The Real Rules of the Budget Game: Minority Fiscal Decision Making in the United States Senate

by

Marsha Jean Simon

A.B., Economics and Political Science Mount Holyoke College, 1973

M.S., Political Science Massachusetts Institute of Technology, 1975

SUBMITTED TO THE DEPARTMENT OF POLITICAL SCIENCE IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF

DOCTOR OF PHILOSOPHY IN POLITICAL SCIENCE AT THE MASSACHUSETTS INSTITUTE OF TECHNOLOGY

JUNE 2005

( 2005 Marsha Jean Simon. All rights reserved.

The author hereby grants to MIT permission to reproduce and to distribute publicly paper and electronic copies of this thesis document in whole or part.

.- s 'A

/ Signature of Author: ! _ , - '-, 61 Department of Political Science I f-'D March 31, 2005

Certified by: V / IJvey'/ M. Sapolsky Professor of Public Policy and Organization Thesis Supervisor

Accepted by: :~ ~ MSACUET IN E Roger Petersen

MASSACHUSTS INSTI Associate Professor of Political Science OF TECHNOLOGY Chairman, Graduate Program Committee

OCT 17 2005 4° ,/lv LIBRARIES 2

The Real Rules Of The Budget Game: Minority Fiscal Decision Making In The United States Senate

by

Marsha Jean Simon

Submitted To The Department Of Political Science On March 31, 2005 In Partial Fulfillment Of The Requirements For The Degree Of Doctor Of Philosophy In Political Science At The Massachusetts Institute Of Technology

ABSTRACT:

This study examines the consequences of the Gramm-Rudman super-majority budget rules on fiscal decision making in the Senate. It attempts to determine the efficacy of these rules as defined by those who advocate them, Public Choice scholars and conservative activists, by testing both whether they restrain spending overall and, second, whether they more often block spending benefiting concentrated special interests than other types of spending.

The study concludes that super-majority budget rules do not restrain spending, much less spending on special interest legislation. The Gramm-Rudman rules were not responsible for the budget surplus that emerged in the late 1990s, and public choice scholars have no credible explanation for the surplus. Further, I argue that these rules have had the unintended effect of strengthening the hand of the leadership of the committees responsible for spending and tax legislation and diminished the ability of other Senators to influence money bills. These rules have compounded the anti-democratic bias of the Senate, increased hold-out costs, and generally made the legislative process less transparent and understandable to the public and even to the Senators themselves.

Thesis Supervisor: Harvey M. Sapolsky

Title: Professor of Public Policy and Organization 3

The Real Rules of the Budget Game: Minority Fiscal Decision Making in the United States Senate

Table of Contents

Foreword 6

Introduction 11

Chapter One: Philosophical Roots of Gramm-Rudman 17

Buchanan, Lord Keynes and Special Interests Minority Fiscal Decision Making

Chapter Two: The Origins of Super-Majority Rules in the Senate 29

Constitutional Super-Majority Requirements Super-Majority Requirements by Senate Rule and Precedent Filibuster Budget Act Waivers

Chapter Three: Historical Background (Ideas Have Consequences) 37

The 1974 Congressional Budget And Impoundment Control Act Enactment of Super-Majority Budget Rules Gramm-Rudman Byrd Rule Budget Rules Post-1985

Chapter Four: Analysis of Budget Points of Order and Motions to Waive the Budget Act 1985-94 63

Budget Act Points of Order and Motions to Waive in the Senate Findings Which Senators Raise Budget Points of Order? Which Types of Measures are Subject to Budget Points of Order? Which Types of Budget Points of Order Were Raised? What is the Significance of the Super-Majority Requirement? 4

Chapter Five: Conclusions (Bad Ideas Have Bad Consequences) 85

Budget Points of Order Were Used to Protect, Not Curb, Money Bills Budget Points of Order Are Not Evenhanded and Favor Special Interest Legislation Budget Points of Order Did Not Produce the Budget Surplus (Which Was Caused More by Tax Revenue Increases than Spending Restraint) There is Little Evidence that Budget Points of Order "Chilled" Floor Activity Public Choice Explanations of the Surplus are Weak or Nonexistent Super-Majority Voting Requirements Increase Hold-Out Costs and Special Interest Provisions in Money Bills Budget Points of Order Are Mostly a Procedural Defense on the Floor

Chapter Six: Prescription for Reform 116

Selected Bibliography 121 Works Cited Interviews Cited

Appendices 128 Tables in Text:

1. Description of U.S. Senate Budget Points of Order Raised Post-Gramm- Rudman (December 12, 1985) Through the 103rd Congress, 2nd Session (1994) 72-73

2. Motions to Waive the Budget Act Approved or Rejected Post-Gramm-Rudman (December 12, 1985) through the 103rd Congress, 2nd Session (1994) 74 6

The Real Rules of the Budget Game: Minority Fiscal Decision Making in the United States Senate

Foreword

The Budget and Impoundment Control Act was nearly a decade old in 1981 when the budget process became a central concern of every Washington legislator and lobbyist. At that time, I was employed by the Housing Assistance Council, a nonprofit organization working on low-income rural housing issues, and was assigned to work with a coalition of other anti-poverty organizations to secure the reauthorization of the Economic Opportunity Act - the centerpiece of President

Lyndon Johnson's War on Poverty. Only a few months into the first term of

President Ronald Reagan, then-Congressman Phil Gramm (D-Texas) crossed party lines to work with the Republican Ranking Member of the House Budget

Committee, Delbert Latta (R-Ohio), and used the little understood budget reconciliation process to pull off two stunning defeats of the Democratic

Leadership. President Ronald Reagan's domestic legislative agenda was adopted nearly wholesale, and the repeal of the Economic Opportunity Act was only one of the many casualties suffered by the anti-poverty advocates that Gramm and

Latta engineered. 7

In 1984, I went on to work as a lobbyist on behalf of Food Stamp program recipients at a public interest law firm, the Food Research and Action Center

(FRAC). The centerpiece of FRAC's agenda at that time was the restoration of the cuts made in Food Stamp benefits by the Gramm-Latta team. As the legislative vehicle for this effort, the 1985 Farm Bill, neared completion that autumn, we were blindsided by now-Republican Senator Phil Gramm's budget reform proposal, which was enshrined in an amendment he offered with Senator

Warren Rudman (R-New Hampshire) to the debt limit increase bill.

Working through the Coalition for Human Needs, we scrambled to protect low- income programs from the proposal's automatic spending cuts. We failed in our efforts in the Senate, where the Gramm-Rudman amendment was approved with

88 votes. We were, however, ultimately somewhat successful in the House and the conference committee in exempting a number of low-income programs entirely from the cuts and limiting the possible damage to other programs such as

Medicaid, the largest public health insurance program for low-income families.

At the same time, we paid little or no attention to new rules requiring a super- majority of sixty Senators for many tax and spending decisions. 8

Early in 1986, I accepted a job as a lobbyist for Families USA, a new nonprofit organization working on low-income health and income security issues. I prided myself on my ability to exploit the budget process and was successful in helping to enact a number of Medicaid program expansions which were buried in budget reconciliation bills that provided net budget savings. By the early 1990s, I worked on Capitol Hill for Senator Edward Kennedy (D-Massachusetts) as Chief

Advisor for Budget and Health Policy. In 1995, after the Clinton health reform legislation failed spectacularly and the Democrats lost their majorities in both the

Senate and House to the Republicans for the first time in forty years, I took a position with Senator Tom Harkin (D-Iowa) as the Minority Staff Director of the

Labor, Health and Human Services Appropriations Subcommittee.

It was not until my tenure on Capitol Hill that I focused on the super-majority budget rules enacted as part of Gramm-Rudman and their effect on policy making in the Senate. In part, Senate rules are so complex that one almost has to be a parliamentarian in order to understand them. In addition, only the Senators and their staff who must withstand the rigors of Senate floor debate, lest they be humiliated in public view on the C-Span cable channel, have the necessary incentive to learn these arcane rules. 9

What I learned about the congressional budget process alarmed me. From my standpoint as a staff member for Senators trying to reform the nation's healthcare system and provide adequate funding for the social programs then in place, the budget rules seemed to impede us at every turn and to require us to devise policies that only made sense within the rules' distorted reality. Since I had begun my career with the intention of being a college professor and was one of the thousands of ABD's (students that had fulfilled all of the requirements of their

PhD except to write the dissertation) working in public policy jobs in

Washington, I had a slight academic bent and started to systematically collect data on how the budget rules operated. I was especially interested in the super- majority budget points of order enacted initially as part of the 1985 Gramm-

Rudman amendment, since they had been a source of frustration to me during my work in and outside of the government.

I left the Senate in 1999 with several huge binders of budget data in hand, and took a position managing government relations for the American College of

Obstetrics and Gynecology. After several years of the abortion policy wars, the

Republican sweep of both chambers of Congress, and the election of President

George W. Bush in 2000, I was ready for a change. I decided to return to graduate school and use the budget data I had collected to write my dissertation 10 after a twenty-plus year hiatus. My years of lobbying served me well, and after six months of discussion and the invaluable help and advice of Professor Harvey

Sapolsky, the Political Science Department at MIT readmitted me to their PhD degree program.

Harvey Sapolsky, chairman of my dissertation committee, and the other members

-- Charles Stewart, also a professor in the MIT Department of Political Science, and Cindy Williams, a principal research scientist at MIT's Center for

International Studies -- gave me their expert comments and assistance in developing my dissertation topic. They helped to transform my inchoate dissatisfaction with the federal budget process into the research reflected here.

