In today's USA Today, Gene Steuerle discusses the "Fiscal Democracy Index," defined as the percentage of federal revenue not allocated for mandatory programs, including interest payments.  It is not a pretty picture:

and here is something that I did not know (links in the original):

For the first time in U.S. history, in 2009 every single dollar of revenue was committed before Congress voted on any spending program. Meanwhile, most of government's basic functions — from justice to education to turning on the lights in the Capitol — are paid for out of swelling, unsustainable deficits.

CG&G's very own Bruce Bartlett sends me a copy of a letter to Senate Majority Leader Harry Reid from 10 U.S. senators that asks Reid to support some version of the legislation introduced by three sepaarte groups of other senators that would create a budget commission or some other special process to deal with the deficit.  Bruce used different language in his note to me but he essentially asked "WTF?".

When Congress can't or won't do something about the budget, it typically suggests that something be done about the budget process.  That's what's happening here.  The letter to Reid says "Congress needs to adopt a special process..." because the senators "do not believe that action...will occur under regular order..."  They specifically ask that new process be included in the debt ceiling increase that will be needed by the end of this year.

It's not going to happen or, if it does, it's not going to make any difference.  Here's why:

You're really pissed.

You've had enough with appropriations not being passed by the time the fiscal year begins on October 1.

You want to do something about it.

You want to know why it's not a good idea to change the start of the federal fiscal year from October 1 to January 1 so that Congress has three extra months to pass all the bills.

Here's why not.

Playing With Deadline: No Answer to Annual Appropriations Mess

Oct. 6, 2009
By Stan Collender

“Why,” I was asked Thursday as fiscal 2010 began, “doesn’t Congress change the start of the federal fiscal year from Oct. 1 to Jan. 1 so that it has more time to adopt all appropriations?”

This weeks' New Yorker magazine has an excellent article on OMB Director Peter Orszag by Ryan Lizza.  I have enjoyed my discussions with Peter ever since he arrived at the President's Council of Economic Advisers in 1995 and later at the Brookings Institution and at the Congressional Budget Office, which he directed in 2007 and 2008.  Although the article strikes me as a little too cute, Lizza accurately describes Peter's superior analytical mind, dispassionate manner, and far seeing policy recommendations.  Peter's strength, like President Obama's, has been his ability to understand all sides of a policy without letting that cloud strong and clear policy recommendations.  President Obama has placed a big bet on Peter's determination that health care reform can reduce the deficit.  Most Washington insiders think of health care reform as costing a lot more.  Who turns out to be right will make a big difference to all of us taxpayers and to President Obama's political future.

Could we solve our budgeting problems through strong financial incentives to elected representatives?  "The Bonus Plan to Save America," courtesy of the conservative Samwick brother, suggests it might be cost effective.

What a difference a year makes.  Last January, discussions of tax cuts used the mantra, "Timely, Targeted, and Temporary," to describe what the federal government should do with a stimulus package.  I thought it was an unfortunate tactic, and I'd be more angry about it now if the $150 billion tax cut package it precipitated hadn't been followed up by even more ridiculous fiscal policy later in the year.

At the time, I proposed a better way to deal with downturns, in a number of posts (and two op-eds and commentary).  It is summarized here:

The constructive idea in the op-ed is to consider the backlog of public infrastructure projects needing attention, prioritize them, schedule them in over a multiyear horizon, include their costs in budget projections, and then move them forward in time if the economy weakens and prices go down to make them cheaper to do sooner rather than later.

Andrew's post this morning about Dan Rostenkowski's being attacked by his own constituents after telling them that they would have to pay for their own catastrophic health care coverage isn't just a long-forgotten event from a bygone era.  To this day, it's something that members of Congress cite chapter and verse when discussing the budget.  Like a story passed down from generation to generation, this includes current representatives and senators, the vast majority of who weren't in office when the event occurred.

I can't tell you the number of times the Rostenkowski incident has been mentioned by members of Congress at meetings I've attended.  Usually it's mentioned as a throw away line ("I don't want my constituents chasing me down the street").  But it's also often been the start of a statment ("Dan Rostenkowski found out the hard way what happens when...").  I've heard the story used by Democrats and Republicans, liberals and conservatives, and representatives and senators.

There used to be a time when elected officials didn't seek to break the budget even when expanding federal spending.  In this respect, the Medicare Catstrophic Coverage Act of 1988 is instructive.  Here is (an excerpt of) what President Reagan said when he signed it:

[I]n a moment, I will sign the Medicare Catastrophic Coverage Act of 1988. This legislation will help remove a terrible threat from the lives of elderly and disabled Americans, the threat of an illness requiring acute care, one so devastating that it could wipe out the savings of an entire lifetime. The scene is only too easy to picture. An elderly couple, perhaps one has a very long stay in the hospital; the other forced to empty the savings account, to skimp on groceries. And even for those never actually forced into this situation, there's the gnawing worry, the fear, that someday it might just happen. This legislation will change that, replacing worry and fear with peace of mind.

I'm proud to be able to note that the legislation follows the same premise as all sound insurance programs. It will be paid for by those who are covered by its services. Even so, I must add a word of caution. Every administration since the Medicare program was passed has worried about the seemingly uncontrollable cost increases in our government health care programs. Whoever the President in office, program costs have exceeded the best congressional budget estimates. Unless we're careful, it's possible that aspects of this legislation will do the same.

US Budget Watch, a project of the Committee for a Responsible Federal Budget, has released "Promises, Promises: A Fiscal Voter's Guide to the 2008 Election."  From the Introduction:

The two major political parties’ presidential candidates are campaigning on a lengthy list of policy initiatives, most of which would have significant impact on the federal budget. While not all of these proposals will become law, they do reflect the candidates’ values and priorities, and the policies each candidate is likely to pursue once in office. In addition to these new initiatives, a number of outstanding tax and budget issues exist that will need to be addressed, such as which of the 2001 and 2003 tax cuts should be made permanent, how to fix the Alternative Minimum Tax, what to do about growing entitlement spending, how to control health care cost growth, and how to pay for the wars in Iraq and Afghanistan. The next president will face difficult fiscal challenges. It is therefore critical that voters understand the potential budgetary impacts of the candidates’ plans.

Peter Goodman and David Herszenhorn tell us in today's New York Times that "Democrats See a Need for Further Economic Stimulus."  The discussion is a very good example of what the absence of the last post's budget target can enable--every political faction advocating for a handout today funded by taxpayers in the future.  There should be no need for further spending in 2008 & 2009 that is not combined with lower spending or higher taxes in 2010 & 2011, when the economy has turned around.

In the article, the references to infrastructure spending are what caught my eye.  Consider: