Tax and Trade and the Budget
Posted on March 23, 2009
Tax and Trade in the Budget
It might seem like putting the budget and Congress together is a single sentence would be contradiction in terms. And the budget process in Congress is painful.
The budget is a joint resolution, not a law signed by the President. And like many joint resolutions, it is pretty much ignored as soon as it it passed and doesn't become law.
The budget does have a couple of uses. First, it sets spending levels for the Appropriations Committee (which explains why most Appropriators hate the Budget Committee). Second, it decides whether or not the Senate’s rules against excessive spending (better known as budget points of order) will be enforced or not.
The procedure for making those spending decisions is called reconciliation (also known as a Catholic sacrament). Unlike the Catholic version, which requires you to face up to your sins, reconciliation gives the Senate the best chance to ignore the sins of the past and to pass big spending bills without getting any real input from the minority.
You see, under reconciliation, a big spending (or tax bill) can pass with just 51 votes, unlike most other measures, which require 60 votes to end a filibuster. The kicker is that if you pass legislation under reconciliation, it only remains in effect for a decade.
It was under reconciliation where President Bush passed his first tax cut bill (which explains why after 10 years, those tax cuts are just about ready to expire).
Now, Senate Democrats are contemplating whether they should enact cap and trade (or tax and trade, as I like to call it) energy policies under reconciliation. House Democrats, of course, want them to do so, because the House always wants the Senate to act more like the House. Having a 51 vote threshold allows Senate Democrats to act way more liberal than if they were to have to reach a 60 vote threshold.
The Democrats have to ask themselves one simple question: do they want to cut a deal with John McCain or not. McCain, who is a supporter of cap and trade-like policies, could be an ally for President Obama in this debate, but while he is a believer in the global warming nostrums, he can hardly be called a Nancy Pelosi acolyte. Should the Democrats get McCain, they will also probably get Democratic centrists like Blanche Lincoln, Jim Webb, Mark Pryor and Evan Bayh. But should the Senate Democrats decide to go with a left-wing approach, they will be negotiating with the likes of Mark Warner and Bill Nelson. Not easy, but certainly easier than dealing with McCain.
Should Senate Democrats give in to the House and proceed with reconciliation for tax and trade (and health care), it will signal that the President’s centrist rhetoric about bipartisanship is just a bunch of hot air.