As I began to work on my research topic, I was astonished to discover that the super-majority budget rules had deep philosophical roots in conservative scholarship known as public choice theory. Prominent among the scholars practicing this discipline was a Nobel Laureate, James Buchanan, and a former

Director of the Office of Management and Budget, James Miller III. I became convinced, in the words of another influential conservative, University of

Chicago Professor Richard Weaver, that "ideas have consequences." 11

Introduction

This study examines the consequences of the Gramm-Rudman super-majority budget rules on fiscal decision making in the Senate. It attempts to determine the efficacy of these rules as defined by those who advocate them by testing both whether they restrain spending overall and, second, whether they more often block spending benefiting concentrated special interests than other types of spending.

The first chapter examines the philosophical roots of Gramm-Rudman in the public choice school of social science, especially James Buchanan's work on the operation of Keynesian economic theory in western democracies. This chapter also includes a discussion of the Senate's anti-majoritarian design and the effect of super-imposing the Gramm-Rudman rules on fiscal decision making in that body.

The second chapter traces the origin of super-majority budget rules in the Senate, including super-majority voting rules by Constitutional requirement and by

Senate precedent and rule-making. 12

The third chapter examines the historical roots of Gramm-Rudman, beginning with the enactment of the 1974 Budget and Impoundment Control Act when

Congress thoroughly debated and rejected super-majority budget rules. This chapter also recounts the debate and passage of the Gramm-Rudman and Byrd

Rule super-majority voting requirements and follows their development to the present.

The fourth chapter presents the empirical heart of this study - an analysis of floor votes on motions to waive the budget rules in the nine years following the enactment of super-majority budget points of order in late 1985 (early fiscal year

1986). The analysisfound that super-majoritybudget points of order are very effective obstacles tofloor amendments,with an 81% success rate.

However, the points of order were not effective spending restraints. In fact, most points of order raised and sustained had nothing to do with spending. Nearly six out of ten points of order were raised against measures that had no or de minimus costs to the taxpayer. Points of order were even raised against measures that saved the taxpayers' money and these were sustained almost three-quarters of the time. Over the nine-yearperiod, first-year savings in actual spending (outlays) 13 were only $74.1 billion- only about enoughto cover the outlay cost of thefirst two supplemental appropriations to fund the Iraqi War ($71.3 billion).'

Instead,points of orderproved to be an extraordinarilyeffective toolfor the party and money committee leadership to defend their bills on the floor. Two-thirds of all points of order were raised by these Senate elite. The leadership succeeded in blocking amendments nearly nine out of ten times. Rank and file Senators were successful less than half the time.

But the leadership was not evenhanded in using this budget enforcement tool.

Defense bills were subject to points of order only three times in ten years and were waived every time.2 Domesticspending measures-- challengedsixty-eight times -- were waived only one out of three times.

The points of order proved most valuable in the first nine years post-Gramm-

Rudman in helping the Senate Democratic leadership pass President Clinton's

1See Issue Table 2 av. In constant fiscal year 1986 dollars, the nine year savings are $53.6 billion and the cost of the first two Iraqi supplemental is $35.3 billion. Thus, in constant dollars, it is likely a third supplemental could almost be covered by the Gramm-Rudman savings. 2 These "defense bills" were actually an increase in funding for veterans' health programs, an increase in funding for the State Department and payments in reparation for the internment of Japanese during World War II. In fact, no points of order whatsoever were raised against measures classified as defense spending in the Budget Act and annual budget resolutions. 14

1993 budget reconciliation bill, a centerpiece of Clinton's domestic policy agenda. Five out of twelve times budget points of order raised by the leadership and sustained by the full Senate thwarted the will of a majority of Senators seeking to substitute spending cuts for tax increases and strike retroactive tax provisions in the bill. The points of order therefore allowed the Democratic leadership's preference for a mix of tax increases and spending cuts to prevail over a majority of Senators' preference for spending cuts alone. Similarly, once the Republicans regained control of the Senate in 1994, their leadership used the

Budget Act's super-majority budget points of order to kill the Tobacco Bill3 four years later. The Tobacco Bill was sponsored by Senator John McCain (R-

Arizona), chairman of the committee of jurisdiction, the Senate Committee on

Commerce, Science, and Transportation. A bi-partisan super-majority of

Senators in the Committee voted 19-1 to favorably report the bill. Indeed, when a majority, but not a super-majority, of the Senate voted 53-46 to sustain the super- majority budget point of order raised by Senator Ted Stevens (R-Alaska), chairman of the Appropriations Committee, the bill had no net cost to the

Treasury and included $190 billion in tax cuts. The stage had been set for the point of order by Senator Pete Domenici (R-New Mexico), chairman of the

3 S. 1415, the Universal Tobacco Settlement Act, was the federal enabling legislation for the settlement reached between the tobacco industry and the states. 15

Budget Committee, when he earlier in the year inserted defective language in the

Budget Resolution which failed to provide an allocation to the Commerce

Committee for the Tobacco Bill. Just prior to the vote on the point of order,

Senator John Kerry (D-Massachusetts) aptly remarked,

The Senator from New Mexico [Domenici] does not tell you every penny that is contemplated to be spent in this bill is offset - it is offset ... So this is a charade. This is a charade. We have all learned that you can always find an excuse and a way to use the Budget Act to accomplish your goals.4

The fifth chapter presents my conclusion that super-majority budget rules do not restrain spending, much less spendingon special interest legislation. The

Gramm-Rudman rules were not responsible for the budget surplus that emerged in the late 1990s, and public choice scholars have no credible explanation for the surplus. Further, I argue that these rules have had the unintended effect of strengthening the hand of the leadership of the committees responsible for spending and tax legislation and diminished the ability of other Senators to influence money bills. These rules have compounded the anti-democratic bias of the Senate, increased hold-out costs, and generally made the legislative process less transparent and understandable to the public and even to the Senators themselves.

4 Senator John Kerry, Congressional Record, (June 17, 1998): S 6481. Notwithstanding this statement, in the 2004 Presidential election Senator Kerry repeatedly touted his early support in 1985 for the Gramm-Rudman amendment. 16

Chapter Six is my prescription for reforming the budget process in the Senate. I recommend repealing the super-majority budget rules as well as most limits on debate on budget bills.

I hope that this research on the Gramm-Rudman supermajority budget rules will also have consequences and help to reform the budget process. The congressional budget process should inform and clarify Senators' efforts to set budget priorities, not selectively frustrate them. 17

Chapter One: Philosophical Roots of Gramm-Rudman Buchanan, Lord Keynes and Special Interests

The Gramm-Rudman budget enforcement rules not only clearly and significantly changed the rules of the budget game; they were a triumph for public choice scholars, who had long advocated super-majority voting requirements for fiscal decision-making. For example, Jim Miller, public choice scholar and the most vocal Reagan administration advocate for Gramm-Rudman during debate and enactment of the law, has characterized it as "the best legislative incarnation of public choice theory."5

Public choice scholars use microeconomics or the theory of decisionmaking by firms in capitalist economies to explain decisionmaking by politicians in various political systems, including majority-rule democracies. The best known scholarship applying public choice theory to fiscal policy outcomes in the United

States is Nobel Laureate James M. Buchanan's book, co-authored with Richard

Wagner, Democracy in Deficit: the Political Legacy of Lord Keynes. He argues that deficit spending is inevitable because, in the post-New Deal world, Congress will always choose to spend now and pay later. Keynesian economic theory, in practice, has "problems of incentive compatibility" or a "bias toward deficit

5 Miller III, James C., foreword to Public Finance in Democratic Process by James Buchanan (Chapel Hill: Chapel Hill University Press, 1987): viii. 18

finance."6 John Maynard Keynes gave policy-makers the rationale to deficit- spend in recessions while failing to provide a means to curb these tendencies when the economy is strong.7 In Buchanan's words, "The lacuna in the

Keynesian prescription is the absence of some counterforce, a control or governor that will keep spending within limits."8

At least some of the Senators debating Gramm-Rudman were familiar with this public choice critique. Senator James McClure, a conservative Republican from

Idaho and an original co-sponsor of Gramm-Rudman, declared that "[W]e prime the pump when it [the economy] is down but we do not pay off the deficit when economic activities are up. We have never tried Lord Keynes' total hypothesis.

We only tried the comfortable side of it spending our way out of recession ... and

I think on the basis of past performance that has proven to be erroneous." 9

6 Tollison, Robert, foreword to Democracy in Deficit: The Political Legacy of Lord Keynes, The Collected Works of James M. Buchanan, Volume 8, by James M. Buchanan and Gordon Tullock (Indianapolis: Liberty Fund Inc., 2000): p. xi. Tollison was also a colleague of Gramm's at Texas A&M University. 7 It is interesting that the conservative political scientist Paul E. Peterson finds this argument "a cliche." Peterson argues that the large deficits Gramm-Rudman was intended to address were unique to the Reagan administration, and that the executive branch was the controlling force in setting fiscal policy. Indeed, he shows - as appropriators on Capitol Hill are always protesting - that the Congress consistently appropriates less in the aggregate than the President requests. See Peterson, Paul E., "The New Politics of Deficits," in John E. Chubb and Paul E. Peterson, The New Direction in American Politics (Washington, D.C.: The Brookings Institution, 1985):365-397. 8 Buchanan and Tullock, p. 147. 9 Senator James McClure, Congressional Record, (October 5, 1985): S 12719. 19

Likewise, the Reagan administration had public choice scholars in very senior policy positions: Jim Miller, newly-minted Director of the White House Office on

Management and Budget (OMB) in the Reagan Administration, testified before a

1985 House Budget Committee hearing while Gramm-Rudman was pending that

"the forces [to spend] are so strong in most modem democracies. There is a real political bias toward deficit finance, and without some sort of compact like this, I don't think it likely that the deficit would be substantially narrowed."' °

Buchanan, however, unlike many other public choice scholars, is not concerned about majority voting resulting in unstable or irrational policy outcomes, or

