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Passing the Buck

government Policy

America needs a Finance Minister.

If you have a passing familiarity with the American system of government, you’ll know that the House of Representatives is responsible for the federal budget.  They pass it, the Senate edits it, they reconcile it, and it gets passed into law.  In this respect, it should be familiar to Westminsterites where lower houses are responsible for money bills and the budget and upper houses are used for oversight.

In practice, there’s a significant difference between the creation of budgets in Congressional and Westminster systems of government.  The nature of Westminster legislatures is that money is their primary responsibility: the Government is chosen based on their ability to pass critical legislation. The most critical legislation is the budget, followed by money bills.  A failure to pass a budget results in either the assumption of power by a new Government from the same Parliament or the dissolution of Parliament for new elections. In the United States, Congressmen and Senators have fixed term lengths and the legislature’s term is not determined by the passage of any particular legislation.  One result of this difference is that budget deadlock is possible: parties in Congress can fail to pass a budget for their entire term and still hold their jobs, while Parliamentarians are forced to pass an annual budget or have the House dissolved by the Queen.

Westminster legislatures also have a straightforward path to building a budget. The Minister of Finance instructs his department and together they return a draft to Parliament and then to a committee with very limited powers to make changes (serving an oversight role more than a constructive role).  The final bill is then sent to the House for a straightforward vote and the bill is passed to the Senate or the Lords (which don’t, by convention or law depending on your jurisdiction, hold up budgets).  Should a minority Government lose a vote on their budget, new elections are called to resolve the deadlock and the winner is typically seen as having a mandate to pass their first budget even if they too are a minority.  There is a single person responsible for the budget (the Minister of Finance) and a group that is chosen based on their ability to pass bills ensuring its passage (the Government).  Members of Parliament have no opportunity to directly edit the budget and Cabinet retains the exclusive right to propose money bills.

America’s Congressional system has no Finance Minister.  The Secretary of the Treasury serves at a similar level, but the role is fundamentally dissimilar when actually talking about budgeting.  Compared to Canada, the Treasury Secretary serves a role more similar to the President of the Treasury board: focused on implementation more-so than broad planning and budget-building.  Unlike his British or Canadian counterpart, the Treasury Secretary doesn’t come from Congress.  Congress writes the budget and the relevant committees have a great deal of power to add riders and special interest spending.  The Senate has the chance to add even more riders, ensuring that the budget becomes an unmanageable beast.  With American legislators much less likely to vote along party lines than British or Canadian Parliamentarians, the American budget becomes a mess.

There is no single person who can be said to be responsible for ensuring that there is an American federal budget.

Not only does the Treasury Secretary not have effective sway over the budget process, but other actors are also trying to influence the budget.  The President annually proposes a budget, but it’s largely symbolic because the President doesn’t have that authority in the Constitution.  What he does have is the ability to veto the plans made by others.  Ditto with Senate leadership.  Because the United States has no formal analogue to the Government Bench of Westminster systems, these multiple designers and veto points create an atmosphere hostile to good public policy.  It’s one of the reasons that the actual passage of a budget from House committee to the President’s desk is such a rare thing in America, opting instead for “continuing resolutions” that give parties the chance to regularly spar over the budget.

There is no single person who can be said to be responsible for ensuring that there is an American federal budget.

This dysfunction is a symptom of separation of powers.  Only the House of Representatives has the ability to appropriate money, but the Executive Branch is the one doing the spending and the one seen as being at fault for bad fiscal policy.  In a fused Westminster government where the Executive is formed exclusively from the ranks of sitting Members of Parliament, the Executive is guaranteed to get what they want by virtue of being the Government.  If they can’t, new elections are in order and a budget is passed on a regular basis.  Budgets become smaller, leaner documents that take the option of explicit financial guarantees for certain constituencies off the table.

One of America’s greatest policy challenges is the pairing of the expanding role of its federal government and that same government’s inability to act quickly and effectively because of consistent gridlock.  It’s not the fault of Democrats or Republicans: it’s a systematic design flaw in the American project.  An American legislature run under the Westminster style of government would be able to ensure much more effective governance.  They would be able to replace their byzantine policy process with a group of Ministers who must seek legislative consent and who are directly responsible for passing Government legislation.  Separation of powers is a fundamental part of the American Constitution and how Americans see themselves, so the likelihood of this ever happening is essentially zero.  There are good reasons that America’s framers decided to eschew the Parliamentary model they experienced in the 18th Century.  Recognizing this flaw, however, can prove instructive for newer states working to design an effective system of government.  One can hope that, eventually, America will embrace a more stable and effective legislative structure.

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