Anyone who is still wondering how Congress plans to deal with the very tight caps on discretionary spending need only look to the sleight-of-hand that lawmakers are attempting in connection with the 2000 Census.
Even though the Census is a constitutionally mandated event that takes place every ten years, the House Appropriations Committee's Subcommittee on Commerce, Justice, State, and Judiciary, presumably with the full support of the leadership, is planning to label $4.5 billion for the census as an "emergency" so that it can be spent without regard to the Budget Enforcement Act's limitations.
The subcommittee's justification is that more than was projected must now be spent to conduct the census because of the recent Supreme Court decision that requires the census to be done with two different methods: a door-to-door count and a statistical sampling.
This raises a number of questions.
First, will the more fiscally conservative House members-like Tom Coburn, R-Okla.-who have been so insistent this year that the appropriations cap not being raised, accept this plan even though it is an obvious circumvention of the spending limits? If they do not object, does this mean the door is open for whatever additional gimmicks are needed for Congress to get around the caps?
Second, after the almost $7 billion they added earlier this year to the Kosovo supplemental for what everyone acknowledges was anything but emergency military needs, and this $4.5 billion in highly questionable emergency spending, will congressional Republicans be able to say with a straight face that they are the party of fiscal restraint?
Democrats Roll
One of the less obvious, but potentially more important, budget events that occurred last week was when Sens. Bob Kerrey, D-Neb., and John Breaux, D-La., voted with the Republicans on the finance committee in favor of the tax bill that eventually emerged from committee. Sen. Bob Torricelli, D-N.J., also indicated that he might support the bill on the Senate floor.
Kerrey insists that he voted for the bill to keep the process moving forward but that he really believes the tax cut should be far smaller than the bill he supported in committee. And he and Breaux, along with Sen. John Chaffee, R-R.I., and Jim Jeffords, R-Vt., introduced a $500 billion tax cut at the end of last week.
It is not clear whether a tax cut of that size will be big enough to get a majority of Republicans to vote for it, especially in the House. The White House has indicated that even a $500 billion tax cut would be vetoed. But the Kerrey/Breaux/Torricelli ploy certainly points the way to a possible compromise.
On The Other Hand...
But at the same time Kerrey and Breaux might have been trying to point the way to a compromise, the Congressional Budget Office was making a compromise much harder. CBO reported last week that the prescription drug benefit for Medicare beneficiaries President Clinton has proposed, and which many believe is the one thing the White House wants so much it will be willing to sign a tax cut to get, will cost twice what the administration estimated. Unless Congress mandates that CBO use OMB scoring (something that it has been increasingly willing to do this year), this will reduce the part of the surplus that is available for a tax cut and so could make a deal impossible.
Tilt
The extraordinary disconnect between fiscal and monetary policy intensified this week. At the same time that Federal Reserve Board Chairman Alan Greenspan was testifying to one congressional committee that the best option this year is to use the budget surplus to reduce federal debt, the full House and the Senate Finance Committees were approving a big cut in taxes, and, as noted above, the House Appropriations Committee was using a gimmick to increase spending beyond the caps. Greenspan, who is considered by many on Capitol Hill to be as close to an economic oracle as could possibly exist and who is usually given the majority of the credit for managing the economy so well, essentially was ignored.
Gipper Who?
Ronald Reagan got a great deal of political mileage during his presidency out of the statement that he could not "spend a nickel" without Congress allowing it to happen. But House Republicans resoundingly repudiated that statement last week. Ways and Means Committee Chairman Bill Archer, R-Texas, and the rest of the leadership justified their efforts to push through a tax cut this year by saying that if they did not do it, then President Clinton would spend the surplus.
Does this mean they think Reagan was wrong? Or does it mean House Republicans do not believe they have the will (or votes) to say no?
Countdown Continues
Still no word about whether the start of the August recess will be delayed for at least a week so that the House can pass more fiscal 2000 appropriations. Assuming the delay happens, there are 28 potential legislative days left before the start of fiscal 2000. If there is no delay, only 23 days are left.
If Mondays and Fridays, when Congress typically does not do much legislative work, are excluded, there are only 20 potential legislative days left if the House delays its recess, and a mere 17 days left if it leaves town as currently scheduled.
Question Of The Week
Last Week's Question. Why did the Congressional Budget Act limit the number of terms a representative could serve on the House Budget Committee? The answer is that there was a general concern by members of the Appropriations and Ways and Means Committees that the new Budget Committee would become a super committee and claim much of their power. Limiting the number of terms of budget committee members was expected to limit their expertise and loyalty both to that committee and the budget process. The concerns of the existing money committees were also eased when a number of the budget committee slots were required to be filled by appropriations and ways and means committee members who would then serve on both committees simultaneously.
The winner of this week's "I Won A Budget Battle" T-shirt, who was selected at random from the correct responses that were received, is Brad De Long, who teaches economics at the University of California, Berkeley.
This Week's Question. How about a basic question in the heat of the summer? What happens if Congress and the president agree to spending in excess of the appropriations caps? Send your response to scollender@njdc.com and next week's "I Won A Budget Battle" T-shirt could be yours. If there is more than one correct response, the winner will be selected at random from all of the correct answers received.
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