"majority cycles" caused by the lack of a median voter in multidimensional decision making. Political scientist Charles Stewart, for example, states that:

The lack of a median in multidimensional politics means that majority voting rarely will settle on stable policy solutions on its own accord. An equilibrium of tastes rarely is found in any complex democratic setting ... This lack of a median in multidimensional policy making and the "chaos result" that follows, in my opinion, is one of the deepest and most unsettling features of democratic politics.l

10U.S. Congress. House. Committee on Government Operations, Legislation and National Security Subcommittee, H.J. Res.3 72, Increasing the Statutory Limit on the Public Debt, Joint Hearing (October 17, 1985): p. 89. Miller's Executive Associate Director at OMB was Timothy Muris, who helped to staff Senator Gramm on the technical details of Gramm- Rudman. Muris went on to teach at George Mason University in northern Virginia just outside of Washington, D.C., where Buchanan currently teaches. I Stewart, Charles III, Analyzing Congress (New York, N.Y.: W.W. Norton and Co., 2001): p. 46. 20

Buchanan, on the other hand, embraces any instability inherent in majority decision making:

Aren't "majority cycles" the most desirable outcome of a democratic process? After all, any attainment of political equilibrium via majority rule would amount to the permanent imposition of the majority's will on the outvoted minority. Would not a guaranteed rotation of outcomes be preferable, enabling the members of the minority in one round of voting to come back in subsequent rounds and ascend to majority membership?'

Buchanan, however, does have a concern. He is worried about "discrimination against minorities rather than securing the stability of political outcomes." 13 He urges the adoption of "institutional constraints," or rules to protect minorities and change federal policy-makers' incentives:

[M]ajority rule may be allowed to operate in the realm of ordinary politics, provided that there is generalized consensus on the constitution or on the rules that define and limit what can be done through ordinary politics.'4

One rule Buchanan favors is super-majority requirements for fiscal decision making. He is an admirer of nineteenth century Swedish economist Knut

Wicksell's "rule of unanimity," a concept that rejects majority decision making in favor of unanimity in determining the supply of public goods; i.e., the size of government. Absent unanimity, Buchanan and Wicksell fear that some member

12 Buchanan, James, "What is Public Choice Theory?" (Lecture delivered at Hillsdale College, February 3, 2003): p. 1. 13 Ibid. 14Ibid., p.2. 21 of a group will be made worse off by a proposed change. What they leave unstated is who is likely to be made worse off when majorities determine the supply of public goods - the wealthy minority who pay the highest taxes in a progressive tax system. What is also left unstated is that unanimity "subjects the whole to the veto of one."15

However, Buchanan acknowledges that unanimous decision making has unacceptable transaction costs. He writes, "Practically speaking, the rule of unanimity would result in few, if any, decisions being made."' 6 This leads

Buchanan to accept the "relative unanimity" 17 of super-majority voting rules.

In summary, Buchanan contends that, "Budgets cannot be left adrift in the sea of democratic politics. They must be constructed within constraints that impose external form and coherence on the particular decisions about size and distribution which an annual budget reflects." 8 Majority fiscal decision making leads to growing budget deficits financed on the backs of the wealthy minority.

15 King, Brett, "The Use of Supermajority Provisions in the Constitution: The Framers, The Federalist Papers and the Reinforcement of a Fundamental Principle," Seton Hall Constitutional Law Journal 8 (Spring, 1998): p. 395. The full quote is "[James] Madison described the unanimity rule as 'absurd' because it subjects the whole to a veto of one..." 16 Buchanan, James, The Demand and Supply of Public Goods (Chicago: Rand McNally and Company, 1968): p.9 4 . 17 Ibid., p. 95 18Ibid., p.182. 22

Super-majority voting requirements can re-impose fiscal discipline and end deficit spending and confiscatory, progressive tax policy.

Another fiscal policy position advanced by public choice scholars, most notably

John McGinnis and Michael Rappaport, former Justice Department attorneys in the Reagan administration, is that super-majority voting requirements reduce special interest spending by the federal government and "improve the balance between public interest goods and private interest goods."19 McGinnis and

Rappaport argue that "the fundamental pathology of modem spending patterns stems from the superior influence that concentrated interest groups wield with legislators, even though such groups are far less than a numerical majority."20 In their view, the bounties these groups obtain from the political system are "private interest goods" such as non-income-related transfer payment programs, of which

Social Security is the largest. "Public interest goods" are programs benefiting the majority of taxpayers, such as defense spending and means-tested poverty programs such as the Low Income Home Energy Assistance Program or Section 8

Rental Assistance. They argue further that "because private interest spending tends to result in a substantial number of net losers, such spending will often fail

19"Supermajority Rules as a Constitutional Solution," William and Mary Law Review 40, no. 365 (February 1999): p. 373. 20 Ibid., p. 372. 23 to command the support of a super-majority.' 21 We should expect then that the super-majority voting requirements of Gramm-Rudman should not only reduce spending overall but also more often block spending on programs benefiting concentrated special interests than on programs in the public interest, as

McGinnis and Rappaport define these terms.22

Below I discuss the mechanics of minority decision making in the institutional context of the Senate and whether Gramm-Rudman has had the effect that public choice scholars predicted.

Minority Fiscal Decision Making

As a result of Gramm-Rudman's enactment, Congress' "power of the purse" fell to the control of a minority of Senators. Each Senator's vote in fiscal matters was thereafter no longer equal. In voting rights terminology, their votes were diluted.

Forty Senators, representing as few as twenty states, could now block majorities favoring changes in tax or spending policy. These forty Senators could now

21 Ibid., p.373.

22 I find their categorization of Social Security, in particular, to be unsupported by the facts and would argue that the program greatly benefits not only seniors but their children and grandchildren as well, who no longer have the responsibility of income support for the elderly. Looked at from the Rappaport-McGinnis perspective, it is interesting that Social Security was the first program exempted from Gramm-Rudman - even before it was initially brought to the Senate floor. Presumably this should have diluted their enthusiasm for Gramm-Rudman. 24 wield a minority veto over fiscal policy. Gramm-Rudman thus devalued the votes of a majority of Senators with profound effect on the federal legislative process.

As legal scholar Robert Leach argues:

Congressional rules are unique creatures. On the surface, they regulate only the internal operations of a legislative branch... However, they also impact nonparticipants in the legislative process, for the rules can affect policy outcomes.23

McGinnis and Rappaport acknowledge that along with the re-weighting of Senate votes comes an increase in hold-out costs. The smaller number of Senators in a position to bargain for their votes can demand a higher price, potentially resulting in an increase in special interest provisions in legislation. Higher hold-out costs can also result in further delaying the already slow deliberative process in the

Senate. George Washington's "cooled coffee" may become absolutely tepid when super-majorities are required for the Senate to act.

Gramm-Rudman also exacerbated the institution's anti-democratic bias. The

"Great Compromise" reached by the Constitutional Convention to grant each state equal representation in the Senate results in the under-representation of citizens in states with large populations. As a result, political scientists Frances

23 Leach, Robert S., "House Rule XXI and an Argument Against a Constitutional Requirement for Majority Rule in Congress," UCLA Law Review 44 (April 1997): p. 1273. 25

Lee and Bruce Oppenheimer demonstrate in their study of Senate apportionment that every racial minority suffers under-representation in the body. Political scientist and constitutional scholar Robert Dahl agrees with their assessment:

Unequal representation in the Senate has unquestionably failed to protect the fundamental interests of the least privileged minorities. On the contrary, unequal representation has sometimes served to protect the interests of the most privileged minorities. An obvious case is the protection of the rights of slaveholders rather than the rights of slaves.24

Lee and Oppenheimer also show that the increasing difference in the size of the smallest and largest states has worsened the effects of Senate apportionment since

1787.25 Super-majority voting requirements layered on Senate apportionment allows Senators representing less than 5% of the population to potentially control fiscal decision making.2 6

On the other hand, a super-majority requirement in the ill-apportioned Senate can have the effect of assuring that a majority of citizens are represented. Legal scholar and political scientist Brett King suggests that the constitutional requirement for a Senate super-majority to approve treaties, for example, might

24 Dahl, Robert, How Democratic is the American Constitution? (New Haven and London: Yale University Press, 2001): pp. 52-3. 25Lee, Frances E., and Bruce I. Oppenheimer, Sizing Up the Senate (Chicago: Chicago University Press, 1999): p.2 1. 26 Ibid., p.2. 26 be an attempt by the Founding Fathers to counterbalance the overrepresentation of small states in the Senate.2 7 However, a Senate super-majority requirement is no guarantee that policies which receive the support of the majority of the people will pass.

A bias to the status quo ante is another obvious result of the super-majority rules.

As A.J. McGann points out in his recent paper, "The Tyranny of the

Supermajority," "[w]ith super-majority voting, the status quo is privileged - if there is no alternative for which a super-majority votes, the status quo is maintained." 28

Rules, especially complex rules, by design favor insiders. Since the super- majority points of order created by Gramm-Rudman are many and arcane, it has enhanced the power of insiders in the budget process, especially the Chair and

Ranking Member of the Budget Committee. Of course, the Gramm-Rudman super-majority voting requirements are far from the only anti-democratic or anti- majoritarian devices in the Senate.

