- Budget Conference Outlook
- October 28, 2013
- Law Firm: McDonald Hopkins LLC - Cleveland Office
A critical piece of last week’s agreement to reopen the federal government and avoid defaulting on our debts was the commitment by both parties in Congress to pursue a larger deficit reduction plan by December 13.
The Congressional Budget Act of 1974 requires the House and Senate to adopt an annual budget resolution that is a blueprint around which Congress sets its spending and revenue policies for the subsequent year. Though the budget resolution itself does not carry the force of law, it sets in place parliamentary procedures to expedite the adoption of laws that fulfill the budget’s goals. To achieve this, however, both chambers must go to a “conference committee” to resolve their differences. Then both chambers must adopt the same version of the budget by majority vote. As one would expect, this task can be difficult with a Republican-controlled House and a Democratic-controlled Senate.
In March, both chambers passed their respective versions of the budget resolution. The conference committee formed to resolve those differences has now been anointed the venue to adopt a deficit reduction plan and it must conclude by December 13. But the two plans differ greatly in spending levels and revenue estimates. Beyond numbers alone, there is far greater conflict about the proposed policy changes that allow accountants to arrive at those bottom-line figures. The House Republican plan includes substantial changes to Medicare and food stamps, among others. The Senate Democratic plan proposes new taxes.
Many Americans will ask, what will occur if the Budget Conference does not meet its goal of resolving their differences by December 13? There is no enforcement mechanism that kicks in should the conference fail. And practically speaking, the federal government will continue to enact spending bills and revenue bills without annual blueprints. If, however, they do succeed, one must remember Congress still must enact laws that actually execute the Budget Resolution, which is a tall order.