No Budget, No Pay: A Breakdown

January 23, 2013

Today, the House passed “No Budget, No Pay Act,” which temporarily suspends the current $16.4 trillion limit on federal borrowing until May 18, 2013. The bill will allow the federal government to borrow whatever funds necessary through that date to meet financial obligations. The bill itself is designed to be an incentive for lawmakers to get serious on passing a budget resolution for the upcoming fiscal year. If Congress fails to adopt a budget by April 15, the salaries of members will be held in a separate account until a budget is adopted.

Has this issue come up in Congress before?
Bills have been introduced before on withholding Congressional pay. In 2011, there were two house bills (H.R. 994 and H.R. 3643) and two Senate bills (S. 1442 and S. 1981) introduced that suggested a pay freeze for Congress if lawmakers were able to get government spending under control. In 2010, two bills were introduced in the Senate (S. 3143 and S. 3158) along the same line.

Is this bill a step toward solving our fiscal issues?
Perhaps. “No Budget, No Pay” suspends the debt ceiling, which buys Congress a few more months to have a worthwhile debate about how to handle our debt. However, the bill does not address the automatic spending cuts (the “sequester”) that are scheduled to go into effect on March 1, 2013. Nor does the bill tackle the continuing resolution that is set to expire on March 27, 2013, which needs to be renewed in order to continue the funding of government agencies.

What signal does this send to the rest of the country?
Appealing to Congress’s sense of civic responsibility and the need for fiscal constraint is not enough to get the debt issue taken seriously. The House passed the bill to make it clear that unless a budget resolution is passed, government officials will suffer direct and immediate consequences. But are the consequences really that severe? Even if lawmakers do have their salaries suspended, as soon as the budget resolution is adopted they’ll receive back pay.  Moreover, the bill does not require that both the House and the Senate pass the same budget resolution. So technically, the budget process for fiscal year 2014 does not have to be completed.

This is one of the most avoidable crises our nation has ever faced. By keeping their campaign promises of fiscal responsibility and simply not spending more than we take in, lawmakers can bring our economy back from the brink.

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