Congress Should Follow Its Budget Rules
It seems to have become a routine annual event that one fiscal year passes into another without the federal government having finished an annual budget. This budget impasse — and the political theater that has seemingly become permanently attached to it — has to stop. As the president and CEO of the National Defense Industrial Association, my principal concern is for the defense budget, which provides the funding for the Pentagon and ultimately, the association’s 1,600 member companies who comprise the defense industrial base.
Although I referenced that the federal government has not completed a budget, what that actually means is that the United States Congress has — once again — failed to complete the budget by following its own process. The president by comparison finished his budget proposal and submitted it to Congress in February. Congress again has been unable to complete its work and get a budget across the finish line. This is disturbing because — although it is increasingly less obvious to the public — Congress actually has a very good process for doing so.
When the nation was first founded, the calendar year and fiscal year were the same, each beginning on Jan. 1. The budget for the nation was prepared and enacted by Congress — exercising its constitutionally granted power of the purse — and the president as chief executive distributed the funds as appropriated. This was the budgetary practice until 1842 when the calendar year and fiscal year were separated with the latter being moved to July 1. The logic for this adjustment was so that new members of Congress taking office in early January would not have to wait, particularly in the House where tax legislation must originate, for half their elected term to expire before they could have any impact on revenue and spending.
But as time went by, particularly following the progressive era personified by the administration of President Theodore Roosevelt and the emergence of the United States as a major power after World War I, the decentralized structure of Congress, along with the expansion and growing complexity of the federal budget, led to the passage of the Budget and Accounting Act of 1921. This act required the president to submit a draft budget to Congress for consideration and enactment, created the Bureau of the Budget within the Treasury Department to assist, and established the General Accounting Office as an arm of Congress to evaluate and critique budgets and the appropriation of funds.
The beginning of the fiscal year remained July 1, however the broad outline of the existing budget process was established. In the late 1930s, President Franklin Roosevelt moved the Bureau of the Budget — today known as the Office of Management and Budget — from Treasury to the executive office of the president, giving the chief executive even greater involvement in budgets.
In 1974 President Richard Nixon impounded certain appropriated funds arguing that they should not be obligated as Congress internally did not have a structured process for aligning revenues and expenditures. Nixon lost the battle — as the courts ruled against him — but won the war as Congress passed the Budget and Impoundment Control Act of 1974. This act formalized the process we have today of budget resolutions, allocations, and if necessary, reconciliation. It also moved the fiscal year to Oct. 1 so Congress would have more time to complete its business. This process is generally called “regular order.”
But what we are finding today is little “regular” in “regular order.” Congress rarely has all 13 appropriations bills finished by Oct. 1, much less presented to the president for signing into law. For example, the last defense appropriations bill finished by then was in 2007. To keep the government functioning, Congress resorts to passing short-term, often confusing, continuing resolutions allowing programs to continue at existing levels. Lately, even this effort has been perverted by sequestration and the use of mechanisms such as the Pentagon’s overseas contingency operations fund to pay for needed programs above the sequestration caps. But this approach relies on funds only good for one year, clearly inappropriate and inefficient for funding multi-year development and production programs.
This has to stop. Congress would be incensed if the president — any president — did not submit a budget as required in early February. As discussed, over the past two centuries Congress has established a reasonable process for producing a budget, which is one of its most fundamental responsibilities. It has established several, highly capable offices to assist with the details of budget formulation and to provide reasoned, non-partisan advice. It has established a schedule ending Oct. 1, which allows more than enough time to finish the task. Congress just needs to respect and follow its own process.
Here is just one example of the implications of this situation. Of the five members of the Joint Chiefs of Staff who will be leaving their positions or retiring this September, none ever had a defense budget passed on time under regular order following the procedures of the Budget Control Act of 1974 during their entire term in office. This has made their already demanding jobs enormously more difficult.
After receiving the President’s budget, Congress has more than sufficient time to complete its budget process, and there is more than ample opportunity for Members of Congress to offer their views about spending levels and priorities, both individually and through committee work. There is also ample opportunity for addressing and resolving differences in budget priorities and allocations between the Executive and Legislative branches – something known as compromise. But anyone disrupting and distorting the budget process, particularly with “budget brinksmanship” that threatens a government shutdown, or embracing other tactics leaving the federal government without an approved budget when the fiscal year begins on October 1st, does not serve the Nation well. We badly need “regular order” to replace the “regular disorder” of the past few years. Our military forces need it, and the American people expect it.