Bloated Government? The Problem Is the Opposite

How well-intentioned budget reforms have been exploited to drain executive agencies of staff and funding.

By Fatou Ndiaye

Tagged Agenciesbudgetpolitics

Serenity Towers Apartments in Memphis, Tennessee, is a senior living facility subsidized by the Department of Housing and Urban Development (HUD) and managed by Millennia Housing Management, an LLC landlord. Over the past few years, Serenity Towers’ seniors have lived with no hot water, bedbugs, mold, broken elevators, unfair evictions, and scorching temperatures without air conditioning. Last summer, poor living conditions prompted Tennessee state judge Patrick Dandridge to call on Serenity Towers to find temporary housing for residents without hot water or AC. However, with no openings at other HUD properties, residents continued to occupy the faulty building.

That same summer, Serenity Towers passed its HUD inspection by two points.

How could such a clearly defective building pass inspection? Simple. HUD doesn’t have enough staff to properly inspect the buildings it subsidizes. As a result, HUD ends up running counter to its mandate by placing thousands of people in unsafe housing. The national housing shortage, exacerbated by the pandemic and the increase in extreme weather events, has only worsened the strain on HUD’s stretched resources. Nationwide, rents went up 65.7 percent between 2000 and 2021.

Since 2000, HUD has lost an astonishing 30 percent of its full-time staff. Capacity issues were compounded during the Trump years, when then-Secretary Ben Carson called for deep spending cuts. HUD cut its budget by 19.5 percent between the 2017 and 2019 fiscal years, slashing funding for public and Indian housing programs, fair housing and equal opportunity programs, and more.

A chronically underfunded and understaffed HUD cannot adequately oversee rental assistance, compliance with fair housing laws, disaster relief, and other key programs. This is clear from HUD’s years of failing to quickly address housing discrimination complaints, distribute vouchers for homeless veterans, and more. There are plenty of problems built into our housing laws, to be sure, but without adequate staff, HUD can’t even enforce the good rules that are on the books already.

Other government agencies face similar issues. A 2021 House science committee report found that the Environmental Protection Agency (EPA) lost 3.9 percent of its STEM workforce during the Trump years, and STEM losses accounted for about 60 percent of the EPA’s total workforce decline during that time. Such a reduction in the EPA’s STEM staff reduces the agency’s ability to respond to environmental emergencies, effectively regulate emissions, and clean up contaminated land. Meanwhile, the Department of Justice (DOJ) has to contend with the impact of its own cuts: The number of proposed mergers and acquisitions reported under the 1976 Hart-Scott-Rodino Act (which requires parties to report large transactions to the government) in 2020-21 surged to a level not seen since the late 1990s. But the DOJ Antitrust Division’s staff levels have fallen over the past 25 years, leaving remaining employees with the largest caseload in the past 20 years.

These issues are the result of a decades-long onslaught on federal departments and agencies. When government agencies remain perpetually understaffed and underfunded, they lose their ability to help people and achieve progressive policy objectives.

How did we get to this point? And what can we do to fight back? To answer that, we must understand the mission and failures of the Congressional Budget Act (CBA). Over the decades, it has become clear that the CBA did not fully accomplish its mission and contributed to the chronic underfunding of federal agencies. Understanding how the appropriations process is supposed to work versus how it currently works will help Americans refine strategies to get our voices heard in Congress.

What the CBA Set Out to Accomplish

The Congressional Budget and Impoundment Control Act of 1974, the formal name of what we now call the CBA, formalized Congress’s process for writing America’s federal budget. The CBA established how the government reconciles spending and revenue legislation with overall budgetary goals, a process Congress lacked prior to the law’s passage. It was intended to institute a more effective and timely way to set national priorities, and to rein in presidential power over the budget process; executive impoundment—the failure by a President to spend legislatively allocated funds—peaked under Richard Nixon, who refused to spend nearly $12 billion in congressionally appropriated money for programs he opposed, drawing Congress’s ire. At the same time, many in Congress accused Nixon of executive overreach in shaping annual budgets.

