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Politics

Washington Week: What's Next with the Deficit Deals

November 20, 2011 - 6:00pm

The supercommittee apparently wasn't so super. The members announced Monday they would not be able to meet the deadline of Nov. 23 for finding $1.2 trillion to $1.5 trillion in savings in our federal government over the next 10 years.

This group of 12 members of Congress was born when Congress passed the Budget Control Act on Aug. 1. This act was a result of the nation's debt limit needing to be increased, so a deal was made between the president and our Congress. According to the Budget Control Act, if Congress failed to pass legislation saving at least $1.2 trillion, an across-the-board cut would occur. This process, known as a sequester, would take place in January of 2013. The Department of Defense would take the biggest hit under the sequester scenario since the law stated that DOD would bear 50 percent of the cuts needed to reach the $1.2 trillion in savings. Other nondefense agencies would feel a 48 percent cut and Medicare would get the final 2 percent in cuts.

The political spin-shysters are saying the committee's failure is ultimately OK because our federal budget will still be cut by the sequester process. This writer says, not so fast. Lets look at past history for a minute to see if anyone really believes that Congress is going to allow the sequester to take place. After all, it is past congresses that got our country to the point that our debt just topped out at $15 trillion last week. So here is a bit of history as to how Congress handled other budget deals that were supposedly going to cut our federal budget.

Back in the mid-1980s the Balanced Budget and Emergency Deficit Control Act was created by former Sens. Phil Gramm, R-Texas, Warren Rudman, R-N.H., and Ernest Hollings, D-S.C. It called for sequesters or across-the-board cuts to control our federal spending. These sequesters were much like the sequester language contained in the current Budget Control Act. In the first five years under the GRH bill, two sequesters occurred. The results were:

  1. The amounts in the sequester were changed by future legislation.
  2. The sequester was overridden by subsequent debt agreements.

The Gramm/ Rudman/Hollings (GRH No. 1) was revised two years later because it was deemed unworkable and thus Congress created GRH No. 2. After three more years of trying to live under GRH No. 2, Congress usurped the bill with the Budget Enforcement Act.

By the 1990s, Congress was now trying to live under the Budget Enforcement Act. The bill set limits on spending and created a "pay-go" type ofrestraint. This meant that Congress couldn't spend more money than it had. Consequently, Congress had to pay for every program it created or funded. However, there were so many major government programs that were exempted from the "pay-go" rules that the BEA became worthless. However, while the BEA was in place, three sequesters occurred. The results were:

  1. Overturned by future legislation (sequestration).
  2. Overturned by future legislation (pay-go violation).
  3. Allowed to make the cuts under a small sequestration.

By the year 1998, our federal government actually had a surplus of money, thanks in part to the dot com economic boom. Spending restraints were ignored or waived by votes in the Senate and House. After all, our federal government had more money than it knew what to do with. The treasury had money coming in from new taxpayers, new businesses, and state tax revenues were all healthy and happy.

After 9/11, Congress began to fund wars, expense natural disasters, create mammoth new government agencies and pass huge spending bills, including Medicare Part D. All of this spending was being charged to our national credit card.

By the end of 2006, the Democrats controlled Congress and the out-of-control spending continued. By 2008, under the helm of Speaker Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., Congress stopped passing budget resolutions. Budget resolutions act as a blueprint for spending for Congress. The budget resolution sets up limits and targets for the money Congress spends on behalf of our federal government. Without a budget resolution, passing the individual appropriations bills that fund all of our agencies became very difficult.

After all, if you don't know what your spending limits are, how can you know when you have to stop spending? Obviously, you can't and don't. The appropriations bills became bundled together into one huge omnibus appropriations bill. A total funding figure was then negotiated and agreed to by a few leaders in Congress. The Congress as a whole was given a take-it-or-leave-it proposition when it came to funding our federal government via the appropriations process. Obviously, holding hearings and listening to the merits of worthy federal programs never gottheir "day in court."

Rather, anything and everything was fully funded, with increases to boot! The practice of funding small local projects called "earmarks" was put on steroids during this period. Once the practice was accepted, it became very commonplace for most members of Congress to request earmarks as an example of their concern for their constituents back home.

In 2009 and 2010, with spending in its heyday, the Obama administration pushed through Congress a multitrillion-dollar Obamacare health bill, an $889 billion stimulus bill, TARP funding, auto bailouts and much, much more. All of this added to our federal credit card.

By 2010, Congress passed "pay-as-you-go" as part of a debt limit increase bill. This pay-as-you-go provision had so many programs that were exempted that it, too, basically had no teeth.

In August, the Congress created the 12-member supercommittee tasked to tackle Congress's debt and spending problems.

Now we are in November of 2011, and if you look at the past history of budgets and congresses of old, does anyone really believe that this Congress will allow the sequester to take place in Jan. 2013?

Stay tuned.

Elizabeth B. Letchworth is a retired, elected United States Senate secretary for the majority and minority. Currently she is a senior legislative adviser for Covington & Burling, LLC and is the founder of GradeGov.com.

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