Déjà vu budget

Edwin P. Santiago, Executive Director of the Stratbase ADR Institute

In the olden days, houses had electrical fuses. A fuse is a safety mechanism with a metal strip inside that melts when overheated from excessive current in the circuit. When a fuse blows, it stops the flow of electricity, preventing what could be an electrical fire. Nowadays, homes mostly have circuit breakers. While they work differently from fuses, they are intended for the same purpose.

Although these devices are not aesthetically pleasing, you would not want your home without them. They also act as an alarm that tells us when something needs our attention. When the breaker “trips,” it is often caused by an overloaded or short circuit. We think of these things as safeguards. We are so convinced of their efficacy that they have permeated every aspect of our lives, including governance.

One such safety net is what is commonly referred to as the budget reenactment provision. The 1987 Constitution states that “if, by the end of any fiscal year, the Congress shall have failed to pass the general appropriations bill for the ensuing fiscal year, the general appropriations law for the preceding fiscal year shall be deemed reenacted and shall remain in force and effect until the general appropriations bill is passed by the Congress.” This was a carry-over provision from the 1973 Constitution, where it was originally included.

In the US, where this mechanism is not available, a government shutdown is a reality whenever the appropriations law does not materialize. The funding gap that is produced from the absence of an approved budget dictates the ceasing of government operations. This is rooted in the principle that no money may be drawn from the treasury unless there is an appropriation authorized by law — the so-called power of the purse that exclusively belongs to Congress. These shutdowns result in a furlough of non-essential government personnel and the disruption of government activities and services. You can imagine, of course, the degree of displeasure and frustration from all sides, not to mention the obvious economic implications.

Our charter essentially follows these same principles. But the genius of ours is that a government shutdown is prevented by the budget reenactment provision. We do not get to experience the absence of government, unless you understand that it in the figurative sense. The operations of the government continue — regardless of what we think of it — albeit in a seemingly déjà vu manner.

That should be good, right? Over the last couple of weeks, as it was becoming apparent — and later, a certainty — that Congress would not be able to submit the budget for the President’s approval and signing into law, discussions about the effects of the reenacted 2018 budget — and a reenacted budget, in general — on the economy resurfaced. The opinions and sentiments about a reenacted 2018 budget have been largely unfavorable.

This naturally raises the question why a reenacted budget is not good.

The government will practically be in status quo. Almost everything should be the same, in accordance with the provisions of the 2018 General Appropriations Act. In 2019, we have to make do with the resources we had this year but for the same things. New government programs are out of the question, regardless of their necessity and urgency. You can imagine what this will do to multi-phase projects. Next-round salary increases will have to be put on standby. The implementation timetable of new projects will be significantly delayed.

What cannot be the same, however, even with a reenacted budget, would be capital outlays. A budget provision in 2018 to build a bridge in a specific location cannot be interpreted to be available again to build the same bridge, although anecdotes about highway constructions being funded several times its amount has been a mainstay in corruption folklore.

A reenacted budget also opens the opportunity for the President to exercise discretion over which projects to pursue from the savings of agencies, testing the extent of the power of the purse of Congress. And, given its discretionary nature, it is highly susceptible to abuse and corruption.

I raise these points because while we exalt the budget reenactment provision of the Constitution as a safety valve against a government shutdown, it appears that it also has its weak points. By instituting that automatic reenactment mechanism, we have effectively removed the circuit breaker that would otherwise have given us the urgency to demand from Congress to perform one of its most important and sacred tasks of passing the budget. Similar to having no circuit breaker or fuse, the automatic reenactment has, by analogy, allowed the current to continue flowing into the circuit, despite the problems, thereby risking further damage.

A government shutdown is not desirable either, but it may be more alarming and damaging than a government running on a déjà vu budget. And, because of this, we can demand more urgency from Congress. As they say, sometimes, you have to let it rip.

If and when that happens, the members of Congress will have a lot to answer for and they would be risking their political future. Perhaps, then, they would prioritize passing the budget instead of squabbling over who gets what and railroading a charter change that masquerades as federalism but, in reality, is intended to serve their political and business interests more.



This article was originally published in BusinessWorld.

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