No budget? No problem! The strange politics behind a budgetless America.
President Obama has proposed a federal budget. Congress looks sure to ignore it, and Senate Democrats show no desire to pass any budget. It would be the fourth straight budgetless year.
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It is just such a political hit that, entering an election year, congressional leaders want to avoid. By averting a floor vote on a comprehensive budget package, congressional leaders protect vulnerable members from having to commit to deficits, tax hikes, or spending cuts that could hurt them at the polls.Skip to next paragraph
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“What avoiding a floor vote on a budget does is eliminate the need for members of Congress to go on record for or against a deficit,” says Mr. Collender.
The result: the emergence of Senator Reid's plan to avoid a budget vote altogether. Last summer's debt-ceiling deal did provide some budget guidance for parts of the federal government, Collender says. But it does not lay out plans for Social Security, Medicare, and interest on the national debt, he adds.
Together, those items account for 65 percent of federal spending, up from 42 percent in 1971. According to Obama's budget, that mandatory spending is expected to reach 78 percent of federal spending within 10 years.
Unless the public reacts to the lack of a budget – which is seen as unlikely for such a seemingly arcane issue – there’s little pressure on lawmakers to commit to votes on a comprehensive budget plan before November. And Congress has other issues on its mind.
Both Democrats and Republicans are already looking ahead to even tougher tax-and-spend decisions outside the budget process that come due after November. Here are the top tax-and-spend measures to be decided by Dec. 31, most likely in a lame-duck session of Congress.
- The Bush-era tax cuts are set to expire on Dec. 31. The Obama budget for fiscal year 2013 proposes extending tax breaks only for people with incomes less than $250,000. Many Democrats, especially from high-cost-of-living states like New York, want to see those tax breaks extended for incomes up to $1 million.
- A 2 percentage point cut in Social Security payroll taxes, extended unemployment insurance, and the “doc fix” to avert cuts in reimbursement rates to doctors treating Medicare patients are all set to expire on Feb. 29. If extended, as expected, Congress will face another decision point on the entire $160 billion package on Dec. 31.
- The debt-limit deal mandates that Congress begin $1.2 trillion in automatic spending cuts, to be divided between defense and domestic spending, in January 2013. Congress has 10 months to come up with an alternative deficit-reduction package. Any agreement before the elections is seen as unlikely.
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