Tag: kent conrad

No Budget in 1,000 Days? No Budget Ever!

Around the time of President Obama’s State of the Union speech two weeks ago, Republicans and their allies came out arguing that the Democratic Senate hadn’t produced a budget in 1,000 days. Senate Budget Committee chairman Kent Conrad (D-ND) disputes the charge.

Is it true? The new budget season started Monday, so it’s a great time to examine that question.

Budget season really did start Monday. The Congressional Budget Act has a timetable in it (at section 300) that says the president submits his budget on or before the first Monday in February. We’re underway!

But I hope you weren’t holding your breath waiting to get a glimpse of the president’s budget. The White House has kicked back its release by a week—an unfortunate symbol of how both ends of Pennsylvania Avenue flout budget processes in ways large and small.

Now to the question: When was the last Senate budget?

Let’s start with a preliminary question: What is a “budget”?

The Congressional Budget Act defines it with reference to the document it appears in, known as a “concurrent budget resolution.” That definition is gobbledegook:

On or before April 15 of each year, the Congress shall complete action on a concurrent resolution of the budget for the fiscal year beginning on October 1 of such year. The concurrent resolution shall set forth appropriate levels for the fiscal year beginning on October 1 of such year and for at least each of the 4 ensuing fiscal years for the following—
(1) totals of new budget authority and outlays;
(2) total Federal revenues and the amount, if any, by which the aggregate level of Federal revenues should be increased or decreased by bills and resolutions to be reported by the appropriate committees;
(3) the surplus or deficit in the budget;
(4) new budget authority and outlays for each major functional category, based on allocations of the total levels set forth pursuant to paragraph (1);
(5) the public debt;
(6) for purposes of Senate enforcement under this title, outlays of the old-age, survivors, and disability insurance program established under title II of the Social Security Act for the fiscal year of the resolution
and for each of the 4 succeeding fiscal years; and
(7) for purposes of Senate enforcement under this title, revenues of the old-age, survivors, and disability insurance program established under title II of the Social Security Act (and the related provisions of the Internal Revenue Code of 1986) for the fiscal year of the resolution and for each of the 4 succeeding fiscal years.

Take a look at the last budget the Senate passed, though, and you can see these things—not that it’s a clear, readable description of what the future holds for government activity.

Now, Senator Conrad objects to the charge that he hasn’t produced a budget, saying that the Budget Control Act, which passed just last August, is a budget. It’s “more extensive,” setting the budget for the current year and the next one; it’s not just a resolution, but a law; and it has caps on discretionary spending going forward ten years.

Looking at the text of the bill, a government-budget novice like myself can’t see this. It doesn’t look like other congressional budgets, and it doesn’t fit with the definition in the Congressional Budget Act.

But why do we have to accept the government’s definition of what a budget is? It’s our government, and we get to decide when we’re seeing a budget.

I went to a handy resource, called a “dictionary,” to look up the word “budget.” The first two definitions are helpful:

1. an estimate, often itemized, of expected income and expense for a given period in the future.
2. a plan of operations based on such an estimate.

Now we have something we can use! And it can help us sort out what’s going on in federal ‘budgeting.’

The president’s budget, laying out not only gross spending numbers but the agencies and bureaus where the money will be spent, is a budget, under the more extensive, second definition.

What the House and Senate do, when they do their “budgeting,” is put out gross numbers and then some detail based on functional categories like amounts to be spent on “national defense” and “community and regional development” and stuff. That … almost meets the first definition, but it certainly isn’t itemized. Congress doesn’t actually do budgets.

My conclusion—as a human being and not a budget wonk—is that the Senate has not produced a budget in more than 1,000 days. I also conclude that the Congress doesn’t really produce budgets ever.

I investigate all this because of my work on transparency. If there is going to be a transparent federal budget and transparent spending processes, they have to have some relationship to what the public expects to see and some consistency among them (such as between the president’s budget and Congress’s).

If the political charge sticks—that the Senate has failed to budget—so be it. But the problem goes deeper. Congress basically doesn’t budget. It is owned by the complexity of the federal government and incapable of budgeting in a meaningful way. Congress just spends money in the appropriations process—which it flouts just as often as its so-called “budgeting.”

‘The Problem with CLASS Is That It’s Voluntary.’

As I write, the House is debating a bill that would repeal the CLASS Act, one of two new entitlements created under ObamaCare. It’s hard express just how awful this program is. Here’s my attempt from back in October, when the Obama administration admitted CLASS is a bust:

The idea behind CLASS was that the government would run a voluntary and self-sustaining insurance plan to help the disabled pay for long-term care, including nursing home care…

Congress required CLASS to set each applicant’s premiums according to the average applicant’s risk of needing such long-term care, rather than her individual risk. But averaged premiums are only attractive to people with above-average risks. Since few people with below-average risks would enroll, the average premium would rise. That would encourage more people with below-average risks not to enroll, and the vicious cycle would continue until the program collapsed.

As it turns out, CLASS collapsed even before its 2012 start date. The same thing happened when Obamacare imposed the same sort of price controls on health insurance for children in September 2010: the markets for child-only coverage collapsed in a total of 17 states, and are slowly collapsing in even more.

