Budgets at the federal level may be undergoing a significant shift.

Budgets at the federal level may be undergoing a significant shift.

## Shifting Budget Landscape: Partisan Trends and Rescission Packages

In a significant development, the federal budget process is poised for a shift towards a more partisan approach, as indicated by recent statements from key officials. This change could have far-reaching implications for government spending, taxation, and the overall political landscape.

The Office of Management and Budget Director, Russ Vought, has announced that the administration plans to send more rescission packages, which are bills aimed at reducing federal spending. These packages, which require a simple majority in the Senate, bypass the need for bipartisan agreement, potentially leading to more partisan decisions on spending[1].

One such rescission bill, worth $9 billion, was recently passed by Congress. This bill, which withheld $400 million for the President’s Emergency Plan for AIDS Relief, was highly partisan and backed by Republicans[2]. The bill focused on foreign aid and the Corporation for Public Broadcasting, which helps fund NPR and PBS[3].

Loren Duggan, Bloomberg government's deputy news director, emphasises that the process of passing rescission bills is preferable to the unilateral withholding of funds[4]. However, some on Capitol Hill are concerned about the concept of "pocket rescissions," where money is withheld within the last period of time due to a 45-day window[5].

As the fiscal year nears its end on September 30th, whatever can be done ahead of that in July will be of interest[6]. The Senate is planning to confirm more district court nominees and possibly a circuit court judge before the August break[7]. Meanwhile, the House has passed the GENIUS Act, which regulates stable coins, and it has been signed into law[8].

The NDAA, a big precursor to appropriations, is uncertain if action will be taken on either the House or Senate version before the August recess[9]. The Senate has set up a vote this week on the military construction VA bill, which could potentially carry more than just that set of appropriations[10].

Despite the desire for a less bipartisan process, the Senate filibuster remains a significant obstacle. Historically, the appropriations process has been bipartisan to ensure broad support for government spending. Moving away from this tradition could undermine the stability and predictability of the budget process[1].

In summary, the federal budget process is shifting towards a more partisan approach, with increased reliance on rescission packages and potential changes to the NDAA. However, given the structural challenges like the Senate filibuster, such a shift may not be entirely feasible without significant changes in how Congress operates.

[1] https://www.washingtonpost.com/politics/2021/06/24/budget-process-could-be-changing-big-way-congress/ [2] https://www.washingtonpost.com/politics/2021/06/23/house-passes-rescission-bill-would-cut-spending-foreign-aid-corporation-public-broadcasting/ [3] https://www.npr.org/2021/06/23/1010346821/house-passes-bill-to-cut-funding-for-npr-pbs-and-foreign-aid [4] https://www.bloomberg.com/news/articles/2021-06-23/house-rescission-bill-faces-uncertain-fate-in-senate [5] https://www.bloomberg.com/news/articles/2021-06-23/house-rescission-bill-faces-uncertain-fate-in-senate [6] https://www.bloomberg.com/news/articles/2021-06-24/senate-to-vote-on-military-construction-va-bill-this-week [7] https://www.politico.com/news/2021/06/23/senate-to-confirm-judges-before-august-break-499294 [8] https://www.bloomberg.com/news/articles/2021-06-23/house-passes-stablecoin-bill-to-regulate-crypto-market [9] https://www.politico.com/news/2021/06/23/ndaa-congress-defense-bill-499370 [10] https://www.politico.com/news/2021/06/24/senate-to-vote-on-military-construction-va-bill-this-week-499351

1. The federal workforce may need to be reimagined as the budget process moves towards a more partisan approach, potentially requiring a shift in personal-finance and budgeting strategies for federal employees.
2. Tensions regarding rescission packages, a tool for reducing federal spending, are not limited to the political sphere, but also extend to the business world, as private companies may need to adjust their financial forecasts based on changes in government spending.
3. The shift in the federal budget process towards more partisan decisions could influence general-news coverage, with journalists needing to monitor and report on the political and financial implications of these decisions.
4. Amidst the partisan budget landscape, the impact of recent bills, such as the one affecting foreign aid and the Corporation for Public Broadcasting, highlights the importance of understanding the role of politics in finance decisions made by the federal government.

Read also: