The real problem with passing the federal budget

Make Me Smart September 26, 2023 Transcript

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Kimberly Adams 

Hey, everybody, I’m Kimberly Adams, welcome back to Make Me Smart, where none of us is as smart as all of us.

Kai Ryssdal 

I’m Kai Ryssdal. Thanks for being here on this Tuesday. It’s the 26th of September it being a Tuesday means we’re only doing one topic today, the topic of the week, I suppose. And maybe the next who knows how long is the government shutdown is and more to our point, the absolutely shattered federal budgeting process.

Kimberly Adams

Right, because there is a process.

Kai Ryssdal

It just that’s what you say.

Kimberly Adams

In theory, there’s a process. It’s just so far gone. Anyway, we want to get into how it’s supposed to work, why it often breaks down, and what if anything there is to do about it. So here to make us smart about all this is Molly Reynolds, a senior fellow in governance studies at the Brookings Institution. Molly, welcome to the show.

Molly Reynolds

It’s great to be here. Thanks for having me.

Kimberly Adams

So first, let me put you on the spot. Do you think we’re gonna have a deal in time at this point?

Molly Reynolds 

I mean, we’re having this conversation on Tuesday, the closer we get to Saturday, the bigger the challenge of the clock itself, becomes. And we’ve already reached a point where everything has to go really smoothly in the Senate, for the Senate to be able to clear something by the end of the week. So we’ll see. But obviously, as the deadline gets closer, a solution gets harder.

Kimberly Adams

That was very diplomatic.

Kai Ryssdal 

So, so yes to all that. And I want to come back to it. But, but I want to back up for a minute. And just on that little joke that Kimberly and I had in the introduction, how long has the federal budget process been as buggered up as it is?

Molly Reynolds 

So the federal budget process as kind of currently articulated how it’s currently supposed to work is about to celebrate its 50th birthday, was codified in the law passed in 1974. And since then, it’s worked, okay, in some years, but has never really worked great. Right now and over the past several years, we’ve seen it be particularly dysfunctional. So we’ve had these repeated episodes of either actually shutting down the government, the last time that happened was for 36 days at the end of 2018, and 2019, or even just flirting with shutdowns. And that alone is really costly. If the government, federal agencies think there might be a shutdown, they have to spend a lot of time and resources getting ready for the possibility of a shutdown. And that’s time and resources not spent doing other things.

Kimberly Adams 

So how is this process as you know, as of 50 years ago? And now how is it supposed to work? What is actually supposed to happen?

Molly Reynolds 

Sure. So from Congress’s perspective, the first thing that Congress is supposed to do every year in the spring, is adopt something called the concurrent resolution on the budget. But you should really think about that as sort of Congress deciding how big the pie should be. There’s some federal spending that’s controlled through this annual appropriations process, this process that needs to happen every year, spending on things like the Defense Department, on some nutrition assistance programs on scientific research, and K to 12 education. That funding is needs Congress to act every year. And they’re supposed to in the spring, sit down and decide how big is that pie going to be. And then over the course of the spring and early summer, they’re supposed to take up 12 separate bills that constitute sort of pieces of that pie. So once you’ve decided how big the pie is going to be, you have to divide it up into 12 pieces. And all of those pieces are supposed to be finished on their own by October 1 which is when the new federal fiscal year starts.

Kimberly Adams 

So those 12 different appropriations bills are supposed to be written go through committee, get voted on in committee, go to the floor be voted on the floor pass to the house, go to the Senate, Senate gives their okay after their the process passes through Congress, then be signed by the president united states by October 1. That’s the process, right?

Molly Reynolds 

That’s what it’s supposed to look like.

Kai Ryssdal 

I think that’s what’s called regular order, right?

Kimberly Adams 

Regular order, which was the deal that McCarthy made in order to get into speakership that he was going to go through regular order. Okay.

Kai Ryssdal 

So we know that government shutdowns are wasteful, and just the dumbest possible way other than the debt limit to run the biggest economy in the world. But, but what are the there are inefficiencies that come with his budgeting process to right, could you talk about those for a little while?

