Budget Counsel Reference


Reference Source
for the
Congressional Budget Process


Welcome to the Budget Counsel Reference website. The intent and design here is to facilitate greater comprehension of Congressional budget law. Of the many responsibilities of the U.S. Congress, perhaps the most essential is its power over the resources of the United States. The law governing the budget process is not a matter of accounting, but the essence of a republican form of government. 

  Periodic Counsel Advisory
Notes from beyond the wall

November 14, 2018

“The Congress shall assemble at least once in every year, and such meeting shall begin at noon on the 3d day of January, unless they shall by law appoint a different day.”

January 3 of 2019 is a Thursday, so the House will convene and likely adopt its organizing resolution the same day. The House is not a continuing body, and since all its rules expire at the end of each Congress, which happens on noon on January 3 odd-numbered years. An interesting aside is how they manage this, since the first action the House takes is to appoint the officers of the House. How a body that no longer exists can vote to do anything is sort of glossed over. Back on January 3, 2017, they adopted H. Res. 1 (115th Congress), which appointed the Clerk, the Sergeant-at-Arms, the Chief Administrative Officer and the Chaplain, technically before anyone formally around to even receive or bring into existence an “H. Res. 1”. No one has ever really complained, and the limbo that is short time before the end of one Congress and the formal beginning of the next has never really been a problem.

They will elect a new Speaker, of course. Since current Speaker Paul Ryan will no longer be a Member of Congress, the ceremonial handing over of the gavel from the Republicans to the Democrats will likely be done by Rep. Kevin McCarthy, who will then be the then former Majority Leader, and then Minority Leader (unless Republicans decide on somebody else). The then newly minted Speaker Nancy Pelosi (unless Democrats decide on somebody else) will be formally in her position.

As important as all that is, the major thing that happens that day is the adoption of “H. Res. 5”,[1] which will be the “organizing resolution” and is where the Rules of the House of Representatives are established, or modified if needed. Since the Democrats have complained for years about the way Republicans have run the chamber, that is what minority powers are supposed to do after all, they will likely want to make a point of the shiny and new stuff they are going to implement.

This includes budgetary rulemaking changes (which in budget law is pretty important). The Democrats were last in the majority for the 110th and 111th Congresses, which covers four budget cycles. They managed to get three budget resolution conference reports adopted (but with a Democratic Senate). That’s not a bad average when comparing it with the years immediately before that time, and the half-dozen years after. While she won’t be able to get a budget resolution adopted in the 116th Congress, not unless a budget deal is reached and it extends to a “Bipartisan Budget Act of 2019”, it is a good bet she will manage a House-deemed budget resolution for fiscal year 2020.

In the Rules package, since no budget resolution was adopted for fiscal year 2019, but rather only one deemed in force by section 30103 of the Bipartisan Budget Act of 2018, the Rules Package could be used to make modifications to that text, since it operates for budget enforcement in the House only anyway. The other option is to do nothing, and since the “deemer” is in law, it will carry over into the new Congress (the “resolving clause” of the H. Res. always includes language bringing forth all the old laws and rules into the new Congress).

Here’s what the Rules Package will likely contain:

Holman Rule. It will nix theHolman Rule” separate order from section 3(a) of H. Res. 5 (115th Congress). This is an exception to the rule against legislating on an appropriation bill for amendments (1) reducing amounts of money in the bill, (2) reducing the number or salaries of Federal employees, or (3) reducing the compensation of any person paid by the Treasury. During debate, Minority Whip (soon to be Majority Leader) Steny Hoyer said: “It undermines civil service protections.”

Amendment Shield for Appropriation Bills. They might keep clause 2(g) in rule XXI. It is a rule to protect appropriation bills from being changed – any amendment proposing to increase budget authority at all is immediately ruled out of order. This rule shredded the House Budget Committee, or rather cemented its irrelevance in the last Congress, since it rendered the section 302(f) point of order of the Budget Act irrelevant. That is the one that enforces the allocation and suballocation levels contained in budget resolutions. No enforcement, no real need for the allocation or suballocation to begin with and really brings up the question as to the need for the budget resolution (and hence and thence the Budget Committee’s relevance).

