Budget Battles: Five servings from the budget buffet

So many tasty morsels are currently being prepared in the congressional and administration budget kitchens that it would be criminal not to offer up a few tidbits this week.

1. Now This Would Be A Surprise

For the past few years the actual tax receipts collected in April have resulted in a massive positive revision in the budget forecast. This "April Surprise" has not only earned itself a name, but many in Congress have come to expect and rely on it happening every year.

This year, though, the House and Senate members who have been anxiously waiting for another April Surprise from the Congressional Budget Office may be the ones who are surprised. The expectation that CBO will revise its forecast with a higher surplus (which could then be used to offset a bigger tax cut than the one assumed in the just-passed fiscal 2000 budget resolution) may be way off base. In fact, it is possible that CBO may even forecast a lower surplus than it did in January.

The most recent indication is the Treasury Department's report of actual results for March 1999, which showed the deficit for the month being $2.3 billion higher than CBO estimated in its April 12 preliminary report. This could mean the bigger and earlier tax cut that many on Capitol Hill were hoping for might actually have to be smaller and slower in coming.

CBO has also quietly let it be known that to compensate for the last few April surprises, its January revenue estimates were pumped up a bit more than the models justified. In other words, the April Surprise that many on Capitol Hill are waiting for may have already occurred.

2. Party Like It's 1999 (Not 2000)

CBO is also gently letting people know that even if there is an April Surprise it may have no long-term implications. The surplus estimates for fiscal 2000 and beyond, the ones that will be important for Congress and its tax cutting desires, could be largely unaffected by the upward revision in the current year's numbers.

CBO is becoming increasingly wary of further long-term positive revisions in its projections. Because it is still assuming an economic slowdown next year, and because over the next five years it is still building a recession into its forecast, there is some concern about assuming that better-than-expected fiscal 1999 results will be repeated every year thereafter.

3. Could Milosevic Kill The Tax Cut?

The emergency supplemental appropriation now working its way through the legislative process is both good news and bad news as far as the budget debate is concerned.

The good news, of course, is that the Kosovo situation has provided Congress with a legitimate "emergency" to fund. That means a legislative train will be leaving the station to which a variety of nonemergency items could be coupled. Any spending that had been considered for next year that is instead provided under the emergency designation will take some of the pressure off the caps on fiscal 2000 appropriations, which virtually everyone concedes are too tight to be politically acceptable.

The bad news is that while the emergency designation could make it easier for Congress to live with the caps, it will also allow additional overall spending-and that will reduce any on-budget surplus. Congressional Republicans have taken the equivalent of a blood oath to offset any tax cut with the on-budget surplus, so anything that reduces it-like additional emergency military spending-will also reduce the amount by which taxes can be cut.

4. What A Difference A Day Makes

Did anyone notice how quickly the congressional pledge not to spend the Social Security surplus was abandoned? President Clinton's proposed $6 billion supplemental appropriation for Kosovo presented Congress with an interesting dilemma. On the one hand (as noted above), it is an opportunity to take some of the pressure off the very tight fiscal 2000 appropriations cap by accelerating next year's spending into 1999. On the other hand, spending more in 1999 means increasing the total budget deficit, and therefore spending more of the Social Security surplus.

Bottom line: In spite of all of the congressional rhetoric about saving Social Security, its surplus as among the very first things thrown overboard when the budget ship started to list.

5. Just In Case You're Ever On Jeopardy

The answer: Strom Thurmond, R-S.C., Robert Byrd, D-W.Va., and John Dingell, D-Mich.

The question? Name the only three current members of Congress who were in Congress the last time the United States had two consecutive budget surpluses. The surpluses occurred in 1956 and 1957. According to National Journal's Almanac of American Politics, Thurmond was first elected to the Senate in 1954 as a write-in candidate. He resigned and won the seat again in 1956. Byrd was elected to the Senate in 1958 after first serving three terms in the House. Dingell was elected to the House in a special election in 1955.

"Budget Battles" Budget Countdown

As of today there are 72 potential legislative days until the start of the coming fiscal year. If Mondays and Fridays, when Congress frequently does not conduct legislative business, are excluded, there are only 43 potential legislative days left.

None of the fiscal 2000 appropriations have been passed by either the House or the Senate.

Correction

Last week's column incorrectly noted the dates the House and Senate adopted the fiscal 2000 budget resolution conference report. The House passed it on April 14; the Senate adopted it on April 15. I apologize for the error.

Question Of The Week

Last Week's Question. The question was, if the Republicans retain control of the House in the next election, who will replace John Kasich, R-Ohio, as chairman of the budget committee. The answer is, nobody knows. Unlike the usual procedure used for other committees, seniority is seldom the determining factor in picking the budget committee chair. In fact, the new chair does not even have to be a member of the committee. So while there are many obvious possibilities-all of which were named by "Budget Battles" readers-no one has a lock on the position.

Congratulations to Andrew Prior of Arthur Andersen, who was the only one of this week's many entries to get the correct answer. Andrew receives an "I Won A Budget Battle" T-shirt and a note to his boss suggesting a raise.

This Week's Question. Here is your chance for budget immortality. If there are laws of nature (i.e., What goes up must come down) and laws of science (E=mc2), what are the laws of budgeting? For example, would the federal budget version of Sir Isaac Newton's law be "The deficit that goes up must come down? Send your proposed law of federal budgeting to scollender@njdc.com. If your suggestion is selected, you will not only win your own "I Won a Budget Battle" T-shirt, but you will be the author of one of the five immutable laws of federal budgeting that will be revealed in a future column.