Partisan budget reconciliation strategy burns bridges
Even as they push a $1 trillion infrastructure spending package, Democrats are burning bridges with their partisan $3.5 trillion federal budget.
This spending plan will make it difficult to tackle big items on the horizon, such as the debt ceiling. To be fair, it’s been a bipartisan effort to turn the annual budget into a partisan effort. This is only the latest misuse of the budget solely to unlock the quick-pass reconciliation mechanism that follows on the heels of the 2017 Tax Cuts and Jobs Act and on key portions of the 2010 Affordable Care Act.
However, this proposed package is certainly the costliest and broadest use of budget reconciliation to enact partisan policy priorities. These are policies with implications spanning almost every facet of the federal government (one notable exception being the Department of Defense, which is on its own path to plus-ups).
Where the 1974 Congressional Budget and Impoundment Control Act intended for reconciliation to reduce deficits, the fiscal 2022 budget will trigger an explosion in government growth, followed by a tsunami of debt. There are few surprises among the litany of issues expected to cram their way into the reconciliation bill that this budget will generate.
President Joe Biden campaigned on his “Build Back Better” agenda of climate-related make-work jobs, free college, universal pre-K, and government healthcare expansion. But his platform is best summarized as “more of everything,” regardless of how wasteful, unnecessary, or ineffective a program may be. On top of that, congressional Democrats are hoping to include a tax cut for wealthy homeowners in the form of state and local tax deduction cap “relief.” They also want a rule change to enact emergency spending with only a simple majority in the Senate by eliminating a 60-vote point of order.
Looking ahead, Democrats are going to need votes outside their conference to tackle some urgent issues. Since the expiration of the debt ceiling suspension on July 31, Treasury Secretary Janet Yellen has been warning that the department’s “extraordinary measures” will only become harder to sustain once the new fiscal year begins on Oct. 1 and big bills come due. The Congressional Budget Office concurs that the Treasury could run out of money and options in the first quarter. Yet, the fiscal 2022 budget does not include a provision to address the debt ceiling. Democrats have signaled that they are determined to get Republican support for another suspension or increase. Senate Minority Leader Mitch McConnell is equally determined to make Democrats go it alone. It’s clear that the debt ceiling will be a battle royal that unnecessarily puts our economy and credit at risk all for the sake of political gamesmanship.
The debt limit and impending entitlement spending crisis are only two of many key issues that require a bipartisan solution.
There are areas of agreement or compromise on these issues that have bipartisan backing and could improve the fiscal outlook were there any capacity to give the other party a perceived “win.” For example, Sen. Mitt Romney’s TRUST Act would create a process to address federal trust-fund shortfalls and has bipartisan support in both chambers.
A bold, bipartisan deal on even one of our biggest fiscal threats was always wishful thinking. But burned bridges will make even the quotidian work of Congress harder than it already is. Passing appropriations and avoiding a government shutdown before Oct. 1 will be incredibly difficult. Key programs are set to expire, such as the Surface Transportation and the National Flood Insurance programs, not to mention numerous items related to the COVID-19 pandemic. As always, there are also many post offices to rename and commemorative coins to authorize.
A congressional impasse that defers its work or doesn’t complete the work at all will further disrupt our shaky economic recovery and undermine institutions. Burning bridges is a dangerous strategy, particularly when those bridges are ones you still need to cross.
|Budget & Appropriations