Everyone with a rudimentary understanding of insurance saw this coming. The government’s non-partisan actuaries warned of “a very serious risk” that CLASS would be “unsustainable.” One wrote, “Thirty-six years of actuarial experience lead me to believe that this program would collapse in short order and require significant federal subsidies to continue.”

The Democratic chairman of the Senate Budget Committee called CLASS “a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of.” An Obama administration official wrote, “Seems like a disaster to me.” One of President Obama’s own cabinet secretaries called the program “totally unsustainable” and echoed a presidential commission on fiscal responsibility by recommending it be “reformed or repealed.”

Sen. Tom Harkin (D-IA) has diagnosed the fatal flaw in this most ill-conceived government program. I swear, I am not making this up:

The problem with CLASS is that it’s voluntary.

Harkin isn’t the first person to wistfully lament that CLASS would be such a great program if only we could put non-participants in jail. He’s just the first person I know of who has said so explicitly. Others have said that the collapse of the CLASS Act should inspire confidence in the rest of ObamaCare, which imposes the same type of price controls on health insurance, and then threatens to put people in jail if they don’t buy it. Here’s how I described that strategy back in October:

Obamacare inspires confidence in its supporters, then, because one part of the law throws a Hail Mary pass to prevent another part of the law from stripping Americans of the insurance that currently protects them from illness and impoverishment. Feel safer?

Rather than make the CLASS Act compulsory, Congress should make the rest of ObamaCare voluntary:

[Ezra] Klein writes, “One way of looking at the administration’s [CLASS] decision is that it shows a commitment to fiscal responsibility.” If so, then let’s handle the rest of Obamacare exactly the same way. Congress should require Obamacare’s health insurance provisions to be voluntary and self-sustaining, just like CLASS: no individual mandate, no taxpayer subsidies. Or is fiscal irresponsibility part of the plan?

Harkin and other ObamaCare defenders have a profound lack of respect for other people’s freedom and dignity. The problem with that is that it’s voluntary. If it were a medical condition, it might be excusable.

Cheap Talk from a Fiscal Commissioner

The president’s fiscal reform commission started off with some breathtaking chutzpah from Senate Budget Committee Chairman Kent Conrad (D-ND):

Rising federal debt is like a tsunami that could swamp the country at any moment…Our economic strength and security is on the line. Now is the time to act. And we need everyone, Democrats and Republicans, working together on a solution.

If now is the time to act, why did Sen. Conrad just pass a budget plan out of his committee that promises massive spending, deficits, and debt?

From a transcript of Conrad’s opening remarks:

I personally believe that saying, ‘everything is on the table’ is critical. I hope none of us will take things off the table prematurely, because I think it is clear it’s going to take dramatic changes on the spending side of the ledger, and it’s going to take changes on the revenue side of the ledger.

Does Sen. Conrad consider farm subsidies to be on the table? In February, the Wall Street Journal exposed Conrad as a hypocritical big spender. For example, Conrad doesn’t miss an opportunity to shower his farm constituents with federal largesse:

He has been a defender of the state’s grain farmers ever since [his election to the Senate in 1986]. He voted last April against a proposal to cap federal payments to the nation’s farmers at $250,000 per farmer per year, a measure that Mr. Conrad criticized as disastrous but that supporters said would have saved $1 billion a year.

He also helped draft a five-year, $300 billion farm bill in 2008 that boosted overall farm subsidies. The bill created a $3.8 billion emergency “trust fund” for farmers who lose crops or livestock to natural disasters, which was Mr. Conrad’s idea. Since 2008, North Dakota ranchers have received $23 million under the fund, second only to Texas.

What about federal entitlement programs, which represent the biggest budgetary threat going forward?

In 2003, Mr. Conrad joined most Democratic senators to support Mr. Bush’s plan to provide Medicare prescription-drug coverage to seniors, at a cost of around $40 billion a year. The plan required Congress to scrap the spending controls Mr. Conrad once championed. Republicans won the votes of Mr. Conrad and other rural senators by agreeing to expand the program by pumping $25 billion more into rural hospitals and doctors over 10 years.

Then there’s that health care “reform” bill Conrad just voted for, which will cost an estimated $2.6 trillion once fully implemented.

Not to be outdone, the president had his own galling comments:

Flanked by the co-chairmen of the new commission, Obama challenged the two parties to join in taking a “hard look” at the growing gap between what the government spends and raises in revenue, and to “think more about the next generation than the next election.”

The “growing gap” the president cites is one of his own doing. The following chart shows the projected gap between spending and revenues according to the Congressional Budget Office’s analysis of the president’s latest budget proposal:

The chart shows that revenues are already set to consume a larger share of the economy. The problem is that spending is on an elevator going up.

The politicians with the most power in Washington are precisely the ones pretending that they are powerless to steer the nation away from a looming fiscal disaster. Their claims are total, utter, complete nonsense. Both Obama and Conrad could have proposed budgets this year that actually cut spending to reduce the deficit. Both chose not to. They are the ones fueling the “tsunami.” They are the ones who don’t have the guts to cut off this generation’s subsidy recipients for the sake of the next generation. It’s that simple.