27 King, Brett, "The Use of Supermajority Provisions in the Constitution: The Framers, The Federalist Papers and the Reinforcement of a Fundamental Principle," Seton Hall Constitutional Law Journal 8 (Spring, 1998): p. 411. 28 McGann, A.J., "The Tyranny of the Supermajority" (Paper presented at the annual meeting of the Public Choice Society, San Diego, California, March 2002). 27

In any legislative body, the orderly consideration of legislation demands more than simple majority rule. This situation is especially true in the Senate which must handle complex, federal legislation. The Senate committee structure, for example, is often cited by scholars as an undemocratic, but necessary, legislative mechanism. Lawmakers are also aware of the anti-majoritarian issues raised by the committee system, including those compounded by the budget process. I discuss in Chapter Two how the germaneness rules for budget resolution and reconciliation bills, including the Byrd Rule, were intended to stop majorities in committees (small minorities of the whole body) from imposing their policy preferences on the Senate super-majority by circumventing the filibuster. (The use of budget legislation to circumvent the filibuster was an unintended effect of the decision in 1974 to limit debate on the budget resolution and reconciliation bills so that Senate minorities could not delay the budget process.) Ironically, my data shows that the committee majorities, the power of which the germaneness rules were intended to curb, use these rules to block amendments to their bills on the floor. Thus, the full Senate is denied a majority vote on amendments blocked by budget points of order on the floor.

The Gramm-Rudman super-majority voting requirements, however, were not mechanisms intended to improve the deliberative process. Rather, they were 28 intended to enforce the provision's deficit reduction targets and balance the budget by 1991. Thus, the anti-democratic effects of the legislation can only be justified if the super-majority rules resulted in a balanced budget. No one, not even the most ardent advocates of super-majority fiscal decision making, would argue that they achieved their goal of a balanced budget by 1991 when deficits reached their highest levels.29 Whether Gramm-Rudman ultimately helped produce the budget surplus of the late 1990s is discussed in Chapters Three and

Four.

29 See, for example, John Berthoud, now the President of the Taxpayers Union, who concluded in his 1992 study of Gramm-Rudman: "And not only did the law fail to bring zero deficits, it led to only a barely statistically significant reduction in deficits." Berthoud, John English, "Gramm-Rudman-Hollings: The Fiscal Weapon of Public Choice" (Unpublished Dissertation, Yale University, May, 1992): p. 444. 29

Chapter Two: The Origins of Super-Majority Budget Rules in the Senate:

The Senate is an institution which respects minority rights with procedural protections for the preferences of minorities and even individual Senators. One

Senator can wield enormous power on the Senate floor through extended debate

(the filibuster), preventing bills from being taken up ("holds"), and objecting to leadership proposals for the consideration of bills ("unanimous consent agreements"). According to CRS's Walter Oleszek, however, "most issues in the

Senate are decided by a simple majority vote: one-half-plus-one of the Members voting, assuming the presence of a quorum."3 0 Under Senate precedent, not even a majority minus one vote carries - a tie vote on a question defeats it.

Constitutional Super-Majority Requirements

The original Constitution requires a super-majority of two-thirds of the Senate in only five situations:31 removing federal officers in an impeachment proceeding

30 Oleszek, Walter J., "Super-Majority Votes in the Senate," CRS Report for Congress 98-779 GOV, The Library of Congress, (Updated February 20, 2001): p. 1. Note that the required quorum is also a majority, in this case of Senators in the body, 51 if all seats are filled. 31 The original Constitution required majorities or submajorities slightly more often than supermajorities. See Brett King's discussion of this point in his article, "The Use of Supermajority Provisions," On page thirty five, he writes "By the middle of September, 1787, a Constitution emerged which contained six different supermajority requirements; five of which were substantive voting provisions and one supermajority quorum requirement. In addition, the Constitution included one simple majority provision, two absolute majority requirements, three submajority requirements and one enacting provision." In note 30, he brings his count up to date: "With the effective repeal of Article II, section 1, clause 3 by the Twelfth Amendment, 30

(Article I, section 3, clause 6), expelling Senators from the Senate (Article I, section 5, clause 2), overriding presidential vetoes (Article I, section 7, clause 2), ratifying treaties (Article II, section 2, clause 2) and proposing constitutional amendments to the states for ratification (Article V). In addition, just two amendments to the Constitution require a two-thirds vote of the Senate: the

Fourteenth Amendment, ratified after the Civil War in 1868 and no longer relevant, to allow a supporter of the Confederacy to hold any civil or military office, and the Twenty-fifth Amendment, ratified in 1967, to remove a President from office who is unable to discharge the duties of the office.

Thus, the Constitution as originally drafted and in the present requires super- majorities in only six, very limited circumstances, none of them related to the

Congress' tax, spending or monetary powers.32 (By contrast, the Budget Act includes more than twice as many super-majority points of order.) Indeed, the the definitive count in the Constitution today appears to be nine supermajority requirements (seven substantive and two procedural), eight majority rule requirements (four absolute and four simple) and three submajority rule provisions. This count excludes the enacting provision of article VII." In sum, there remain more majority or submajority provisions than there are super-majority provisions in the Constitution. 32 Dan L. Crippen, former Director of CBO, points out that "[B]eyond [the] broad grant of legislative authority to tax and spend, the Constitution is silent about fiscal policy and budgeting. It does not specify how tax or spending laws are to be formed or carried out, provides no direct role for the President in fiscal matters (beyond his power to veto legislation approved by the Congress), and says nothing about a national budget system." Crippen, Dan L., "Informing Legislators About the Budget: The History and Role of the U.S. Congressional Budget Office," (Speech at a meeting of parliamentary officials of the OECD, June 7, 2002): p.2. 31 writers of the original constitution were critical of the super-majorities required in the Articles of Confederation for coining money, appropriating funds, and determining the size of the army and navy - all fiscal or monetary policy matters. 3 3

The original Constitution granted to the Senate (and the House of

Representatives) the authority to "determine the Rules of Its Proceedings"

(Article I, section 5). Constitutional scholars are divided on whether this grant permits the Senate to adopt additional super-majority voting requirements that other provisions of the Constitution would render unconstitutional.3 4 Those

33 Ibid. 34 This controversy was the subject of debate and litigation in 1995 when the House adopted Rule XXI (5) (c), which requires a supermajority of three-fifths of all House members to raise income taxes. Representative David Skaggs (D-Colorado) and fourteen other House members along with the League of Women Voters filed a legal brief in federal court arguing that this rule was unconstitutional because it conflicted with the presentment clause of the Constitution and with the document's presumption of majority decision making by the Congress. The D.C. Federal Court dismissed the case based on the legal doctrine of "remedial discretion" a narrow interpretation of the "political question" doctrine which views judicial review of Congressional rulemaking and other Congressional actions as violating the separation of powers among the three branches of the federal government. See Skaggs v. Carle, 898 F. Supp. 1, 2 (D.D.C. 1995). Representative Saxton (R- New Jersey) argued during debate on the House rule (See the Congressional Record, January 4, 1995, p. H 64) that it was constitutional based on an earlier case decided by the Supreme Court, Gordon v. Lance in 1971 which reversed the West Virginia Supreme Court and let stand a West Virginia constitutional provision and statute requiring a super-majority for political subdivisions to incur bond indebtedness or increase tax rates above the levels provided by the state constitution. It is questionable whether the Gordon decision addresses the question of whether the Congress can adopt super-majority rules for enacting all or certain types of legislation. See Brett King's discussion of the Gordon decision which he describes as " ... one of the most poorly reasoned High Court decisions in the post-New Deal era." King, Brett, "Deconstructing Gordon and Contingent Legislative Authority," The University of Chicago Law School Roundtable 6 (1999): pp. 145. It is interesting that the case 32

arguing for super-majorities view the grant of rulemaking powers to the Senate as

absolute.35 Legal scholars who view super-majorities as unconstitutional make a more complex (and more convoluted) argument. Their most powerful argument is that the Constitutional provision (Article I, section 3, clause 4) for the Vice

President to cast the tie-breaking vote in the Senate makes no sense unless the drafters assumed decisions would be made by majority vote.36 In addition, political scientists Sarah Binder and Steven Smith, in their study of the Senate filibuster, find it significant that "delegates to the [constitutional] convention did not write into the Constitution any procedural protections for Senate minorities."3 7

originated in West Virginia given Senator Robert Byrd's (D-West Virginia) subsequent role in adopting super-majority budget rules in the Senate. 35 For arguments for the constitutionality of super-majority voting requirements in the Congress see the writings of McGinnis, John 0. and Michael B. Rappaport, "The Rights of Legislators and the Wrongs of Interpretation: A Further Defense of the Constitutionality of Legislative Supermajority Rules," Duke Law Journal 47 (1997): pp. 327-349. Also see Leach, Robert S., "House Rule XXI and an Argument Against a Constitutional Requirement for Majority Rule in Congress," UCLA Law Review 44 (April 1997): pp. 327-349. 36 For arguments against the constitutionality of super-majority voting requirements see the writing of Brett King, especially King, Brett, "Deconstructing Gordon and Contingent Legislative Authority," The University of Chicago Law School Roundtable 6 (1999):pp. 133- 193 and "The Use of Supermajority Provisions in the Constitution: The Framers, The Federalist Papers and the Reinforcement of a Fundamental Principle," Seton Hall Constitutional Law Journal 8 (Spring, 1998): p. 363-414. Also see Delker, Neals-Erik William, "The House Three- Fifths Tax Rule: Majority Rule, the Framers' Intent, and the Judiciary's Role," Dickinson Law Review, 100 (Winter, 1996): pp. 341-382, Bloch, Susan Low, "Congressional Self-Discipline: The Constitutionality of Supermajority Rules," Constitutional Commentary 14 (Spring, 1997): pp.1 -6 and Ackerman, Bruce et al., "An Open Letter to Congressman Gingrich," The Yale Law Review 104, no. 6 (April, 1995): pp. 1539-1544. 37Binder, Sarah A. and Steven S. Smith, Politics or Principle? Filibustering in the United States Senate, (Washington, D.C.: Brookings Institution, 1997): p.5. 33

Super-Majority Requirements by Senate Rule and Precedent

The two most important rules requiring either a two-thirds or three-fifths vote in the Senate are Senate Standing Rule XXII, invoking cloture and section 904 of the Budget Act governing waivers of the Budget Act.

