There’s Nothing Wrong with the Budget Process

Focusing on procedure blinds us to much more fundamental problems with the parties in Congress.

As Congress trudges toward another shutdown standoff this month, the budget and appropriations processes once again take center stage. Congress can’t pass budgets. As a result, it can’t pass appropriations bills. The legally-imposed deadlines for both processes fail to spur action. The congressional budget process has become the punchline of a not-very-funny joke. And year after year, we all give our best guess as to how, when, or if Congress will complete its annual work or if the government will shutdown.

These fits also spark discussions about how to fix the budget process. Reform proposals range from biennial budgeting, moving the fiscal year, automatic continuing resolutions (CRs) to eliminate shutdowns, and more. These changes, could ease budget’s burden on the legislative calendar, make budget fights more achievable or, at a bare minimum, make congressional failures more tolerable. They also carry tradeoffs. Automatic CRs avoid shutdowns but rob Congress of routine oversight and its power of the purse, not to mention CRs are a horrible for government operation. Biennial budgeting avoids annual standoffs but does little to stifle budget standoffs.^[1] These procedural tweaks could ameliorate some of the worst consequences of congressional dysfunction.

But these reforms would not fix the problem. Congress could implement every one of these ideas and still suffer budget and spending paralysis. The reality is Congress’s problem with its budget process is not procedural. The problem is the parties in charge of it. The budget process, itself, is not actually broken. Rather, it is not used any more. And that speaks to the status of both parties in Congress, which point to a more fundamental political problem.

For example, the budget process is among the least complicated in Congress. It is the first step in the congressional budget cycle. The 1974 Budget and Impoundment Control Act stipulates that Congress must adopt a concurrent budget resolution by April 15th. The deadline for the legislation is less important than the process used to adopt it. This bill passes only through the House and Senate by majority votes, no presidential signature required. Once agreed to by both chambers, the resolution sets guidelines for other bills. Those bills include the 12 appropriations bills reported from each chamber’s appropriations committees and potentially reconciliation bills, if the budget resolution includes instructions for that purpose. (Reconciliation is interesting because it is really the only reason Congress adopts budgets anymore, but that topic is really for another post). But the first step is easiest: adopt a budget resolution. By law, this only requires a majority vote in both chambers. So in a no-vacancy Congress, 218 votes in the House and 51 votes in Senate is all you need.

In the U.S. Congress, it does not get much easier. Senators cannot filibuster budget resolutions. Presidents cannot veto them. Several laws and chamber rules protect budget resolutions from nongermane amendments and extraneous issues. Procedurally, budget resolutions are among least difficult to pass.

Yet, for the last decade Congress stopped using the budget to make appropriations decisions. Table 13 in this CRS reports shows that Congress adopted only one budget resolution between 2011 and 2016. The only reason that budget was adopted was to start the reconciliation process to repeal Affordable Care Act after Republicans won the House and Senate in the 2014 midterms. Since 2016, Congress adopted four budgets. Again, these budgets were only vehicles to start reconciliation: the AHCA in FY2017 (ACA repeal part 2); the Trump tax cuts in FY2018; the American Rescue Plan in FY2021; and Inflation Reduction Act in FY2022. None of those budgets carried numbers to pass appropriations bills.^[2]

Just in case that is not depressing enough, more recently Congress has essentially given up. In 2023, Budget Chair Jodey Arrington (R-TX) finally released his budget September 19, 5-months after the deadline, days before a potential shutdown, and mooted by the Fiscal Responsibility Act negotiated in May of that year. To cap it off, the bill never made it out of committee. The Budget Committee’s FY2025 budget was reported from committee in March of this year but has sat in limbo ever since. The budget process did not fare much better under Democrats. In 2021, the House had to deem the spending numbers because, in the words of then-Budget Chair John Yarmuth (D-KY), “I’d be amazed if we can get a budget resolution out of the committee.”^[3] Democrats, again, skipped the budget resolution in 2022. Nor did Democrats pass a budget in 2019, and 2020 was such a mess a budget resolution did not even exist. Meanwhile, the Senate managed to be even less prolific than the House. (Not surprising.)

