The U.S. Constitution is clear: "No money shall be drawn from the Treasury but in Consequence of Appropriations made by Law." In other words, Congress is constitutionally mandated to pass a budget to fund the federal government or else everything comes to a screeching halt. Under current law, that means Congress is supposed to pass its spending bills every year.
Yet, the perpetual threat of government shutdowns seems to loom larger each year, with another funding lapse set to take place at the end of this month if Congress fails to act.
Here are five eye-opening facts that demonstrate the serious cracks in the U.S. budget process.
- The current budget process dates back to a 1974 law that has only worked as intended four times.
The Congressional Budget and Impoundment Control Act of 1974 aimed to simplify the budget process. Instead, it created a byzantine system involving several layers of approval, from multiple committees to both chambers of Congress and the president. Since this law's enactment, Congress has only managed to pass a budget and its accompanying spending bills on time only four times and never in this century.
- The last time all 12 spending bills were passed on time was in 1996.
Way back in 1996, Congress last managed to pass all 12 spending bills on time, when the national debt stood at $5.2 trillion. Now, 27 years later, the national debt is a jaw-dropping $33 trillion. The delayed budgeting process isn't just a scheduling issue—it's a symptom of fiscal negligence.
- Between 2010 and 2022, Congress passed 47 continuing resolutions to cover a few months of government spending.
To avoid a government shut down, Congress often falls back on "continuing resolutions," temporary fixes that keep the government funded at existing levels. These resolutions avoid tackling hard questions like, "Why are we spending this?" or "Is this program effective?" Essentially, they are a governance Band-Aid, not a cure. Since 2010, the number of continuing resolutions has sharply risen as the rise of partisanship has made the budgeting process more contentious.
- Lawmakers have proposed various fixes to prevent funding lapses.
The 2013 "No Budget, No Pay" law – first proposed by No Labels -- emerged in an effort to stave off a government shutdown. The idea is straightforward: if Congress fails to pass the mandatory annual budget and spending bills, their paychecks should be withheld. The 2013 law only applied for a limited period, but the idea remains popular with the American people. More recently, lawmakers have put forth bipartisan proposals like the Government Shutdown Prevention Act, which would automatically funds the government at existing levels while preventing Congress from leaving Washington, D.C., unless they pass new spending legislation.
- Credit agencies have cited America’s broken budgeting process as an explicit reason for downgrading the nation’s credit rating.
Financial fallout from budgeting dysfunction isn't merely a political issue, it’s an economic one. In the wake of the debt ceiling standoff earlier this year, Fitch, a leading credit rating agency, downgraded the nation’s credit rating from AAA to AA+, noting, "The rating downgrade of the United States reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to 'AA' and 'AAA' rated peers over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions."
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