You Say You Want a Resolution

The Senate Budget Committee yesterday approved of a fiscal year 2011 budget proposal by a largely party line 12-10 vote, setting up a heated floor fight over the budget resolution that will highlight the fiscal challenges facing the country.

As we pointed out yesterday, the budget blueprint will reduce the deficit more than the president’s plan, narrowing the gap to 3 percent of GDP in 2015 -- an important goal. We also observed that a major piece to achieving this goal is the assumption that the full cost of patching the AMT and estate tax will be offset after two years. A key question moving forward will be if this represents the laying down of a firm marker for paying for tax cuts and spending increases or not. Essential to tackling the deficit will be if lawmakers view this as a serious commitment that must be realized or a simple budget gimmick that can be ignored.

In the mark up of the bill, the committee considered several amendments that presage the intense debate to come when the entire Senate takes up the resolution and represent many good ideas for fiscal discipline.

The panel approved the following amendments:

• Establishment of a point of order against reconciliation legislation that creates new direct spending greater than 20 percent of the total savings instruction (Senator Gregg).

• De-funding of programs recommended to be scrapped by OMB in FY 2009-2011 (Senator Warner).

• Stricter reporting requirements from stimulus funding recipients (Senator Warner).

• Development of metrics to measure changes such as cost and quality of health care resulting from the health care reform law (Senator Warner).

• A requirement that budget resolutions contain a "truth in debt disclosure" section stating the amount of money that the budget resolution would add or subtract from the national debt (Senator Crapo).

• The cancellation of authority to spend the $44 billion in unused TARP funds (Senator Graham).

• Establishment of a point of order against emergency spending unless 16 senators signed a letter supporting it (Senator Bunning).

• Requirement that war spending be offset over the next decade (Senator Feingold).

The following amendments, meanwhile, were rejected:

• A prohibition on the use of Medicare cuts to offset spending increases or revenue reductions in any other program (Senator Gregg).

• The addition of the debt of Fannie Mae and Freddie Mac to the national debt (Senator Crapo).

• The rescission of $42 billion in unused stimulus (ARRA) funds (Senator Cornyn)

• Discretionary Spending caps for FY 2011 – FY 2015 (Senator Sessions).

CRFB is particularly disappointed at the failure of the caps proposed by Senator Jeff Sessions, similar to legislation that has come close to enactment on the Senate floor. The resolution does include President Obama’s freeze on non-security discretionary spending for three years, but CRFB has argued that more needs to be done to cap discretionary spending.

The resolution also coordinates Senate PAYGO rules with statutory PAYGO requirements set forth in the PAYGO law enacted earlier this year. This action actually weakens PAYGO because the Senate PAYGO rules were stronger than statutory PAYGO, which carved out several exemptions. Genuine pay-as-you-go discipline will be required to reduce the deficit and stabilize the debt.

Budget Committee Chairman Kent Conrad should be commended for moving forward with a budget resolution when many contended that Congress should forgo its responsibility to adopt a budget blueprint that highlights the bleak fiscal outlook in an election year. We hope that the House follows suit. The blueprint approved by the Budget Committee is far from perfect, and doesn’t do nearly enough to put the budget on a sustainable path. But it reflects movement in the right direction towards reducing the deficit.

Senate committee passage does not mean smooth sailing for the blueprint. There isn’t a lot of time available to consider the resolution, before the Memorial Day recess, especially considering the 50 hours of debate which is required, and the absence of a limit on the number of amendments that can be offered.

And even if the Senate manages to pass its budget plan, there is no guarantee the House will consider a budget resolution this year. Congress failed to pass budget resolutions in FY 1999, 2003, 2005 and 2007.

If no budget is passed, the House and Senate likely will consider “deeming resolutions,” which would provide the Appropriations Committees with an overall spending allocation for the year. If no deeming resolution is passed quickly, House appropriators could begin considering their annual spending bills in committee, using whatever guidance they are given by congressional leaders. Under the Budget Act, the House Appropriations Committee may begin marking up its bills after May 15, even if no budget or deeming resolution has been adopted.

The Senate is prohibited from working on its spending bills without a resolution and any Senator can raise a point of order against the spending measure. However, that point of order can be waived by a simple majority vote.

Adopting a budget resolution won’t be easy, but we hope Congress does not circumvent the important process. The debate within the committee foreshadows the tough deliberations and choices that await. These decisions cannot be avoided. Only through an open debate with all the options considered can we put the country on a sustainable fiscal course. Deliberation on the budget resolution will provide a critical forum for policymakers and the public to see the extent of the fiscal dilemma we face and the hard choices involved in overcoming it. Those that rail against the deficit must be prepared to offer specifics on what to do about it.

As the Beatles said:

You say you got a real solution. Well you know. We’d all love to see the plan.