Cutgo and Paygo. The new majority will almost certainly bring back the “paygo” point of order, since that was its basic claim to fiscal responsibility last time around. It enforces a “deficit control” regimen rather than “direct spending control”. This really means that it prevents tax cuts with equal vigor, perhaps more so, than increases in non-offset direct spending. From a Republican standpoint, this means it allows taxes to increase to offset increases in direct spending (meaning new entitlements). From a Democratic standpoint it is greater fiscal responsibility since one cannot cut taxes without offsetting the loss of revenue, and thus resources, to the Federal Government. Since it is much easier to cut taxes than to cut spending, and much easier to raise taxes (invariably “on the rich”) to cover the cost of new spending, each standpoint has some truth to it, and also fails to quite tell the whole story at the same time.

Macroeconomic Estimates. Clause 8 of rule XIII requires certain estimates from the Congressional Budget Office (with the service of the Joint Tax Committee sometimes employed on revenue effects) to take into account the effect the bill would have on the economy.  It is reserved for “major legislation” and was put in place in the 114th Congress. It is a largely innocuous rule, with the obnoxious aside that it includes the authority for the Chairmen of the House Ways and Means, and of the Senate Finance Committee, to require these kinds of estimates for revenue legislation, instead of the Budget Committee Chairman having sole authority over the subject. It seems minor, but it is a Budget Committee prerogative that was trampled on and shows what can happen when the staff director of the Budget Committee is going to move to the Ways and Means Committee (not as a new staff director though) but still can make decisions to the benefit of the new position to the detriment of the old. The problem with the rule is that it appears to allow for tax cuts to generate offsets through higher growth in the economy, what is termed “dynamic scoring” by some. Democrats have used terms quite derisive of the concept so it is likely a goner, its innocuousness notwithstanding.

It is unfortunate but the egregious practice of waiving all points of order for all legislation coming to the House floor for consideration under a rule will likely continue.  This practice is not part of the Rules Package, but rather the mode of operation put in place by Speaker John Boehner after taking the gavel in the 112th Congress. Its continuance is a certainty since it built on the only slightly less autocratic procedure it replaced from the the 111th Congress, put in place by the once and future Speaker Nancy Pelosi. That one waived all points of order in the same fashion, with the exception for the “paygo” point of order.

Not too long ago, and certainly in the early part of the twentieth century, such a practice would have been thought a tyrannical abuse of power that even the “Czar” of the House Uncle Joe Cannon (Speaker from 1903 to 1911) would have found egregious.

This will not bother a Speake Pelosi, since the centralization of power in the Speaker’s Offices will likely remain the case. The real problem, though, is that Nancy Pelosi is not one to come to agreement with the other party. It is not in her DNA. Enough agreement will be managed to keep the government running, but very little more. That might be a good thing, sometimes gridlock works to the benefit of the country. The old conservative maxim of “just don’t do something, stand there” has enough truth in it to hope it might work.

[1] Within memory, there have only been two instances where “H. Res. 5” has not been the number, both when the House majority parties turned: the 104th Congress and the 110th Congress, when it was “H. Res. 6”.

November 9, 2018

To think about … the mindset toward appropriation Acts has changed quite a bit in the past twenty-eight years. While last year there was a non-event shutdown of the Federal Government for a day. In 1990, the Federal Government also shut down, it started on midnight of a Friday (October 5) and lasted to midnight Monday (October 8), with government wheels beginning to turn again on Tuesday. It being a Columbus Day weekend, it did not shake the earth, though a bit of tutting did occur.

The comparison to last year’s shutdown is not the point here though, it’s how they resolved the appropriations lapses is: Five short term spending laws were enacted (on of them with the ominous sounding number of H.J. Res. 666, ironically reopening the government). No, the difference here is not the shutdown, but the way Congress and the President chose to resolve the situation. To be fair, it was an unusual year in that it was ending after a bipartisan budget agreement, and it all became wrapped up with the debate over the issue of tax increases. A relatively little known Republican Newt Gingrich did not particularly like the inclusion of that policy and made quite a lot of noise during the back and forth in autumn of 1990.