Filibuster

In 1806, the early Senate dropped its previous question motion and no longer allowed a simple majority of Senators to end debate and vote on pending measures. From then until 1917, when the Senate adopted Rule XXII, the preferences of even one Senator willing to "filibuster" or debate at length could prevail over those of all of his other colleagues. With the adoption of Rule XXII, a super-majority of the Senate could vote to "invoke cloture," or end debate, on pending legislation.

Initially, the super-majority required to end debate was two-thirds of Senators present and voting, provided that a majority of Senators (a quorum) are on the

Senate floor. The current rule, adopted in 1975, is three-fifths of Senators "duly elected and sworn," or sixty, if all Senate seats are filled. (This is known as the

"constitutional three-fifths" because super-majority provisions in the Constitution 34

follow this approach.3 8) Two-thirds of Senators present and voting are required

for cloture on motions to consider changes in the Standing Rules of the Senate.

However, only a simple majority of Senators present and voting is required to

successfully appeal the ruling of the presiding officer that a standing rule has been violated.39 For example, on March 16, 1995, Senator Kay Bailey Hutchinson (R-

Texas) challenged the ruling of the Senate's presiding officer and overturned

Senate Standing Rule XVI, prohibiting authorizing legislation on appropriations bills. The Hutchinson amendment to H.R. 889, a supplemental defense appropriations bill, eviscerated the Endangered Species Act of 1973 and overturned a long standing rule intended to protect due process in the Senate by a vote of 57-42.40 Thus, a simple majority of Senators, by failing to uphold the

38 Riddick, Floyd M., "Interview # 4, Filibuster and Cloture," interviewed by Donald A. Ritchie, Oral History Project, United States Senate Historical Office, July 27, August 1 and 25, 1978: p. 133. Floyd Riddick was the Senate Parliamentarian from 1964- 1974 and worked in the Parliamentarian's Office prior to that period. He is also the original author of Riddick's Senate Procedure, the definitive book on Senate rules. 39 A two-thirds vote, and a day's notice in writing are required to suspend the Standing Rules. This is test is so strict that it is virtually never attempted and has the perverse effect of causing the Rules to be overturned, by precedent, following a successful motion to appeal the ruling of the presiding officer. 40 On July 26, 1999, the Senate by a simple majority vote of 53-45 agreed to an amendment offered by Senate Majority Leader Trent Lott (R-Mississippi) to overturn the "Hutchison precedent" which had allowed Senators to offer non-money, policy setting amendments to appropriations bills. Prior to this vote, however, the Senate Appropriations Committee, under the new leadership of Senator Ted Stevens (R-Alaska), had begun to report original Senate bills instead of taking up previously House-passed (or H.R.) appropriations bills, as had long been the practice. As a result, Rule XVI, written when the Senate took up H.R. appropriations bills, only prohibited authorizing amendments from the floor to appropriations bills. Substantive authorizing provisions are permitted under the reinstated rule provided they are added by the Appropriations Committee. This is another example of money committee leadership, commanding only a majority of committee members, less than a fifth of total Senators, 35 ruling of the presiding officer, can sweep away procedural protections and substantive legislation under the Standing Rules of the Senate.41

Budget Act Waivers

In contrast, although the Budget Act supermajority voting rules were patterned after Rule XXII,42 requiring a three fifths vote of the Senate membership, a challenge to the ruling of the presiding officer also requires sixty votes.43 Thus, under no circumstances can a simple majority of Senators put aside or waive a

Budget Act super-majority point of order. In this respect, the Budget Act super-

wielding great power. (See Rundquist, Paul, "S. Res. 160: Rule XVI and Reversing the Hutchison and FedEx Precedents," CRS Report for Congress RS20276, (Updated July 29, 1999). th 41 In the 108th and 1 0 9 Congresses, Senate Republican leaders threatened to use this loophole to change Standing Rule XXII, the filibuster rule, by majority vote to prohibit the Democratic minority from filibustering judicial nominees. This proposal is popularly known as the "nuclear option" because of its expected effect on comity in the Senate. Its proponents, however, call it the "constitutional option," arguing that the Constitution limits super-majority voting requirements to those specified in the document. This argument, of course, is the exact opposite of the one used by the Republican leadership in the House to justify the adoption of an amendment to House Rule XXI in 1994 requiring a super-majority to raise tax rates. 42 Steve Bell, Staff Director of the Senate Budget Committee in 1985, said that the super- majority budget rules were consciously patterned after Rule XXII, the cloture rule, hoping to avoid the condemnation of Senator Robert Byrd (D-West Virginia). Bell, Steve, former Staff Director of the Senate Budget Committee in 1985, interview with the author, February 19, 2004, Washington, D.C. Byrd was minority leader in 1985 and earlier was author of the compromise amendment in 1975 establishing the current cloture rule. (See Riddick, Interview #4, for a discussion of the history of the cloture rule.) 43 The amendment to the Budget Act requiring a supermajority to successfully appeal the ruling of the presiding officer occurred in 1987 when the Congress fixed the Gramm-Rudman sequester. Gramm expressed concern about the possibility of a majority of Senators overruling the presiding officer on a budget point of order the first time a substantive point of order was raised (which occurred on the 1986 Supplemental Appropriations bill as recounted in Chapter Four.) 36 majoritypoints of order are stricter and more durable than even the rules governingfilibusters. Further, these budget rules violate the principle of legislative sovereignty which prohibits current legislatures from binding future legislatures.44 Legal scholars, Catherine Fisk and Erwin Chemerinsky, in an exhaustive article on the Senate filibuster, argue that it is not the super-majority cloture vote that is troubling, but rather the super-majority vote required to end debate on a motion to change the filibuster rule. Citing Gramm-Rudman, including the super-majority waiver requirements, they warn that "In an increasing array of instances, Congress is adopting legislation that has entrenching effects; that is, it binds future sessions of Congress."4 5 Fisk and

Chemerinsky conclude that "It is a clearly established principle of constitutional law, supported by fundamental democratic principles, that one Congress cannot tie the hands of future Congresses. "4 6

44 This principle is based on British common law and holds that one legislature has the same power as its successors and, thus, no legislative body can bind its successor. One legislature binding its successor legislatures is also termed "entrenchment." 45Fisk, Catherine and Edwin Chemerinsky, "The Filibuster," Stanford Law Review, 49, no. 181 (January, 1997): p.2 5 3 . 46 Ibid. 37

Chapter Three: Historical Roots of Gramm-Rudman (Ideas Have Consequences)

In the summer of 1985, the United States Senate unexpectedly gave broad, bi- partisan support to legislation popularly known as Gramm-Rudman after its two chief Senate sponsors, Phil Gramm and Warren Rudman, Republicans from

Texas and New Hampshire, respectively. The third sponsor of the bill was Ernest

Hollings, a Democrat from South Carolina, whose early support gave the measure a bi-partisan cast. (By the fall of 1989, he had denounced the measure and demanded, in his words, "a divorce."47).

Gramm-Rudman began as an amendment to a controversial increase in the federal government's borrowing authority (or debt limit) to $2 trillion. It was intended by its sponsors to radically alter the federal budget rules by imposing discipline on the federal budget process. Intense wrangling between the Democratic House and Republican Senate ensued and by December 12, Congress approved the legislation and President Ronald Reagan signed it into law. In those short months, they rewrote the decade-old Congressional Budget and Impoundment

Control Act of 1974 (the Budget Act). Although it was the economic policies of

47 Yang, John E., "Fiscal Follies: Ever-Growing Deficits Establish the Failure of Gramm- Rudman," Wall Street Journal, October 3, 1989. However, by 2004, when Senator Hollings retired from the Senate, his Senate website listed "Gramm-Rudman-Hollings" as one of his major accomplishments. It is unclear when Senate Hollings reconciled with the budget law. 38

the Reagan administration that led to a doubling of the nation's debt during the previous five years, it was the Republicans in Congress who took advantage of the situation and reaped its political benefits. 48

Phil Gramm, a backbencher from Texas and recent convert to the Republican

Party, saw the opportunity presented in the debt limit increase to the "magic number" of $2 trillion49 and quickly sold the Republican leadership on his bold proposal to change the federal budget rules. Gramm had long wanted to test his belief that "a general [budget] constraint can be successful where individual cuts have failed ... [F]orcing Members [of Congress] to order their priorities within an agreed-upon constraint will mean a reduction in the growth of many welfare programs and with it the destruction of a [liberal Democrat] political power base."50

48 The political benefits of Gramm-Rudman were more than offset by the cost of a vote by a majority of Republicans in the Senate earlier that same year to reduce the Social Security cost- of-living benefit increase. Many political analysts blamed that vote for the Republicans loss of the Senate in the 1986 elections and added the term the "third rail" to describe the consequences of voting to reduce Social Security benefits - even just the rate of increase in the benefits. 49 See Charles Stewart III's discussion of the symbolic power of large, budgetary numbers in the history of U.S. budget reform politics, Stewart, Charles III, Budget Reform Politics (Cambridge: Cambridge University Press, 1989): p. 222. 50 Gramm, Phil, "Understanding the Deficit Problem," Guest Editorial, The Wall Street Journal, (Thursday, October 16, 1980) reprinted in The Role off Government in a Free Society: A collection of Speeches and Articles by Phil Gramm (The Fisher Institute: Dallas, Texas, 1982): pp. 17-21. 39

Prior to his election to the House in 1978, Gramm was a professor of economics at Texas A&M University. Along with his fellow academics and conservative activists, Congressmen Dick Armey and Newt Gingrich, Gramm was trained and later taught at public, non-elite universities that were home to neither Franklin

Roosevelt's "brain-trusters" or John Kennedy's "best and the brightest." It is somewhat ironic that publicly-funded universities such as Texas A&M

University, The University of Georgia and George Mason University produced the political ideas and activists that powered a successful, conservative, anti- government movement in the late twentieth century. In the words of conservative activists, "Ideas have consequences"5' and powerful, political ideas in the 1980s were coming from different places than the cutting-edge economic and political theories that powered the pro-government movement earlier in the century.

