Business Ethos Blog

The Budget: Such A Deal

Dr. David Mielke, Retired Dean of the College of Business at Eastern Michigan University

Congress finally passed a budget that has been delayed since October 1, 2017 by a series of continuing resolutions.  As it could be expected, the $1.3 trillion 2,232 page budget was passed at the eleventh hour, or within 24 hours of a possible partial government shutdown.  The House even had to pass an exception to their rule that any legislation has at least a couple days of review before a final vote.  It brings to mind Nancy Pelosi’s famous quote regarding Obamacare, “We have to pass the bill to see what’s in it.”  What is in the bill?  What isn’t in it?  Do all of the provisions actually deal with the budget or do we once again have non-budgetary issues included?  Is Congress spending enough to keep nearly everyone but taxpayers happy?  Was the budget bill and the process to get it passed the “Right Thing to do?”  Let’s look at some issues:

1. The $1.3 trillion, 2,232 page budget for this year is part of a two year budget deal passed a month ago that boosts defense spending by $80 billion and domestic spending by $63 billion above limits set in 2011.  It was the largest bump for defense spending in 15 years.

2. The bill ends for now, the controversy over funding for President Trump’s wall.  $1.57 billion was included for the construction of “physical barriers” on the border with Mexico and other security measures as well as funding for 60 miles of replacement or secondary fencing.  The bill provides minimal or no increases for enforcement officers, detention bed space and no punishments for sanctuary cities.

3. There is $4 billion to address the opioid crisis, funding for school safety grants, more funding for the National Institutes of Health, Head Start, child care programs and veterans’ health care.  In addition, new resources to combat Russian cyber attacks during the mid-term elections, another $308 million for states to secure their election systems and a fix to the tax reform bill dealing with grain cooperatives.

4. $10 billion was allocated for infrastructure, provisions for $650 million to Amtrak for track improvements along the busy Northeast corridor, an increase from $322 million in 2017, a $1.34 billion increase to the Census to help prepare for the 2020 survey and the first legislative steps to rein in gun violence by strengthening the national background check system for buying firearms.

5. The bill didn’t end a dispute over how to pay for a new rail tunnel under the Hudson River connecting New York and New Jersey  The supporters say the federal government should pay for half of the $12.7 billion cost.  The Trump administration says New York and New Jersey should pay for the majority of the project.  They did agree to include $540 million to fund part of the tunnel.

6. The bill does not address the DACA issue or any other immigration issues and sanctuary cities will not be defunded.  Lawmakers could not agree on what immigration provisions to include with the extension of DACA.

7. Despite pressures to provide funding to stabilize the Affordable Care markets no money was allocated.  It was expected because President Trump cut off subsidies for insurers last year.  A major dispute arose as Republicans invoked the Hyde Amendment citing funds could not be used to support abortion.  Planned Parenthood was funded.

8. Efforts to include the authorization of online sales taxes were also defeated.

The budget process always involves compromises for spending, but do we once again see issues that have nothing to do with budgets and should be handled with separate legislation?  More examples of pork that supposedly been outlawed with earmarks?  Were the issues excluded such as Obamacare funding, DACA, sanctuary cities and the interstate sales tax rightfully excluded?  Can we be pleased that there is a budget and not another continuing resolution to continue spending as we had last year?  What about the budget process that is supposed to conclude in time for the beginning of the fiscal year on October 1st?    Can we expect more of the same again this year—a series on continuing resolutions that carry us well into 2019?  Despite the exclusions there seems to be plenty that the Democrats wanted and the same can be said for the Republicans, but is it the “Right Thing to do?”  You can argue for and against many of the items that were funded, the reality is that those dollars reflect compromise in most instances, and the majority view of what is important for us–with one exception, the $540 million for the New York-New Jersey tunnel.  That is pure pork.  Those items that were excluded should be excluded–online sales taxes, DACA and immigration and sanctuary cities.  These are in general, not budgetary issues but policy issues that Congress should act on with separate legislation.  How much longer can they avoid DACA and immigration?  The expansion of background checks for gun ownership should not be in this legislation, but a separate gun control bill debated, but then our legislators dodged a bullet, so to speak, by “doing something.”   What is very disturbing is that the budget process at best is broken.  Congress should not be funding Washington’s activities in this way, with a huge omnibus bill, rushed to the finish line just ahead of a deadline that would trigger a federal government shutdown.  The details of appropriation bills should be hammered out in committees and finished by September 30.  They should not be crafted months late behind closed doors and then dumped into lawmakers’ laps with just hours to decide how to vote.  Such a Deal!