Budget Resolution Claims and Responses

The House is currently discussing a potential path forward on an FY17 budget resolution.  As Heritage Action explained last month, there are four criteria necessary for conservatives to support a congressional budget resolution:

  1. Balance within the budget window without accounting gimmicks;
  2. Remove Obamacare tax revenue, as the law should repealed in 2017, and as last year’s reconciliation exercise proved the GOP remains committed to repealing the entire law, including all of its tax increases;
  3. Explicitly reaffirm the GOP’s commitment to bold entitlement reform, especially Medicare premium support; and
  4. Abide by the topline FY17 budget levels contained in last year’s Republican budget.

As things stand right now, there is an effort to convince conservatives to vote for an FY17 budget that calls for $1.070 trillion in discretionary spending, which is $30 billion above the levels set by the Budget Control Act of 2011.  The “unenforceable nature of budget resolution promises” should cause those conservatives to reject the type of deals currently being discussed.

Below are some commonly made claims and straightforward conservative responses:

CLAIM: Thirty billion dollars is miniscule in the grand scheme of things. This budget will be cutting trillions of dollars. And besides, it’s entitlement spending that we need to be concerned about, not discretionary spending.  

RESPONSE: While this may be true from an overall fiscal perspective, it is not compelling when talking about budget resolutions. While budget resolutions touch on a number of topics they only really serve two primary, operational functions: 1) to lay out potential reconciliation instructions (which can also be done in January of 2017); and 2) to lay out the amount of discretionary funding the appropriators must adhere to for the year. While it can propose “illustrative examples” of possible entitlement spending reforms now and in the future, it has no impact on enacting those policies. Therefore, higher discretionary spending in FY17 should not be traded for unenforceable budget language promising mandatory cuts that won’t happen this year.

CLAIM: If we have to give up $30 billion in discretionary spending this year, we should ask for the budget to identify $30 billion in mandatory savings in exchange.

RESPONSE: As alluded to above, all budget resolutions contain “illustrative options” on how to reduce mandatory spending. The kind of tradeoff envisioned in the above scenario would be no trade-off at all: It would simply be another traditional budget resolution. In fact, last year’s budget assumed $136 billion in first-year savings, which Congress immediately proceeded to ignore by enacting a deficit-busting “doc fix”, the Bipartisan Budget Act, and transportation spending legislation. To be clear, the existence of “illustrative options” are par for the course and certainly not something worth horse-trading over.

CLAIM: But you did mention one other functional benefit of a budget: The ability to do reconciliation. Shouldn’t we give in on the discretionary number in exchange for setting up a reconciliation process, either in this year or in early 2017 for a Republican President?

RESPONSE: While each chamber should generally work its will regardless of the prospects or limitations of the other chamber, there are key exceptions to that rule, and reconciliation is one of them. With due respect to the House, reconciliation is only relevant as a Senate tool. The House can pass any bill by simple majority vote. The usefulness of reconciliation is only in allowing budget-related legislation to pass the Senate with a simple majority vote.

More importantly, for reconciliation process to even go in effect in the Senate, the Senate must itself pass a budget and the House and Senate must then agree on a unified budget resolution. There is no indication that the Senate can or will be able to pass a budget this year. In fact, all evidence points to the contrary; as such, all scenarios involving reconciliation this year seem farfetched.

CLAIM: Passing a budget will give conservatives leverage by allowing them to pass, and put on President Obama’s desk, individual appropriations bills.

RESPONSE: Even after the passage of the BBA, the subsequent FY16 omnibus, and hopes for a “regular order” appropriations process in 2016, many observers have noted that it is likely only a matter of time before House or Senate Democrats pick an issue with which to disrupt the process of passing Republican-drafted appropriations bills. House Democrats did so last year over the Confederate flag issue, and Senate Democrats filibustered a defense appropriations bill to gain political leverage. The initial Ryan-Murray deal did not lead to an orderly appropriations process and lawmakers should not be under any illusion liberal obstructionism will not occur this year to deny Republicans policy and process victories.

CLAIM: Conservatives might as well vote for a budget, otherwise the budget numbers will just be “deemed” anyway, and conservatives will get nothing out of it.

RESPONSE: It is true that, in absence of a formal budget resolution, the House could simply “deem” its budget numbers for the year to allow appropriators to write appropriations bills (the Senate had a “deeming” provision embedded in last year’s BBA agreement). This could be done by a simple House Resolution (H.Res), usually as part of a “rule” for another piece of legislation, or even on each individual appropriations bill. It could also be considered as a stand-alone resolution.

However, the prospect of deeming a budget at the higher spending levels seems politically infeasible. Budgets, as well as House rules, are generally party-line votes. In this case, however, House leadership would have to rely on Democrats to pass such a deeming resolution at the BBA levels. And that problem would not be a one-time, rip-the-Band-Aid-off event, as House leadership would then have to rely on Democrat votes for every subsequent appropriation bill on the floor (and possibly even in Committee). Such a scenario would not demonstrate the difference between the two parties but rather it would turn the majoritarian House into a “coalition” House for the rest of the year.

The most obvious path forward in the House is to write a budget, and the subsequent appropriations bills, to the BCA’s 1040 ($1.040 trillion) levels, while taking the $30 billion difference from non-defense discretionary spending.

CLAIM: Aren’t we on the path to a CR in September regardless of what we do on the budget resolution? Isn’t this fight much ado about nothing?

RESPONSE: On the contrary, conservatives considering their vote on the budget resolution should be looking towards September, and they should take into account why many want them to cave now, in March, over the discretionary spending levels. By acquiescing to the higher BBA spending levels now, conservatives will have no leg to stand on come September when a CR at inflated spending levels is jammed through in the final hour. By agreeing to BBA levels in the budget, conservatives are throwing away their leverage on spending for the remainder of the year.

CLAIM: Shouldn’t we just accept the BBA spending now and then return to the Budget Control Act levels for FY18?

RESPONSE:  No. By design, the BBA sets up a $3 billion dip in discretionary spending come FY18.  Just as they did after the conclusion of Ryan-Murray, some lawmakers will use that as a justification to strike another deal with Democrats to increase the budget caps.

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