The legislation was designed to create a steady rhythm for the annual congressional budget process. Under the CBA, that process is meant to take place over nine months, starting on the first Monday in February, when the President submits a budget to Congress, and ending on October 1, which marks the start of the fiscal year.

In all, through the CBA, lawmakers sought to make federal budgets timely and predictable, and to effectively set national priorities. But 1974 was a much less polarized time, so no one thought to include provisions in the CBA to prevent politicians from abusing the federal budget process for political gain. But in the decades since, it has become clear that cynical actors can take advantage of the CBA’s shortcomings to hold the federal government hostage.

The Rise of Continuing Resolutions and Omnibus Bills

Today, nearly 50 years after the CBA’s passage, missed deadlines and gridlock are commonplace in the federal budget process. Congress has adopted a budget resolution by the target date (April 15) only six times, most recently in 2003. Though they are not signed by the President (and therefore not law), budget resolutions set spending limits for the 12 appropriations subcommittees.

Failures to meet different deadlines have varying consequences. For example, the President’s budget submission is often late, especially during presidential transitions. However, there is no statutorily established penalty for a late submission. In a worst-case scenario, a late submission just delays other stages of the budget process, which is a headache, but not a threat to the country. The consequences of missing other deadlines, however, particularly the debt limit, can be far more severe.

The debt limit, which is a relic of World War I and far predates the CBA, refers to a ceiling imposed by Congress on the amount of debt the Department of Treasury can accrue to meet the government’s ongoing financial needs. Once the debt limit is reached, it’s generally believed that Treasury can’t borrow more money, which means it won’t have enough revenue to meet all the funding obligations set by previous legislation.

In other words, nothing prevents Congress from appropriating spending past the debt limit. Members of both parties routinely advance bills that push spending past the debt limit, then grumble that Congress—that is, they themselves—is spending beyond its means. It’s an absurd system, which is why almost no other countries have a debt limit, and none have debt limits that function like ours.

If the debt limit is not addressed on time and the government defaults on its debt, it could send the United States into a recession, shock global financial markets, freeze credit markets, and send stock markets plummeting worldwide. To prevent that from happening, per the CBA, the House and Senate Appropriations Committees are supposed to pass 12 different appropriations bills that are broken up by subject area and based on funding levels allocated in a budget resolution. However, since the 1990s, Congress has continually missed the CBA deadlines to pass all these bills. In practice, if the government is kept open at all, it is through continuing resolutions and massive omnibus spending bills.

Continuing resolutions (CRs) are pieces of legislation that extend funding for federal agencies (usually at the same level as the previous fiscal year) for a certain time frame. CRs are usually passed on or before the start of the next fiscal year (October 1) if Congress and the President fail to finalize all appropriations bills by then. They avoid a shutdown and keep the federal government operational until the appropriations bills for the next fiscal year become law. An omnibus spending bill, on the other hand, is the massive, typically rushed piece of legislation that Congress uses to pass a budget after failing to pass separate appropriations bills on time (by June 30); it is the sum of all appropriations bills that had yet to be passed before the next fiscal year.

Congress last passed all its required appropriations measures on time in the 1997 fiscal year. The result? CRs and omnibuses have been used to keep the government functioning for the past quarter-century. If the CBA was supposed to ensure a steady pace for federal budget processes, it has clearly failed.

Why the CBA Failed to Create a Timely Budget Process

Two key developments helped cause and exacerbate the ongoing failure by lawmakers and the White House to set national priorities in a timely manner.

1. The Gingrich Playbook and the Weaponization of Budget Processes

Former House Speaker Newt Gingrich played a pivotal role in hastening political polarization and partisan prejudice in Congress. In the 1990s, the end of the Cold War and the rise of radical right-wing media outlets after the repeal of the Fairness Doctrine set the stage for the rise of today’s conservatism. Without a Soviet bogeyman to rally against, the Republican Party needed a new enemy to bind its coalition of big business, religious conservatives, and libertarians. While Ronald Reagan remains a sainted figure in conservative politics, his occasional openness to political compromise and ultimately optimistic public persona—“It’s morning in America,” the “shining city on a hill,” and so on—actually dismayed the more doomsaying elements within the right.

