CHRIS EDWARDS, CATO INSTITUTE
Part of the federal government is closed today because the two parties cannot agree on a discretionary spending plan for the balance of fiscal 2018. No compromise has yet secured the 60 needed votes in the Senate. The government had been operating under a “continuing resolution” (CR) that has now expired.
When policymakers cannot pass regular appropriations bills or a CR, nonessential federal activities are shut down. In particular, “agencies are required to begin a shutdown of all activities not essential to the protection of property or the safety of human life and furlough all non-excepted employees.”
Shutdowns are embarrassing for policymakers, as they suggest to the public that Washington is run by squabbling kids. But it is hard to make the trains run on time under current budget rules given the supermajority barrier in the Senate and the divergent policy views of the parties.
As it turns out, the solution to the shutdown problem is simple: An automatic CR that fixes discretionary spending at current levels. If a fiscal year begins, and the parties have not agreed on a spending plan, then agencies may continue existing spending activities. The auto CR would be in force until normal appropriations bills were enacted.
An auto CR law might include declining spending levels and other mechanisms, but simpler is probably better. An auto CR would avert shutdown crises, decrease partisan acrimony, modestly tilt the budget process toward restraint, and reduce the chance of time-pressurized spending deals that blow the bank.
Chris Edwards is the director of tax policy studies at the CATO Institute and editor of www.DownsizingGovernment.org. He is a top expert on federal and state tax and budget issues. Before joining Cato, Edwards was a senior economist on the congressional Joint Economic Committee, a manager with PricewaterhouseCoopers, and an economist with the Tax Foundation.