Doing the Same and Feeling Worse
Not that things were going very well anyway. While debating GRH, Congress also tied itself in knots about immediate budget choices; the
new year brought no relief. To summarize events, let us return to our diary.
Budget Diary, Part 2
September 15, 1985 : Rules Committee members Anthony Beilenson (D-Calif.) and Butler Derrick (D-S.C.), who chair the Budget Committee task force on reconciliation, deny Representative Rostenkowski a fast-track rule on the grounds that the proposed Ways and Means reconciliation bill falls $2.4 billion short of what the budget resolution (S.Con.Res. 32) requires. The Ways and Means chairman, who usually avoids such upsets, said he had been "blind-sided."[99]
September 24 : Acting in tandem, the chair and ranking minority member of the Senate Budget Committee, Pete Domenici and Lawton Chiles, succeed in delaying and making small cuts on appropriations bills that do not comply with S.Con.Res. 32. The issue—budget authority (spending over time) versus outlays (spending during a fiscal year)—surfaced when Domenici and Chiles got the Senate to cut $139 million in Treasury-Postal outlays because they were over the budget resolution. Appropriations people are livid. Senator Mark Hatfield, Appropriations Committee chair, argued that Congress had never before considered appropriations bills in terms of outlays. That whole issue had been fought with Stockman again and again. If the focus was to be on outlays, then whoever controls outlay estimates controls the bills; it sure looks like a naked power grab by the Budget Committee. Desperate to get some handle on the deficit, Domenici and Chiles made no apologies.[100]
September 25 : Congress quickly adopts a CR extending to November 14 to stop the government from being shut down. At least they could agree on something. Also today GRH is introduced in the Senate.[101]
September 29 : Former Budget Director David Stockman called for Congress to stop faking and find at least $100 billion in new taxes because "we just can't live with these massive deficits without traumatic economic dislocations." He predicts that "sooner or later" deficits would "bring inflation back."[102] How soon he didn't say.
October 9 : The Senate passes the balanced budget (Gramm-Rudman) amendment to the debt ceiling bill.[103]
October 23 : Senate Budget and Appropriations go to war over the transportation bill. Faced with the tight targets in the resolution, Subcommittee Chairman Andrews slashes $500 million from the FAA and the Coast Guard. Domenici says nobody believes the House will agree to that in conference; he wants to cut mass transit, Amtrak, and highways instead. Andrews agrees that cutting the FAA and Coast Guard is unrealistic but adds, "if we keep the misery in two categories … maybe
somehow or another the happy bird of truth will fly in through the window and those who lead the Budget Committee will realize that [the resolution] … should have … never seen the light of day." Domenici and Chiles win a 1.6 percent across-the-board reduction.
Meanwhile, the subcommittee had left out a $16.3 million road project in New Mexico. Domenici won an amendment to get it back (56 to 40), but most members of Appropriations opposed him. Feelings were not friendly.[104]
October 24 : The House passed what it claimed to be a $60.9 billion reconciliation package, while the Senate delayed and OMB—claiming overstated savings and objecting to some policy decisions—threatened a veto.[105]
Extraneous measures ("riders," they used to be called) have multiplied to well over a hundred; so Senators Domenici and Chiles, along with Majority Leader Dole and Minority Leader Byrd, are trying to limit them. Byrd introduces a bill to restrict future amendments to reconciliation bills by requiring a three-fifths vote to overturn a ruling that amendments were not germane. The Byrd amendment, cosponsored by Senators Dole, Domenici, Chiles, and Ted Stevens passed 96 to 0. Apparently no senator approved of what most of them did.[106]
October 29 : Alleging that "if [Reagan] can meet with the Russians, he can meet with us," Representative James Jones and other GRH conferees ask for a budget summit conference as a substitute for the GRH proposal's procedures. The president refused.[107]
October 31 : The Ways and Means Committee reconciliation (H.R. 3128) has passed. It meets GRH targets by assuming later passage of a superfund cleanup authorization that provides $3.1 billion in new revenues for that trust fund. The biggest savings were in medicare; some increases were made in poverty programs.
