The Absence of a Budget, of Spending Bills, of Tax-Law Changes...

Stan Collender writes:

BUDGET BATTLES : The Big Budget Story Of 2006: That a House and Senate controlled by the same party couldn't agree on a budget resolution for the first time in history, or that only two of the FY07 appropriations were adopted by the start of the fiscal year. Without question, the biggest federal budget story of the year is that Republicans abandoned the policies they have been promoting since 1994. The Republican-controlled Congress and White House apparently realized that everything they wanted to do on the budget was so unpopular that continuing to pursue those policies would create big political problems. There's simply no other way to interpret what happened.

The political party that said it wanted to cut federal spending refused to bring up any of the FY07 appropriations that would have included those reductions. The only two appropriations that were approved -- defense and homeland security -- included increases in spending. The others were held until after the election, when spending can be cut or not cut without any immediate political consequences.

Rather than taking credit for proposing and passing reductions in spending, or trying to get Democrats on record against those cuts so they could use it against them during the campaign, the White House and Republican leadership decided to delay any debates or votes until after the election. This is not what a party confident that spending cuts would be popular would do. But appropriations were only part of the story. When the House and Senate leadership decided against trying to do a budget resolution this year, they also effectively decided to forego making any changes to entitlements.... [N]ot doing a budget resolution effectively was a leadership admission that its own members were unwilling to vote for entitlement reductions, that they would not be politically popular, and that Republicans are not as devoted to them as they said they were.

Here again, the fact that before the election the leadership did not want to have its own members vote for entitlement reductions or force Democrats to go on record opposing the cuts is a strong sign that Republicans do not have enough confidence in their own budget policies to run on and be judged by them.

But the best indication that Republicans have abandoned the budget policies they have so steadfastly championed in recent years came on what many considered to be their signature issue: taxes. It's simply hard to believe that the leadership did not push a vote on some type of tax cut before the election. Even the most obvious and highly supported tax cuts, including many that would have been easily approved, were simply shunted aside until after the election.... [T]his was a sea change from the recent past when Republicans used every possible opportunity to cut taxes and brag about it.

This leaves next year's budget debate in terrible shape months before it even begins. Unless there's a dramatic change, the Republicans' abandonment of their budget positions means that neither they nor the Democrats will have an idea about what they want to do. Combined with the likely narrower margins in Congress next year (regardless of which party is in the majority), this almost guarantees that work on the budget will be slow, halting and painful. It also means that incremental progress may be too much to expect. That could be the biggest budget story next year.

I'm somewhat more optimistic. The fact that the Republican congress has no clue what to do on the budget creates the possibility that somebody like Treasury Secretary Paulson could lead them in a constructive direction. At least they won't automatically go in the destructive directions they have gone since Januar 2001.

Comments

[Salted Peanut Lover]

I thought Paulson was on record as against any tax increases. Until that changes he has no credibility or usefulness.

[BroD]

Yeah, whatever the outcome might be, the fact that the GOP simply walked away from the budget is sort of outrageous isn't it?

Sure, to me this doesn't elicit the same horror as say torture but it should ignite the hair of anyone who claims to be a fiscal conservative.

[christofay]

Paulson toadie until proved otherwise should be the mature educated man's opinion of this worthy.

The Fed govt is controlled by republicans and decided on Bush's whim, and you think one more of that gang is going to make a difference?

You have seen the latest from Bernanke? "Reform of our unsustainable entitlement programs" which means after blowing the money the Fed govt collected on social security taxes, they're not going to pretend to give it back.

[Barry]

Brad: "I'm somewhat more optimistic. The fact that the Republican congress has no clue what to do on the budget creates the possibility that somebody like Treasury Secretary Paulson could lead them in a constructive direction. At least they won't automatically go in the destructive directions they have gone since Januar 2001."

Brad, the GOP has shown that they don't want expert advice on anything except political campaigning. In fact, they hate it, loathe it, and hate anybody who actually knows anything. The GOP has also shown that it realizes that fiscal irresponsibility pays far better than responsibility. The Democrats will always clean it up - against GOP resistance, of course.

Adding to that that Paulson is a Bush appointee, which, this far into his rule, shows that Paulson is scum, pure and simple.

Please stop assuming that there are actual technocrats on the other side. That assumption stopped holding true by 1994 at the latest.

[bakho]

This dereliction of duty would pass the authority to spent WTFever he wants to the Bush unitary executive.

If Congress is not doing its constitutionally mandated duty to fund the government, WTF is it doing (besides IMing the pages)?

[TomC]

Passing a budget is Government 101. If you can't even minimally take care of the finances then you don't deserve the authority.

[wkwillis]

You aren't thinking politically.
The Republicans can't pass a budget before the election. They would have to repay the campaign donations in that budget before the election where the voters could see it and then vote against them. Not going to happen. They will do it after the election. It's going to be a blowout budget and that may collapse the dollar all by itself.
Then again, if the Democrats do win a large Congressional majority to take office in 2007, after the post election session, the loanowners overseas may figure that the Democrats will pay back what the Republicans borrowed after the Democrats take charge in the election of 2008.