Basically, Congress has begun skipping step-one of the budget and appropriations cycle. So it’s not shocking it now regularly stumbles on the steps that follow, which should by law theoretically fund the government by September 30.

It's hard to fault legislative procedures if they go unused. A bike isn’t broken just because the rider refuses to ride it. But the parties’ decisions to skip the budget process as it relates to appropriations is illuminating. The underlying reality is neither party has the votes to pass budget resolutions. Neither party can marshal a majority to make basic decisions regarding government funding - at least not without bipartisan help. Republicans can rally behind tax cuts. Democrats can rally behind prescription drug reform, climate investments, and expanding the child tax credit. But both parties are fundamentally divided on basic decisions about funding existing programs. For Democrats, progressives rail about the lack of investment in housing, healthcare, and more, while moderates refuse to vote for reduced defense spending in exchange for those priorities. Republicans, on the other hand, are fractured between establishment members who want to contain spending and conservatives seeking deep cuts to non-defense. As a result, neither party can budget as a partisan majority today.

Unfortunately, Congress’s institutional structure is ill-equipped to accommodate the parties’ internal divides. Both chambers’ institutional structure still privileges party leaders. This creates a political and institutional mismatch. Strong party leaders function best when leading cohesive majorities. As party coalitions have fractured on spending, it has created bigger hurdles for partisan congressional leaders. So they have altered their strategies. Rather than engage the budget process, which could result in embarrassing votes, they wait until it verges on a crisis to negotiate with their opposition. Thus, nearly every fiscal year for the last decade begins with the question: Will Congress avoid a shutdown? Then we anxiously await the point when leaders’ cave to the obvious compromise, take a political hit, kick the can down the road, or finally pass funding bills months late. Partisan animosity still exists, making these necessary cross-party negotiations fraught with political risk for congressional leaders representing their partisan constituencies. The combination of political polarization and intra-party fractures have made the budget process basically unworkable.

However, that is not the budget process’s fault. The filibuster plays a role in this dysfunction, no question. At this point there is little reason justifying its existence other than raw, minority power. But the breakdown in congressional budgeting is even more fundamental than that. The parties are breaking down on very basic questions about government funding and operation. Faltering cohesion is not easy to see because votes demonstrating those fractures are skillfully avoided (though there are some signs). Still, the parties’ procedural decisions tip their cards. There is only one reason a majority party would skip over a majority-only process. They don’t command partisan majorities on these bills.

That has been true for roughly a decade now. It has been more obvious in the 118^th Congress as the Freedom Caucus strains House Republicans to a breaking point. But short of a dramatic reorganization of congressional power in both chambers, these party fractures will continue to short-circuit the budget process. And reforming the budget process won’t address the party-based problems causing these breakdowns. Majority-based processes can’t work without a willing majority.

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^[1] Congress has effectively used biennial budgeting the last decade to evade the caps in the Budget Control Act of 2011 or otherwise set spending levels. As this happened, there was an increase in shutdown threats in Congress. Correlation is not causation but this is enough to dispel the myth that budgeting less frequently somehow alleviates fiscal standoffs.

^[2] These budgets included discretionary spending numbers. However, they merely copied the caps in the Budget Control Act for those years, a law that created budget cap for defense and nondefense discretionary spending, with the expectation they would be revised via law later in the year. Those numbers were so deficient they were revised every two years between 2013 and 2021.

^[3] Scholtes, Jennifer and Caitlin Emma, “Budget and Appropriations Brief: No votes to spare on a budget resolution — Liberals ready to leave GOP behind — House GOP pitches their infrastructure plan,” Politico Pro Budget & Appropriations Brief, May 19, 2021.