The House combined H. R. 3128 with previously approved H. R. 3500 and sent it to the Senate. The two bills have entirely different reforms of the Pension Benefit Guarantee Corporation, one from Education and Labor, and one from Ways and Means; both committees, however, claim savings. There are some real cuts: the bills have abolished synfuels; slowed the filling of the Strategic Petroleum Reserve (maybe not wise, but it saves money); frozen federal pay for FY86; cut spending authority for the Highway Trust Fund and SBA direct loan programs; authorized less housing aid than in the past; put a means test on some veterans' health care and a new one on student loans; and cut about 15 percent from Community Development Block Grant (CDBG) and Urban Development Action Grants (UDAG).
November 1 : The House approves its version of Gramm-Rudman.[108]
November 6 : The Senate does likewise.
November 8 : Senator Dole begins singing "Jingle Bells" to his colleagues to remind them that failure to pass a budget is holding up adjournment for the Christmas holidays.[109]
November 13 : The debt limit is extended—again.
November 14 : The Senate passes its version of reconciliation, including agriculture and superfund provisions that the House had passed as separate bills.
December 4 : By a narrow margin (212 to 208), the House approves a catchall appropriations bill to cover most government spending until the end of the fiscal year (September 30, 1986). The president threatened to veto on the usual grounds.
December 6 : The reconciliation conference begins. Chairman Domenici "expressed consternation that despite the potential for 'amazing' savings, `nobody cares…. I think people have just grown used to budget issues being big now.'"[110] No, they have just been listening to Domenici and his allies saying everything is terrible and Congress isn't doing anything.
December 12 : President Reagan signs the Gramm-Rudman-Hollings bill committing the government to balance the budget by October 1990 and raising the national debt limit. Also, a new stopgap CR is passed to keep the government going over the weekend.[111]
December 16 : Although the interim catchall appropriation will expire at 6:00 p.m., the administration advises federal employees to report for work. After some obstruction by GOP Representatives William E. Dannemeyer (Calif.) and Robert S. Walker (Pa.), the Speaker pushes another short-term CR through the House.[112]
Later, the House defeats the CR recommended by the appropriations conferees, 239 to 170. Republicans oppose it, two to one. Democrats split; liberals are upset because the conferees basically accepted the Senate's defense figures. They feel that gives defense a cushion against GRH.[113]
December 18 : The CR conferees try again. They give defense $1.3 billion less in new BA than the Senate's figure and significantly restrict the use of about $6 billion in unobligated prior-year balances, essentially a windfall from lower inflation. While these figures are still closer to the Senate, Senator Stevens says they provide a 2 percent cut in purchasing power; the coming sequester will make the cut more like 7 percent.[114]
However, the Senate and House conferees dealing with reconciliations are deadlocked over financing the superfund cleanup of toxic wastes. The House wants a tax on all manufacturers while the Senate insists on confining the tax to the petrochemical industry. Why the fuss? The broader tax was the equivalent of a value-added tax (VAT), essentially a sales tax at each stage of production, which Republican conservatives opposed because, if extended, it would be a huge money-maker. And
as revenue rose, following the children's allowance theory, so would spending, thus making government considerably larger.
At the same time, another disagreement arose over extending the cigarette tax.[115] The process of reconciliation had (as Richard Cohen wrote in the National Journal ) "run amok."[116] It took up 198 pages in the Congressional Record and involved some thirty separate subconferences, running the gamut from straightjacket to Christmas tree, all under the name of deficit reduction.
December 19 : By an overwhelming 78 to 1, the Senate approves the conferees' deficit reduction bill, except for the superfund tax provisions, which remain in disagreement.[117] The CR passes the Senate on a voice vote, the House by 261 to 137.
December 20 : Reconciliation stalemate: the administration objects to a $6 billion distribution to the states of revenues from coastal oil leases, an import fee to support workers who lost jobs due to foreign competition, and increases for poor people's programs. Senate Democrats fail to win approval for the House version of reconciliation. The Senate refuses to adjourn, which supposedly means the House cannot. With Christmas and a big snowstorm approaching, the House leaves anyway. Reconciliation is dead.
"The whole year has been spent on deficit reduction and without this crowning, element … all we've done has been for zero," mourns Senator Chafee.[118] Senate Minority Leader Byrd sums up the session as "the worst I've seen since I've been here."[119]
December 21 : On his weekly radio broadcast, the president argues that GRH does not require tax increases or that domestic programs be funded by diminishing national defense.[120] Tom Foley tells the New York Times that "it's going to get much worse next year."
