Budget Resolutions Need More Transparency

Romina Boccia / March 24, 2015

It’s a big week for the new GOP-controlled Congress. Unlike the past when Congress was divided, this year there is no one to blame if GOP lawmakers fail to pass a budget. This puts tremendous pressure to unite diverse lawmakers in the House and Senate behind one spending plan by the mid-April deadline. But first each chamber is seeking support on its own budget resolution this week.

There are three reasons why Congressional budget resolutions are relevant. The budget resolutions:

1. Set the total level of discretionary funding (known as 302a allocation in budget-speak);
2. Provide reconciliation instructions to committees to draft legislation changing mandatory programs or revenues that can be fast tracked in the Senate and pass with a majority (rather than a super majority); and
3. Send a non-binding message about policy priorities.

The budget resolution is most relevant for the purpose of setting the maximum discretionary spending level that the appropriations committees get to divvy up among the various government agencies and programs. While the budget resolution may contain policy changes and allocations over the 10-year budget window timeframe, the document is not binding beyond the fiscal year for which it was introduced—in this case fiscal year 2016, which lasts from Oct. 1, 2015 through Sept. 30, 2016.

This means that any policy changes, like repealing Obamacare, represent non-binding messages regarding priorities that won’t become law unless the relevant congressional committees draft separate legislation to put them into effect. Since neither budget includes very specific reconciliation instructions it is unclear how they intend to use the special budget reconciliation process. Furthermore, the low savings targets (in the Senate, the Finance and Health, Education, Labor and Pensions Committees are instructed to reduce the deficit by only $1 billion over 10 years) leaves open the possibility that the reconciliation process could be used for anything.

As such, savings estimates provided in the House and Senate budgets are unrealistic. They represent mere policy suggestions that further lack important details in several areas. Even so, Congress, and particularly the Senate, is highly cautious in merely suggesting big changes in policy.

Certainly a budget vague in details and that leaves one of the most popular programs—Social Security—untouched despite its severe and growing financing challenges, has a higher likelihood of passing in a diverse Congress. That—passing a budget—seems to be the key concern. It even trumps establishing the legislative momentum to actually address the key drivers of spending and debt.

Another key area of weakness is that while the budget resolutions pledge full Obamacare repeal, including its $2 trillion in spending and $800 billion in tax revenues over the decade, the budget assumes that unspecified tax changes that will achieve the same level of revenues as would be the case with Obamacare’s taxes in place. Implicit in the assumption that Congress will raise the same level of Obamacare tax revenues after repealing Obamacare is that Congress will raise taxes.

The House and Senate budgets are a start and lawmakers should be commended for committing in spirit to balancing the budget before the end of the decade by repealing Obamacare and making reforms to Medicare and Medicaid. To truly commit to a path to balance in substance, lawmakers should go back to the drawing board.