Faux Finances II and III Redux

As noted in our previous post, Mark Hyman's recent series of commentaries simply regurgitates points he made in April of this year. Rather than reinventing the wheel, I am reproducing my original responses to this series. The following are Parts II and III of the three-part series.

Faux Finances Parts II and III

Mark Hyman’s idea of letting congressional budget committees write budgets that have the force of law is problematic. Of course, it was problematic back when Congress actually voted on this idea five years ago (and rejected it overwhelmingly by a count of 250 to 166).

Knowing how strongly he feels about plagiarism, I hate to even suggest that Hyman is recycling ideas without giving credit to those who came up with them, but his ideas of making the budget into law and requiring a 2/3 majority to change it are old ideas. At least as far back as 1997, Republican Christopher Cox of California has advocated just such a system. During the 106th Congress, a bill largely based on his ideas was debated and voted on, going down to a bipartisan defeat.

More important than Hyman borrowing Cox’s ideas are the reasons why these ideas are suspect. No one loves the way the budgeting process works now, but that doesn’t mean that any changes in it are by definition good. Supporters of a Cox-type budgeting scheme suggest that by making the budget a law that outlines broad spending priorities, it will make it easier to reach consensus between the president and Congress early in the budgeting process. They also suggest that it will make the risk of government shutdowns a thing of the past because if an agreement isn’t reached, spending limits from the previous year will kick in.

That’s hunky-dory as long as the president and the Congress are more or less on the same page to begin with. But that’s often not the case. Currently, the threat of government shutdown forces the major players to come up with at least stop-gap compromises to keep things going. Under the Cox plan, there would be no such motivation, and if an impasse was reached, last years spending limits go into effect.

The most obvious problem with this is that the needs of the nation change from year to year. Spending the same amount on the same things year after year (should a compromise budget not be reached) is fiscally idiotic. What would have happened (for example) had Congress and the president not reached an agreement on a budget in 2002 and spending on domestic security ended up being locked in at 2001 (i.e., pre-9/11) levels?

Proponents will say, “Oh, well that’s what the 2/3 majority vote would be for—it would allow for emergency changes in spending.” But while Hyman champions the idea of a 2/3 majority required to change budgeting levels as a goad to greater bipartisanship, it effectively allows a minority the chance to hold the budget hostage. If 1/3 (+1) of the members of either the House or Senate decided they didn’t want any additions made to the budget, that would be it.

And that’s ultimately why those who support this version of the budget-as-law come primarily from the ranks of the right-wing. The underlying motivation is that it would be fine and dandy with most of these folks to have a budget impasse every year, one that would automatically revert spending to the level of the year before. This would result in de facto cuts in all government programs. Education, health care, Social Security . . . all of it gets cut without anyone actually having to go on record as voting against these things. It’s a way for arch-conservatives to achieve their ends without having to actually fight an intellectually honest battle (which they would certainly lose).

In the meantime, I’m off to the campus coffee shop to get my latte.

And that’s The Counterpoint.

For more on the problems with this type of budgeting approach, see this article by the Center for Budget and Policy Priorities.