THE HOUSE is scheduled to take up, perhaps this week, a bill to change the congressional budget process. The proposal by Reps. Jim Nussle and Benjamin Cardin is meant to strip away some of the pretense in which the budget now comes regularly wrapped. That's a worthy goal, but the legislation goes too far in conforming the budget rules to reality -- the reality being that Congress wants to hand back or out, in the form of tax cuts and/or spending increases, more money than in the long run the government will have on hand or can afford.
The bill would redefine and lower the current standard of fiscal discipline. It also would remove one of the most important devices for forcing Congress to come to terms on a budget each year. Neither of these provisions should be allowed to stand.
For purposes of control, the current rules divide the budget into two parts. The third of all spending subject to the annual appropriations process is theoretically subject to a fixed dollar cap. The remainder of the budget -- taxes and the semiautomatic spending for Social Security, Medicare, Medicaid, food stamps, etc. -- is subject to a pay-as-you-go rule. Any legislated tax cut or spending increase has to be offset by tax increases and/or spending cuts.
The bill would drop the offset requirement to the extent that there is a surplus in the non-Social Security part of the budget. Such a surplus could be spent with impunity. The president has implicitly agreed to such a relaxation, but only if an agreement can be reached to restore the finances of Social Security and possibly Medicare first. His realistic fear is that otherwise money needed to meet those looming obligations will be used for other purposes, in particular the ill-advised, oversized tax cut the Republicans advocate. He's right to insist on that condition; we hope he sticks to his position and to his threat to veto this bill if it prematurely backs off.
To avoid the annual threat and embarrassment of a government shutdown, the bill also provides for automatic appropriations at the previous year's level if the president and Congress fail to agree on new appropriations each fiscal year. But that would put the leverage on the wrong side of the argument. The effect would be to ratify spending limits already too low, by reducing the political consequences if either a willing Congress or a willing president walked away from the annual responsibility to fund the government.
The budget rules are anything but rational, but they've helped to produce a good result. A deficit has been converted to a surplus. Instead of ignoring the massive obligations that face it just ahead, the government is in a position to save against their onset by paying down the debt. No budget rule is a substitute for political will, but the goal should be insofar as possible to preserve existing fiscal policy, not ease it.