Congressional and Political Effects on Federal Managers
Federal agencies are facing a massive budget crunch and the chances of resolving these resource issues in the near future appear to be slim. Working with Congress is critical since the legislative branch appropriates federal government resources. Here’s an overview of Congressional campaign season from The Hotline’s John Mercurio:
- Nomination battles: Conventional wisdom is that this is the year for Democrats.
- However, both republicans and democrats have seen very divisive primaries and nominations, often letting the “less than best” candidate get the nomination for both parties. The result is that many races have both sides being less competitive than expected.
- International factors to consider: Iraq, Iran, North Korea, gas prices.
- Indictment factor: Tom Delay, Conrad Burns, Enron – the Democrats are pushing a “culture of corruption” campaign on the Hill. But many people believe the corruption is on both sides of the aisle.
- Immigration debate: Can a compromise be reached?
An overview of the current budget deficit situation:
- In general, there has never been a time when there is a greater gap between rhetoric and reality. What Congress and the President say is different from what they do – this is bad news for federal managers.
- The result is unusual pressure on the federal budget in the future.
- This is not new: 1980s budget deficit exploded in size and was not solved until the late 1990s.
- What can we learn from the 1980s?
* No one gets credit for trying to balance budget; in fact, you are often the “bad guy” for trying to budget balance. Examples: Senators Dole and Domenici tried to balance budget in 1985 by cutting Social Security, and in 1986 the Republicans lost control of the House.
* President Clinton tried to raise taxes in 1993 to balance budget, and Democrats lose the House in 1994.
* Success balancing the budget in 1997 because moderates ruled: Democrats agreed to domestic spending cuts and Republicans agreed to minimal tax increases.
Key looming issues for the federal government budget include:
- Medicare/Medicaid entitlement spending growing quickly. Congress finally addressed this issue somewhat this year by trimming some entitlement spending by $40 billion.
- Estate tax.
- Appropriation spending -- this will be the target for the near future. Since no one is willing to reduce entitlement spending and no one is also willing to raise taxes, the only way to deal with the budget deficit and “impress” constituents is to cut government spending and waste by taking aim at the federal budget.
- For this reason, President Bush is asking again for line item veto, even though it won’t have a major impact on spending.