Gingrich and conservative media seized on this turn and began using cynical and personal attacks like never before. His influence over the GOP only grew as Republicans used his vitriolic playbook to win a landslide victory in the 1994 midterm elections, propelling him to the speakership. Eventually, as Republicans fully embraced Gingrich’s aggressive, polarizing political tactics, they ushered in a culture of heightened partisanship in Congress.

In accordance with this approach, Gingrich and the GOP spearheaded a weaponization of budget processes for partisan political gain, revealing the severe consequences of treating the CBA’s budget timeline as a cynical political weapon rather than a good-faith motivator for doing the public’s work. With Gingrich as speaker of the House, Republicans adopted a “no compromise” approach to signal ideological purity to their party base, leading to several major, intentionally choreographed government shutdowns. After all, if your political opponents are “sick,” why would you allow them to preside over a functioning government, or work with them to achieve the same?

One of the forgotten, technical elements of the 1990s budget showdowns has to do with whose data gets treated as legitimate. Both the Congressional Budget Office (CBO) and the Office of Management and Budget (OMB) provide baseline budget projections, which are estimates of the federal spending, revenues, and public debt expected during a fiscal year under existing policies. Baseline projections are rooted in economic assumptions (like inflation, unemployment, and economic growth) and technical assumptions (such as demographic and workload changes). They provide a benchmark for comparing proposed budget policy changes to existing policies, and can help identify necessary changes to meet budget policy goals.

The CBO’s baseline (known as current services estimates) and the OMB’s baseline (known as budget baseline projections) both follow the rules set by section 257 of the Deficit Control Act of 1985. However, each baseline projection is based on distinct economic and technical assumptions. As a result, the CBO and OMB tend to project different levels of spending, revenue, and future economic and program performance.

That’s perfectly normal; the federal government is a sprawling entity made up of dozens of agencies and subagencies, each of which is highly complex. Considered as a whole, the federal government is the single largest actor in the American economy, which means its economic activity inevitably intersects with other aspects of our chaotic world, such as potential recessions, geopolitical events, and so on. No one can predict all of this perfectly, so having different models with varying assumptions helps policymakers map out a range of possibilities.

But in the fall and winter of 1995-96, Republicans were more committed to deep budget cuts than to any sort of good-faith discussion about federal spending, much less to a series of technical conversations about individual departments’ scopes and priorities. That year, the CBO’s projections happened to be less optimistic about incoming revenue than the OMB’s, and thus justified deeper spending cuts. The Republicans gravitated to the CBO projections to the exclusion of any more optimistic scenario. Meanwhile, the White House under President Bill Clinton sought to use data from its OMB.

This point of contention signaled a change in how budget negotiations are conducted. The impasse was not rooted in specific department budgets or line items. Rather, it was fueled by a vague notion of how “big” the federal government should be. The Gingrich-led GOP cared more about obstruction than a functioning, funded government (which, if one took them at their word, they did not believe in anyway). The opposition party’s willingness to weaponize the budget process, even if it resulted in a weeks-long government shutdown, marked the beginning of a new era of American gridlock, dysfunction, and sharp partisanship.

2. The Shift from Committee Power to Party Power

From the mid-1940s to the mid-1970s, Congress was in its “committee government” era, during which committee structures were the locus of power for domestic policymaking. But over time, both parties implemented institutional reforms to shift power away from the committee system and toward party caucuses and leaders.

Legal scholar Neal Devins argues that these reforms passed partly due to growing party polarization. As the two major American political parties grew more ideologically uniform—most liberals became Democrats, most conservatives became Republicans—and the ideological distance between the parties grew, party members were more likely to prefer centralized leadership over a more decentralized system. This is because as party members become more alike, the cost of giving party leaders agenda-setting powers diminishes relative to the potential benefits. If the rank and file are likely to broadly agree with whatever the party leadership puts forward anyway, there’s no reason for them to give themselves more work and slow things down in the process.

