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The Senate spent last night—all night—focusing attention on climate change and the need for new legislation. As The Hill reports, Senate Majority Leader Harry Reid used the opportunity to attack the Koch brothers:

“It’s time to stop acting like those who ignore this crisis — the oil baron Koch brothers and their allies in Congress — have a valid point of view,” Reid said Monday evening. “But despite overwhelming scientific evidence and overwhelming public opinion, climate change deniers still exist. They exist in this country and in this Congress.”

The implication, of course, is that the “un-American” Koch brothers (and those who Senator Reid has described as “addicted to Koch”) are responsible for the failure to move forward on climate change (and all other things pure and good).

Of course, the House did pass a climate change bill (Waxman-Markey) in 2010, only to have the bill declared DOA by…Senate Majority Leader Harry Reid. As the New York Times reported (July 22, 2010):

Bowing to political reality, Senator Harry Reid, the Nevada Democrat and majority leader, said the Senate would not take up legislation intended to reduce carbon emissions blamed as a cause of climate change, but would instead pursue a more limited measure focused on responding to the oil spill in the Gulf of Mexico and tightening energy efficiency standards.

“We know where we are,” Mr. Reid told reporters after reviewing the state of energy legislation with Senate Democrats and administration officials. “We know that we don’t have the votes.”

(more…)

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A few days ago, I gave the theoretical logic for why the availability of the government shutdown results in growing government spending. Advocates of smaller government should advocate a default budget rule that is far milder than shutdown. Now, I have come across academic research by David Primo finding just this at the state level. States with an automatic shutdown provision actually spend on average $64 more per capita than states without such a provision.

As Tea Party Republicans approach the final denouement of their humiliating, destructive defeat on the latest budget battle, it bears thinking about how U.S. fiscal institutions essentially predestined this outcome.

HT: Matt Mitchell

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Following Marc’s great post on congressional dysfunction, I’d like to point how political science tells us that the availability of government shutdowns actually causes the growth of government spending. The analysis follows the 1979 spatial analysis of zero-based budgeting by Thomas Romer and Howard Rosenthal.

Suppose that there is one dimension of politics: the size of the federal budget. There are a fiscally conservative party and a fiscally liberal party. For simplicity, assume the median, electorally decisive American voter is somewhere between the two. We could plot the parties’ and median voters’ positions on this dimension like this, where “C” is the conservative party, “M” is the median voter, and “L” is the liberal party:

Federal budget

 0|----------------------------------|--------|-----------|------------------------------------------| 100% of GDP
                                    C        M           L

Now suppose that there is a need to pass a budget. If the budget doesn’t pass, the government partially shuts down (S). Once the government shuts down, the median voter M perceives the outcome as being more favored by the conservative party, with ideal point C. The liberal party with ideal point L can make a budget proposal that must get approval from both parties, so conservatives have the opportunity to accept or reject it – in the latter case, the government stays shut down. After the budget is approved or rejected, there is an election, and the median voter M votes for the party with the closer budget position. Parties care most about winning election, then secondarily obtaining their preferred budget.

In this example below, once the conservative party gets associated with S, causing the shutdown, then L is able to propose its ideal point (L). Conservatives accept the budget, because otherwise they would remain associated with S, and the median voter prefers L to S, so would turn conservatives out at the next election.

 0|----------|-----------------------|--------|-----------|------------------------------------------| 100% of GDP
            S                       C        M           L

The median voter will only be willing to vote for conservatives who reject a liberal budget proposal if S is closer to their ideal point than the liberal budget proposal. Knowing this, L will propose something close enough to the median voter to prevent that outcome – and conservatives will accept it. Take the following example, where P is the proposal liberals make:

 0|----------|----|-----|----------|----------------------|------------------------------------------| 100% of GDP
            S    C     M          P                      L

P is infinitesimally closer to M than S is, so M votes for the liberal party, unless the conservatives also vote for the budget.

So once a shutdown happens, a bigger budget than the median voter prefer (let alone the conservative party) looks inevitable. Knowing this, conservatives won’t want the government to shut down to begin with. But that still means liberals have a lot of bargaining power, and the budget will tend to grow.

In real life, of course, shutdowns happen very occasionally. Why? (more…)

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The federal government has been running by continuing resolutions for some time—a product of the inability of Congress to execute one of its prime constitutional functions: authorizing and appropriating funds. The textbook version of the budget process is quite simple. It is also largely irrelevant given that Congress rarely passes the twelve appropriations bills by the beginning of the fiscal year (October 1). As the Office of Management and Budget’s FY 2013 Analytical Perspectives notes (p. 127):

Since 1977, when the start of the fiscal year was established as October 1, there have been only three fiscal years (1989, 1995, and 1997) for which the Congress agreed to and enacted every regular appropriations bill by that date. When one or more appropriations bills has not been agreed to by this date, Congress usually enacts a joint resolution called a “continuing resolution,’’ (CR) which is an interim or stop-gap appropriations bill that provides authority for the affected agencies to continue operations at some specified level until a specific date or until the regular appropriations are enacted. Occasionally, a CR has funded a portion or all of the Government for the entire year.