Debate on Gramm-Rudman on the floor of the Senate, in the press, and even among budget experts focused almost solely on the legislation's automatic budget

51 This phrase is the title of a book published in 1948 and written by University of Chicago Professor Richard M. Weaver. Weaver, Richard, Ideas Have Consequences (University of Chicago Press: Chicago, Illinois, 1948). The book argues that the West is in decline because of a turning away from Christian values. It both argues against "the fetish of material prosperity" and for the acquisition of private property as a "self-justifying right." Despite the contradictions, it has nonetheless been embraced by neoconservatives. For example, former President Ronald Reagan in remarks at the Heritage Foundation Anniversary Dinner on April 22, 1986 said, "[I]t goes back to what Richard Weaver has said ... Ideas do have consequences, rhetoric is policy and words are action." I suspect Professor Weaver would have had a bit of trouble endorsing Reagan's assertion that rhetoric is policy. 40 cutting or "sequester" mechanism that set fixed dollar targets for annual budget deficit reduction. If Congress and the President failed to meet these targets through the normal legislative process, then automatic cuts in spending or sequestration were required. Washington insiders largely overlooked another feature of Gramm-Rudman that would prove to have a more significant and longer lasting impact on the budget process - namely, the means to enforce the new and the existing budget rules. The central feature of the new Gramm-

Rudman budget enforcement rules was a requirement for sixty Senators (whether or not all 100 were even present and voting) to override the requirements of the amended budget law. Amending the Budget Act itself now required a super- majority - entrenching the Gramm-Rudman rules and clearly binding the fiscal choices of future Congresses.

The 1974 Congressional Budget and Impoundment Control Act

The Gramm-Rudman super-majority voting requirement was a radical break with the 1974 Congressional Budget and Impoundment Control Act. Furthermore, the almost back-handed adoption of these requirements contrasted sharply with the early 1970s, when Congress thoroughly debated super-majority voting requirements prior to enactment of the original budget law. 41

The Joint Study Committee on Budget Control (a special bi-cameral committee convened to devise new legislative levers to control the budget) had unanimously recommended that two-thirds of the House and the Senate approve any waiver of the new budget rules.52 But this recommendation was immediately discarded by the House Rules Committee, which wrote in its report accompanying the Budget

Act:

[B]udget reform must not become an instrument for preventing Congress from expressing its will on spending policy. The original bill would have ruled out many floor amendments, it would have stunted the free consideration of appropriations measures, it would have bound Congress to unusual and oppressive rules, and it would have given one-third of the Members the power to thwart a majority's effort to revise or waive such rules. Points of order could have been raised at many stages of the process and legitimate initiatives would have been blocked.53

When the Senate took up the reform bill, the Committee on Government

Operations initially restored the super-majority requirement for waiving budget points of order. However, an amendment by first-term Republican Senator

52 See U.S. Congress. Report of the Joint Committee on Budget Control, Recommendations for Improving Congressional Control Over Budgetary Outlay and Receipt Totals, H. Rpt. No. 93- 147, (April 18, 1973): p.2 7. As with Gramm-Rudman, the legislation authorizing this joint committee was attached to a debt limit increase on February 27, 1973. The debt causing such alarm then was about $450 billion ($1.1 trillion constant 2004 dollars) at the end of 1973. The last debt limit increase on November 19, 2004 was more than twice that amount in nominal dollars, nearly $1 trillion, and brought the total debt to just over $8.1 trillion. (See Press Secretary, "Statement on S2986," White House, November 19, 2004.) Note that the press release's title included just the bill number and no other information to identify the topic; reflecting the perceived unpopularity of debt limit increases. 53 U.S. Congress. House. Committee on Rules, Budget and Impoundment Control Act of 1973, H. Rpt. No. 93-658, (November 20, 1973): p. 29. 42

William Roth of Delaware to extend the two-thirds voting requirement to efforts to raise the spending totals in the budget resolution was rejected in the committee markup by a vote of nine to three. Roth's additional views to the committee report stated, "Should Congress really desire that extra spending increment, let them say so by adopting a second resolution with a two-thirds vote."5 4 Although the bill was reported unanimously, two members of the committee, Democrat Lee

Metcalf of Montana and Republican William Saxbe of Ohio, argued in their additional views that "to be both workable and effective, the congressional budget process must remain relatively flexible. And to be flexible, it must be free from procedural devices that would deny the will of the majority at crucial points in the process." 55

The Metcalf-Saxbe concern obviously resonated with others in the Senate. When the bill was subsequently considered by the Committee on Rules and

Administration, the committee abolished the super-majority requirement on the grounds that:

Generally, the committee tried to apply existing Senate rules and procedures to the congressional budget process, except where it was

54U.S. Congress. Senate. Committee on Government Operations, Federal Act to Control Expenditures and Establish National Priorities, S. Rpt. No. 93-579, (November 28, 1973): p 104. Ibid, p. 101. 43

apparent that a specific new provision would be necessary to achieve the purposes of the bill. Accordingly, the 25 new point-of-order situations were reduced to ten and these may be waived by majority vote, thus giving a maximum of flexibility to the procedures. 6

Allen Schick, then a Congressional Research Service (CRS) budget expert, wrote in his detailed account of the passage of the 1974 Budget Act that Congress rejected the super-majority waiver requirements and any "arrangement which explicitly favored spending cuts over increases. To have done so would have curbed the legislative power of Congress by making future outcomes dependent on budget procedures rather than on majority will."57

The Rules and Administration Committee also reaffirmed a decision made by the

Government Operations Committee that had broad implications for future action by the Senate on the budget rules. Both Committees limited debate on budget resolutions which set the broad outlines for taxing and spending and on budget reconciliation, a procedure intended to implement savings assumed in the budget

56 U.S. Congress. Senate. Committee on Government Operations, Committee of Rules and Administration, Congressional Budget Act of 1974, S. Rpt. No. 93-688, (February 21, 1974): p. 25. Robert Byrd, then Majority Whip and Chairman of the subcommittee ofjurisdiction, Subcommittee on the Rules of the Senate, played the key role in the sequential referral of the budget bill and its vetting with the leadership of the key committees. See Schick, Allen, Congress and Money (Washington D.C.: The Urban Institute, 1980): p.6 7 - 71. 57 Schick, p.73. 44 resolution. 58 The Rules and Administration Committee reduced the limits for general debate 59onbudget resolutions from the 100 hours provided by the

Government Operations Committee to only 50 hours. In addition, this committee set a limit of 20 hours of general debate on budget reconciliation. This action was intended to protect budget legislation from filibuster and efforts by a minority of

Senators to delay or derail spending cuts or tax increases. However, it had the unintended effect of making this legislation a magnet for unrelated or "non- germane" provisions.

Enactment of Super-Majority Budget Rules

The super-majority budget rules enacted for the first time in the 9 9th Congress included provisions of the Gramm-Rudman amendment to the debt limit increase as well as the lesser known Byrd Rule, an amendment to the 1985 budget reconciliation bill.

58 The Rules and Administration Committee provided for an optional budget reconciliation bill reported by the newly created Budget Committees - essentially the same provision in the final 1974 Budget Act. Foreshadowing the Gramm-Rudman amendment, the Government Relations Committee had proposed a mandatory reconciliation bill reported by the existing Appropriation Committees which required pro rata cuts in discretionary spending to meet binding spending ceilings established in the budget resolution. 59 General debate is overall debate on legislation. Within total limits on general debate, the Committees also set limits on debate on individual amendments. 45

Gramm-Rudman

The Gramm-Rudman amendment debuted as a bill, H.R. 1981, on February 23,

1981 along with President Reagan's first economic plan. The bill's co-sponsors were then-Representative Phil Gramm and fellow Texas Democrat and Majority

Leader, Jim Wright. There are conflicting accounts of whether or not the liberal

Democrat Wright supported the substance of the bill.60 The bill was more moderate than its Senate successor, featuring a similar automatic sequestration requirement but no super-majority enforcement mechanism. In fact, Republican conservatives in the House were initially leery of the bill because the automatic deficit reduction mechanism cut defense and domestic spending in equal parts.61

It is possible that Wright added his name to Gramm's bill as part of an effort to

"curb his conservative tendencies by enhancing his influence within the

60 Tom Polgar, Legislative Director to Senator Rudman in 1985, said in an interview that he believed that Wright had signed onto the bill "as a courtesy." Polgar, Tom, Legislative Director to Senator Rudman in 1985, interview with the author, January 20, 2004, Washington, D.C. However, Don Wolfensberger, a Republican staff member on the Rules Committee, recalled that then-Representative Trent Lott (R-Mississippi) told him in early 1981 that both Wright and Gramm had approached him to co-sponsor the bill. Wolfensberger, Don, "Deficit Politics and the Process Problem: Some Personal Reflections," (Unpublished manuscript written for the Congress Project Seminar on Congress and the Politics of Deficits, September 22, 2003). 61 Don Wolfensberger also wrote that he recommended that Lott not co-sponsor H.R. 1981 because it might cut defense too deeply. As a result, Lott held off for some time but joined nearly eighty other co-sponsors later in the 99th Congress. Ibid. 46

Democratic Party."6 2 Trying unsuccessfully to head off the defection of conservative southern Democrats led by Representatives Gramm, Charlie

Stenholm and Kent Hence, all Texas Democrats, to the Reagan economic plan,

Wright also arranged to give Gramm a seat on the Budget Committee over the objections of Democrats already serving on the Committee.