For example, as part of the 1995 “Gingrich Revolution,” the Republican Congress adopted drastic reforms in the House and Senate that centralized power in party leadership. These reforms included introducing term limits for House and Senate committee chairs, making systematic changes in the Senate roll call agenda, gutting subcommittee autonomy, and empowering handpicked committee chairs to name subcommittee chairs and control committee staff.

As a result of these changes, lawmaking has become less transparent. In the “committee government era,” notable legislation was debated and edited by committees and subcommittees. Now, fewer bills are deliberated upon by committees. One study found that nearly 40 percent of all House bills and 80 percent of all Senate bills are deliberated outside of the committee system.

Another consequence of the decline of committee power is the shrinkage of committee staff size. Since strong committees effectively checked Gingrich’s ability to seize total power in the House, he and Republican leadership slashed committee staff by one-third on the first day of the 104th Congress in 1994. They justified this as an effort to shrink government spending, but the salaries of these committee staffers were a miniscule portion of a federal budget that funds highways and an army.

This was part of Republicans’ “Contract with America,” their legislative agenda during the 1994 congressional election that outlined the main campaign promises and legislative goals that underscored their sweeping victory. The first promise was to restore so-called “fiscal responsibility” by balancing the budget through cuts to federal spending. Congressional Republicans and their intellectual backers at the Heritage Foundation, which played a major role in shaping the Contract with America, argued that spending cuts should literally begin in one’s own house. Hence the substantial cuts to the House’s committee staff.

Gingrich’s counterparts in the Senate followed suit. It quickly became clear that this wasn’t just about cutting the government budget. As the Heritage Foundation acknowledged, the “permanent staff” of Capitol Hill, including congressional committee staffers, could affect public policy and push back against conservative priorities. Republicans hadn’t controlled Congress for 40 years, and they wanted to dramatically reduce the size and influence of staff who had flourished under Democratic-controlled Congresses.

Staffing cuts were indicative of Republicans’ goal to diminish the capacity and power of professional staff within the federal government, and of the federal government more broadly. Clearly, it worked. Neither chamber has ever fully recovered: In 2015, there were 2,115 professional personnel in House and Senate standing committees, less than two-thirds of the total in 1991 (3,528 professional personnel). That staffing decrease has happened just as the American population and economy have both grown substantially, and the corporate-funded lobbying and influence businesses in Washington have also exploded. Given these lopsided proportions, the gap in Congress’s ability to comprehend key issues independent of corporate influence, and thus make policy effectively, is vast and growing.

The shift from a committee‐​centric Congress to a party‐centric Congress exacerbated the CBA’s failure. Complete control by party leadership has made the budget process sluggish and opaque to the public and even other lawmakers. Since the process is essentially negotiated among congressional leadership—as opposed to issue-specific committees—there’s now little opportunity for other stakeholders to get involved in discussions.

The combination of opaque deliberations, secluded leadership negotiations, and slashed committees has created a new normal in which rushed omnibus bills are the only viable appropriations option. Using this frantic and obscure budget process, Congress and the White House have consistently failed to provide agencies with the funding they need to effectively perform their responsibilities to the American people. The annual passage of these omnibus bills has forced numerous agencies to work with less even as their mandates and caseload continue to grow.

Take the EPA, where between 1990 and 2010 staffing levels stagnated as the agency’s responsibilities increased, the U.S. economy tripled in size, and the population rose by 20 percent.

In that same time period, the Occupational Safety and Health Administration’s (OSHA) staff declined by 25 percent as the American workforce grew by 20 percent. This inadequate staffing at OSHA, the agency responsible for upholding workplace safety, has prevented it from fulfilling its obligations to the public during emergencies. A 2021 report from the Labor Department’s inspector general found that between February and October 2020, OSHA received 15 percent more safety complaints compared to 2019 (largely due to the COVID-19 pandemic) while the number of investigations conducted fell by 50 percent. Evidently, the current budget process is leaving agencies ill-equipped to protect the public in emergency situations.

