On Tuesday, the Treasury Department announced that the country’s deficit had hit the $1 trillion mark just nine months into the fiscal year. Fear of the deficit had already led Congress to kill or delay an administration-backed jobs bill, a federal extension of unemployment benefits, a war funding bill and federal funding for Medicaid. Now, the 13-digit monster has claimed its latest victim: a full budget for the coming fiscal year.
[Congress1] Recognizing that Democrats would be reluctant to record “yes” votes for a budget that would augment the deficit, the House leadership opted to deem as passed a “budget enforcement resolution” instead, just before the July 4 recess. While the distinction between an enforcement resolution and a full budget is largely technical, there is one crucial difference: Under the enforcement resolution, Democrats can no longer use a parliamentary tactic known as budget reconciliation next year — a process Democrats had hoped might allow them to pass key pieces of legislation, such as a jobs bill, with 51 votes in the Senate, as opposed to the usual 60 needed to overcome a filibuster.
Under the arcane rules of the Senate, budget reconciliation can only be used if it was written into the budget rules passed the previous year. With no full budget, there can be no reconciliation. As a consequence, Democrats lose a valuable tool for passing budget-related items on a majority-rules vote. Stimulus and jobs measures, if they combined short-term spending with longer-term deficit reduction, would have qualified for reconciliation.
Some policy advisers and members of Congress pushing for a such a measure — and recognizing that it could not make it past a Republican filibuster — viewed reconciliation as a last hope. “What we want to do is end up with legislation that is going to create a substantial number of jobs,” Sen. Bernie Sanders (I-Vt.) told reporters. “We don’t have 60 votes to do that. We could do that through majority rule, 51 votes.”
But a desire among Democrats to avoid voting on a deficit-increasing budget won out over the need to preserve reconciliation in creating the budget enforcement resolution. “Members looked at the budget and said, ‘We might need more deficit spending,’” said Jim Horney, the director of federal fiscal policy at the Center for Budget and Policy Priorities. “And anything you do to try to reduce those deficits would necessarily include policies that might not be popular — tax increases, cuts in major programs.” The House leadership judged the enforcement resolution as less of a political risk for moderate Democrats who will face difficult re-election campaigns in the fall.
It wasn’t either chamber’s first choice. Throughout the spring, both House and Senate leaders promised that a full budget was coming down the pipeline. “The plan is to work to bring a budget resolution to the floor,” House Speaker Nancy Pelosi (D-Calif.) told reporters in April. And Sen. Kent Conrad managed to pass a budget through the Senate Budget Committee, a major step in getting a budget to the floor.
But behind closed doors, the budget process caused considerable tensions — both between the House and Senate and between more and less liberal members of each chamber. In one of the few on-the-record comments made about the process, Rep. Earl Blumenauer (D-Ore.) told Fox News: “There is some real tension within our caucus. … But it is still an item of open discussion. … I, for one, feel better about putting [a budget] out for everybody to see — but that’s a little above my pay grade.”
Off the record, Senate and House staffers have pointed fingers at one another as to who is to blame for the lack of a full budget. The Senate is the chamber that cannot get enough votes to pass anything, House staffers say, and the House should not be required to do the Senate’s work. The House did not even put together an actual budget — unlike the Senate Budget Committee — Senate staffers retort. The House side proffers that it did not pass a budget because the Senate said it could not get 51 members to stand up and vote for a deficit-increasing measure.
Ultimately, reconciliation and the broader budget both died due to a lack of conviction on the part of Democrats about the need to spend more. Democrats knew in advance that they absolutely wanted the reconciliation option available for health care, and so they kept it on the table in last year’s budget. But they never committed to more stimulus, jobs funding or other types of bills for fiscal year 2011.
“Even if they had gotten a full budget, there was no agreement that they would want to have reconciliation instructions for any big, significant legislation,” Horney said, noting that Democrats had promised not to move cap-and-trade or a carbon tax via reconciliation. “There was just no consensus among Democrats about what to do here.”
The budget enforcement resolution passed the House quietly, attached to a war spending bill. Nevertheless, the maneuver ginned up considerable criticism. “There is not a big functional difference between [a budget and a budget enforcement resolution], but there is a big symbolic difference,” said Maya MacGuineas, the head of the Committee for a Responsible Federal Budget. “Having Congress neglect to create a budget for political reasons is disturbing, to say the least, this year. In terms of the symbolism, for the credit markets, it is a strike against us, if Congress will not talk about where responsible cuts are going to come from. And in terms of partisan politics, it is fuel for the fire, too.”
And Republicans have been happy to fan the flames. “Facing a record deficit and a tidal wave of debt, House Democrats decided it was politically inconvenient to put forward a budget and account for their fiscal recklessness,” Rep. Paul Ryan (R-Wis.), the ranking member of the House Budget Committee, said on the House floor. “With no priorities and no restraints, the spending, taxing and borrowing will continue unchecked for the coming fiscal year. The so-called ‘budget enforcement resolution’ enforces no budget, but instead provides a green light for the appropriators to continue spending, exacerbating our looming fiscal crisis.”
So despite their efforts to avoid deficit-related criticisms, Democrats are being hammered for deficits and for obfuscation. And in the process, they’ve made it almost impossible to imagine a meaningful jobs bill passing next year.