All of the current public hand-wringing about how (or whether) Congress will be able to get out of the appropriations mess it is in this year is masking what is becoming increasingly obvious-a solution is not only at hand, but is already being implemented.
First, a brief review of the situation.
The 1997 budget deal included caps on appropriations through the end of fiscal 2002. These caps were designed to eliminate the deficit after five years. Not surprisingly, the toughest spending changes were delayed until after the 1998 elections.
Although there will now be a surplus in 2000 instead of the deficit that had been projected when the deal was put together, the caps remain in place because no provision was included to eliminate them if a surplus occurred sooner than expected. In addition, the fiscal 2000 budget is the first one being debated after the 1998 elections, so the tight spending limits are now starting to bite.
How tough are these appropriations caps? In January, the Congressional Budget Office estimated that, depending on what you assumed for inflation and other factors, the budget authority limit was as much as $45 billion below the level needed for all programs to continue at their current levels in 2000. If Congress and the president agree to the increases being discussed for the military, education, and the National Institutes of Health, the caps could be close to $75 billion too low-and massive automatic across-the-board spending cuts could be the result if a sequester has to be imposed.
The easiest solution, of course, is for Congress and the President to agree to raise the caps. But Congress decided in its fiscal 2000 budget resolution that it would not vote to increase the caps from their current levels. And with the White House insisting that the caps do not have to be raised because it was able to accommodate all spending needs in its budget without doing so, legislation raising the caps seems very unlikely.
The next obvious alternative is for Congress to agree on spending reductions that will bring total spending down to the caps. But Congress has already rejected the idea of cutting spending by this amount. The phrase being used by the House and Senate Appropriations Committee chairmen to talk about the caps-that there is "not enough money to go around"-is an admission that there is little stomach in the House and Senate to support the spending cuts needed to comply with the current limits.
If Congress and the president will not support raising the caps or lowering spending, the only solution left is for the caps to be circumvented. That, in fact, is what has already started to happen.
For example:
The emergency supplemental appropriation for Kosovo adopted a few weeks ago included almost $7 billion in non-emergency military spending that would otherwise have had to be fit under the fiscal 2000 budget cap. Labeling it as an "emergency" means that the spending can happen without the caps being raised.
In spite of Congress' insistence in recent years that the administration use CBO numbers, several weeks ago CBO was directed by the House and Senate to lower its cost estimate for the fiscal 2000 defense authorization bill because it was $10 billion higher than the estimate made by the Office of Management and Budget. Although such directives have occurred before when CBO and OMB have disagreed over what something would cost, arbitrary reductions of this magnitude appear to be unprecedented.
Instructions such as this apparently are going to continue. The word is that appropriators have identified at least $7 billion where CBO cost estimates are above those provided by OMB and it will direct that the CBO numbers be lowered.
House Speaker Dennis Hastert, R-Ill., last week announced that he would use one of the most tried and true tricks of recent years-assuming additional revenues from auctioning part of the broadcast spectrum. Most people familiar with this issue admit that these revenues are never actually going to be collected.
There will not, of course, be a specific vote to get around the spending caps. Not only would that have no chance of passing, but it also would make Congress highly vulnerable to criticism from everyone from President Clinton to the fiscally conservative base of the Republican party.
Instead, the decision to circumvent the caps will occur incrementally, so that it is almost imperceptible to the average member of Congress, the media, and certainly to most voters. The only question is whether there will be enough gimmicks to cover the huge difference between the caps and what everyone seems to want to spend.
Fiscal Y2K Countdown
As of today there are 45 potential legislative days left before the start of fiscal 2000. If Mondays and Fridays, when Congress does not usually conduct legislative business, are excluded, there are a scant 28 working days left before the fiscal year begins.
Question of the Week
Last Week's Question. Many readers knew that there generally is no penalty for Congress failing to comply with reconciliation instructions, but only one person knew that the Congressional Budget Act prohibits the House from recessing for more than three consecutive days in July if it does not pass its reconciliation bill by June 15.
(This raises an interesting question in a year like this, when the July 16 deadline given to the House Ways and Means Committee in the budget resolution to report its reconciliation tax changes makes a vote in the full House by the deadline impossible. In any case, the prohibition against a not-longer-than-three-days-in-a-row recess has never been enforced anyway.)
Congratulations to Kate Sparks, legislative director to Sen. Herbert Kohl, D-Wis., who gets an "I Won A Budget Battle" T-shirt for demonstrating once again that no budget act provision is too small or ineffective for someone not to know about it. Honorable mention to Laura McClintock of the AFL-CIO.
This Week's Question. If Congress has decided to use gimmicks to get around the budget caps but is having trouble coming up with some new ideas, perhaps we can help them find a few new concepts to consider. For example, suppose Congress assumes that the federal government sells several of the largest national parks and then immediately leases them back from the new owner? That way the Department of the Interior will be able to assume the revenues from the sale but only have to show one year's spending.
Send your idea to scollender@njdc.com. The one selected will get an "I Won A Budget Battle" T-shirt. And who knows, you also might find your suggestion in an appropriation bill this year.
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