Relying on CRs and Omnibus Bills Limits Government Capacity

Congress’s overreliance on CRs and omnibus bills contributes to the chronic underfunding of the federal government. Averting a government shutdown is obviously better than not averting a shutdown, and thus is a benefit of using CRs. However, this creates a range of problems, one of which is that it slows hiring initiatives.

In a 2022 report, the Government Accountability Office found that rural development officials within the Department of Agriculture (USDA) sometimes paused hiring offers when CRs came into effect. CRs can also slow down strategic hiring plans, training, and program services. The USDA is very slowly getting back to 2010 staffing levels after suffering massive staff attrition over the last decade, especially during Donald Trump’s presidency. Hiring delays only hurt an already understaffed USDA’s ability to fulfill its various responsibilities: For example, USDA has lost economists studying the impact of climate change on food supply at a time when heavier rains in the Northeast could lead to agricultural vulnerabilities.

Furthermore, CRs create uncertainty about an agency’s final funding level. This leads federal managers to hoard funds, and in some cases spurs pauses in hiring and purchasing. Uncertainty also limits agencies’ ability to plan and jeopardizes funding for grant recipients. For example, Education Department officials need to know their final funding levels to make contracting decisions and to calculate grant amounts for Predominantly Black Institutions (PBIs) that receive federal funding. When the department is forced to rely on CRs, participating PBIs struggle to plan how they are going to spend the awarded funds without knowing the final funding amount.

But one of the biggest impacts of our budgetary chaos is how it centralizes power within Congress. The point of passing 12 separate appropriations bills is to empower many different committees, and their subcommittees, across Congress. All these committees have expertise in the agencies that fall under their particular appropriations jurisdiction. This lets each committee set funding levels from a more informed perspective, and perhaps just as importantly, means that many different members of Congress have leverage over other members’ priorities. This prevents power from becoming too centralized within Congress, and at best, incentivizes compromise and collaboration between members.

But omnibus bills kill all of that. They bundle several different appropriations bills together, resulting in behemoths of legislation that can run several thousand pages. Oftentimes, members of Congress aren’t even given enough time to read through the thousands of pages in a bill before passing it. Similarly, the bundling of several individual bills together leaves members with essentially no time to hold hearings, propose amendments, or review and correct provisions. Thus, those who put the omnibus bills together—namely, party and committee leaders and top executive-branch officials in both parties—have more power in the federal budgeting process than subcommittee members with a more granular understanding of the needs of the departments to be funded.

With that power, party leaders and top officials have not ensured that agencies across the federal government are receiving the funding they need. Looking at the appropriations numbers from the 2023 fiscal year omnibus bill (seen in the table below), it is clear that non-defense agencies are struggling: The Food and Drug Administration (FDA) received almost $1.75 billion less than its $8.3 billion budget request, and HUD got $16 billion less than the $77.8 billion requested. The worker-friendly National Labor Relations Board (NLRB) and OSHA were $20 million and $69 million shy of their respective budget requests, despite the Biden Administration wanting to be the most pro-union administration in American history. Time and time again, top officials have devised omnibus bills that left these agencies and others, like the EPA and the DOJ Antitrust Division, with more to do and fewer resources to do it.

Other Consequences of Not Abiding by the CBA

There have been six government shutdowns since the Gingrich Revolution in 1994. Essential services and mandatory spending programs remain operational during a government shutdown. However, key government agencies and programs that rely on congressionally appropriated funds don’t. As a result, the American people suffer.

For example, OMB found that the October 2013 government shutdown held up more than 800 FDA food inspections designed to address unsanitary conditions and practices. The shutdown also delayed home loan decisions for 8,000 rural families and prevented hundreds of patients from enrolling in National Institutes of Health clinical trials. Businesses were hurt too. OSHA’s Consultation Program, which provides free on-site safety and health assistance to employers, was shut down, negatively affecting nearly 500 small businesses.

Government shutdowns also delay pay for federal employees, causing them financial, emotional, and psychological stress. During the 2018-19 government shutdown—which, at 35 days, was the longest in U.S. history—about 380,000 workers were temporarily furloughed, according to CBO estimates. That’s about 40 percent of the federal civilian workforce. Another 420,000 employees reported to work but did not receive pay until the shutdown ended.