Still, when all was done, the government reopened, but that was on October 9. Congress continued to work on separate appropriation bills, and the authorizing committees continued to work on their pieces of a full measure reconciliation bill (including the Budget Committees contribution of title X, the Budget Enforcement Act of 1990).

Instead of one massive omnibus bill, or several small bills, the President was sent fifteen bills to sign. They became Public Laws 101-506 through 101-520.  That includes thirteen appropriation bills, one reconciliation bill (the Omnibus Budget Reconciliation Act of 1990) and the Defense Authorization, and annual event of pretty big deal sort proportions.

The idea of a return to such a mindset, that the appropriation bills should be done separately, and that a deal could be reached of the size of OBRA 1990, and it could include a major restructuring of the budget laws, is so far fetched as to boggle. Still, it is worth mentioning since at the time it was greeted with a rather dismissive attitude: “anyone can raise taxes” and “they’re giving up on real deficit reduction”. Looking back, except for one’s views of taxes, which is such a partisan issue it will be exempt from comment here, the mindset and work effort that went into the entire thing is very impressive, and it would be nice if it could come back in some fashion.

That being unlikely, the other thing that might be nice to return is to bring back the Rules of the House and the role of the House Parliamentarian. Since the Pelosi first time around in 2007 (110th and 111th Congresses), and since then under the GOP, the House Rules have been pretty much all the time. That is a loss, and reflects badly on a great legislative institution.

November 8, 2018

The mid-term elections certainly proved the old adage “Expect the expected.” Well, maybe it’s not that old, and it’s mostly just used around here. Similar to that is the verity that budget law is home to the opposite principle of Occam’s Razor: Among all available approaches to a situation, the most complicated is usually the right one. 

The Democrats were expected to take the House and they did. At least here they were, but this is a website that is besides politics. It cannot really be non-politics, since budget law is too dependent on that subject to be pure on the matter. It just attempts to be mind over that matter. Once the euphoria dies down (and it will), once the reality realization kicks in (and it will), both soon, except for those Democrats with a memory, things will look different. Many Democrats will remember they were frustrated by a President Bush and his somewhat indifferent view toward their majority, the reality of the limits of a one-House majority in Congress will settle in.  President Trump’s staff is even now working on their computer shortcuts to place the words “executive privilege” in every document imaginable (maybe “Control + W” will work. 

For a Democratic majority, this could be a great opportunity to really change things. Maybe for the good, maybe not. Among the possibilities, at least two come to mind,  one is likely and depressing: Endless attempts at investigations and subpoenas, and gnashing and thrashing, like a mosh pit with papers and lawyers. Budgeting has been concentrated in the Speaker’s Office under Boehner, and Ryan was very much stuck with it, and you can bet Pelosi will not only stay that course, but may up it a notch.

On  some other hand, a budget process deal is the another way to go: It costs very little, the President likely has no real interest and might just like to have something to sign. The Democrats might be able to assemble some “good on budget technicals” people (Richard Kogan and Gail Millar come to mind), and do something worthwhile. 

This last would have to come in the wake of the wrap up of the Joint Select Committee on Budget and Appropriations Process Reform bill that will eventually be marked up, though it will disappear very quickly once it sees the light of day. That’s unfortunate, since a great deal of work went into the product, and it was a wonderful opportunity, the cards were just not really on the right table. 

Quote for now: If you always say you observe a “post-now” philosophy, you’ll always be in style (or out of it), whichever is better (or worse).

October 26, 2018

The 2018 mid-terms, the election year that should have been certainly beneficial for Democrats, if history is any guide. The election of a new President is followed by something of a  retrenchment two years later, which was certainly the case in 1982, 1994, and 2010. This last one is the most interesting from a budget law perspective. When the Republicans retook the House, after four years of a Speaker Pelosi, they did a number of things in reorganizing the institution that raises the question as to whether they will be undone by a return to Democratic control. If that happens, of course.

