America’s Budget Process: A Return to Normalcy?

Illustration of two political parties coming together to talk budgetIn 1920, presidential candidate Warren Harding campaigned on a “return to normalcy” promise after the end of World War I, a war that unhinged most of Europe from aristocratic rule and left many more people disillusioned. He said that Americans needed “not nostrums, but normalcy; not agitation, but adjustment; not the dramatic, but the dispassionate; not experiment, but equipoise.”

After the calamity of the Great Recession of 2008-2011, many Americans also became disillusioned with their government.  What Americans needed was for their elected leaders to work together to right the ship of state. What they got instead were constant ideological battles, an inability or unwillingness to work together, and threats of government defaults, shutdowns, and sequesters — all of which contributed to the angst already created by soaring unemployment and the largest housing and stock market collapse since the Great Depression.

Is Congress Finally Working Together?

But this year Congress might have finally woken up and listened.  The budget sequester that was supposed to force Congress to come up with a debt and deficit cutting deal BEFORE it went into effect seems to have Congress working together more closely now that it HAS gone into effect. A budget deficit reduction deal approved earlier in the year seems to be holding, and Congress approved a debt ceiling increase without all threats of default.

Recently the House and, more importantly, the Senate passed their budget resolutions that set spending levels for the year.  The Senate hadn’t passed one in four years.

And what of those House and Senate budget resolutions?  Certainly they are far apart in their approaches.  The House resolution achieves all $4.6 trillion in deficit reduction through cuts in spending and entitlement programs.  The Senate achieves a smaller deficit reduction target of $1.85 trillion through a combination of tax increases and spending cuts.   But despite huge differences, both sides have said they want to try and work out a compromise plan.  Quite a different story from prior years.

President Barack Obama Releases Budget Proposal

And yesterday the president released his budget proposal for FY 2014.  Though the president’s budget is usually the start of the annual budget process, this year it arrived after the House and Senate had approved their budget resolutions. The White House approach was to try and find a middle ground.

The president’s budget cuts the Senior Community Service Employment Program (SCSEP) by $71 million, but it also undoes the sequester for the Department of Labor WIA programs and consolidates just two programs: the Trade Adjustment Assistance and WIA-Dislocated Worker programs into a new Universal Displaced Worker (UDW) program.  By comparison the House-passed SKILLS act consolidates 35 programs and cuts funding.  The president’s budget calls for new tax revenue but also cuts Social Security benefits by proposing a different method for adjusting benefits.  A mixed bag of good and bad news for Goodwill and people we serve.

No doubt there will be much political maneuvering in the coming weeks and months as both sides vie for public support for their budgets.  But if a middle ground is found then perhaps the normalcy of the budget process will once again have returned to Washington, DC.