While Trump repeatedly minimized the impact of the shutdown on federal employees, Congress worked to pass the Government Employee Fair Treatment Act of 2019. The law stipulates that federal employees who are furloughed or required to work during a shutdown receive back pay on the earliest date possible after the shutdown ends. But while protections like these are welcome and needed, they don’t shield employees from all the negative ramifications of a shutdown. (The act also institutionalized an assumption that government shutdowns are here to stay as a feature of American politics—disturbing, but realistic.)

In addition to financial loss, furloughed employees lose supportive work relationships, feelings of success, and a sense of control. University of Albany researcher and psychologist Lisa E. Baranik argues that “Even after employees have been given back pay, negative reactions to the furlough can continue. Once trust is violated, it is difficult to gain it back.” These deleterious effects compound another chronic issue for the federal government: the struggle to retain employees and keep agencies adequately staffed.

One way the federal government competes with the private sector for talent is by offering higher than average job security. Government jobs may pay less, but employees are paid dependably and likely to keep their jobs for their entire careers if they so wish. Government shutdowns chip away at this key selling point for the public sector.

Reduced job security will both further dissuade talent from joining the federal workforce and jeopardize employee retention. Job security, pay rates, and more all depend on Congress’s ability to start passing predictable, higher budgets. With a post-Gingrich Republican Party radicalized against the very concept of government spending—and a Democratic Party leadership that’s all too happy to enjoy the centralized power Gingrich initiated—that doesn’t seem likely anytime soon. 

Where We Go from Here

Despite the CBA’s noble intentions, its failure to establish a timely budget process and its lack of safeguards against abuse of the process gave anti-government zealots everything they needed to hold the government hostage—an event that we now expect as a regular feature of our politics.

Committee staff sizes have shrunk as committees themselves have lost almost all their budgeting power over the agencies they oversee. Institutional reforms have shifted power away from the committee system and toward party caucuses and leaders, leading to less transparent lawmaking, fewer bills being deliberated by committees, and chronically under-resourced non-defense federal agencies. These two phenomena have helped Republicans achieve their goal of diminishing the capacity and influence of the federal government and its employees.

As a result, Congress has grown overly dependent on CRs and omnibus bills to fund the federal government. This creates funding uncertainty, limits agencies’ ability to plan, jeopardizes funding for grant recipients, and slows hiring initiatives. Omnibus bills also give power to a handful of congressional leaders who, for the past two decades or so, have failed to adequately fund the functional capacity of the federal government. All of this makes it harder for federal agencies to fulfill their responsibilities and access the resources they need.

Americans should pay closer attention to how the budget process works. Acting as if the appropriations process operates as outlined in the CBA prevents us from understanding how the process actually plays out. Better understanding of the (sadly annualized) omnibus and CR processes will allow us to recognize how the GOP weaponizes the budget process to make political gains. But after recognition comes the more difficult part: developing mechanisms to hold Democratic Party leaders like President Biden, House Minority Leader Hakeem Jeffries, and Senate Majority Leader Chuck Schumer accountable for the fine print of the deals that they cut.

Understanding how budget processes keep non-defense agencies understaffed, underfunded, and underperforming is also important. Government effectiveness (and frankly, the ability to do any good at all) will require higher funding levels for basic executive branch implementation capacity, and the path to such support likely requires reforming the CBA. Promising reform proposals include budgeting for two years at a time instead of one, and increasing committee involvement in the budget process, such as by requiring Senate spending and tax committees to provide detailed spending and revenue plans to inform budget development.

Gingrich realized nearly three decades ago that attacking government capacity and hijacking the budgeting process could benefit his corporate benefactors. It’s about time civil society developed a counterstrategy.

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Fatou Ndiaye is a researcher with the Revolving Door Project. She holds a B.A. in Political Science from McGill University and an MSc in International and Social Public Policy from the London School of Economics and Political Science.

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