Sunday, March 25, 2018

The Budget Guy reminds us that GOPs budgeting in DC continues to get worse

With all of the craziness in DC going on this week, the fact that we came within 1 day of another federal government shutdown didn't get a lot of attention. A massive 2,200-page bill was able to pass Congress and be reluctantly signed by President Trump before Friday night's deadline, and there's no imminent threat to government operations for now.

In Forbes, "Budget Guy" Stan Collender had a good rundown of the mess of an omnibus that is now law. Collender noted that the budget deal that became law cemented that we're in a new era of fiscal irresponsibility, rife with cronyism and localized goodies. Which proves that all of the wailing that Tea Partiers made about "soaring debt" at the start of the 2010s were lies filled with crocodile tears as things are worse now than they were 8 years ago.
1. $1 Trillion Or More Annual Federal Budget Deficits Are About To Become An American Tradition

This spending bill plus last year's big tax cut means that the American fiscal realignment is now set and balanced federal budgets have become pure fantasy. Annual deficits of $1 trillion to $2 trillion are here to stay and, realistically, the U.S. has abandoned the possibility of running a surplus and reducing the national debt. In the future, elected officials will take victory laps if the deficit is close to $1 trillion.

2. Earmarks Are Definitely Back

No one used the word while this bill was put together, but there should be no doubt that "earmarks" -- money set aside for a specific purpose -- were used extensively to buy votes. Some were the traditional small amounts for a particular state, district, industry or company; others were the inclusion of whole programs. Either way, they were almost precisely what congressional Republicans, led by former Speaker John Boehner (R-OH), swore to stop doing. To quote the movie "Poltergeist II..."They're back."
Collender also noted that the omnibus package wasn't merely a continuation of spending on current programs, but also included other tax law changes and adjustments along with some new programs. He calls this approach the "Veg-o-matic" method of legislating, where a bunch of stuff is chopped together with the idea of keeping members of Congress from having to explain why they voted for some of the crap that was in the bill, since that provision is never split off.

Governing magazine went over some of the added funding in the omnibus, and it seems to sound like something that Democrats would sterotypically pass - increases in numerous areas of domestic spending, in contrast to the cutbacks Trump's Administration had called for in its budget document, and the tough talk that Paul Ryan has made for most of his 20 years in Congress.
The funding boosts are not a total surprise since February’s spending deal included increases in domestic spending. But states were still doing a fair amount of guesswork when it came to anticipating exactly how much money certain programs would get from the feds, says John Hicks, executive director of the National Association of State Budget Officers.

“This is a really good budget for states as it relates to traditional programs where they partner with the federal government,” he says. “I’d say the numbers here in many areas are even higher than what states were counting on.”

For example, highway funding will get a $3.5 billion boost. More than two-thirds of the increase will come in the form of discretionary funding and will supplement what's coming from the Highway Trust Fund.

Education funding will see a $2.6 billion increase, with $400 million of that being set aside for charter schools.

Child care development grants, which help pay for child care so that low-income parents can find work or go back to school, are set to almost double to a historic $5.2 billion in funding. The Center for Law and Social Policy called the boost a “significant win” that will help 230,000 children and their parents across the country.
The increase in discretionary funding is what Collender refers to as "the return of earmarks", and while it's a bit dangerous in that it seems to put a lot of power into the Trump Administration to decide how to spend that money vs a set aside that is passed down to states and communities, it likely will make it easier for these areas to afford projects.

So if you thought Tea Partiers were all about transparency in spending and cutbacks in domestic programs and passing off more spending decisions to the states, I got one word for you - SUCKER!

Collender also warns that the new spending deal only runs through the end of the 2018 Federal Fiscal Year, which ends on September 30, 5 weeks before the November midterms. But given that the Republican leaders in Congress and the Republican president that are trying to avoid the hard choices while also trying to strike poses of strength for low-info voters, the Budget Guy says that it's very possible that things could blow up right before Americans go to the polls.
..As much as most congressional Republicans and Democrats will want to avoid even a near-shutdown just before the 2018 midterm elections, there is little time left for all the negotiations that will be needed to enact even a straightforward continuing resolution that just extends the 2018 funding levels. As I noted in a previous post, as of April 1, the House and Senate only have about 45 legislative days left before the next fiscal year begins.

Add to this limited time frame (1) a Trump 2019 budget that effectively has already been abandoned by the White House and rejected by Congress, (2) a new chairman of the Senate Appropriations Committee (current Chairman Thad Cochran (R-MS) will retire for health reasons on April 1), (3) the House and Senate not planning to adopt a congressional budget resolution this year, (4) increasingly partisan congressional politics heading into the election and (5) a president who has now promised never to sign another massive spending bill and you get a recipe for yet another fiscal cliffhanger with a government shutdown tied to the railroad tracks.
Notice how poorly and dysfunctionally Congress runs when Republicans are in charge, and how fiscal issues that had been set aside in the Obama era are now worse than ever within 15 months of the GOP running everything in DC? Not a coincidence folks.

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