Congress to Skip the Budget Process—-a Transparency Problem at the Very Least

You are required by law to file your taxes by the end of the day tomorrow, and you get penalized if you don’t. Meanwhile, Congress will not meet its April 15 requirement to pass a budget resolution. The budget resolution is the plan for FY 2011 revenue and spending that dictates the amounts in forthcoming annual spending bills.

It’s an understatement to say that skipping the annual budgeting process is a transparency problem. It’s a management problem, a spending problem, a leadership problem, a responsibility problem …

More commentary and a timetable of the congressional budget process is on the WashingtonWatch.com blog. Politico broke the story (so far as I can tell). Reuters quotes Senate Budget Committee Chairman Kent Conrad (D-ND) saying, “We’re going to go full speed ahead” with the budget.

You have until the end of the day tomorrow, senator.

This Week in Government Failure

Over at Downsizing Government, we focused on the following issues this week:

Deficit Commission: Wrong Target, Wrong Approach

Legislation being considered on Capitol Hill would create a supposed deficit reduction commission. If politicians were bound by truth-in-advertising, this proposal would be called a tax increase commission. It creates a mechanism that will – at best – replicate the 1982 and 1990 budget summits, both of which were fiscal disasters from the perspective of those who favor limited government. The inevitable result of a “bipartisan” process is a 50/50 deal of “spending cuts” and “tax increases,” but the spending cuts are off the “baseline” (which assumes spending goes up), so even if the changes are real (and they rarely are), they are merely reductions in increases. The tax increases, meanwhile, are real and come on top of all the revenue growth built into current law. Moreover, many of the so-called spending cuts are actually increases in revenue (the “offsetting receipts” charade). Last but not least, this legislation is a stalking horse for VAT (that’s what all the talk about an “antiquated” tax system that needs to be “modernized” is all about).

What’s remarkable about this proposal is how Democrats are almost transparent in their desire to lure Republicans into committing political suicide. As demonstrated by the 1982 and 1990 budget deals, everything is examined through the prism of distribution tables once a budget summit or commission commences and the GOP inevitably comes across as the bad guys who try to protect the rich at the expense of the poor. Of course, if Republicans are really stupid enough to travel down this path, they’ll deserve exactly what happens. But some people in Washington are aware that the proposed commission is a recipe for a major tax hike. The Financial Times cites Cato’s Chris Edwards in its report:

The push for a bipartisan commission to deal with the fiscal challenges facing the US gained momentum on Wednesday as 27 senators sponsored revised legislation that would create such a task force. The bill, introduced by Democrat Kent Conrad and Republican Judd Gregg, both fiscal hawks, would charge an 18-member group of serving legislators and administration officials with coming up with a plan to solve what they called “the nation’s long-term fiscal imbalance”. …In a sign that the concept of such a commission is gaining ground politically, anti-tax activists immediately attacked the proposal, saying it would lead to tax increases. Grover Norquist, head of Americans for Tax Reform, published an open letter saying the “commission is unacceptable from a taxpayer perspective” because “it would lead to a guaranteed tax increase”. …Chris Edwards, director of tax policy at the small-government Cato Institute, said a commission was likely to put too much emphasis on tax increases when “long-term projections reveal a spending catastrophe, not a revenue challenge”.

One final comment. It is utterly absurd to categorize Senator Kent Conrad as a fisal hawk. This term supposedly suggests a member who actively pursues deficit reduction. Yet according to the vote rating of the National Taxpayers Union, Conrad’s most recent rating is an F. Which is the same grade he got the previous year, and the year before that, and the year before that. Indeed, Conrad “earned” failing grades in 14 out of 17 years, and got a D in the other three years.

CBO: Democrats Bend Health Care Cost Curve — in the Wrong Direction

This is too good.  Directly from the ABC News blog post, “CBO Sees No Federal Cost Savings in Dem Health Plans:”

Here’s a blow to President Obama and Democrats pressing health care reform.

One of the main arguments made by the President and others for investing in health reform now is that it will save the federal government money in the long run by containing costs.

Turns out that may not be the case, according to Doug Elmendorf, director of the nonpartisan Congressional Budget Office.

Answering questions from Democrat Kent Conrad of North Dakota at a hearing of the Senate Budget Committee today, Elmendorf said CBO does not see health care cost savings in either of the partisan Democratic bills currently in Congress.

Conrad:  Dr. Elmendorf, I am going to really put you on the spot because we are in the middle of this health care debate, but it is critically important that we get this right.  Everyone has said, virtually everyone, that bending the cost curve over time is critically important and one of the key goals of this entire effort.  From what you have seen from the products of the committees that have reported, do you see a successful effort being mounted to bend the long-term cost curve?

Elmendorf:  No, Mr. Chairman.  In the legislation that has been reported we do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount.  And on the contrary, the legislation significantly expands the federal responsibility for health care costs.

Formatting in original.