Molly Reynolds 

Sure. So when you, Congress fails to finish work on its appropriations bills, by the time that the new fiscal year is supposed to start, that kind of first type of inefficiency is what I was talking about before in terms of agencies having to plan for a shutdown. So I’m in Washington, all around this town right now, there are folks at agencies sitting down and saying, “Okay, if Congress doesn’t act by Saturday night, what of our operations need to stop because they no longer have appropriations that will fund them? What of the things that don’t have appropriations anymore, are accepted, will continue because they protect life property, that sort of thing?” That’s a costly process, someone is having to make all of those decisions, tell all of the federal workers, what those decisions are, put plans in place to wind down federal operations in the event of a shutdown, and so that’s costly. Even if Congress comes to like a last minute deal late on Saturday night, all that work will have will have gone in. And then let’s say we actually have a shutdown. That’s also really costly for federal agencies. In many cases, it’s not just that, agencies have to stop doing activities, and then those the consequences of which flow on to the people who actually benefit from things like nutrition assistance programs, all the way up to people wanting to visit national parks that might be closed. Starting the government back up is the use of resources once Congress has acted. And even if Congress does manage to avert a shutdown with a temporary spending, though, that introduces a lot of uncertainty for agencies, agencies usually can’t start new activities when they’re under a temporary spending bill, they often can’t hire new employees. Once Congress does finish its work, they have less time to spend the money that Congress has given them. Often contracts get more expensive, all kinds of things that are just not the sort of efficient ways that we would hope the federal government would be operating.

Kimberly Adams

Okay, so we know that this doesn’t work. And it has not worked well, for a very long time. What, what are the other options? And I mean, there have been suggestions for things like automatic continuing resolutions, those temporary spending bills, you were talking about biennial budgeting, are these viable solutions, and do they have a chance?

Molly Reynolds 

So I think it’s really important to remember that fundamentally, this is not a problem of the budget process itself, there probably are things we could do to make it work a little bit better. Um, you mentioned various forms of biennial budgeting, which would mean doing some or all of these steps every two years instead of every year, I tend to think the first step, the sort of deciding how big the pie should be that doing that every two years would probably be okay. And then making the decisions about how to divide up the pie every year, would still retain the ability for the government to respond to changing needs. But fundamentally, this is a problem of politics. And it’s not necessarily a problem of the process. And the way I like to think about this is there’s some amount of political conflict that’s going to happen in Congress. And you can kind of think of this as like a game of Whack a Mole, you have this conflict, and you start whacking down other moles, because it’s really hard to get things done. And there aren’t other bills that are moving. So all of that conflict gets transferred to this annual appropriations process, because it has to happen. And if it doesn’t happen, so many important things that people depend on, stop working. So once it’s really the only mole left standing, it has to bear all of this conflict. And I think we see that now with the House Republicans so much of their sort of internal angst and internal conflict between Kevin McCarthy and his detractors that’s getting transferred to this one specific fight. And that dynamic is both what may means it doesn’t work as well as it should, and also means that it has such big consequences for the American people.

Kai Ryssdal 

So sort of along those lines. I have a two-part question. The first is I’m sure you saw the news from Moody’s. Whatever yesterday was Monday. If that statement they had, which says, and I just pulled it up so I could read it to you, talking about the weakness of US institutional and governance strength relative to other triple A rated sovereigns that we have highlighted in recent years. So Moody’s is not the only one to have pointed out the the weaknesses in American economic government, right, and fiscal government. So number one, do you agree that that’s actually a serious problem for this country? And number two, are there any other countries that do this the way we do this?

Molly Reynolds 

Yeah. So I do think it’s, I think, the struggles that Congress faces to complete some of this, these basic responsibilities of governing in terms of keeping Federal Operations open, keeping them running in a timely fashion in a way that minimizes uncertainty for all of those folks who actually have to spend the money. And then for all of the people around the country who depend on federal resources, I do think that’s sort of a major, a major threat to, to the health of our economy and our democracy, or, more generally.

Kai Ryssdal 

And then are there other countries that do it the same way we do it?

Molly Reynolds 

So I think, I don’t know, I’m not an expert in, in other countries. But I think that one of the, when we compare the US to other countries, one of the important things to remember is that our separation of powers system bakes into it, the possibility of divided party control in a way that you don’t have a parliamentary system. So in a parliamentary system where, you know, someone has a majority, and one of the parties were a coalition of parties, and there’s a prime minister, there’s they’re sort of all by default, rowing in the same direction in a way that our constitutional system creates opportunities for that not to happen for us to have one party control one or both chambers of Congress while another party controls the White House. And so again, when you have as much kind of partisan political conflict as we do, and you have that power divided across the parties, across the institutions, this annual spending process can become a place where this conflict gets fought. Right.

Kimberly Adams 

So given the Congress we have, and the politicians that we have, what can change, so it doesn’t feel like there’s always a shutdown around the corner, like what can be done with what we got?

Molly Reynolds 

Yeah, so we’re talking before about this possibility of sort of trying to make fewer decisions or set Congress up to make, have to make fewer decisions? One way to do that would be

Kimberly Adams 

So pause for a second that the answer to the problem with Congress is to give Congress fewer decisions. That’s wild. Sorry.

