XVIII No. 42

It's been a long couple of weeks. Billions of dollars wasted on a government shutdown that accomplished nothing and dragged down economic growth as the debt ceiling was threatened. And the deal finally passed sets us up for another throwdown in January of next year.

Less seasoned budget watchdogs might look at this with gloom. But it doesn’t have to be this way. What happens in the next couple months can forestall yet another threat of government shutdown or default. Congress has gotten a last minute reprieve and the chance to do what’s right. The choice is up to them.

First off, the agreement starts a budget conference committee that is supposed to hammer out the differences between the House and Senate top line discretionary spending numbers by December 13—that’s Friday the 13th to be exact.

This is all well and good, but this process was supposed to happen back in April shortly after the House and Senate adopted their budget resolutions. Instead there was a lot of name calling and budgetary shadow boxing, with the appropriations committees in both chambers passing bills they knew were an anathema to the other. And maybe an anathema to their own chamber considering that out of twelve annual spending bills, only four got through the House Floor and none got through the Senate Floor. So this time, don’t do that. With Democrats controlling the Senate, Republicans the House, and a second term President, the budget resolution’s not going to change the world.

Secondly, the current continuing resolution funding government would cost $1,088 billion on annual basis; $986 billion of which is subject to the caps mandated by the Budget Control Act (BCA) that all parties agreed to back in 2011. The domestic discretionary part of that funding level is in accordance with the BCA, in fact it's about $1 billion under. The defense discretionary side is about $20 billion over. Absent a decision by the budgeteers, that will get lopped off in January as the across the board sequestration cuts kick in.

Some folks hope for a grand bargain. Let’s not get ahead of ourselves. We would be okay with a petite agreement that sets funding at the BCA levels and starts the discussion on necessary tax and entitlement reform. Or a deal that achieves the deficit reduction envisioned by the BCA. Just get the ball rolling. Besides, in fiscal year 2015, the caps under the BCA start to rise (essentially, the BCA recalibrated the baseline) each year until its end in 2021. That should make it easier to live under.

Third – don’t spend the next three months backsliding into business as usual legislation that brought us to this point in the first place. The next item on the House’s agenda is a multi-billion dollar water bill that tries to make everyone happy. There’s already a $60 billion to-do list for the Army Corps of Engineers – an agency that gets less than $2 billion in construction funding each year. Instead of piling on more projects, Congress needs to do the hard work of figuring out which are the best investments. Also, farm bill negotiators need to come up with a bill appropriately responding to our deficits. Instead of a trillion dollar bill that increases subsidies for a sector experiencing record profits, they need to implement real reforms. And the tax extenders – annually expiring special interest tax breaks for everyone from NASCAR track owners to liquor conglomerates – is lurking. Congress is never going to get out of this debt crisis cycle until they start making choices and asking everyone to pull their fair share.

As a country we desperately need all members of Congress to work together to take both big and small steps to put our country on a stronger fiscal footing. Diffusing the threat of an immediate default and reopening the government will give Congress another chance to do not what is easy, but what is right. As Sen. McCain is fond of saying, Congress’ approval rating means it's down to blood relatives and current staff. If they can compromise and start (gasp!) working together, the country can start digging out of the fiscal and credibility hole they put us in.

It's time to make government work.