Budgeting Bytes

I suspect the President tonight will want to put the focus on the budget, which is this gigantic piece of legislation that expresses national priorities on a host of topics, but which has gotten scant attention in the age of bonuses and banks and bailouts. I must admit to a certain discordance with the Organizing for America effort to sign up pledges for the budget in the midst of the Geithner plan's release and the fury at Wall Street.

However, I do agree that we can't wait another second to move forward on these priorities. The situation with the banks will play itself out, but failing to invest in health care and energy and education for the future would be downright criminal and would actually deeply harm efforts at overall economic growth. We know the Republicans will oppose such a plan to help people who work for a living - it's their nature - but the bigger fear is that so-called "centrist" Democrats will do the same. Kent Conrad today already sounded like he's hacking away at the budget.

Sen. Kent Conrad (D-N.D.), chairman of the Senate Budget Committee, has been among those complaining about elevated levels of spending in the president's request. Yesterday, after meeting at the White House with Biden, Conrad said he has made "hundreds of billions of dollars of adjustments" to Obama's request in the budget proposal he plans to unveil today.

"When you lose $2.3 trillion on a revenue forecast, then you have to change and budget. And we have changed the budget," Conrad said.

Conrad said his proposal would trim Obama's spending request across the board to dramatically reduce future deficits. In 2014, for example, when the CBO predicts that Obama's request would produce a $750 billion deficit, or 4.3 percent of the nation's overall economy, Conrad said his proposal would generate a deficit of less than $600 billion, or just under 3 percent of the economy. Many economists consider a deficit equal to 3 percent of the economy to be sustainable, because at that level the nation's borrowing would not grow faster than the economy as a whole.

Administration officials signaled that the White House may be willing to accept significant spending cuts so long as the president's signature initiatives on health care, education and clean energy are preserved.

Congress writes the laws, so this isn't all that outrageous. And I agree with taking out the $250 billion dollar placeholder for future bailouts of the financial sector - if the Administration finds that necessary, they can make their case and earn it. But quite a bit of the Congressional Dems' reworking troubles me. First, they are reserving the right to lie:

On the alternative minimum tax, Spratt said the budget will not in later years incorporate Obama's assumption that the $30 billion-plus cost of fixing the AMT and instead assumes other revenues are raised to limit its reach.

"Other revenues" is Washington-speak for "we want to pretend that this will still bring in the same amount of money every year even though we'll get rid of it and not replace the revenue." I assumed that honesty would be the first thing to go in Obama's budget - it's too expensive.

Next, there's the big question mark of what items will fall under budget reconciliation. Already, cap and trade has been written out of that scenario, which is crucial because that was the mechanism for paying for Obama's "Making Work Pay" tax cuts for the middle class:

House Democrats won't advance President Obama's controversial global warming initiative under fast-track rules that could effectively cut Senate Republicans out of the debate, a top Democratic lawmaker said Tuesday.

The House will try to use special budget procedures to remake the health care system, Budget Committee Chairman John Spratt Jr., D-S.C., said Tuesday [...]

At issue is whether to advance controversial Obama initiatives under filibuster-proof rules in the Senate. Republicans say the maneuver would freeze them out of deliberations on such important topics, and Democrats like Conrad say it shouldn't be used for such complicated legislation. But the Democratic-dominated House wants to make sure Republicans don't hijack the legislation.

"Reconciliation is pretty well settled," Spratt said. "I think we'll have reconciliation (for) health care."

The terms of the deal have already been written on health care - Republicans can come to the table between now and September or they will be shut out of the deal. But cap and trade won't work the same way. The whole reconciliation process itself is byzantine and based almost entirely on the whims of Robert Byrd back in the 1980s. Really the Senate parliamentarian ultimately decides what becomes a subject for reconciliation, which is bizarre and no way to run a railroad.

Taken as a whole, the uncertainty of the reconciliation process transforms it into a game of chicken: If Republicans refuse to cooperate with health reform and force Democrats to resort to reconciliation, no one knows what will emerge out of the other end. Republicans might have no input, but Democrats will be at the mercy of an obscure bureaucrat's interpretation of an undefined Senate rule. It's the legislative equivalent of deciding a bill on penalty kicks.

What should not be missed in all this is the absurdity that is the contemporary Senate. You need 50 votes to pass a bill. You need 60 votes to overcome a parliamentary trick that allows 40 senators to talk about cheese whiz until everyone else heads home for the night. But some priorities -- deficit reduction and the budget among them -- were judged too important to face the filibuster. There was no particular rationale given for that shortcut, but the relevant senators have clung tightly to its terms. Last week, Sen. Robert Byrd, now in his late 80s, reiterated that reconciliation was "a process intended for deficit reduction," and using it for health reform and cap and trade "is an outrage that must be resisted."

But the reconciliation process has been used for plenty that did not reduce deficits. Both of President Bush's tax-cut plans traveled through the process. And the very senators who speak reverentially of the filibuster now, voted for reconciliation then. Judd Gregg, in fact, voted for reconciliation every time it was used in the Bush era.

The actual answer is to do away with the filibuster. The Senate GOP today threatened to tear down the chamber if health care or cap and trade are folded into the reconciliation process, so it's not like the minority has no recourse - they can use all the parliamentary maneuvers they want. But if we want to meet the tremendous challenges we face when an irrational minority abuses the lawmaking process, at some point we will need to allow the majority to rule.

Anyway, the President's presser starts shortly.