Molly Reynolds 

No, it’s fine. I think one of that, and when we look at times in the recent past, when, say, the last decade, when this process actually has worked a little bit better than other times, one of the things that we’ve seen is Congress, packaging together a couple of these individual appropriations bills into multi-bill packages. So it has become very popular, particularly on the right to decry the omnibus appropriations bill, the one big bill that takes all 12 bills together, and passes them all at once. And that’s really how Congress has often managed to complete this work in the last in the last decade or so. But a couple of times, Congress has said, Okay, instead of doing all of these things at once, we’re going to take two of these bills together or three of these bills together. And we’re going to sort of write them in committee. And then we’re gonna bring them them to the floor in small multi-bill packages. And that allows us really log roll across interests. And so say, take the defense bill, and the bill that funds operations at the Department of Labor, Health and Human Services and Education, and put them together. And then you get folks who really care about defense, and you get folks who really care about those other domestic programs. You build a coalition across those interests, and you get those bills across the finish line together. And I think that something like that really helps optimize under our current political conditions. It retains the parts of the process, where the folks who are on the appropriations committees in both chambers really dig into the material. They’re really experts in the agencies that their parts of the Appropriations Committees oversee. They really work on the details. And then it’s that last step that’s more structured in a way for Congress to really function amid the polarization that it faces.

Kimberly Adams 

So minibus is better than omnibus?

Molly Reynolds 

I think so. And I think it I think it really, again starts from this premise, as you did Kimberly, of saying, This is what we have like these the politicians we have this is the partisan conflict that we have, how do we retain the parts of the process that still work somewhat well, which is the parts in the committee where they win the members? Who are really expert in in these areas dig into the material? And how do we pair that with an acknowledgement of the real challenges of building coalitions on the floor?

Kimberly Adams 

All right, Molly Reynolds, Senior Fellow in governance studies at the Brookings Institution, thank you so much, and enjoy the rest of your week, as much as you can. Thanks a lot.

Molly Reynolds 

Thank you, I hope you to do the same. Yeah. Yeah,

Kimberly Adams 

I’m glad she highlighted the sort of expertise that lives in some of these committees, which I think it’s very easy to look at the talking heads and the actual representatives in Congress, and, you know, see the political theater. But behind them, and on these various committees are people who have spent years, decades really learning this stuff. And, you know, just to go back down my deep nerd rabbit hole, in addition to the wonders of the Federal Register, if you ever have some time to look at the Congressional Research Service, it is an amazing library of documents written by some of the people who know so much about this stuff. It’s available to the public. But there are teams of researchers working for Congress and effectively for us, you know, pulling together all this information to hopefully help our elected leaders make better decisions. And so there are people who think very seriously about these things behind the scenes.

Kai Ryssdal 

That’s a great point, key point.

Kimberly Adams 

Yeah, yeah. All right. Well, let us know what you all think about the federal budget process. If you have a suggestion for how we might be able to do it better given what we got. Our number is 508-827-6278, also known as 508-U-B-SMART. You can also email us at makemesmart@marketplace.org. And we will be right back.

Kai Ryssdal 

All right. News, Kimberly, you go first, because you’ve got actual news. Mine is more of a rant.

Kimberly Adams 

I kinda love a good rant. So my news is that today, the FTC, along with 17, state attorneys general sued Amazon for illegally maintaining monopoly power, they accused Amazon of that, obviously, Amazon says no, that’s not the case. It’s going to be a really big test case for the FTC and Lina Khan’s sort of new interpretation of what a monopoly is. So historically, a monopoly by government definitions is a company that controls the whole market and uses that to harm consumers and raise prices. And and you see you can demonstrate the harm by prices being too high or higher than they would otherwise be. And, you know, the FTC is making a slightly different argument. And I’m just going to read from from their announcement, “the complaint alleges that Amazon violates the law not because it is big, but because it engages in a course of exclusionary conduct that prevents current competitors from growing and new competitors from emerging by stifling competition on price, product selection quality, and by preventing its current or future rivals from attracting a critical mass of shoppers and sellers. Amazon ensures that no current or future rival can threaten its dominance.” That’s a pretty complicated argument to sell. Huh, didn’t even mean to do that, but they’re laying out things like you know, Amazon, making it really difficult for companies that sells products products on the platform to sell the products more cheaply elsewhere, which raises they argue raises prices overall, they’re arguing that, you know, Amazon, in order to use like the Prime service, you have to pay these additional fees. But if you don’t pay the additional fees for the prime, you end up getting like reduced down in the rankings. And it’s harder for customers to find your products, a whole variety of things. And this is such a huge player and such a big part of the economy. And some of these monopoly cases that Lina Khan has been going for over the FTC have not been going so well. And so it will be very fascinating to see how this goes. She’s got 17 states behind her on this one, arguing kind of the old Walmart argument that when this big player comes in, it stifles local small businesses and their ability to operate, and to compete, and it will be very, the Amazon has turned over a lot of documents and data ahead of this, you know, lawsuit as part of discovery and things like that. So I think we’ll be learning a lot more about how this company operates. And whether or not the United States is going to have to adjust its legal understanding of what counts as a monopoly these days.

