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Budget, Debt Limit, and Spending: What to Look for in the 114th Congress

- January 2015

A recap of the budget process – and how it has been ignored:

The most fundamental statutory obligation of Congress is to discharge its fiscal duties: adopt a Federal Budget, pass individual appropriations bills to fund the government, and protect the full faith and credit of the United States.

The statutory budget deadlines are clear: The President is required to submit his budget outline to Congress by the first Monday in February for their review; in April Congress is to complete its review of the President’s budget and complete action on its own concurrent resolution on the budget; appropriations bills are considered in the summer; by June 30th the House completes action on all the annual appropriations bills (which must originate in the House); on October 1st the new fiscal year begins and all appropriations bills are to be passed and signed into law.

These deadlines have not been met in years – in some cases decades. President Obama has missed virtually every budget deadline since his election – in at least one instance failing to submit his budget to Congress until April, after the deadline for Congressional review of the document had already passed.

The Congressional track record is no better. Congress last met its obligation to pass a Joint Concurrent Budget Resolution in 2009 . . . but they haven’t passed one by the statutory deadline since 1994. The last time Congress enacted all of the individual appropriations bills before the end of the fiscal year was also 1994, more than 20 years ago. Individual appropriations are routinely wrapped into huge “omnibus” spending bills or “continuing resolutions.” This process is irresponsible at best, and is the cause of the brinksmanship that makes government-wide shut down threats real. If at least some of the individual appropriations bills were passed as they are supposed be during the year, the entire government would not shut down at the end of the fiscal year; only those agencies for which appropriations bills had not been passed would be affected.

Will it change in the 114th Congress?

It should. For the first time in years, Republicans control both houses of Congress, so conflicts between the houses should not obstruct action on a budget or appropriations bills.

House and Senate Budget Committee Chairmen Cong. Tom Price (R-GA) and Sen. Mike Enzi (R-WY) are both committed to making the budget process work, and the appropriations committee chairmen have always preferred to pass individual appropriations bills rather than cede their spending authority to unmanageable continuing resolutions or omnibus bills.

Just as significant, the GOP Leadership knows that its best chance of setting the agenda – moving their own policy issues, and rolling back some of the Obama agenda – is through the appropriations process. As Senator McConnell observed to the New York Times on December 22nd: “Many of my members are not used to voting for appropriations bills. But if we are going to pursue our agenda to push back against the bureaucratic overreach seemingly on steroids for the last five or six years, we need to put appropriations bills on the president’s desk and make him make a choice.”

And House Speaker Boehner has spent four frustrating years being tagged with leading a “do nothing” Congress despite passing dozens of bills, because those bills died without even being taken up in the Democrat-controlled Senate. The House has a much better track record than the Senate of passing budgets and appropriations bills, and with the GOP takeover of the Senate, the Speaker can – hopefully – finally see action by both houses on a shared agenda.

The Reconciliation opportunity:

One additional, and potentially significant, advantage for the GOP if they succeed in restoring order and moving a budget: the budget resolution can authorize consideration of a reconciliation bill. This would afford the new GOP majority the opportunity pass some significant parts of their legislative agenda in a non-filibuster-able bill. [For more information on the reconciliation process see our staff report on A Look Ahead: What Issues Are Likely To Dominate The Agenda In Washington In 2015?]

Dates and deadlines to watch:

There are a series of triggers and dates in the year ahead, and how Congress and the White House deal with each of them will tell us how much has changed, or if it’s still business-as-usual in Washington.

February 2nd: This is the date by which the President is required to submit his budget to Congress. It he meets the deadline it will be a departure from his past performance.

February 27th: The one government agency NOT funded through the end of the fiscal year on September 30th is the Department of Homeland Security. DHS enforces immigration laws, and the GOP Congress funded it only through the end of February to give them an opportunity to review – and possibly defund – the President’s executive action granting temporary legal status to millions of illegal immigrants. Should Congress not pass a new bill funding DHS, that agency would shut down on March 1st. While not as catastrophic as a complete government shut down, the politics of shutting down the department responsible for homeland security could be problematic for the Congress, or the President, or both. Of note, the Congressional Research Service released a report last fall which found that immigration services would continue even if the government were shut down.

Mid-March and thereafter: A year ago the Congress enacted legislation effectively suspending the limit on the amount of debt the government can incur, and that suspension ends on March 15th. After that date the Treasury Department will most likely take the usual “extraordinary measures” (and yes, that sentence is oxymoronic – taking “extraordinary” measures is the usual Treasury response to the debt limit) through summer or early fall to avoid default. But at some point the statutory limit on debt will be reached, and that could well trigger a confrontation in Congress between the GOP Leadership and the Tea-Party-aligned conservatives over whether to extend the limit and/or what policies to demand in exchange for extending it.

April 1st – April 15th: These are the target dates for introduction and final action on a Congressional budget. As noted above, Congress has not met its obligation to have both houses pass a Concurrent Resolution on the Budget on time since 1994, and haven’t passed one at all since 2009. It should be easier this year with Republicans controlling both houses of Congress and Budget Committee Chairmen Tom Price and Mike Enzi both determined to succeed. But the budget sets the spending targets for the Federal government, and the sequestration caps set in 2011 remain in effect. Budget/deficit hawks want the caps kept in place and spending restrained, pro-defense Republicans want action taken to allow an increase in defense spending even if the overall caps are retained, and the Administration and some members of Congress in both political parties would like to see the caps lifted and spending increased. Resolving all those conflicting spending priorities will not be easy, and adoption of a budget – especially if it is done on time – would be a very notable accomplishment.

May-July: Individual appropriations bills are supposed to be considered in each House of Congress following the adoption of a budget resolution. It has been so many years since that has been done that it would be nothing short of stunning were it to happen this year.

September 30: The end of the Federal Fiscal year – and the date by which all of the appropriations bills are supposed to be passed by Congress and signed into law by the President. This hasn’t happened since 1994. If they fail to pass all (or in some years, any) of the 12 individual appropriations bills, the remaining bills are rolled into a huge “omnibus” appropriations bill, or a “continuing resolution” is passed to keep the agencies funded at the prior year levels. And often short-term continuing resolutions are adopted to fund the government for a few weeks or months – or even just a few days – to give Congress time to complete action on a final spending bill. And if all of that fails, the government shuts down when the funding comes to a halt, as it did in October, 2013.

Clearly, there is not a business in the country that manages its finances the way the Federal government manages the taxpayers’ money. The Federal budget system is completely broken. Senator Mike Enzi is a vocal proponent of budget process reform, and as the new Chairman of the Senate Budget Committee, has the opportunity this Congress to try to push those reforms through his committee. If he succeeds, it will be very good for the country.