Five thigs are going on that merit attention.
First, Rick Perry got caught showing he has not always wanted to be president or else he never would have let his father lease a certain hunting property known by a term that the Geographers decided was racist in 1962. Only Herman Cain objected from the GOP field. This won't hurt him with the Tea Party, however it will make him look even more marginal with the general electorate. He's toast. He could likely save his reputation by having a beer with Cain and Obama at the White House - although that would be the death of both their campaigns with the Tea Party.
Second, we have Chris Christie exploring a last minute run. He could be a Reagan when more seasoned and likely occupies the issue space that Romney already holds. The real difference between Romeny and Christie is that Romeny panders to conservatives and I frankly don't see Christie doing that, especially if and when he is eventually elected. I expect that he will tell the Tea Party to shut the you know what up and they likely will - especially in Congress.
Third, Amanda Knox has been freed. She likely should not have been convicted in the first place and likely would not have been in the U.S. with the same evidence - much of which would not have been allowed in given adequate legal representation. From what is reported, 46% of verdicts in Italy are reversed on appeal - however, their appeals also include a retrial of the facts. That is not a bad priniciple for the USA to adopt.
Fourth, the Wall Street protests are attempting to ignite an American Spring. I suspect they are in the wrong place. The top 1% don't care about street heat. If you boycott them, they will simply fire more workers. The Arab Spring brought down dictators. While our politics is bought, it is only bought because the electorate buys into the message they see on the political ads and votes for those candidates who take the corrupt money.
The current infrastructure won't pass or ratify an amendment to not make money something other than political speech. Even calling for a constitutional convention won't work, because the people who would call for a convention or ratify it come from the same partisan structure as the members of Congress who take the money. The current mix of third parties won't help either, since they have a nasty habit of running activists rather than electable elites (lawyers, doctors, war heroes). Until the Democrats get behind a common sense reform which distributes money to challengers as well as incumbents during the nomination phase, their hands will be seen as dirty as the Republicans. All money should go to the party, who should distribute it equally to any candidate who can bring in 15% of attendees at a District or State open caucus held for the express purpose of seeing who is a viable candidate. If they don't, whatever major party replaces the GOP when it goes off the rails might do so instead.
The real complaint the protestors have is about jobs. Since the Reagan tax cuts, employers have had an incentive to seek productivity gains because owners, stockholders and CEO can capture more than half of the gains. It got much worse under Bush II, when tax rates on dividends and capital gains went to 15%, meaning that the plutocrats GET 85% OF THE GAIN FROM PRODUCTIVITY. Productivity means reducing labor costs through outsourcing, union busting, holding the line on pay and benefits and automation. Until Obama actually makes this argument and backs it up with data, jobs will continue to be lost. Letting the Bush/Obama tax cuts expire is the only course - and Wall Street is not the place to deliver that message.
Ultimately, workers won't be secure until they gain ownership and control of the companies they work for. Simple ownership is not enough if it does not include shifting control to workers and their representatives. Having the unions join the protest is not enough. The unions themselves must be the target of protest - with the clear message to get off the dime and start using their leverage to control the companies their members work for. The UAW should have had a majority of Chrysler's board, rather than a token member instructed to vote with the majority. The Taft Hartley Act restrictions on concentrated ownership need to go and the unions need to radicalize. Union resistance to Social Security personal accounts should change. The electoral issue should take a back seat to personal accounts which hold the voting stock of the firms where their members work, with a third of that stock dedicated to an insurance fund of all such firms so that no one loses money. As important, such union owned firms should be more like Southwest Airlines than United Airlines. The goal of union management must be profitablility as well as member protection. That can come with more workplace democracy - which is a farce unless the benefits of productivity go to both the workers and the folks who actually innovate (rather than paying them a salary with the expectation of innovation).
The fifth issue is the budget process. The Senate Budget Committee is holding hearings today and I submitted comments for the record, which are identical to the comments sent to the HBC two weeks ago - which are also in my book, Musings from the Christian Left. These suggestions were first sent out in 1990 and are as relevant today as they were 21 years ago. The comments are under the fold.
