NASE Blogs

The Budget Process [Guest Post]

Monday, February 28, 2011
Note: This post was written by NASE Chief Counsel Mike Beene.

The White House budget proposal for fiscal year 2012 (Oct 1, 2011 to Sept 30, 2012) came out recently, spawning comments from every imaginable corner. So what does it mean? Let’s back away from the frenzy and look at the process.

The President’s budget is really the first move in a negotiation that the White House uses to publicize its goals and hopefully get public and congressional support. Call it a proposal of what the president wants to accomplish, what it would cost, and how we will pay.

Will this be the actual budget next year, and how do we pass a budget? Well, it takes money to run a government, and all revenue raising laws must start in the House of Representatives according to our constitution. In reality, Congress will take what the president proposes and keep or discard what they will. Finally, a budget that can pass the House and the Senate and be signed into law by the president is the goal.

Does this mean we always pass a budget? No. In fact, 2011 never brought a budget agreement, and the government is currently operating under temporary measures. A new resolution must be approved by March 4 or the government will not be able to act. Expect this approval, but expect it to be temporary as debate continues. So really the president’s budget is like a serve in tennis, so expect a return. Also, appreciate that the budget will frame areas of debate about our current situation, the government’s role and the will of the country to make prudent decisions.

Let’s look at what this particular budget does and doesn’t do. ..

It sets out a number of proposed cuts in the area of discretionary spending. Most lawmakers in Washington recognize that our spending and deficits need to be addressed, but how? The President’s budget only addresses cuts to the 36% of the budget that is not already obligated. The President’s proposed budget addresses areas like defense, education, foreign aid, the space program, research, highways and general infrastructure. It does not address the entitlement programs, which include Social Security, Medicare and Medicaid. Many Republicans call the failure of this budget to address the entitlement programs a failure of leadership. For its part, the White House agrees that the programs must be addressed, but believes the issue can best be addressed in closed door sessions. Citing prior failures of published proposals, the White House prefers to address this issue in private sessions with Congress.  

It is difficult to imagine meaningful and responsible progress without soon addressing these programs that currently make up 64% of our spending. The bipartisan debt commission gave some solutions. Let’s encourage our elected officials to take a serious look at this issue sooner rather than later. Now is the time.

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