H.R. 1981 was set aside by Gramm in the next Congress in the turmoil over his removal from the Budget Committee by the House leadership,63 and his subsequent resignation and re-election as a Republican from the same House district. The final straw for Jim Wright was reportedly Gramm's opposition on the House floor to adopting the procedures for the 100th Congress recommended by the Democrats' caucus. Julia Malone, a reporter for the Christian Science

Monitor, wrote at the time, "Gramm reached the final limit when he fought the rules changes that had passed in the Democratic caucus. It is an unwritten rule that members can fight hard behind the closed doors of the caucus on party

62 Nadler, Richard, "A Half-Sung Hero," National Review On-Line (Posted September 5, 2001, 8:30 a.m.) 63 More specifically, the Democratic Steering and Policy Committee declined to re-nominate him to a second term on the Budget Committee because Gramm had actively collaborated with the Reagan White House to defeat the Democratic leadership's budget in the previous Congress. A Democratic party panel had not taken such a step since 1911. See Baker, Ross, "Party and Institutional Sanctions in the U.S. House: The Case of Congressman Gramm," Legislative Studies Quarterly, Volume X, (Issue 3, August, 1985): pp. 315-337. 47 matters, but in public they vote together."6 4 Gramm's removal from the Budget

Committee may have driven home the importance of the rules of procedure in

Congress and may have led to his resignation from Congress. His resignation, however, was more likely caused by the gain of 26 seats by the Democrats in the

1982 election, thereby eliminating the conservative southern Democratic-

Republican majority in the House.

The Gramm plan next appeared in the spring of 1985, when the freshman Senator approached Pete Domenici (R- New Mexico), the moderate to conservative chairman of the Senate Budget Committee, with "a great idea." 65 Gramm told

Domenici and his staff that he wanted to attach an amendment similar to H.R.

1981 to the "must pass" legislation to raise the debt limit to $2 trillion when it came up in the summer or fall. Senator Domenici forwarded the bill to his staff members, specifically Sid Brown, a senior staff member, who worked to on the bill with Senator Gramm off and on for several months. 66

Just prior to the August recess, the conference report on the fiscal year 1986 budget resolution came to the Senate floor. The report was the product of an

64 Malone, Julia, "Reagan's Boll Weevil Friends Get Warning," The Christian Science Monitor (Midwestern Edition, January 5, 1983): p.1 . 65 Bell, Steve, former Staff Director of the Senate Budget Committee in 1985, interview with the author, February 19, 2004, Washington, D.C. 66 Ibid. 48 agreement between President Reagan and House Speaker Tip O'Neill (D-

Massachusetts) to drop from the final budget plan both the Senate's reduction in the Social Security cost-of-living adjustment and the House's cut in the administration's request for defense spending, thus adding billions of dollars to the $200 billion dollar plus deficit in the coming fiscal year. During debate on the conference report, Senator Warren Rudman, outraged by what he perceived as a betrayal by President Reagan of the tough choice taken by Senate Republicans, also called for action on the debt limit bill to curb deficit spending. Rudman asked his legislative director, Tom Polar, to develop a proposal by the end of the recess in early September to reduce the federal deficit. Polar unearthed H.R.

1981 and recommended its automatic spending reduction approach to Rudman.

Rudman joined with Gramm and began to shop the bill to potential cosponsors.

Gramm could not have chosen a better partner than Rudman, a moderate

Republican, both budgeter and appropriator, who was trusted by his fellow New

England Senators, mostly liberal Democrats.67 Rudman was the "political glue" that made the Gramm-Rudman amendment possible.6 8

67 Rudman, Warren B., Combat: Twelve Years in the U.S. Senate (Random House: New York, 1996): pp. 82-3. 68 Polgar, Tom, Legislative Director to Senator Rudman in 1985, interview with the author, January 20, 2004, Washington, D.C. Polgar also confirmed the sequence of events recounted in Rudman's memoir cited above. 49

Gramm and Rudman's highest priority was to find a Democrat to join them, and they approached Senators Lawton Chiles (D-Florida), moderate Ranking Member of the Budget Committee; Russell Long (D-Louisiana), moderate Ranking

Member of the Finance Committee; Lloyd Bentsen (D-Texas), conservative second Ranking Member of the Finance Committee. They finally succeeded in enticing Senator Ernest "Fritz" Hollings (D-South Carolina), moderate Democrat and former Ranking Member on the Budget Committee. Hollings' price was the removal of Social Security from the automatic spending cuts required in the bill - another fortuitous moment that helped the long-shot amendment's chances.

Initially, the Republican leadership in the Senate and the White House opposed the Gramm-Rudman amendment and urged them to support a "clean" debt limit extension. However, as Gramm, Rudman and now Hollings picked up co- sponsors, soon adding liberal Christopher Dodd (D-Connecticut) and then David

Boren (D-Oklahoma), a respected moderate Democrat, Senate Majority Leader

Dole (R-Kansas) decided to sign on. On October 3, 1985, Senator Dole announced that the debt limit would not pass the Senate without the Gramm-

Rudman amendment attached and introduced the amendment himself. Dole also immediately offered a second degree amendment to Gramm-Rudman, essentially 50 identical to the first degree amendment, in order to block substantive amendments by other Senators.69

Again, unrelated events worked to assist Gramm and Rudman, whose efforts to append their amendment to the debt limit coincided with Jim Miller's appointment as Director of OMB. Miller was an enthusiastic supporter of

Gramm-Rudman and had also begun his career as a conservative economist academician, even spending some time at Texas A&M University with Gramm.70

The Senate approved Miller's appointment on October 4, the day before the

White House put aside its concerns about the amendment's effects on defense spending (the administration's first take on the bill being the same as Trent

Lott's) and fell in line behind the Senate Republicans.

The first draft of Gramm-Rudman required a joint resolution, signed by the

President, to waive, amend or repeal the provisions of the amendment. The provision, in its entirety, read as follows:

69 In general, pending legislation can be amended in only two "degrees." The first degree amendment is intended to change the pending legislation. Senators may offer a second degree amendment to the first degree amendment to change the first degree amendment or as in this case, to protect the first degree amendment from changes. 70 Timothy Muris, who arrived at OMB with Miller, said "Phil [Gramm] had Public Choice in mind." (Muris, Timothy, Executive Associate Director, Office of Management and Budget, 1985-87, currently Foundation Professor of Law, George Mason University, interview with the author, November 15, 2004, Washington, D.C.). 51

WAIVERS AND AMENDMENTS. - Notwithstanding section 904(b) of the Congressional Budget and Impoundment Control Act of 1974, any other provision of law, or any rule or standing order of the Senate or the House of Representatives, no provision of this section, or any amendment made by this section, may be waived, amended, or otherwise modified except by joint resolution that - (1) does so in specific terms, referring to such provision by its designation and declaring that such joint resolution waives, amends or otherwise modifies such provision; and (2) is addressed solely to that subject.71

This provision applied only to the Gramm-Rudman amendment, not to the 1974

Budget Act, but was nevertheless breathtaking in its scope. Both the waiver provisions in the Budget Act and the Standing Rules of the Senate were superseded and no further amendment of Gramm-Rudman was permitted except by a joint resolution "addressed solely to that subject." Thus, no "log rolling"72 was permitted in crafting the joint resolution and if the President were to veto any modification to Gramm-Rudman, a two-thirds vote of both houses of Congress would be required to override the veto and enact it into law.

There was little debate on the floor concerning the joint resolution despite the fact that it clearly violated the constitutional provision (Article I, section 5) discussed

71 U.S. Congress. Senate. Waiver provision of Amendment No. 730, the Balanced Budget and Emergency Deficit Control Act of 1985, to H.J. Res. 3 72, increasing the statutory limit on the public debt, Congressional Record, (October 3, 1985): S 12566. The term "log rolling" as I use it here is not intended to have the simple, traditional meaning of a legislator trading his or her vote on one bill he or she cares little about in exchange for another bill of greater importance. Rather, the term means the strategic swapping of support for provisions within a single bill to achieve the necessary votes for passage of that bill. 52 in the previous chapter granting both chambers the authority to write their own rules with no executive branch approval. Although the Gramm-Rudman waiver/amendment process had been discussed on the floor on September 25 by the provision's chief sponsors, no mention was made of the matter until October

4. Senator Don Reigle (D-Michigan) was the first to publicly express concern about the super-majorities required to repeal Gramm-Rudman:

[I]f this becomes law, with the support of the President's signature, if we come along later and Congress decides that we made a terrible mistake ... and we want to undo it, a majority will not accomplish that. We can have a majority in the House and in the Senate in the future that will say 'I made a terrible mistake and must undo this thing'. We may have strong majority votes to take it off the books, but the President can veto it. 73

Then-Minority Leader, Senator Robert Byrd, remarked on the issue three days later, stressing the constitutional issues:

I do not want the President vetoing any Senate rule. I do not want the House of Representatives to tell the Senate what we can or cannot do with a waiver motion. I am adamantly opposed to that provision. When it gets to the point where ... the Senate, under the Constitution, cannot be the judge of its own rules and proceedings, and both Houses have to pass a joint resolution before the Senate can act or waive an action within the sole purview of its own authority, then we will have failed in our duty.74

73U.S. Congress. Senate. Senator Donald Reigle, Congressional Record, (October 4, 1985): S 12651. 74 U.S. Congress. Senate. Senator Robert C. Byrd. Congressional Record, (October 7, 1985): S 12827. 53

Senator Byrd also indicated that Gramm-Rudman's sponsors were amenable to an unspecified, alternative provision addressing waivers and amendments.75

The following day, Senator Byrd and Senator Lawton Chiles (D-Florida),

Ranking Member of the Budget Committee, offered an alternative amendment.