Early January 1986 : OMB must produce a budget that meets the GRH targets, and nobody is going to believe it—but, OMB doesn't believe anybody else's numbers either. Director James Miller declares that the pending reconciliation bill, claiming to reduce the deficit over three years by between $60 and $80 billion, actually amounts to a mere $16.6 billion. Domenici retorts that these OMB figures are "patently absurd."[121]
Later : OMB tries to lighten the mood by parodying the idea that the budget is "Dead on Arrival." An OMB official takes an ambulance, lights flashing, to the Government Printing Office where a group of hospital-gowned attendants tear pages out of the budget to symbolize the economic surgery the president thought necessary. "The 1987 budget lives," declares OMB public relations staff. But Tip O'Neill calls the budget "crazy and nonsensical" because it refuses tax increases, insists on defense increases, and demands cuts in domestic programs, as well as eliminating eighty-one of them—something that will never happen.[122]
Mid-January 1986 : The FY86 reconciliation process resumes. Senators from tobacco-growing and offshore-oil states, who had benefits stuck in the moribund reconciliation bill, are urging its resuscitation. The administration now sees it may have erred in helping block reconciliation; it would have made the cuts required in Gramm-Rudman easier. Agreement has been reached to deal with the superfund on its own and to consider dropping those extraneous measures that caused controversy.[123]
February 25 : Senate and House leaders confer. Senators agree to prepare an offer. Four months have elapsed since October, reducing by one-third the possible savings for 1986.[124]
March 3–6 : The Senate offer meets administration objections—giving states too much oil revenues and expanding medicare, medicaid, and AFDC.[125] The House votes to meet the Senate halfway; it deletes superfund and cuts health costs but stands firm on AFDC.
March 14 : Agreeing to delete the superfund provision, the Senate, urged by the administration, also insists upon eliminating some state offshore-oil revenues and increases in health funding. With White House blessing, the Senate scales down the House offer, although Majority Leader Dole and Speaker O'Neill can't quite agree.
March 18 : House leaders call the Senate position unacceptable. But House Republicans move to accept the Senate amendments and lose by only twenty-five votes as the House Democratic position erodes.
In Assistant Majority Leader Allan K. Simpson's image, reconciliation was "beginning to lose its feathers and entrails," like a pigeon caught in a badminton game. Stephen Gettinger's dry account cannot be improved upon: "The House returned the bill to the Senate March 18, which sent it back to the House the same day, the ninth time it had crossed the Capitol since … December 19."[126]
March 20 : Republicans join tobacco and offshore-oil Democrats to pass the March 14 Senate offer, on the second try, 230 to 154.
April 1 : The official text of H. R. 3128, the reconciliation law, was sent to the president on this appropriate day. Congressional parliamentarians could not remember a law that had been so frequently amended. Just as the Gramm-Rudman act had been dubbed "Grammbo," in reference to Sylvester Stallone's film Rambo, so, in anticipation of his next film, H. R. 3128 has been called COBRA, the Consolidated Omnibus Budget Reconciliation Act.[127]
Budget Director Miller is credited with a triumph. His refusal to compromise paid off more than once. As OMB spokesman Edwin Dale told reporters, Miller "won by hanging tough on it, and Bob Dole did a great job. We're pretty delighted with it, and it will be signed by the president."[128]
Source: Congressional Quarterly Weekly Report, April 5, 1986, p. 753.
Reprinted by permission of Congressional Quarterly, Inc. All rights reserved.
Although parliamentary practice usually prohibits amendments beyond the second degree (an amendment of an amendment), passing COBRA required special rules allowing five degrees of amendments. Officially, then, the House would be considering "the Senate amendment to the House amendment to the Senate amendment to the Senate amendment to the House amendment to the Senate amendment."[129] As a monument to this labyrinthian process, the Congressional Quarterly prepared a neat, simplified version of how this bill became law.
Unlike Sisyphus, Congress had finally gotten its reconciliation boulder to the top of the hill. Of course, some claimed that in the process the boulder had eroded into a pebble. The budgeters had time neither to quibble nor to celebrate. They had to figure out what to do about Gramm-Rudman-Hollings, the plan they had adopted to (in essence) make budgeting easier by making it harder.
When people continually disagree over the same issues, yet they must try to come to an understanding because some budget must be passed, cooperation can take two forms: they can concentrate on who can hurt the other the most (GRH), or they can discover an integrative solution in which each comes to believe that their otherwise opposing preferences will be served by the same program. That is tax reform.