Bad news for the FY 2000 budget debate

The 1998 elections will make next year's debate on the fiscal 2000 budget much more difficult. The bottom line: Even though it is only November, the passage of a fiscal 2000 budget resolution and a reconciliation bill must already be considered to be in considerable doubt.

Here's why:

This year's debate on the fiscal 1999 budget, the first in which Congress failed to agree on a budget resolution, was hampered by five overriding problems.

1. No Directive. The surplus developed so unexpectedly that there never was any national debate about what should be done with it. The polls consistently showed last year that voters were divided and fickle on this issue almost to the point of being schizophrenic. Some days a tax cut was favored; other times it was more spending or reducing the national debt. This meant that Congress did not have a clear idea about what to do.
2. Narrow Majorities. The small margins in the House and Senate made it extremely difficult to put together a majority on any controversial issue, especially the budget.
3. Weak Leadership. While almost every analyst said that the best way for the Republican majority to take away the president's leverage was to pass the budget and appropriations as early as possible, the House leadership was never able to get its members moving on an expedited timetable. In spite of Speaker Newt Gingrich's, R-Ga., desire that the budget resolution not change the 1997 budget deal and be done as quickly as possible, Budget Committee Chairman John Kasich, R-Ohio, insisted on passing a resolution that had a big tax cut and big spending reductions even though it took two critically important extra months to do it.
4. Inflexible Budget Process. The budget process, which was designed to reduce the deficit, proved almost incapable of dealing with the surplus.
5. Republicans vs. Republicans. The big friction in the House on the budget was not between Republicans and Democrats, but between conservative Republicans (who wanted to make an ideological stand) and politically pragmatic Republicans (who wanted to show they could make the congressional railroad run on time). A similar political fissure existed between Senate Republicans, where moderate/pragmatists held the balance of power on budget issues, and House Republicans, where the Kasich plan reflected the policies of the conservatives.

1. There may have been a few isolated instances where the surplus was discussed in a local debate, but there was nothing that can be interpreted as a national referendum on the issue. As a result, the debate on the fiscal 2000 budget begins with at least the same uncertainty about public preferences as there was this year.
2. The narrow Republican majority in the Senate remained unchanged, while the one in the House got even narrower.
3. Although Gingrich's decision to resign and the challenges to House GOP leaders certainly could change the outlook, for now the leadership must be viewed as being at least as weak as before. Even if an ultimately stronger team emerges, it will take some time for the new organization to work together effectively. The first few months of the 106th Congress, however, will be the ones when the Clinton budget will be sent to Congress, the April 15 congressional budget resolution deadline will fall and the tone for the rest of the budget debate will be set. This means the team will either prove itself quickly, or the fiscal 2000 budget debate will be characterized by a continued lack of leadership on the issue on which it may be most needed.
4. The budget process will get worse next year as Congress and the White House struggle to deal with very tight fiscal 2000 caps on appropriations. And while accommodations like the $20 billion-plus "emergency" appropriation passed at the end of the 105th Congress are certainly possible (see Budget Battles Oct. 21 and Oct. 28), the growing militancy of the more conservative House Republicans (see below) will make that more difficult.
5. Ideologically, things got much tougher for three reasons. First, conservatives in the House believe the biggest mistake the leadership made was not sticking to fiscally conservative policies, which alienated the Republican base in the election. As a result, in the year ahead conservatives are likely to use this as a rallying cry whenever they see their leaders straying from a harder conservative line.

   Second, with the defeats of Alfonse D'Amato, R-N.Y., and Lauch Faircloth, R-N.C., Senate Republicans got less conservative-making compromise with increasingly conservative House Republicans more difficult.

   Third, the narrower majority in the House gives the conservative wing even more power, and makes it far more likely that any budget-related legislation that emerges from the House next year will be closer to its preferences. This will be further away from what is likely to acceptable to the Senate.

Question of the Week

Last Week's Question. Almost all of the responses to last week's question, which asked you to come up with a plot for a budget television drama called "The Big Budget" that would attract a large audience during the November sweeps, dealt with either alien influences and government conspiracies worthy of the X-Files.

The winner of the "I Won A Budget Battle" T-shirt goes to the anonymous reader who suggested a two-part episode about a cabal of House members who supposedly were opposed to the balanced budget amendment to the U.S. Constitution, but were secretly in favor of it. It included an assassination, a sexy reporter, phony numbers and a cliffhanger ending. In other words, just a normal day in the world of federal budgeting.

This Week's Question. A few quick calls and you should be able to find out the answer to this one. Even though he was reelected easily, Rep. John Kasich, R-Ohio, may have to give up his chairmanship of the House Budget Committee at the end of this Congress. Why? Because I could not send a T-shirt to this week's winner, the first two correct answers to scollender@njdc.com will gets his or her very own "I Won A Budget Battle" T-shirt to wear in front of a fireplace on a cold evening this fall. (Note: I supply the T-shirt; you have to get the fireplace on your own.)