Beware of the ‘unknown knowns’ of budget reform

Nearly eight full months after Hurricane Michael devastated the Florida Panhandle, President Trump signed the bill that Congress approved the week before, sending over $19 billion in emergency funding toward Bay County and other regions recently hit by various hurricanes, wildfires or flooding.

Of course, as these measures often do, it also sent quite a bit toward other priorities, such as $2.4 billion to the Community Development Block Grant program, and it passed before most elected officials had time to examine the full text.

Passage came only after months of delays and bickering among leaders who had butted heads over whether to include funds for everything from Puerto Rico to border security.

Controversy did erupt, not over the eight-month politicized delay, nor the bill being saddled with unrelated priorities, but after three House Republicans briefly blocked passage until Congress could come back to vote on the final bill in person.

In today’s fraught political climate, it should be little surprise that nothing is immune from the ugliest of political battles. But this latest standoff is a particularly timely reminder of the realities of our broken budgeting process — and the biggest risk that comes when Congress attempts to reform.

Amid “tweetstorms” and international conflicts, the dry subject of budget process reform rarely makes headlines, but there is progress on the horizon nonetheless. Leaders in the Senate seem serious about finally doing something to fix the dysfunctional status quo, with Budget Chair Mike Enzi (R-Wyo.) even holding a recent hearing on the subject.

But if we are to right the country’s fiscal ship, leaders should beware, to borrow from former Defense Secretary Donald Rumsfeld, of the “unknown knowns.” That is, while we may not know exactly what a well-functioning budget process will look like after a generation of managed chaos, we can know a bit about what not to do — and let that knowledge guide us forward.

According to original research commissioned by the organization I lead, there were several unintended consequences the last time Congress seriously reframed its budgets. The most measurable impact came in the way federal grants have been allocated.

There is strong evidence, in fact, that the 1974 Budget Act may have increased importance of federal grants as a tool for building coalitions and encouraging passage of presidential priorities. There is a statistically significant increase in grants awarded to members of the president’s own party during the years following 1974.

The fact that supplemental funding after devastating natural disasters was used as a political bargaining chip for eight months should come as little surprise in what the research shows.

The root of the problem, of course, is not with programs themselves or even with the administrations that have used them but the way in which political actors will use whatever mechanisms of power are available to them — no matter how critical the needs or how much waste might be involved.

Without strict rules that restrain spending itself and force lawmakers to make tradeoffs, any new budgetary framework risks simply greasing the wheels of government as it spends ever-higher amounts of money. Without oversight, transparency and regular order, a new framework would inevitably become an easier way for waste to go unchecked.

Anyone, even the most stringent fiscal hawk, believes the federal government has some responsibility for certain things, and even the most committed defender of Washington largesse must admit the way things operate now has failed.

The ugly fights, though, will continue, unless and until Congress can summon the political will to confront the root of the problem and use the tools it has available to safeguard against the “unknown knowns.”

Jonathan Bydlak is a fiscal policy expert and the founder and president of the Coalition to Reduce Spending. He also spearheads SpendingTracker.org.