Tags: Economic- Crisis | congress | omnibus | bills | spending | taxes

Gridlock Defines Congress, Budget

By John Pisciotta   |   Monday, 03 Jan 2011 12:03 PM

Congress is currently embroiled over its expenditures with no end to budget squabbles in sight.

This following hypothetical interview traces the “genealogy” of the continuing resolution enacted in the December lame duck session back through the failed omnibus spending bill, and the consequnces of failing to enact separate appropriations bills.

The interview reveals gross ineptitude regarding congressional failures to make timely and well-deliberated government spending decisions.

Citizen: In the final hours of the 2010 lame duck congressional session, Congress passed and President Obama signed something called a continuing resolution. Just what is a continuing resolution?

Professor: A continuing resolution is an authorization for government spending in a fiscal year for a short period of time. A “CR,” as legislators call it, typically permits spending at the rate approved for the previous fiscal year. The CR enacted just before Christmas allows the federal government to operate only through March 4, 2011.

Citizen: What are the dates for the federal fiscal year?

Professor: We are in fiscal year 2011. “New Year’s Day” for the fiscal year was Oct. 1, 2010. Fiscal 2011 will end on Sept. 30, 2011.

Citizen: What could Congress have done to avoid the stop-gap approach of a continuing resolution? This short-term fix sure doesn’t inspire confidence in government.

Professor: Congress went to the continuing resolution when the Senate could not muster the votes to pass an “omnibus spending bill” for fiscal 2011.

Citizen: This is getting more complicated. What is an omnibus spending bill?

Professor: An omnibus spending bill provides for government spending for a full fiscal year. The word omnibus is important. An omnibus bill wraps together 11 separate appropriations bills for different government functions into one gigantic legislative act.

The separate bills include defense, homeland security, transportation, etc. The omnibus bill debated in December would have authorized $1.16 trillion of federal spending for fiscal 2011.

The bill failed because it included so many earmarks or special pet spending projects. The 6,000 earmarks in the bill totaled $8 billion in spending. This is not a huge amount. However, the earmark process has become very unpopular.

Citizen: Why didn't Congress just passed the 11 appropriations bills instead of wrapping them together in an omnibus bill?

Professor: That is the way Congress is supposed to do it. The 2010 congressional session began back on Jan. 12. Ideally, each congressional body should have held hearings and approved the separate appropriations bills in time for presidential signing before Oct. 1. During 2010, not one separate appropriations bill was enacted by Congress.

Citizen: I don’t want to be cynical about our public servants, but this seems irresponsible. I don’t think many businesses would start a new year without having budgets in place. Congress does have a lot to do. Would there be any way to provide more time for our legislators to enact the various appropriations bills?

Professor: That has already been tried. Prior to 1977 the federal fiscal year was July 1 through June 30. Congress voted to push the fiscal year back three months precisely to give themselves more time to complete appropriations bills prior to the start of a new fiscal year. This seemed like a reasonable change.

However, the three additional months for deliberation have resulted in no improvement in congressional performance.

Citizen: This has been informative but not encouraging. I am going to watch for Oct. 1, 2011 to see if Congress passes appropriations bills. I am not optimistic. No wonder a December Gallop Poll found congressional job approval at 13 percent — the lowest in the 30-year history of the survey.

John Pisciotta is an associate professor of economics at Baylor Hankamer School of Business, Waco, Texas. Before joining the Baylor faculty in 1980, Pisciotta served on the economics department of Colorado State University at Pueblo. His research interests include the philosophical foundation of economics, K-12 education reform, and the economic role of government.

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