Beyond getting rid of the ostensibly eco-friendly cafeteria policies, where straws were made out of some weird paper that fell apart and spoons that would melt in any hot liquid (like hot chocolate). The GOP overturned the prohibition on plastic and styrofoam too — the prices didn’t come down though (evidently eco-friendly is expensive business — something a poverty stricken young Congressional staffer is ill-prepared to afford).

More to the point, the GOP also got rid of the last shred of a rules-based system for consideration of legislation on the House floor. Speaker Pelosi brought in the idea of waiving all the rules for all legislation except the “paygo point of order” that said no bill could increase the deficit. The GOP got rid of both: The paygo point of order became a “cutgo point of order”, which retained the cumbersomely poor drafting of the rule, but altered it to apply to only prohibiting increasing direct spending. They replaced the rules policy of “waive all with one exception” to just plain “waive all.” Hence, with the exception of the perennially dysfunctional  appropriations process, no bill comes the floor with any of the House rules really applying it to it (motions to recommit are still allowed, but that’s another story).

A bit more minor was the GOP repealing one of its own trademarks — the clause giving special treatment to a point of order raised against Federal Mandates. CRS described how it “repealed clause 11 of Rule XVIII, which allowed amendments striking unfunded intergovernmental mandates on the House floor, unless a special rule adopted by the House specifically prohibited such action.” (See p. 10 of the CRS Report (PDF) for a full explanation).

A Democratic House and a Republican Senate, which seems to be the expected outcome (this is the wrong place for political prognostications though), would end any hope for a return to some semblance of a normal budget process. The hopes were not high to begin with. What would have to happen though, is a “Bipartisan Budget Act of 2019”. With three of them already having been enacted, a fourth would be relatively easy to draft (the first being brilliantly written, of course). The actual numbers they plug in, much gnashing, much frothing, much yelling, but it will all come down to being underwhelming, in all likelihood.

The budget process bill that the bipartisan Joint Select Committee on Budget and Appropriations Process Reform, that’s an interesting question: Nancy Pelosi has no bipartisanship in her DNA, so it would be something of a surprise if she decided to try, right out of the block, a bipartisan budget reform effort. The only reason it might happen is to give Democrats something to talk about other than how much they hate the President. Since that will be the perceived mandate, they may not need anything else. Still, maybe the lesson, one would thing obvious by now, that you need something positive to say to alleviate an overwhelmingly negative political message, would be learned.

Random thoughts from days past … collectively just called: The Blather File.

Items of Note

The Joint Committee on Budget and Appropriations has a website …
Whither the Budget Committee? Wither the Budget Committee

Biennial Budgeting and the Budget as Law: An Inadvertent Trial Run
The Daft Draft: Wording and Debt Limit Language

Consolidated Appropriations Act, 2018
Bipartisan Budget Act of 2018 (Pub. L. 115-123)
Joint Select Committee on Budget and Appropriations Process Reform (BBA 2018)

H. J. Res. 128, Continuing Resolution (Expiring February 8, 2018)
H. Con. Res. 71 (FY2018 Budget Resolution)
Bad Idea: Directed Scoring Provision
Current services budget deadline missed, again

Items of Note, the List

Budget Process

With a Joint Select Committee on Budget and Appropriations Process Reform established by the Bipartisan Budget Act of 2018, those keenly aware of the overwhelming need for such reform must be encouraged. The specifics of the procedures the Committee must follow are somewhat daunting, but any start is a good start. In particular, two thing make for difficulty: The time frame is short — the Select Committee is given only until the end of the year to finish the task. The other is that not only is a majority required of its members, but a majority of both Republicans and Democrats must be in favor it. With budget reform being difficult and complex, this is a hurdle, but optimism is in order since the topic has arisen and the opportunity for success is welcome. 

For some background on the issue of budget reform, the below tractate lays out the basics:

Analysis: Contemplating the Congressional Budget Process

Current Budget Resolution

None: Concurrent Resolution on the Budget for Fiscal Year 2019, Deeming Resolution included in Bipartisan Budget Act of 2018 (Pub. L. 115-123)