DALLAS, October 11, 2013 ― Norm Ornstein is a congressional scholar and political scientist with the American Enterprise Institute. In this three-part interview, he explains the federal budget process as it is suppose to work, as well as the current dysfunction. In part one, Ornstein explained how the system is suppose to work through 12 allocations bills. Although sometimes not all allocation bills are passed and a continuing resolution is needed to bridge the gap until they can be completed, this year is different in that none of the twelve allocations bills have been passed.
Part-two of the interview:
April Thompson: Is the first time that that’s ever happened?
Norm Ornstein: You have to go back to the early 1990s to find an example like this. In general you usually get, you know, three, four, five, six, maybe even eight, nine or ten of them enacted. This is different.
AT: The Continuing Resolution, that’s just based on a formula?
NO: The typical process is – continuing means you continue the previous years spending. But of course, Congress can pass the resolution and the president can sign it where they reduce the funding below the previous year’s levels, increase it to something above, they can do anything they want, but in general, they usually sometimes they’ll do it for a short period of time where they’ll try to work out their differences. Sometimes – we saw this a couple of times in the Reagan years – you’ll have a real confrontation, at least the threat of a shutdown before they reach an agreement. But more often than not, they work it through.
AT: Even though we haven’t had a budget resolution passed in a few years now, Congress has been passing the appropriations bills until this year?
NO: A budget doesn’t have the overarching importance that sometimes people attribute to it because it can be overridden or ignored. As I say, it’s a resolution done by the House. It’s still going to take the specifics of the spending and taxing bills to actually be out there—that’s what matters. The budget is supposed to, more than anything else, the whole idea behind doing the budget was that you could instead of just doing what then 13 separate spending bills without looking at the overall picture, you could step back and look at the overall picture before making these allocations. And the second reason frankly was it was a matter of congressional power.
Before we had a budget process per se, there was a budget that came from the White House. While Congress still had to pass the individual bills, the only branch of government looking at the overall picture and influencing all of this was the executive branch. So this was an attempt by Congress to gain back some of that power of the purse. Before 1973, the number crunching, the real experts, the people who had access to all of the data were in the Bureau of the Budget, then the Office of Management and Budget as it came to be called, in the Executive Office of the President. When they passed the Budget Act, Congress created the Congressional Budget Office so that could have their own economists and budget experts.
AT: About the Congressional Budget Office, my understanding is that they score things, they tell how much things cost. Other than that, do they have any input into the importance of things in the budget or the details of things in the budget?
NO: No, it is suppose to be a group of non-partisan experts that provide economic forecast, that look at the consequences of different kinds of decisions made in spending or taxing, or in sustentative programs. They provide a forecast that sometimes becomes official forecast. What’s important to remember there is that there are some limits built into the law on what the Congressional Budget Office can do. They can’t go off on their own and say, “Actually we’ve got our own ideas here.” When Paul Ryan, for example, put his budget together, he had assumptions of how much revenue would come in from tax cuts, of what programs themselves would cost because of assumptions he made, and he could order the Congressional Budget Office to put those assumptions into its own forecast of the budget.
And at other times, CBO has to issue forecasts based on current law, even if the odds are very, very strong, if not close to certain that current law will be changed. So, for a long time, where the current law was that all those Bush tax cuts would expire after ten years and then all of the sudden revenue would shoot way up, even though everybody knew there was no way all of those tax cuts would expire, you had Congressional Budget Office projections based on them expiring, because that’s what they were required to do.
AT: In addition to looking forward, does the CBO do reports on what has happened?
NO: Yes. Sometimes individuals can request reports. They do their own economic forecasts, just as the Federal Reserve and OMB will do economic forecast. And they can look at what happened with particular programs and whether they have cost more or less, or what they’re projected to cost. They do have some leeway to make some assumptions when a bill is introduced in terms what it would do or what it would cost. A good example there is when the Clinton health care plan came forward, the Congressional Budget Office under the then director Bob Reischauer gave it some rather disappointing projections of what it would cost and save, that was to the great disappointment of President Clinton.
Depending on who’s in charge, there’s input from the leaders of the budget committees and both parties, but sometimes if one party controls both houses, it will be somebody who has a partisan background. But practically speaking, every director of CBO—the first one was Alice Rivlin and now it’s Doug Elmendorf – and if you look at almost all of them, even if they had a partisan background, they’ve run CBO in a very straightforward, honest way.
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