• By
  • John D. McKinnon

Republican Rep. Paul Ryan called for overhauls of Medicare and Medicaid and new limits on defense spending in his party’s budget, while Senate Democrats are proposing nearly $1 trillion in new taxes over the next decade in their own budget plan. Here’s a guide to the often-confusing budget process.

Q. Washington obviously struggles when it comes to budgets. So why should people care about the current budget process?

A. Admittedly, the budget process doesn’t work very well. The Senate hasn’t passed a formal budget resolution since 2009. But the process remains important for the following reasons:

1. At a minimum, it allows the parties to declare their spending and tax priorities. As expected, this year the House Republican version would cut lots of spending — about $4.6 trillion worth over a decade. The Senate Democrats’ proposed budget would raise taxes by almost $1 trillion over ten years and cut spending by a similar amount.

2. If the House and Senate agree on a single unified budget resolution, it could provide lawmakers special fast-track procedures for passing legislation to implement deficit-reduction measures. The budget resolution can include reconciliation instructions, which create procedural shortcuts.

3. Beyond that, this year’s budget proposals could help spur conversations about a grand bargain on budget issues, by getting the two sides talking more.

It’s worth remembering that it’s highly unlikely the House and Senate will reach agreement on a budget this year, given how far apart they are on spending and tax issues. Therein lies the chief weakness of the annual budgeting process: there’s no real downside to not doing it.

Q. What’s the budget process all about?

A. For much of U.S. history, the appropriations and tax-writing committees in Congress have had the real power when it comes to the government’s finances. Originally, those committees had few formal controls on what they did with the country’s money.

With the rise of the U.S. to world-power status around the turn of the last century, lawmakers began to worry more about the government’s finances. They created various budget-planning processes, starting in the 1920s, to try to get a better handle on what the government was raising and spending. The process focused on the executive branch, requiring the president to submit an annual budget, for example.

The current process dates back to a 1974 law that focused more on creating new budget controls within Congress. Those controls include the budget committees in Congress, the budget resolution (which the committees are supposed to adopt) and the Congressional Budget Office (which runs all the numbers). But the budget resolution still doesn’t have a lot of teeth.

Basically, none of the mechanisms that Congress has tried so far has done the trick, exactly, in getting deficits under control.

Q. That’s putting it mildly. Why isn’t the budget process more robust?

A. The appropriations and tax-writing committees have guarded their powers jealously, so the budget committees don’t have that much power over the process. Also, it’s hard for one Congress to do much to bind a future Congress. Basically, without political will to fix the problem, it’s hard for politicians to find a way.

Q. How’s all this related to the other battles going on over sequestration, the continuing resolution and the debt ceiling?

A. Each in its own way is another attempt to force action to address the ongoing budget problems, or at least paper over lawmakers’ inability to agree.

Sequestration is a product of the 2011 Budget Control Act, which aimed to rein in the large deficits the U.S. has been running. Among other things, the act created a special “super committee” to come up with solutions by the end of 2011; if the committee failed, the sequester cuts kicked in starting in 2013. The committee failed, and sequester now is starting.

The continuing resolution, or CR, is simply a substitute for the appropriations bills that Congress has been unable to produce. Absent appropriations for the current fiscal year, Congress has been passing continuing resolutions to keep the government running more or less at the same levels as before. CRs are nothing new, but congressional inability to produce regular appropriations bills seems to be getting worse as the budget choices get more difficult.

The debt ceiling represents another longstanding effort by Congress — like the budget process itself — to get a handle on spending and indebtedness. The debt ceiling evolved from fiscal safeguards that were built into World War I-era measures used to finance America’s entry into the war. As long as the U.S. runs significant budget deficits, Congress periodically must increase the amount of the debt ceiling.