Economists often remind us these days that the still-growing U.S. economy does not mean the traditional business cycle has been abolished. Similarly, budget analysts should be saying that the surplus does not mean the basic principles of negotiating and compromise have been repealed either. If there is going to be a deal this year, the same basic rules that led to agreements in the deficit era will have to be followed now.
This means two things: Before Republicans can negotiate with the Clinton administration, they first will have to agree among themselves on a unified position they can present to the president. In addition, congressional Republicans will have to realize that they are not in a position to demand that the total surplus be used only for what they want. In other words, they will have to compromise to get even some of the items on their wish list.
United They Will Have To Stand
The current political environment, with Congress and the White House controlled by different political parties and narrow majorities in the House and Senate, has meant that almost all successful budget negotiations since 1995 have occurred when Republicans first agreed on what they wanted to do. In many cases the House and Senate have "pre-conferenced" their different approaches, concepts and totals-not only to speed the passage of a budget bill, but also to give the White House far less opportunity to divide its opposition and play one chamber against the other.
What is striking about this year's debate is that this has not happened. Congressional Republicans had the opportunity and the time to work out a unified position early this year when they passed this year's budget resolution by the April 15 statutory deadline, weeks or even months ahead of the usual timetable. Even though they wanted to wait until the July 1 CBO budget update to see if the projected surplus would be higher than previously estimated, House and Senate Republicans could have used the period between the two forecasts to develop a joint "what if?" agreement. They did not, and it has turned into a squandered opportunity.
Their failure means that Republicans vs. Republican negotiations will only begin in earnest after the full House and Senate pass their separate tax bills in late July or early August. Even if the House delays the start of its summer recess, as Speaker Dennis Hastert, R-Ill., has been threatening in recent days, this will make it highly unlikely that the more-or-less unified Republican position that the tax bill conference report will represent will be passed in time for comprehensive negotiations with the administration, to be completed before fiscal 2000 begins on Oct. 1.
This will give President Clinton substantial additional leverage. While Republicans might prefer to combine the discussions on taxes and spending, as the start of the fiscal year gets closer, negotiations over appropriations will have to take precedence over everything else. If they do not, Congress will be faced with the threat of a government shutdown that it cannot allow to happen.
This probably makes one or more short-term continuing resolutions very likely at the beginning of fiscal 2000, as Republicans see the need to combine discussions over final spending levels and taxes to achieve their goals. But (1) the administration likely will insist on higher levels for its programs in these CRs as a condition of agreeing to them; (2) each time a CR is needed to keep the government from shutting its doors, voters will be reminded about some of the biggest political disasters the Republican majority has suffered; and (3) each new potential shutdown threat will mean that negotiations once again will have to focus almost exclusively on appropriations.
It Cannot Be All Or Nothing
The other striking thing about this year's budget debate is that there seems to be little or no discussion about giving everyone something. Instead, tax cut advocates are talking about using virtually all of the re-estimated on-budget surplus for a tax cut, and they are basically saying that spending increases and debt repayment should not even be part of the discussion.
Contrast this with the formula that generally was used to develop a budget deal when there was a deficit to be reduced. Although the basic debate was between those who wanted to protect spending vs. those who wanted to protect taxes, the final deal was almost always some combination of tax increases, domestic spending reductions and defense spending reductions that allowed the political pain to be shared. Budget negotiations often started with this basic formula, and supporters of each part had to explain why that part of the budget calculation should be treated differently this time around.
The surplus seems to have made members of Congress forget this most basic concept of negotiating: Discussions will fail unless all sides feel they are getting something out of it. This is especially true given the very narrow majorities that the Republicans hold in both houses, their assumed inability to get Democrats to vote to override a presidential veto of a budget bill and the fact that a deal is not as important now as it was when there was a deficit.
Deciding what to do with the surplus might not require the same one-third/one-third/one-third formula that was typical of the deficit reduction deals, but something similar will have to be discussed for there to be any hope of reaching an agreement. If the discussions focus on programs rather than a formula, the hard-line positions that congressional and administration budget decision-makers have been spouting will prevent any progress from being made.
Fiscal Y2K Countdown
House Speaker Dennis Hastert, R-Ill., has let it be known that he is strongly considering delaying the start of the August-Labor Day recess for at least a week so that the House can pass more fiscal 2000 appropriations. Assuming the delay happens, there are 32 potential legislative days left before the start of fiscal 2000. If there is no delay, only 27 days are left.
If Mondays and Fridays, when Congress typically does not do much legislative work, are excluded, there are only 19 potential legislative days left if the House delays its recess, and a mere 16 days left if members leave town as currently scheduled.
Question Of The Week
Last Week's Question. Last week's question, which asked how many budget analysts it takes to screw in a light bulb, brought folks out of the woodwork. Long-time and first-time "Budget Battles" readers alike decided this was their chance to be funny, cynical or both. The "I Won A Budget Battle" T-shirt goes to Cliff Isenberg of The Concord Coalition for this answer: "We don't need light bulbs because light has been projected for the next fifteen years." Honorable mention to California attorney Nikola Mikulicich, Jr., whose very detailed response (along with a number of the other best answers) can be seen by clicking here.
This Week's Question. Here is a question that should be tough for everyone. The Congressional Budget Act limited the number of terms a member of the House Budget Committee can serve on the committee. Why?
Send your answer to scollender@njdc.com and you could win an "I Won A Budget Battle" T-shirt to wear-instead of sunblock 125-during your summer vacation. The winner will be selected at random from the correct responses if more than one person answers correctly.
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