Comments for the Record
Senate Budget Committee
Improving the Budget Process:
Strategies for More Effective Congressional Budgeting
608 Dirksen Senate Office Building
October 4, 2011, 9:30 AM
By Michael G. Bindner
Center for Fiscal Equity
Chairman Conrad and Ranking Member Sessions, thank you for the opportunity to submit comments for the record on this issue. These comments were first published on our web page in 2003 and are as equally valid now as they were then.
For most of recent memory, especially in years where large deficits loom, the Congress and the President have been unable to reach consensus on a budget in time for the start of the fiscal year on October first. This is almost scandalous, given the impact of the federal government on the economy. The lives of millions of hardworking public servants and contractors hang in the balance while Congress debates, or more likely stalemates. While it is healthy to debate the nature of government from time to time, holding the nation hostage to stage it is not.
When the government is divided between the parties, budgets are submitted "dead on arrival.” This leads to a series of missed deadlines and a likely impasse that threatens to shut the government down at the beginning of the fiscal year. Often, the impasse leads to the need for an Omnibus Appropriation Act, with its attendant pork barrel spending to assure passage (a practice which further undermines citizen confidence in the Federal Government). The same wasteful programs and tax benefits get funded and the budget crisis goes on. This goes on because each side gains political points for blaming the other, while no one has any stake in lessening their own role.
The federal budget process is broken. It must be replaced with a new budget process that allows for agreement on broad issues and a continuation of government while the details and controversies at the programmatic level are worked out. The solution must include incentives to keep the process moving. To force congressional movement on overall priorities, the administration withholds detailed appropriations proposals until a general solution is passed in both houses of Congress and signed by the President (a Joint Budget Resolution). After this is passed, detailed proposals are submitted and acted upon by the authorization and appropriations committees. A two-year budget process is suggested to assure the process is completed on time.
Phase One: The Joint Budget Resolution
The first phase of the budgetary process is high-level budget enactment. The budget message, revenue estimates and increases, departmental, independent agency and functional spending totals, and deficit projections are included in the Joint Budget Resolution proposal. Until the resolution is enacted the Executive withholds detailed spending estimate or authorizing language. The proposal is submitted to Congress during mid-January, with passage of the Joint Budget Resolution by the July 4th recess.
A Joint Committee on the Budget considers the resolution. The Committee consists of members of the leadership of both houses, various committee chairs and members, and members not assigned to any major authorizing or appropriations committee (who shall be a majority). The Chair alternates between chambers. Such a committee is necessary to expedite action.
After the Committee reports the resolution it is considered in an expedited fashion. If there are differences between the amended versions of the resolution it goes back to the Committee one final time, and acts as a conference committee in this case.
The Executive Branch uses the totals enacted in the Joint Budget Resolution as the totals in its detailed authorizations and appropriations submissions.
Phase Two: Authorization
The second phase of the budgetary process is authorization, which begins after the Joint Budget Resolution is signed, in July of the first session. Most of the authorization process is accomplished before the appropriations process begins. To guarantee this, no appropriations bill is marked up in committee in either house until the authorization bill has secured floor passage in that house, including tax and entitlement adjustments. This occurs by February of the second session. At the start of a new President's term honeymoon authorizations changes are submitted by February, with enactment by September so that they take effect October first.
Authorization legislation addresses changes to current law, revised spending ceilings and floors (which the marked up appropriations bills does not exceed or fall short of subject to a point of order), any new programs or program elimination (the only time these occur), changes to agency regulations, adjustments to any entitlement, and estimates of their effect on the next fiscal period.
The revenue committees examine the progressivity of both taxation and spending to assure that the middle class pays for itself and the upper 20% pay for the benefits they receive plus a lions share of the benefits for the bottom 20% of income earners. Corrections in the tax code are enacted as a result of this review. The revenue committees also examine the level for cost of living adjustments (COLAs) and indexing. COLAs and indexing are adjusted so the public sector neither looses or gains as the result of inflation.
