Feds everywhere are breathing a sigh of relief that Congress reached a deal on an omnibus spending bill – the Consolidated Appropriations Act, 2017 – to fund the government through the end of fiscal 2017. Now we are seeing the obligatory “winners and losers” stories about the bill. They usually list the agencies that got as much or more money than last year as “winners” and the ones who suffered a cut “losers.” That is one way to look at it, and it does share the information most folks want to read – how did my agency do?
Rather than listing winners and losers, I decided to take a look at what the budget deal tells us. Is there anything we should take from this bill that is useful moving forward? I think the answer is yes. Here are five takeaways from the budget deal.
- There is a reason the powers of the legislative branch are in Article 1 of the U.S. Constitution, which says “All bills for raising revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other Bills.” The framers of the Constitution intended to limit the president’s ability to control how money was raised and spent. While some presidents have exerted more influence than others, the Constitution placed the power to tax and spend in the hands of the Congress. That is one of the reasons this or any president’s budget is likely to be dead on arrival on Capitol Hill. The veto pen gives the president leverage, but that leverage is only as strong as his willingness to use it. The budget deal shows that the power to pass a budget remains firmly in the hands of the House and Senate. How so? It includes many restrictions on executive branch actions. Other than not giving the president what he wanted, it includes restrictions on reprogramming dollars, as well as specific direction to do certain things or not do things that the budget does not envision. When you have a 1,665 page document, there is room for a lot of detail. A new agency head wants to redecorate his/her office? That’s OK, but they cannot spend more than $5,000. Want to implement a 9-year old proposal from OPM on competitive areas that are limited to pay bands? No can do. If you have some spare time, take a look at the level of detail. The Congress zealously guards the power of the purse, and this bill is no exception.
- The budget process is still broken. Remember – this is May. We have five months left in fiscal 2017 and we are just now getting a budget. The fiscal year that began last October. It has been more than a decade since Congress passed all 12 appropriations bills in time for the beginning of the fiscal year. What we saw this year has become common. A partial spending bill, an extension, and an Omnibus bill that includes everything in one big package. Continuing resolutions and omnibus appropriations bills that are passed long after the start of the fiscal year do not make it easy for federal agencies to get their work done. How do you plan for a year when it is seven months into the year before you know what your budget will be? Don’t be surprised if the next thing we hear is the annual chorus of complaints that agencies are waiting until the end of the year to spend their money. Of course they are. They have no choice, because they did not start the year with a full budget.
- Much of what is in the agreement should not be a surprise to anyone. I am reading a lot of articles that say the lack of draconian cuts is big news. Really? Did we really expect the Congress to make huge cuts to agency budgets during the middle of the fiscal year? It may take forever to get the bills passed, but Representatives and Senators (and appropriators in particular) know that a massive cut enacted five months before the end of the fiscal year would be a disaster. There is no way an agency could absorb the cut other than massive furloughs of employees and terminating contracts (potentially with penalties). By massive furloughs, I mean multiple days per week for every employee. The consequences could be disastrous. The idea that they would agree to push the government off a cliff and take the blame for it is not realistic.
- The deal is mostly good news for federal workers. It did not include the substantial cuts the White House proposed, and it also includes some restrictions on cutting programs without congressional approval. It requires approval for program cuts of $5,000,000 or ten percent, whichever is less. That may make it more difficult for the administration to make large staff reductions that are not specifically called for in the budget. In addition, it continues the longstanding prohibition on new studies or public-private competitions under OMB Circular A-76 or any other regulation or policy.
- The good news may or may not last. The deal should come with a disclaimer. In some respects it can be interpreted as the Congress not agreeing with the scale of budget cuts that President Trump proposed. It is safe to say there are Representatives and Senators on both sides of the aisle who do not support massive cuts to the Department of State, the Environmental Protection Agency, and others. As I have written about before, cutting the budget is much more complicated than it may seem. But there are also folks on both sides who do support cutting some federal spending. Given more time to consider cuts, and with the ability to impose them much closer to the beginning of FY 2018 and future years, we are likely to see cuts that did not make it this year on the table again. We should also keep in mind that the agreement has not yet passed and been signed by the president. South Carolina Senator Lindsey Graham is making noise about holding up the bill. It is likely to pass anyway.
So the budget battle is not over. In fact, by design, it will never be over. Our system of government is designed with separation of powers for a reason. We do not have a parliamentary form of government, nor do we have a King. The framers created a system specifically to limit the power of any one branch of government. This budget cycle demonstrates their intent in action.
Now that there is a resolution of the fiscal 2017 budget, the cycle starts over again for 2018. President Trump tweeted Tuesday morning – “Our country needs a good “shutdown” in September to fix mess!”
And so it goes….