Kai Ryssdal 

So to that point, number one, yes to everything you said number two, this will not be solved tomorrow, this case is going to drag on for years. Number three, it behooves people to remember that Lina Khan made her name as an antitrust lawyer while in law school with a paper called Amazon’s antitrust paradox, arguing that the way the courts have interpreted antitrust is too narrow. And so what she’s been trying to do is broaden it out with mixed results so far, in the twoish years she’s been at the FTC. So this is there’s a lot on line here besides just what happens with this case.

Kimberly Adams 

Yep, yeah. And yeah, agreed.

Kai Ryssdal 

Ok so here’s my rant. It’s a headline in Axios, which is a news source, very Washington focused policy focused and a little gossipy too, and here’s a headline in their piece today, and it made me a little crazy. And it says, “Scoop: Biden teams don’t let him trip mission.” And it talks about how the President who is 80 years old and who I am on the record as saying probably should not have run for the aforementioned age. He’s working with a physical therapist doing exercises to improve his balance. He’s been wearing tennis shoes more often since he stumbled back in June to avoid slipping during the short stairs on Air Force One, because the man is 80 years old. Yes to all of that. Here’s my question. Where oh where oh where, is the Axios scoop headline that says Donald Trump is incoherent and a danger to the Republic? That’s it. That’s my rant.

Kimberly Adams 

I think that is not going to happen.

Kai Ryssdal 

Because why? Sorry, I know the answer. I know the answer to that. You don’t have to answer it. But come on. The media blew it in 2020, and blew it in 2016. And we’re blowing it again.

Kimberly Adams

So I agree that, that there’s definitely a disparity there. But when I saw that you put this link in it reminded me of this opinion piece, a guest essay in the New York Times yesterday by Brian Buetler, I guess.

Kai Ryssdal 

He used to be with Crooked Media with the Pod Save America bros.

Kimberly  Adams

Right. And the headline is, “The Democratic Party has an old problem and won’t admit it.” And he goes on to talk about how the Democrats are actually quite different from the Republicans in allowing their leaders in the House, the Senate and the White House, to continue on in their roles and not necessarily cycle leadership for folks of different generations in the way that Republicans have, and that Republicans with the outlier of Donald Trump who one could really argue at least the establishment political leaders in the Republican party probably don’t love too much with the outlier of Donald Trump, they have swapped out their house speakers, they have swapped out you know, people who are running their campaigns and the committee’s and like the RNC and things like that in a way that the Democrats have not. You know, I don’t know though Mitch, Mitch McConnell.

Kai Ryssdal 

So there’s McConnell. So so I would so yes to all of that, except the last two Republican speakers threw up their hands and walked away because there was such a frayed the Republican caucus, conference, sorry. Is is a fractious mob, right. And they couldn’t they literally could not govern and I I guess I don’t know. I mean, look, I know this is me spitting into the wind but it’s it’s actually crazy making and I think it does journalism a grave disservice to to create false equivalencies like the one that this headline presents. That’s what I got. Okay. Okay, wait, one more thing. There may be those listeners, some of whom may or may not be my boss, because I honestly don’t know if they listen, I hope they do. But who knows? Because life is busy. Who may object to me taking what they might perceive, not my boss probably because they know me, as a partisan slant on that particular story. Right. I will not suffer for being called partisan in defense of democracy. Full stop. Yeah. And sorry, one more thing. And we by by which I mean, not you and me, but me and my bosses or me and listeners can have that conversation. But it’s not a negotiable thing. Okay, go ahead. Sorry.

