Nothing and Overreact: Budget Issues Lie Between Congress and Recess

7/19/19

As news warrants, I’d like to give you information about politics, policy, history, and Capitol Hill.  Hopefully it will be useful, interesting or both.  If you have a question about how things work (or don’t) inside the Beltway, send it to me and I’ll do my best to answer.  I am calling this column “Nothing and Overreact.”  (The title will be explained in a subsequent column.) 
 
Once you realize that it is going to be a heat index of 110 degrees in Washington this weekend, it is easy to see where the idea of Congressional recess originated.  Hamilton and Jefferson’s Dinner Table Bargain, which moved the capital city from New York 230 miles south to a swamp between Virginia and Maryland, seemed like a good idea at the time.  Congress, in the early 1800s, usually completed its work in the spring and members left town and went home—avoiding Washington’s summers.  The tradition worked, and continued, notwithstanding the invention of the air conditioner, which allowed for sessions deeper into the year.   Although the idea of the grade-school like “recess” is sometimes pilloried, the notion of an August recess was mandated by law in the Legislative Reorganization Act of 1970. 

Typically, party leaders use the threat of cutting into the August recess as a cudgel needed to pass key legislation. This time around, increasing the debt limit, or the amount the U.S. government is authorized to borrow, may be immune to the pressures of jet fumes and escape from D.C.  
 
No one really knows when the U.S. runs out of borrowing authority and the debt limit expires.   Congress must raise the debt limit to permit the government to borrow more money to pay for things Congress already authorized.  The previous debt limit ran through March 2019.  But as has been past practice, the Secretary of the Treasury enacted “extraordinary measures” to prevent a default.  And spending and outlays go on as normal.
 
A debt limit increase must pass, and Congress has never failed to do so—49 times under Republican administrations and 29 times under Democratic administrations.  Increasing or suspending the debt limit is a good example of what happens when the shoe is on the other foot.  The party in the White House usually touts the potential catastrophic outcome if the government defaulted on its obligations and asks the Congress for a “clean” increase.  A clean bill has no goodies tacked on.   Meantime, the party that doesn’t control the White House realizes that a debt limit increase may the only bill to pass in a while and is anxious to add cars to the lone train leaving the station.
 
And here we are again.  Earlier this week Speaker Pelosi dismissed a notion by Treasury Secretary Mnuchin to pass a temporary—several weeks—debt limit increase before the August recess.  This isn’t going to happen, mostly because no one in Congress wants to vote on this twice. 
 
Compensation for 9/11 responders could be one sweetener on the bill and it also makes sense to add the budget caps to the measure.  The budget caps are the broad outlines for appropriations that are meant to restrain discretionary (non-defense, non-entitlements) spending.  Speaker Pelosi very much wants to move the debt limit increase with a budget agreement, but you must have an agreement first.  
 
As of Friday morning, it looks like the Speaker and the Treasury Secretary have a deal on the budget caps for two years.  Big news indeed because the caps have typically been set annually.  But there is still the concept of “offsets”—that is, revenue raisers or spending cuts to “pay for” the added spending—where agreement must be forged.  Remember: nothing is agreed to until everything is agreed to.  
 
So, don’t hold your breath but history has shown the closer we get to August recess the closer negotiators will get to a two-year budget deal and an increase in the national borrowing limit.