I Hear Ron Paul Is Hiring Buce of Underbelly and Roger of Salisbury to do Federal Reserve Oversight

Deeming the Budget Resolution

Robert Greenstein and James R. Horney of CBPP:

House Republican Rule Changes Pave the Way For Major Deficit-Increasing Tax Cuts: Current House rules include a pay-as-you-go requirement that any tax cut or spending increase for a mandatory (i.e., entitlement) program must be offset by cuts in other mandatory spending or increases in other taxes, in order to avoid increasing the deficit. [1] Current rules also bar the House from using budget “reconciliation” procedures — special rules that facilitate speedy action on specified budget legislation — to pass bills that would increase the deficit. The new rules would alter and greatly weaken these commonsense measures:

The new rules announced December 22 would replace pay-as-you-go with a much weaker, one-sided “cut-as-you-go” rule, under which increases in mandatory spending would still have to be paid for but tax cuts would not....

The new rules would stand the reconciliation process on its head , by allowing the House to use reconciliation to push through bills that greatly increase deficits as long as the deficit increases result from tax cuts, while barring the use of reconciliation in the House for legislation that reduces the deficit if that legislation contains a net increase in spending (no matter how small) that is more than offset by revenue-raising provisions....

Moreover, measures to scuttle the current, even-handed pay-as-you-go rule and to allow use of the reconciliation process to increase the deficit are even more indefensible today than such steps were in 2001....

Another aspect of the proposed rules also seems at odds with promises made in the campaign about what a new Republican majority would do. There was much talk about increasing the transparency of the legislative process....

[T]he new rules also include a stunning and unprecedented provision authorizing the Chairman of the Budget Committee elected in the 112th Congress, expected to be Representative Paul Ryan of Wisconsin, to submit for publication in the Congressional Record total spending and revenue limits and allocations of spending to committees — and the rules provide that this submission “shall be considered as the completion of congressional action on a concurrent resolution on the budget for fiscal year 2011.” In other words, in the absence of a budget resolution agreement between the House and the Senate, it appears that Rep. Ryan (presumably with the concurrence of the Republican leadership) will be allowed to set enforceable spending and revenue limits, with any departure from those limits subject to being ruled “out of order.”

This rule change has immediate, far-reaching implications. It means that by voting to adopt the proposed new rules on January 5, a vote on which party discipline will be strictly enforced, the House could effectively be adopting a budget resolution and limits for appropriations bills that it has never even seen, much less debated and had an opportunity to amend. (There is no requirement for Representative Ryan to make his proposed spending and revenue limits available to Members or the public before the vote on the new rules.)... This imposition of budget limits without debate or votes hardly seems consistent with the promised increase in transparency in the legislative process, much less with sound — or fair — budget practices.

The new rules also specifically empower the Budget Committee Chairman to exempt from budget enforcement rules the fiscal effects of repealing the health reform law. The Congressional Budget Office has estimated that the health reform law will reduce deficits by more than $100 billion over the first ten years and by roughly $1 trillion or more over the second ten years. Its repeal would increase deficits by those amounts...

And Stan Collender emails:

From my experience, this new rule would be close to unprecedented in terms of the power it assigns to a single member of Congress [Paul Ryan] ... at least as far as the budget is concerned. The way it's supposed to work is that, once the budget resolution conference report has been approved by both houses, the House Budget Committee as a whole has to vote on and approve what are known as the 302(A) allocations -- basically, how much the appropriations committee has to spend. The Ryan rule eliminates both the need for an agreement between the House and Senate on overall spending (i.e., a budget resolution) and the need for the House Budget Committee to approve the allocations. No debate in committee or on the House floor either.

It sets up a real Perils of Pauline situation when the CR expires in March assuming that Ryan comes up with allocations that cut spending to the 2008 levels. The House will be prohibited from considering legislation that would cause spending to be higher than those greatly reduced levels. The Senate, meanwhile, will likely have no comparable requirement and presumably will be unable or unwilling to approve a CR (or omnibus, or individual approps) for the rest of FY11 at those levels. So the House won't be able to consider what the Senate wants and the Senate won't approve what the House wants.

The House could always ignore or change its own rules, but I doubt it will want or be able to do that with what is likely to be the first big challenge on spending that occurs next year. The tea party will go nuts if they do.

And given that this will be happening 6-7 months into the fiscal year, the only way to get the savings the spending levels will be to fire thousands of federal employees virtually immediately.

As I keep saying, the mantra next year on anything having to do with the budget should be "gridlock, stalemate, shutdown."