Thursday, July 21, 2011

Toothless Platitudes Won’t Solve Debt Crisis

I like Sen. Tom Coburn. In 2007, after the electorate threw out his party’s majority in the Senate, Coburn said: I think [American voters were] wise to want change. The Republicans didn't do what they said they were going to do. They deserve the wrath of the voters." Refreshing. Coburn was and is a fearless opponent of congressional earmarks, bucking his own party members when they sought to benefit their state at the expense of the nation (Coburn was the Senator who blew the whistle on Alaska’s “Bridge to Nowhere”). According to a 2007 GQ article, Senator Coburn wants the American public to know “how it works in Washington, how the machine keeps itself running, and the favors get traded, and the deals get struck, and the bridges to nowhere are going up every day. He wants you to know that the United States Congress simply cannot stop itself—that both parties are in on the fix, backing each other and looking the other way, and that in the spirit of bipartisan waste, they manage to blow $500 billion more than they collect in taxes every single year.” Ahh, the “good old days” when the federal deficit was only $500 billion a year!

Given his reputation as a fiscal hawk, I was not surprised when Sen. Coburn became a member of the Bowles-Simpson Debt Reduction Commission, nor was I surprised when Sen. Coburn continued this effort by becoming a member of the “Gang of Six.” Given the pap that constitutes the Gang of Six proposal endorsed by the President yesterday, I see now why Coburn walked out of the Gang of Six weeks ago.

The Christian Science Monitor today reported on the elements of the Gang of Six proposal. Some of these elements are a bill that cuts $500 billion in discretionary spending over 10 years (remember that in 2007 Congress overspent its revenue by the same amount in one year), a congressional pay freeze (unlike many employees today, Congressmen have had pay raises the last few years), the sale of “unused federal property” (don’t expect top dollar in this real estate market!), and “new discretionary spending caps through 2015.”

“Spending caps” sounds good, but Congress already tried this years ago and it failed. In 1985, because of rising deficits Congress passed, and President Reagan signed, legislation sponsored by Sens. Gramm, Rudman, and Hollings. This legislation, popularly known as “Gramm-Rudman,” provided for automatic spending cuts of “non-exempt funds” if the budget failed to reach established targets. Not surprisingly, in five years Congress failed to pass a budget that met the established targets, and because Congress had exempted a big portion of the budget, Gramm-Rudman required a 32% reduction in defense spending. This was unacceptable, and therefore Congress scrapped Gramm-Rudman and enacted the current system which caps spending and requires Congress to identify and secure new revenues for new spending (the “pay-as-you-go” requirement). We have all seen how well this has worked over the past five years.

The GQ article on Sen. Coburn makes the point that “the members of the United States Congress will spend your money just because they can. That they'll do it even when they can't.”

President Reagan when discussing a nuclear arms treaty with the Soviet Union famously quipped: “Trust but verify.” He never made a similar comment about Congress, perhaps because he found Congress less trustworthy on budget matters.

The only way to save our public treasury and economic future for our children and grandchildren is to restrain our representatives. Just like the Founders restrained government from interfering with citizens’ religious convictions, free speech, freedom of assembly, warrantless intrusions into our homes, right to counsel during criminal proceedings and all the other elements of our Bill of Rights, we need a constitutional restraint from government overspending. We need the federal government to pay for its spending by raising revenue, suffering electoral consequences for either raising taxes or not spending enough money. Just like the states and our households, the federal government must balance its budget, and the only way to hold the government accountable is a constitutional amendment with a provision giving taxpayers the standing to sue if the federal government’s budget is not balanced.

Who Shuts Down the Government According to the Constitution?

Shutting down government, or at least stalling its progress, seems to be a rite of spring these days. Last year a Republican filibuster delayed passage of the health care reform bill in the U.S. Senate. This spring, the Democrats in the Wisconsin Senate and the Indiana House decided to shut down reform efforts in their states by taking their “spring break” in, of all places, Democratic-controlled Illinois (much to the delight of the Illinois hoteliers). Similarly, this spring there has also been much talk about a federal government shut down. In this discussion, however, I have seen little coverage on what the Constitution says about responsibility for a federal government shut down.

In the Constitution, there is a rather obscure provision known as the Origination Clause. This Clause, which is found in Article I, Section 7 of the Constitution, states simply that “[a]ll Bills for raising Revenue shall originate in the House of Representatives.” Although this Clause contains no express words of “shut down” or similar import, it does designate responsibility for supplying government with money, which of course allows it to operate. In conformity with this process, all recent Continuing Resolutions to fund government have originated in the House of Representatives.

Starting the process of funding government in the body closest to the will of the electorate was not an original idea for the Founders. England for many years prior to our nation’s founding required money bills to start in the House of Commons which makes eminently good sense – the representatives of those who pay the taxes should have the first say in what those taxes will be.

James Madison, our fourth President and the Father of the Constitution, noted the importance of the Origination Clause in The Federalist No. 58. He wrote: “The House of Representatives cannot only refuse, but they alone can propose, the supplies requisite for the support of government. They, in a word, hold the purse . . . [which] may, in fact, be regarded as the most complete and effectual weapon with which any constitution can arm the immediate representatives of the people . . .” This powerful weapon, this power of the purse, lies in the hands of those public officials who must face the electorate every two years and therefore are most sensitive to the will of the people, the members of the House of Representatives.

The Origination Clause gives the House the power to start the process of taxing and spending, but this power is not exclusive. That is, in our system of checks and balances, bills to fund the government, like other legislation, must also be approved by the Senate and then signed by the President before they become law.

The House of Representatives fulfills its constitutional role to fund government if it passes a budget and then forwards it to the Senate for consideration. The Senate, of course, may not agree with the budget proposed by the House. Similarly, the President may disagree with the budget passed by the House and Senate and therefore veto it. If the Senate and President disagree with the House passed budget, however, it is they, and not the House, that is deciding to shut down government. The Senate and President would assure continuance of government by agreeing with the budget passed by the House.

Please recognize that this analysis of the Origination Clause does not favor either party. Currently the Republicans control the House as the result of the last election. They want to spend less money than the Democrats in the Senate and the President. If the House passes a bill cutting spending and the Senate and/or President refuses to accept it, it is the Democratic Senate or President Obama who is shutting down the government and not the Republican House. Please note, however, that when the voters return the House to Democratic control in the future and the Senate or the presidency is controlled by the Republicans, a budget passed by the House but refused by the Senate or President will also result in government shut-down but this time caused by the Republicans.

The Origination Clause gives responsibility for initiating and passing a budget to the body that can be thrown out of office every two years. The House Republicans are, just like their Democratic predecessors, responsible directly to the will of the electorate. They should respond to the public who voted them into office. They will fulfill their constitutional responsibility by passing a budget bill the House majority finds acceptable. If this bill is unacceptable to the Democratic controlled Senate and Executive Branch, they can refuse it and therefore cause the government to run out of funds. Such a shut down, of course, would be the fault of the Democrats and not the House Republicans.