Congress and President Bush once again failed to enact any of the 12 appropriations bills prior to the beginning of the new fiscal year on Oct. 1. Recriminations abound, with House Appropriations Chairman David Obey (D-Wis.) blasting Bush for posing for “political holy pictures” during a press conference Bush held criticizing Democrats for inaction. The budget process in Washington continues to be, in one word, broken.
The Democrats pledged to reform Congress, and especially the budget process, when they reclaimed the legislative branch in 2006, much as the Republicans promised (but ultimately failed) to do back in 1994. Yet their “solutions” for dealing with earmarks and entitlements, two especially problematic areas of spending, will do little to address the real fiscal problems facing the nation. Real reform will come only from outside Congress.
Why are Congressional rules so doomed to fail? Congress is unable to impose fiscal discipline on itself because the Constitution gives it great leeway to make, break and even ignore its own rules. Abiding by rules often requires hard budgetary choices, and the temptation to protect funding for one’s district or state, which helps secure voters’ support back home, typically overrides any desire for fiscal discipline.
We see these principles at work right now. Earmark reform enacted this year will at best do nothing and at worst encourage pork-barrel spending because of the many loopholes written into the law that facilitate particular sorts of outlays, such as those benefiting two companies instead of one. As an end run around disclosure requirements, Democrats and Republicans also are bombarding executive agencies with letters “encouraging” them to fund certain programs. In a letter to the Department of Energy requesting funding for an Illinois hospital and university, Rep. Rahm Emanuel (D-Ill.), a champion of the recently enacted earmark “reform,” writes, “While individual projects were not funded in the Continuing Resolution, Congress did provide your agency with ample funding and discretion to provide grants to worthy projects like the ones listed above. I hope you will carefully review and fund [these proposals].”
The Democratic solution for reforming entitlement spending is the resurrection of “pay-as-you-go” rules that expired in 2002 (at the behest of Republicans eager to cut taxes — fiscal problems are a bipartisan creation). These rules require that any increase in entitlement spending not already authorized by the law be offset by tax increases or spending cuts. These rules are like putting a Band-Aid on a gaping wound. The threat from entitlement spending already is in the law — even if no new entitlement programs or benefits are created, the government faces a multitrillion-dollar bill in a few short decades.
So how can we bring some measure of fiscal responsibility to Congress? The answer will not come from within Congress, as history makes clear, so we may need to look to the U.S. Constitution. Only the Constitution binds Congressional procedure, and this document can be altered via a convention proposed by two-thirds of the states with ratification of an amendment requiring the support of three-quarters of the states. (Any amendments proposed by Congress will suffer from the same design problems as internal rules.) There has been no Constitutional convention since the time of the country’s founding, and law scholars disagree on how such a convention would proceed. One risk is that a convention would reopen the entire Constitution to revision. But this risk, which is purely speculative, needs to be weighed against the very real dangers posed by fiscal mismanagement.
Should a convention come to pass, there surely will be a spirited debate about what Constitutional budget rules should look like. A balanced budget amendment is the most commonly discussed rule, but there is disagreement about whether balanced budgets are always optimal for a national government. Other possibilities include limits on spending or tax increases. The nation can only benefit from a discussion about the merits of various reform proposals.
Moreover, regardless of the outcome, the threat of a constitutional convention might have its own impact, prodding Congress to enact real budget reform in much the same way that the initiative process in the states has a dampening effect on spending. In other words, we may not actually need to hold a convention for it to have a threat value. Putting it on the table may be all that is necessary to put the federal government on the path toward fiscal discipline.
Amending the Constitution is a serious step. However, the federal government’s size and responsibilities look much different than what was intended by the framers. Unless radical actions are taken to deal with the structural problems in the federal budget, we will continue to see replays of this year’s budget farce, which keeps us on track for a budgetary disaster (i.e., trillions of dollars in liabilities) that will hamstring the U.S. economy. Clearly, Members of Congress are unable to deal with the self-enforcement problem. It may be time for the states to help them out.
David M. Primo is an assistant professor of political science at the University of Rochester and the author of “Rules and Restraint: Government Spending and the Design of Institutions.”