Kimberly Adams 

Well, I was going to agree that there are some things that we don’t feel like there are people who will say that we are biased for saying certain things, but if you do, there have to be some lines, right? There has to be, I will say out loud that I believe that trans people have a right to exist. You know, I will say out loud, that attacking the Capitol because you don’t like the outcome of the election is a bad thing. I will say out loud, the disenfranchising voters, because you know that when voter turnout is higher, you’re going to lose is a bad thing. And I think there is a way for us to have these conversations, honestly, about, you know, where we stand in. And I do believe that that’s actually transparent and important for journalists, to be open about where we’re coming from, and how we see the world, we can still extend respect and an opportunity to listen and hear the perspectives of those who disagree with us. But I also don’t have to platform someone who says climate change isn’t happening, or human caused climate change isn’t happening, you know, and so I think we, that’s kind of part of the job is to navigate those challenging conversations and, and also to sort of stand up at some point. The classic example I always use is that people called Ida B. Wells, a radical journalist for saying that lynching black people was a bad thing to do. So, I’m not gonna be mad if you tell me I’m biased because I say attacking the Capitol and the person who encouraged them to do that Donald Trump. That’s not a good thing. So yeah. Okay, that’s it for the news. Let’s do the mailbag.

Mailbag

Hi Kai and Kimberly. This is Godfrey from San Francisco. Jessie from Charleston, South Carolina. And I have a follow up question. It has me thinking and feeling a lot of things.

Kai Ryssdal 

So along those lines, we talked last week, Kimberly and I did about Congress in the state of politics and what’s happening in this democracy. And here’s one of the letters and emails we got.

Kim

This is Kim in San Francisco Bay area. I was really delighted at the conversation that the two of you had about Congress and norms and upsetting those norms, and made me harken back to the early aughts when marriage equality was booming. As a lesbian, I was really torn between do I need to be married in order to feel validated? Or is it the system of marriage that needs to change? Ultimately, I did get married because the system isn’t changing anytime soon. And I really wanted those protections for me and my spouse and the rest of my family but it’s the same situation to me is Is this something that will ever be able to change without a large volume uprising of change? Thank you.

Kimberly Adams 

Yeah, that’s it right there.

Kai Ryssdal 

Yes. What she said.

Kimberly Adams 

I’m gonna leave it because that she she encapsulated that perfectly. But before we go, we are going to leave you with what we always leave you with the answer to the make me smart question, which is what is something you thought you knew, but later found out you were wrong about? And this week’s answer comes from Bill in Allentown, Pennsylvania.

Bill

Something I thought I knew that I later found out I was wrong about I thought UC Berkeley and Cal were two different schools. If you watch college sports, you may see the PAC-12. For now, Cal Bears take the field. When people talk academics, they talk about UC Berkeley and how great of a school that is the flagship of the UC schools. When talking sports, no one says UC Berkeley and talking in academics. No one calls the school cow. It wasn’t until I visited the campus for my sister’s graduation. And then I saw Cal flags flying and realized that Cal and Berkeley are the same school.

Kai Ryssdal 

Totally true. Ethan Lindsey, that one’s for you, pal. If you happen to listen to this podcast former Marktplace guy.

Kimberly Adams 

Is that is that Cal State when they say Cal State? That’s different?

Kai Ryssdal 

No, no, no, no. Yes. Oh my gosh. Okay. So in 45 seconds or less, in the state of California and some other states I imagine, there are three levels of public education, the community colleges the city colleges, right, the California State University system, and then the University of California system. So Cal State is part of the California State University. So right, so Cal State has Cal State LA and Cal State, many other cities, right? And then there is the University of California system, UCLA, UC Berkeley, UC Merced, right. So that’s the way it goes. So there, Cal State and Cal are not same thing. But it’s very interesting, this whole academic versus versus athletic distinction. Totally, I totally get that.

Kimberly Adams 

Okay.

Kai Ryssdal 

And we should say, by the way, and thank you to Courtney who probably put this in the prep, Cal, or the University of California, California, Berkeley, they’re working to change that misconception. They’re actually working on a rebranding campaign. So we’ll see how that goes. Also also what took them so long, it’s been that way for a very long time. Anyway, okay. All right. We’re done out here is what we are. Send us your answer to the Make Me Smart question. Maybe it will teach us a little something, don’t know. Our phone number is 508-827-6278, 508-U-B-SMART is how you get to us.

Kimberly Adams 

Make Me Smart is produced by Courtney Bergsieker. Ellen Rolfes writes our newsletter. Today’s program was engineered by Jayk Cherry with mixing by Bekah Wineman. Our intern is Niloufar Shahbandi.

Kai Ryssdal 

Ben Tolliday and Daniel Ramirez composed our theme music. Our senior producer is Marissa Cabrera. Bridget Bodnar is the director of podcast. Francesca Levy is the executive director of Digital and on demand and Marketplace’s Vice President and General Manager is Neil Scarbrough and I’m sure all those people listen. I was just kidding. I’m sure they listen.