- The Washington Times - Wednesday, February 16, 2005

As the congressional budget committees move into full speed this week crafting the Fiscal Year 2006 fiscal blueprint, say “welcome back” to an odd and old creature in the spending control zoology: The reconciliation process, an arcane congressional procedure that harmonizes spending and revenues within the budget.

Although created by the 1974 Budget Act, surprisingly, it hasn’t been applied to curb federal expenditures since 1997 (it’s been used more recently for tax cuts and increasing spending, but not to cut mandatory outlays). So, its return after eight years of hibernation ” a veritable “Savings Cicada” ” may generate some urban myths, but also some new opportunities. Dispelling these misconceptions is an important part of passing the budget and controlling the size of government.

House Budget Committee chair Jim Nussle of Iowa is concerned that misunderstandings about reconciliation could derail spending restraint, so he is wisely conducting tutorials on the subject. Lack of experience with the process and the options it offers could cause lawmakers to fall prey to misinformation or erroneous media reports.

Anyone elected after 1997 has never been through the reconciliation drill (about 40 percent of the House and Senate). “In the House, only two full committee chairs headed up panels the last time reconciliation for mandatory spending control was used,” a knowledgeable House staffer told me. Clearly, there could be a learning curve.

Hyperbole used by interest groups and other spending addicts also generates confusion. The president’s budget restraint is more modest than inside-the-Beltway rhetoric suggests. Democrats and some interest groups have already been whining about the White House’s “deep cuts,” but also assumed these recommendations will magically become law. Both conclusions are wrong.

Projected mandatory spending growth is 5.5 percent over the next five years under current law. The president’s budget slows the growth to 5.4 percent, a one-tenth of one-percent change ” hardly draconian. Portraying modest changes in spending as the “end of the world as we know it” is the common cold of legislative politics. The reconciliation process also offers lawmakers a wide degree of alternatives ” beyond those recommended by the president ” to slow the rate of entitlement growth, which is projected to represent more than 60 percent of the federal budget within 10 years.

Here’s how it works. This year’s budget resolution conference report, which lawmakers hope to hammer out by mid-April, will include so-called reconciliation instructions to authorizing committees charged with making changes in law to achieve budget savings. Cue the Savings Cicadas. The report dictates only the overall amount of savings necessary in broad categories; it’s the congressional authorizing committees (like the Energy and Commerce Committee in the House or the Finance Committee and the Commerce Committees in the Senate) that create the means to achieve that number through a reconciliation bill.

Here’s where a lot of confusion exists. Many believe the recommendations in the president’s budget are the only alternatives used in reconciliation. Not true. The authorizing committees have a great deal of latitude in finding the savings. So, despite the hype about impending “cuts” in the president’s budget, Congress is under no obligation to follow these recommendations (as long as the president eventually concurs). The Hill will likely use some, ignore many, and substitute new ones to reach the bottom-line numbers proposed in the budget resolution as it crafts the reconciliation bill.

“There are all of these people running around saying, ‘Oh my God, this program or that is going to be slashed because it (the cut) was in the president’s budget,’ ” a knowledgeable Hill staffer told me. “That’s not true. If people don’t like the president’s savings recommendation, they can come up with another idea.” Indeed. And if Congress can find a better, more common-sense way to reduce the rate of spending growth, why not?

So, despite all the hand-wringing about spending cuts early in this budget cycle, Congress has flexibility to find creative ways to save money. As a fiscal-control device, reconciliation legislation has the added advantage of protections from Senate filibusters. That’s why lawmakers committed to curbing spending should learn about the Savings Cicadas and the alternatives this process offers. Choosing reconciliation to achieve savings more often might jeopardize its Cicada label, but it’s a tool lawmakers should use to restrain entitlement growth. And they need to do it more regularly than every eight years.


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