The Congress must present these CRs to the President for approval or veto. In some cases, Presidents have rejected CRs because they contained unacceptable provisions. Left without funds, Government agencies were required by law to shut down operations—with exceptions for some limited activities—until the Congress passed a CR the President would approve. Shutdowns have lasted for periods of a day to several weeks.

This shutdown may prove more interesting than the last 17 shutdowns because of the failure to pass any appropriation bills. The House passed but 4 of the 12 appropriations bills for FY2014 while the Senate passed none at all—the norm for the Senate since fiscal year 2011 (see the record at the Library of Congress).

To state things in simple terms, if the Congress executed its constitutional responsibilities and passed the necessary appropriations bills, we would not have government by continuing resolution.  This, in turn, would eliminate the ability of any party to use the CR to promote policy goals. One might fault the House GOP’s strategy of using the CR to magnify its influence over policy outcomes, but the larger problem is the failure of Congress as an institution.

Any surprises that the approval rating for Congress has fallen to a record low of 10 percent?

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As we all know, if a continuing resolution (or CR) is not passed by the end of the day on September 30, the government will shut down. Senator Ted Cruz (R-TX) has threatened to filibuster the House CR because if debate is suspended, the provisions defunding Obamacare will be eliminated via majority vote. If Senator Cruz is successful–or if he is not, and the House refuses to pass a revised CR–then the government will shut down. But ironically, this will have little impact on Obamacare. As Timothy Carney explains in the Washington Examiner:

But for the most part, no CR will fund Obamacare, even if Obama wrote it himself. You know what funds Obamacare? A bill called HR 3590, also known as the Affordable Care Act.

Obamacare funds Obamacare.

The reason is simple: most of the Affordable Care Act does not depend on annual appropriations. The House CR, in contrast, could defund Obamacare (“Notwithstanding any other provision of the law, no Federal funds shall be made available to carry out any of the provisions of the Patient Protection and Affordable Care Act”). All the House GOP needs to do is convince the Senate majority and President Obama to follow its lead.

So here are the possible outcomes in the next few days:

  1. The Senate strips the defunding language from the House CR, the House approves it, the government shutdown is avoided, and Obamacare is left untouched.
  2. Senator Cruz succeeds in mounting a filibuster, the debate on the CR is not suspended, the government shuts down temporarily, and Obamacare is left largely untouched.
  3. Senator Cruz fails, the Senate strips the defunding language, the House rejects it, the government shuts down temporarily, and Obamacare is left largely untouched.
  4. The Senate accepts the House CR and with the President’s approval, Obamacare is defunded.

Does anyone think that the last is a live option? If it is not—and recall: a government shutdown will not have a significant impact Obamacare—what is the larger strategy? Is this simply a means of throwing red meat to the rubes and preventing primary contests from the Right? Or, if you are Senator Cruz, are the goals to maximize face time on the Sunday talk shows, attract donations, and build a mailing list for the 2016 presidential race?

Any insights would be appreciated.

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Ezra Klein has an interesting piece (Wonkblog) on the collective-action problem facing the GOP with respect to Obamacare. Stated concisely:

Here’s the Republican Party’s problem, in two sentences: It would be a disaster for the party to shut down the government over Obamacare. But it’s good for every individual Republican politician to support shutting down the government over Obamacare.

These smart-for-one, dumb-for-all problems have a name: Collective-action problems.

As Klein correctly notes, ideally,  party leadership plays a critical role in managing these problems through the use of various carrots and sticks (“Threats, flattery, fundraising money, and plum committee assignments are all deployed to keep members of Congress from undermining the group in order to help themselves”). But the GOP leadership appears to lack the power to control the behavior of its members, particularly those who are aligned with the Tea Party.

It should prove interesting to watch the collective-action problem unfold in the next few weeks as Congress turns to the continuing resolution and the debt ceiling (not to mention broader issues like immigration reform). (more…)

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Following the defeat of his amendment that would give Congress the right to vote to verify border security as a condition of permitting the path to citizenship for illegal immigrants to go forward, Senator Rand Paul has decided to oppose the immigration reform bill.

While the immigration bill has many flaws, it is certainly a pro-liberty bill on balance (and I am not quite the open-borders absolutist that some libertarians are, but the current state of immigration control is deeply illiberal and contrary to the best American values). Moreover, the bill’s bad aspects are almost entirely the result of the demands of “border security hawks” like Paul and his fellow right-wingers. Even if Paul really is, deep down, a libertarian of sorts, it seems he is likely to stick with whatever the right wing of his party wants. That bodes poorly for any future Paul presidency. Presidents tend to adapt to the culture of the executive bureaucracy: witness Obama’s u-turns on civil liberties issues. Paul’s actions on the immigration bill suggest that he lacks the courage to buck his party even for a popular cause. As Will Wilkinson put it at economist.com,

The energetic ideological base of the Republican Party is a nationalist, identity-politics movement for relatively well-to-do older white Americans known as the “tea party”. The tea party is interested in bald eagles, American flags, the founding fathers, Jesus Christ, fighter jets, empty libertarian rhetoric, and other markers of “authentic” American identity and supremacy.

Does Rand Paul really want to go down in history as a standard-bearer for that ilk? It seems so.

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