Sept. 05, 2020: “Federal shutdown may be averted”

by Christel Hayes and Nicholas Wu of USA Today with contributions from the Associated Press

Saturday’s paper carried an article describing how House Speaker Pelosi and the Trump administration were undertaking negotiations to avert a federal government shutdown like the one that went for 35 days from December 2018 until January 2019. It goes on to explain some of the consequences of the last shut down and the concerns by some that another shut down at this time could have even more severe consequences.

So how would the shut down be averted? It would be averted by the Democrats and administration coming to agreement on a “continuing resolution”. A “CR”, as they are known in Washington, is a decision to avoid the normal budget process and instead allow spending to continue at current levels for a specified period of time. That timeframe is usually until after an election or other politically advantageous period. Unfortunately CRs have been much too common in recent years.

So if they want to by-pass the normal process, what is the normal process? The way our system of government is designed to work is for Washington to follow the following steps:

Step 1. The Congressional Budget Office releases a projection of what government spending and receipts will be for the coming ten years. This is released in January so that the White House’s Office of Management and Budgets can have time to produce their budget proposal and projections before it is required to be presented to Congress.

Step 2. The WH OMB releases it budget proposal outlining the legislative changes, if any, that would be required to adopt the president’s future plans. Again, the requirement is for the president’s budget to be presented to Congress early in the year so Congress can prepare and pass the necessary funding bills before the end of the start of the next fiscal year.

Step 3. The House of Representatives, which has primary responsibility for our nation’s fiscal well being, passes a framework from which individual budget bills will be developed.

Step 4. The House of Representatives passes individual budget bills and looks to the Senate for agreement.

Step 5. The Senate passes its own budget bills and compares them to those passed by the House.

Step 6: Negotiations take place between the House and Senate in order to agree on final budget bills.

Step 7. Once approved by Congress, the budget bills are presented to the President for signature or veto.

Once you see the steps, it is pretty clear that the process is well thought out and rational. So why are CRs necessary? They are necessary when the House and Senate don’t do their jobs!

Now that we understand the “normal budget process” what is wrong with an article that covers the fact that a CR is likely and a government shutdown is likely to be averted. The problem is there is no context for the reader to make any judgement from other than shutdowns are bad and CRs are good. But is a CR at this time a good thing?

What other context would be helpful? First off, some mention of the actual process that should be followed and an answer to why it wasn’t followed would be helpful. Secondly, some discussion of the current state of the nation’s financial situation would also be helpful. I’ve covered most of the first with the above outline of steps. As for the second, some discussion of the current financial crisis we’re currently facing might bring into question whether a “…deal that extend(s) government funding at the same levels they are operating at...” might not be in the best interests of the nation.

We will finish the current fiscal year with Gross Federal Debt of $27 trillion, up from $13.5 trillion in 2010. We will have a $3.3 trillion dollar deficit, after eleven years of successive deficits which have averaged nearly $750 billion per year.

So why do we have another CR near a presidential election. The House failed to do its job. It’s job would have been to set out the priorities it wants the undertake and to do so showing the impact of those priorities through calculations produced by the CBO. It looks like the leadership of the House felt it shouldn’t do what it is required to do. We don’t know why that’s the case, but we do know they didn’t pass the necessary budget bills that are required to fund the government.

What are the consequences of another CR? High levels of government spending and no chance for voters to hear how each party would bring our finances back under control. that is if it’s even possible to do that as large a financial hole Congress has allowed us to dig ourselves into!

How do we stop this fiscal madness is hard to see. Looking to candidates who set following the normal budget process and voting for them might be a good first step!

More on the Federal Government’s finances to come in future columns.

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