This is how silly the federal budget debate has become.
Last week the House passed H.R. 1259, the so-called Social Security lock box legislation. Among other things, this bill would prohibit the Office of Management and Budget, the Congressional Budget Office, and every other "agency or instrumentality of the federal government" from including Social Security revenues and spending in the budget totals.
This means that the "consolidated" federal budget that now includes Social Security would be specifically prohibited from doing so in the future. No one with any connection to the federal government would be allowed to talk about Social Security as if it were a federal program with an impact on Washington's total bottom line.
Social Security, which is already classified as "off-budget," would become something new, different and ridiculous-"off-off-budget."
Would this make it illegal for a staffer in the Treasury Department's Bureau of the Public Debt to compile a table showing total federal borrowing needs that includes that year's Social Security surplus or deficit? Would it be against the law for a representative to send a newsletter to her or his district that talks about the consolidated budget if the totals used include Social Security? Would this prevent Federal Reserve Board Chairman Alan Greenspan from testifying about interest rates if his official statement included the impact of the Social Security trust fund on federal borrowing?
The far better question, however, is what would taking Social Security off-off-budget actually accomplish? H.R. 1259 would do nothing to eliminate the requirement that Social Security trust fund surpluses be invested in U.S. government securities. The basic financial transaction that so often infuriates people-that there is nothing but IOUs in the Social Security trust fund-would not be changed in any way. This means that regardless of how it is classified, the budget problems with Social Security would remain.
It also would not eliminate the requirement that the Treasury Department determine the federal government's borrowing needs based on revenues coming in and spending going out from all sources. Regardless of whether they are on-budget, off-budget, or off-off-budget, Social Security revenues and spending would still always have to be included in the Treasury's calculation-and the amount the federal government borrowed from the financial markets would still be the same.
Finally, this fiscal sleight-of-hand is not going to fool anyone. Even if the government could not legally publish totals including Social Security, Wall Street firms, private economists, the news media and private budget analysts everywhere would all calculate it. Congress and the executive branch would still know what the on-budget plus off-budget plus off-off-budget bottom line would be, and that would spur the same type of calls for spending increases and tax cuts that the current calculations do.
What it will do is make everything even sillier. Before they claim a great victory, H.R. 1259 supporters might want to think about President Carter's inflation czar, Alfred Kahn, who used the word "banana" rather than "recession" to avoid riling voters and the financial markets.
They might also think about what happened within OMB a few years ago, when everyone was told to stop planning for the possibility of the line item veto that Congress was then considering. Some OMB staff started talking about it instead as the "54" project (LIV means 54 in Roman numerals).
If Congress is really worried about the temptation caused by overall budget surpluses that include Social Security, perhaps members should simply agree not to use them for anything.
Fiscal Y2K Countdown
As of today there are 54 potential legislative days before the start of fiscal 2000. If Mondays and Fridays, when Congress typically does not conduct legislative business are excluded, there are only 33 legislative days left.
Question Of The Week
Last Week's Question. There are some serious scholars among us. Congratulations to Kathy Ruffing of the Congressional Budget Office, who wins an "I Won A Budget Battle" T-shirt for this wonderful quote from Anthony Trollope's The Prime Minister: "The budget when produced had been very popular. Budgets, like babies, are always little loves when first born. But as their infancy passes away, they also become subject to many stripes. The details are less pleasing than was the whole in the hands of the nurse."
Honorable mention to Terri Gullo of CBO, Reid Edwards of the Lawrence Berkeley Laboratory in Berkeley, Calif., and recent winner Joe Luchok of the American Accreditation HealthCare Commission/URAC, who quoted everything from Cervantes to Winnie the Pooh.
This Week's Question. Here is an easy one for those Budget Battles readers who are more technically oriented (or is it creatively challenged?). What is the statutory deadline for the completion of the reconciliation process each year? Send your responses to scollender@njdc.com and you too might be wearing an "I Won A Budget Battle" T-shirt on Father's Day this year.