The passage of the $1.3 trillion omnibus spending bill as signed yesterday by Donald Trump represents a shortcut to everything that is wrong with Washington, D.C.
By avoiding any semblance of the regular order budget process in favor of funding by crisis and failing to perform an important function: oversight.
Congress opted instead for wasteful, inefficient and inappropriate funding of tens of billions of dollars in additional funding, with no meaningful reforms.
In the simplest of terms, the omnibus is a spending bill that collects ALL the appropriation bills into a bill to be voted on. The issue is that no single bill, no matter how bad or inappropriate, can be discarded or vetoed as a line item.
The bill becomes law once it goes to the White House and receives the signature of the president, who has a single chance to veto it or put his stamp of approval on it. Once signed, it is up to the president to ensure the funding is sent to the designated agencies, states and projects. A president cannot impound, shift or refuse funding because Congress must approve any changes.
The power to control funding was once exercised by presidents such as Thomas Jefferson, who exercised the power of impoundments in 1801. It was available to presidents up to and including President Richard Nixon and was regarded an inherent power to the office.
The Congressional Budget and Impoundment Control Act of 1974 was passed in response to perceived abuse of the power. Title X of the Act removed that power. The case of Train v. City of New York, tried before the U.S. Supreme Court closed up potential loopholes and the president’s ability to indefinitely reject congressional approved spending was removed.
The Impoundment Act provides that the president may propose rescission of specific funds, but that rescission must be approved by both the House of Representatives and Senate within 45 days. Congress is not required to vote on the rescission and has ignored the vast majority of presidential requests.
Because the procedures set by the Act are cumbersome, most recent presidents supported restoring impoundment power, including Ronald Reagan, George H. W. Bush, Bill Clinton, George W. Bush and Barack Obama, as well as numerous Washington politicians.
Prior to the Impoundment Act, presidents were able to use the Line Item Veto Act of 1996 to strike down laws that came across their desk, which Clinton did 82 times. The law was struck down in 1998 by the U.S. Supreme Court on the grounds it was in violation of the Presentment Clause of the U.S. Constitution.
Strengthening the rescission provision within the 1974 act has been proposed as a means of curtail excessive congressional spending, but thus far, no steps have been taken.
The Impoundment Act does not extend to state governments unless legislation has been passed to prevent impoundment. Forty-three states in the U.S. give their governors authority not to spend money allocated by the state legislature. Only Indiana, Nevada, New Hampshire, North Carolina, Rhode Island and Vermont have impoundment laws in place.
There are key concepts are important to understanding the federal funding process.
The overwhelming majority of federal spending consists of “mandatory spending,” In mandatory funded programs, legislation defines the eligibility criteria for participation, and the government allocates funds to all who are eligible, regardless of the annual cost to the Treasury.
The other category of funding is known as “discretionary spending.” Discretionary-funded programs have annual allocations that set the total level of funding they can provide within that fiscal year.
The funding process is an annual event. Congress is tasked with producing a budget resolution and 12 appropriations bills for each federal fiscal year, which begins on Oct. 1. Other funding legislation, such as emergency funding in response to a natural disaster, frequently occurs outside of the standard process.
The House and Senate set their own rules for how funding bills are handled, but the impact on federal revenue (known as the “score”) is determined by the Congressional Budget Office (CBO). The CBO is also responsible for determining the baseline data used to assess the fiscal standing of the government under various criteria. This baseline data is used primarily to project future deficits or surpluses, but also to project the impact of legislation on federal revenues.
The federal funding process begins with the submission of the president’s annual budget request to the Congress. Traditionally, this is done on the first Monday in February.
Under normal legislative procedures, there is a budget resolution, which establishes the overall blueprint and basic architecture of the entire fiscal plan, which is then debated to establish the economic assumptions, tax policy, defense policy, the deficit or surplus targets – everything that shapes the massive federal budget.
The president’s budget request details the administration’s position on the full range of federal revenue and spending, and encompasses economic projections and analysis, as well as detailed program-by-program funding levels proposed by the administration. It also projects deficits and surpluses for the government as a result of the recommendations in the budget for the immediate fiscal year, as well as the next nine fiscal years.
The administration can use the budget request to introduce new policies, programs or changes. It is prepared by the Office of Management and Budget (OMB), which functions as the chief administrative agency of the Office of the President. The OMB scores the program funding and policy changes detailed in the budget request and often produces different scores than the CBO.
As in the past, many annual funding bills have been packed into an omnibus bill, a proposed law that covers many diverse or unrelated topics into a single document that is accepted or denied by a single vote by the House and Senate.
Because of the large and scope, omnibus bills limit opportunities for debate and scrutiny, and are often used to pass controversial amendments. Critics consider these bills to be anti-democratic.
The current omnibus spending bill ($1.3 trillion) passed by both the House (256-167) and Senate (65-32) contained 2,232 pages, offering very little time for legislators to read the bill, much less understand its contents, and by economic standards, disregarded the country’s unstable fiscal path in favor of more deficit spending and failed to make meaningful spending reforms.