taking on more importance.

According to recent reports, Democrats have come up with a new offer in the talks that would reduce spending by another $20 billion below current levels, on top of the $10 billion that has already been cut through the two CRs passed since the beginning of the year. This would put spending for the rest of FY 2011 near the level initially proposed by House Budget Committee Chair Paul Ryan (R-WI) earlier this year. Yet as the two sides apparently come closer to an agreement on spending levels, the rhetoric is becoming more intense. So, will there be a breakthrough, or a breakdown? The next few days will tell.

To recap, the following table illustrates the various spending levels and amounts below previous levels.

Plan FY 2011 Spending Level (Trillions)
Amount Below 2010 Level (Billions)*
President's FY 2011 Request $1.128 $41 Above
President's Updated Request in FY 2012 Budget $1.115 $28 Above
Funding Levels through March 4th $1.087 $0
Current Funding Level through April 8th $1.077 $10 Below
Original Rep. Paul Ryan Proposal $1,055 $32 Below
H.R. 1 $1.026 $61 Below
Initial Democratic Offer $1.067 $10 Below
Latest Democratic Offer $1.058 $30 Below

*Funding level for first five months of FY 2011 will vary slightly from enacted FY 2010 levels due to small adjustments.

Republicans have used the $61 billion in cuts in H.R. 1 that was passed by the GOP-controlled House last month as their starting point and have chided the Democrats who lead the Senate for not passing their own version. Negotiators must also deal with several policy provisions included in HR 1, such as limiting the actions of the EPA and prohibiting federal funding of Planned Parenthood.

These drawn-out budget negotiations are a perfect example of how broken the budget process is. We're almost one year after the date (April 15) when Congress should have enacted a budget for the year and lawmakers are still haggling over 2011 spending, not to mention the lack of action so far on the FY 2012 budget. We need real budget reform along the lines of the recommendations found in Getting Back In the Black to not only make the budget process more functional, but to also set enforceable fiscal targets to focus policymakers' attention.