As part of this process, authorizing committees consider major regulations enacted since the last authorization. Doing so avoids the practice of appropriators playing games with the funding of regulatory agencies, since Congress has the opportunity to work its will during the authorization process. Before continuing on to the appropriations phase, I briefly discuss ways in which regulatory power is exercised in such a way as to not appear illegitimate by the vast majority of the public.
Increasing Congressional Review of Regulation
A major theme in modern political life is the popular protest against regulations enacted by unelected bureaucrats. This anti-Washington theme aided the campaigns of many recent administrations, including the current one. Other reforms in the regulatory review process increased regulatory accountability to the President. However, these did little to improve the position of Congress.
On June 30, 1983, the Supreme Court ruled the legislative veto unconstitutional in an immigration case, In re Chada. Since that time a Joint Resolution of Disapproval legislative veto has been enacted as a general case. Several other legislative vetoes have also been acted into law. However, many of these cannot survive the standards imposed by the Chada decision. Therefore, Congressional control of agency regulation remains an open question.
To regain control of regulations, authorization committees review the body of regulations under their purview during consideration of the President’s budget. The President or Independent Agencies submit any changes to their major regulations (enacted since their last authorization) as an appendix to their authorization proposals. If the authorizing committees approve of the changes they do nothing. However, if they are unsatisfied with the changes, or wish to make changes of their own they can at this juncture. These changes are made one of two ways. The first way is to write the change into law, which restricts subsequent action. If circumstances change the agency then seeks legislative relief or waits until the next authorization cycle. This option limits the ability of agencies to deal with emergencies, making it undesirable. The second way is to change agency regulation by law, allowing for further change as circumstance changes. This almost superficial difference preserves flexibility in the regulatory process, making it desirable.
Enactment of this proposal firmly places regulatory initiative with the Congress. This approach gives the people say in the regulatory process through Congress, strengthening representative government. In doing so it helps the less well organized (who know how to reach their Congressman, but not the administrative agency). The regulatory review provisions have two more advantages over the status quo. First, they bring the regulatory review process into sharper view, allowing for more involved citizen input. Second, they avoid the constitutional pitfalls of the legislative veto.
Phase Three: Appropriations
The third phase of the budgetary process is appropriations. The Executive Branch begins preparing its detailed appropriation submissions after passage of the Joint Budget Resolution in July of the previous year. It modifies its targets when Authorization legislation is marked up. The Appropriations submissions clear OMB and go to the Hill by March 15th of the second session. The submissions for each program are between the ceiling and floor listed in the authorization legislation. The total for the agency or department matches the total found in the Joint Budget Resolution. Agency submissions reflect program financial performance. Agency personnel defend the submission.
Appropriations sub-committees do not mark up legislation until after the authorization has cleared the full chamber. The full Appropriations Committees reports by June 15. If the total for an appropriations bill exceeds the total specified in the Joint Resolution the bill must clear the Joint Budget Committee before going to the floor. Legislation gets to the President's desk by Labor Day.
If an appropriations bill is not enacted prior to the start of the fiscal period (October 1) the current distribution of spending within current law is maintained, minus programs cancelled in the authorization phase, at the total set in the Joint Budget Resolution. This prevents the government from stopping at the end of the fiscal year.
Enactment of this proposal restores discipline to the budget process. Every actor in the process has specific responsibilities and incentives to meet them. Each actor maintains his share in the process, but not more than his share. The Executive Branch is forced to offer realistic proposals. The Legislative Branch meets its deadlines. The Federal Government then stops arguing about the budget and gets on with the business of governing.
There is support for these propositions in the academic and professional literature. Thomas Lynch of Florida Atlantic University also advocates a two-step budget process in "Federal Budget Reform," beginning with passage of a Joint Budget Resolution, which sets overall spending priorities. After this resolution passes agencies submit their requests, which are considered in detailed budget and bills. The strength of this approach is that it forces Congress to decide on overall priorities before they can begin to consider their local interests. Rudolph Penner and Alan Abramson, in their landmark book Broken Purse Strings, support the establishment of a Joint Budget Committee (echoing Senator Pete Domenici), a Joint Budget Resolution and multi-year budgeting.
Thank you for the opportunity to address the committee. We are, of course, available for direct testimony or to answer questions by members and staff.