The Economist Asia - 27.01.2018

28 United States The EconomistJanuary 27th 2018

2 the Diversity Visa programme, which pro-

vides green cards for immigrants from

places that send few people to America. A

spokesman for Mr Trump said the presi-

dent would still not sign it.

House Republicans favour a bill that

would give some DACArecipients legal

status but not citizenship. It would also end

the Diversity Visa, bar immigrants from

sponsoring family members other than

spouses and young children of American

citizens (doing otherwise, Republicans ar-

gue, would letDACArecipients reward

their parents, who decided to enter Ameri-

ca illegally) and enact a host of other re-

strictions that could cut legal immigration

by up to 38%. That bill would never pass

the Senate.

The gap between the two parties illus-

trates how toxic America’s immigration

debate has become. During the shutdown,

Mr Trump’s permanent campaign released

an ad that snarled, “Democrats who stand

in our way will be complicit in every mur-

der committed by illegal immigrants.” The

ad conflatesDREAMers—who by law can-

not have committed a felony—with crimi-

nals, just as the robocalls conflated people

who willingly entered America illegally

and those who came in their parents’ arms.

Despite the rancour, the contours of a

solutions are visible, if justfaintly. Mr

Trump will release a “legislative frame-

work” on January 29th, based on four

“agreed-upon pillars”: a DACA fix, border

security, and an ending to both the Diver-

sity Visa and to “extended-family chain mi-

gration.” The firstthree should be just

about acceptable to most members of both

parties. The last istrickier. Democrats have

expressed some willingness to end family

migration forDACA recipients, butnot for

everyone. Last weekend’s briefshutdown

may presage a longer one, next month. 7

W

RITING a budget should be about

imposing order. In America, it fre-

quently causes chaos. By letting funding

for the federal government lapse on Janu-

ary 20th, Congress demonstrated, again,

how hard it is for it to approve spending.

The disruption might be worth it if Ameri-

ca’s budget showdowns led to better poli-

cy. But they do not. Budget-making does

not bring income and outlays into line. It

does not allow lawmakers much opportu-

nity to weigh competing claims on re-

sources. And it fails to make long-term

planning easier. It is time for a shake-up.

The constitution gives Congress the

power of the purse. Four things are odd

about the way it uses it. First, annual bud-

gets cover onlythe roughly one-third of

federal spending that Congress has decid-

ed needs reapproval each year. Mostenti-

tlement programmes, such as Medicare,

health care for the elderly, are automatical-

ly funded. So while budget-making pro-

vides opportunities for grandstanding by

Congressmen aboutlong-term fiscal pro-

blems, the process affords few chances to

tackle the principal cause: swelling entitle-

ment spending.

The second oddity is that the process

rarely follows the script, written in the

mid-1970s. Congress is meant to pass 12

separate bills funding each area of govern-

ment, like housing, defence and agricul-

ture. Each ispenned by the appropriate

committee. If spending gets out of hand, or

is too measly, Congress can instruct com-

mittees to write so-called “reconciliation”

bills to redress the imbalance.

In reality, Congress has not passed sep-

arate appropriations bills since 1996. Doing

so takes too many controversial votes. In-

stead, it tends to pass mammoth bills

which fund everything. Often, it cannot

even manage that. So it resorts to “continu-

ing resolutions”, like that enacted on Janu-

ary 22nd, which simply keep spending

flowing at its current level while lawmak-

ers try to work out a deal (see timeline). Be-

cause continuing resolutions mostly pre-

serve the status quo, their prevalence

makes it difficult for government depart-

ments to rejig their operations (which usu-

ally have specified funding streams). This

lack of flexibility is particularly bother-

some for the Pentagon.

Reconciliation, meanwhile, is not used

to enforce fiscal discipline. Instead, it is pri-

marily a ploy for getting legislation

through the Senate with just 51 votes, rath-

er than the more usual 60. Many signifi-

cant laws from recent decades, from Bill

Clinton’s welfare reform to President Do-

nald Trump’s tax cuts, relied on the proce-

dure. Lawmakers reverse-engineer the pro-

cess, estimating the cost of what they want

to pass in advance, and then issuing the

necessary instructions. For example, at the

start of 2017, Congress passed a budget res-

olution the sole purpose of which was to

facilitate the attempted repeal of Obama-

care via reconciliation.

The third strange thing about the sys-

tem is lawmakers’ tendency to try, unsuc-

cessfully, to tie their own hands. For in-

stance, in recent years, budget-making has

been particularly painful because of the

“Budget Control Act” of 2011, which man-

dated deep and indiscriminate cuts to

spending should lawmakers fail to reform

entitlements. They did fail. The result has

been a biennial struggle to lift the law’s

spending caps temporarily, as happened in

2013 and 2015. Under a separate law from

2010, designed to deter unfunded legisla-

tion, Mr Trump’stax cuts might have trig-

gered automatic offsetting cuts to Medicare

and other programmes. Congress found a

way to avoid that in December.

The lastand worst aspect of the system

is the leverage it gives minority interests. It

only takes 41 or more votes in the Senate to

block a budget bill, as Democrats demon-

strated last week. The budget process has

become a conduit for whatever dispute

lawmakers are determined to have, says

Molly Reynolds, of the Brookings Institu-

tion, a think-tank. In mid-2015 John

Boehner, then Speaker of the House, had to

pull a budget bill from consideration after a

late-night amendment to ban the Confed-

erate flag from federal cemeteries.

Proposals for reform abound. Some

want Congress to move to two-year bud-

gets. Others want continuing resolutions

to apply automatically, makingshutdowns

impossible. But many suggested reforms

would require lawmakers to limit their

own bargaining power. For politicians,

that is the budget that really matters. 7

The federal budget

Budgeting, busted

WASHINGTON, DC

America’s budget process swallows time but achieves too little

Regular disorder

United States

Budget negotiations

Source: The Economist

Budget Control Act (BCA) passed

Two-month suspension of BCA spending cuts

BCA caps activated,

spending automatically cut

BCA caps lifted for

a further two years

Government shutdown

(16 days)

Government shutdown

(three days)

BCA caps lifted for

a further two years

Donald Trump

becomes president

First concurrent

budget resolution

since 2009

2010 11 12 13 14 15 16 17 18

Short-term budget deals

Debt-ceiling amendments

Debt ceiling hit/beginning

of “extraordinary measures”

“Omnibus” spending deals

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