Friday, August 27, 2010

Can a Dysfunctional Congress Tame Its Own Dysfunction?

-- Posted by Neil H. Buchanan

I was not planning to write my FindLaw column this week about my proposal for a "Growth Budgeting Board," which I described in a recent scholarly paper and in my Dorf on Law post earlier this week. However, House Republican leader John Boehner gave a speech earlier this week that, I thought, directly implicated my arguments. Of course, it is also possible that I now have a one-track mind, and that I have become a hammer that sees nails everywhere I look. In any event, I felt that Boehner made an argument that demanded comment.

Boehner included the following suggestion in his speech: "I think we should go through every line item in the budget and ask ourselves if the spending is so important we are going to ask our kids and grandkids to pay for it. And if [it] doesn’t meet that test, then why in the hell are we doing it[?]" I sincerely doubt that Boehner meant his comment as anything other than yet another way to say that government spending is bad, as well as yet another opportunity to trot out the kids and grandkids as political props. All of Boehner's public statements that I have heard suggest that he simply does not believe that there are any government spending programs that should be financed by future generations. In other words, there would be exactly zero projects that would meet his proposed test.

Even so, in my column I try to take seriously the suggestion expressed in the speech: that it would be a good idea to go through the federal budget and separate the items that have long-term positive effects on the economy (such as funding for basic research, transportation systems, education at all levels, and so on) from those that do not. That is, in fact, the basic notion behind capital budgeting, as well as the raison d'etre for my proposed Growth Budgeting Board.

Here, I want to explore a different aspect of my proposal. The underlying issue motivating capital budgeting is one of economics -- allowing the federal government to use deficit spending to finance projects that will improve living standards in the long-run. Even so, the real problem is not in the economics or accounting -- which are absolutely standard-issue stuff -- but in a failed legislative process. No Congress has ever explicitly or implicitly imposed a capital budgeting system on itself internally, nor has any Congress ever allowed its hands to be tied by external administrative rules that would force it to adopt and adhere to capital budgeting methods. Why should now be any different?

One possibility is that Members of Congress, in their hearts, really hate the way things are currently done, but they understand that the political process represents a group action problem, forcing them and their colleagues to demagogue issues in a way that makes them feel secretly ashamed. I strongly suspect, for example, that the Senate Majority leader, Harry Reid, feels that way about the Islamic cultural center controversy right about now. In the current environment, moreover, you have all but twelve House Republicans voting against assistance payments to 9/11 first responders, in the pursuit of some perverse kind of political advantage. This has to stick in some people's throats.

The parties do, moreover, accept certain limits on their power. The staff of the Joint Committee on Taxation, for example, "scores" all tax bills to determine the official cost of any tax cut (or the official revenue increase that might result from that increasingly rare breed, the tax increase). Republicans often complain loudly about the methods used by JCT to produce the estimates, but they live by them all the same. This suggests that procedures can, in fact, discipline the worst impulses of politicians.

The gold standard of such procedures, of course, is the method used (in the late 80's, if I recall correctly) to close military bases. There, Congress set rules to have an expert commission determine which military bases would be closed for cost-cutting reasons. When the commission submitted its list, Congress could only vote up or down on the whole package. There were some efforts to break those rules before the final vote, such as Arlen Specter's special pleading for a base in Pennsylvania. Such efforts were entirely predictable. Even so, Congress set up the rules in advance, and it adhered to those rules when the time came -- notwithstanding its power to simply change its mind ex post about the whole process.

(I should add that the real "gold standard" by which Congress created an independent agency to discipline its worst instincts is the Federal Reserve. Pun intended. Senators and Members of Congress love making speeches against the Fed, but they do not dismantle it.)

It is possible, however, that the current political atmosphere is so toxic that nothing new can be done. Not only can nothing be done, but perhaps nothing can be done about nothing being done. The only hope might be that both parties could see an advantage in tying the other party's hands. If a well-run agency could actually be counted on to say that Project X is not a long-run winner, then a politician who opposes Project X would welcome such an agency. More cynically, both parties could imagine that they can capture the new agency, using it to issue proclamations favorable to one's political allies.

Naturally, I do not think that it is a good idea to create an agency that will become an object to be captured. Fortunately, this does not seem likely (and, in any case, is not inevitable). Even in the hyper-politicized Bush years, for example, the Congressional Budget Office maintained its independence from political influence, with a Republican director issuing reports that were inhospitable to his party. (Moreover, this is a person whose work since leaving that office has suggested that he is very much a political animal.) It is, in short, possible to create a watchdog agency that works well.

Having said all that, I do not expect anything like my agency to be adopted. The all-too-easy attack line is that it would "justify deficits." And it would. As it should.

1 comment:

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