This amendment was very similar to Gramm-Rudman and therefore amounted to a concession of defeat. The Byrd-Chiles amendment also set multi-year, maximum deficit targets, and included automatic, across-the-board spending cuts if the targets were not met. One departure from Gramm-Rudman was the Byrd-

Chiles amendment's waiver provision. Identical to the 1974 Budget Act, new budget points of order created by Byrd-Chiles could be waived by a majority of

Senators present and voting. With only a few hours of debate late into the night of October 8, the Byrd-Chiles amendment drew no Republicans and was defeated the next day by a vote of 40-59.76

That same day, October 9, following six days of floor debate (but no hearings or any other prior action by the committees of jurisdiction) and three unsuccessful cloture votes, the Gramm-Rudman amendment was approved by a super- majority

75 Ibid. 76 U.S. Congress. Senate. Vote on Byrd-Chiles substitute to Amendment No. 730, Congressional Record, (October 9, 1985): S 12953. 54 vote of 75-24.77 Democrats provided only a slim majority of 23-22 and only two

Republicans opposed Gramm-Rudman.78 Gramm-Rudman was approved with the original joint resolution language unchanged.

Immediately after the Gramm-Rudman vote, Senator Domenici, who was the

Budget Committee Chairman, described but did not offer technical corrections to the amendment. Senator Byrd urged his colleagues to "stay around and listen, especially those who have voted already for the Gramm, et al. amendment."79

These "technical corrections" removed the joint resolution and proposed in its place a super-majority of sixty Senators to waive the Gramm-Rudman provisions.

In response to a question from Senator Bradley (D-New Jersey) (the only question on the subject) about the waiver provision, Senator Gramm pointed out that the sixty-vote requirement was the same as the cloture rule. He also noted:

77 U.S. Congress. Senate. Vote on Amendment No. 730, Congressional Record, (October 9, 1985): S 12988. 78 The two Republicans were Mark Hatfield (R-Oregon), chairman of the full Appropriations Committee and Lowell Weicker (R-Connecticut), chair of the Labor, Health and Human Services Subcommittee. Both Senators were concerned about the effect of the sequester on domestic, discretionary spending. Senator Hatfield, according to the then-staff director of the Appropriations Committee, Keith Kennedy, came to appreciate the procedural protection on the floor of the Gramm-Rudman rules setting ceilings on subcommittee allocations. (Kennedy, Keith, Staff Director, Senate Committee on Appropriations, 1981-87, 1995-97, 2005, interview with the author, February 19, 2003, Washington, D.C. 79 U.S. Congress. Senate. Senator Robert C. Byrd, Congressional Record, (October 9, 1985): S 12988. 55

If you bring a bill to the floor that is in violation of a budget adopted under this procedure, it will be out of order and can be brought to the floor against the rules of the Senate only by a three-fifths vote of those duly chosen and sworn, that is the binding element of this budget that means we are going to be moving toward budgets that have meaning.8 0 (emphasis added)

For Domenici and Chiles their interests as chair and ranking member of the

Budget Committee trumped partisan politics. Their staff worked through the night on the Domenici amendment.

The following day, the Senate adopted by voice vote a complete Domenici-Chiles substitute to Gramm-Rudman. Thereafter, three-fifths of all Senators would be required not only to waive the new Gramm-Rudman rules but also to waive several of the existing points of order in the 1974 Budget Act, most notably section 306, which prohibits any amendment on the floor which affects matters within the jurisdiction of the Budget Committee. A majority of Budget

Committee members (typically eleven Senators) could thereafter amend the rules governing fiscal policy but only sixty Senators on the floor would have the same power. The meaning of"budgets that have meaning" could be determined by a minority of about one-tenth of the Senate's membership.

80 U.S. Congress. Senate. Senator Phil Gramm, Congressional Record, (October 9, 1985): S 12999. 56

When asked whether those who drafted the Gramm-Rudman amendment were concerned about the anti-democratic nature of the super-majority voting requirement, Senator Rudman's legislative director, Tom Polgar, answered,

"There was no concern. That was the premise behind it. It was on purpose and deliberate."81 He also confirmed the opportunity that Gramm-Rudman presented the Budget Committee, "The Budget Committee wanted to include the '74 Act in writing the super-majority. We went along because it made it harder to repeal

Gramm-Rudman." 8 2 Steve Bell, then-Staff Director of the Senate Budget

Committee, explained why the Committee extended the new super-majority enforcement mechanism beyond Gramm-Rudman: "We knew that the sequester asked the Senate to do something it doesn't want to do and it had the potential to undermine the entire budget process. So we took the opportunity presented by the Gramm-Rudman bill to protect the Committee."8 3

It took two conferences with the House and more than two months before a final agreement was struck on Gramm-Rudman and President Reagan signed it into law on December 18. The conference report included an entire rewrite of title III

81 Interview with Polgar, Ibid. 82 Ibid. ("In writing the super-majority" Polgar meant that the Budget Committee wanted to include all of the existing budget points of order under the supermajority waiver requirement including Section 306 which prohibits amending the budget rules on the floor.) 83 Interview with Bell, Ibid. 57 of the 1974 Budget Act, the budget process section, and extended the super- majority voting requirement to every significant budget point of order.

The Byrd Rule

While negotiations were on-going between the two chambers on Gramm-

Rudman, the Senate turned to consideration of budget reconciliation, S. 1730.

On October 24, with three-quarters of the time for debate on the bill exhausted,

Senators Hollings and Thurmond (R-South Carolina) offered a controversial amendment on textile and shoe imports. This amendment had not been reported by the committee of jurisdiction, the Finance Committee, for lack of support. In addition, a number of Senators had indicated they intended to filibuster the textile bill when it was offered on the floor.

Senator Domenici raised a budget point of order against the provision because it was not "germane" - that is, related to a committee's budget reconciliation

"instructions."84 A number of Senators argued that Hollings' amendment abused

84 The budget resolution may instruct committees to achieve budget savings through spending cuts and revenue increases. These are called reconciliation instructions. Until May 21, 1996, the Senate used budget reconciliation only to achieve net spending reductions. On that date, the presiding officer ruled, and was sustained in his ruling, that reconciliation could be used for tax cuts resulting in revenue reductions. This ruling made the trillion dollar tax cuts possible in 58 the reconciliation process. For example, Senator Russell Long (D-Louisiana),

Ranking Member of the Finance Committee,8 5 said:

It was never the intention when we voted to establish the reconciliation process that it should be used to deny Senators a right to free debate, to have their day in court to explain why they are for or against a measure, and make their arguments for an amendment. There is nothing so desperate about this textile matter that it cannot be considered in an orderly fashion.8 6

However, the point of order was waived by a vote of 57 to 39 -- a majority but not the super-majority required to cut off debate under the cloture rule if a filibuster had been possible. The provision was then added to the bill by a simple majority vote of 54 to 42. At this point, Senator Byrd (who had just voted to waive the

Budget Act and to add the Hollings-Thurmond amendment to the budget reconciliation bill) with Senators Dole, Domenici, Chiles and Ted Stevens (R-

2001 and 2003 using the budget reconciliation process to avoid filibuster and the super- majorities required for cloture. (See Dauster, Bill, "The Monster that Ate the Senate" (Lecture delivered at Washington College of Law, American University, Washington, D.C., January 13, 1998) and the Congressional Record, (May 21, 1996): p. S1452. 85 The action by Long is an interesting example of committee interests taking precedent over constituent interests. Sarah Binder and Steven Smith argue that the origins and subsequent changes to the Senate filibuster rules are a function of Senators' immediate strategic calculations. (Binder, Sarah A. and Steven S. Smith, Politics or Principle? Filibustering in the United States Senate, (Washington, D.C.: Brookings Institution, 1997)). In this case, Long was torn by conflicting strategic needs - to protect the prerogatives of the Finance Committee, author of the lion's share of a reconciliation bill's revenue and spending provisions, and to protect textile interests in his state. Long was a co-sponsor of the Hollings-Thurmond textile amendment but his role as ranking member of the Finance Committee trumped his state's economic needs. 86 U.S. Congress. Senate. Senator Russell Long, Congressional Record, (October 24, 1985): S 14033. 59

Alaska) offered an amendment8 7 to the budget bill. This amendment, which came to be known as the "Byrd Rule," addressed this problem of Senators using budget reconciliation, which is debated under a time limit of twenty hours (not counting the time consumed by voting), as a means to circumvent the filibuster. The Byrd

Rule was also intended to address a related problem - committees including non- germane or extraneous provisions in their reconciliation bills to protect these provisions from filibuster. Byrd explained his amendment:

I would just say that we are in the process now of seeing, if we have not seen earlier, the Pandora's Box which has been opened to the abuse of the reconciliation process. That process was never meant to be used as it is used. There are 122 items in the reconciliation bill that are extraneous. Henceforth, if the majority on a committee should wish to include in reconciliation recommendations to the Budget Committee any measure, no matter how controversial, it can be brought to the Senate under an ironclad built-in time agreement that limits debate, plus time in amendments and motions, to more than twenty hours...

What the Senate was willing to deny to itself as a whole in the absence of a three-fifths vote, these committees, by being faithless to their instructions,

87 The language of the original amendment (including two minor, technical modifications on the floor) is as follows: "When the Senate is considering a reconciliation bill upon a point of order being made and sustained by any Senator, any part of the bill not in the jurisdiction of the reporting committee or extraneous to the instructions given that committee shall be deemed stricken from the bill and may not be offered as a floor amendment. This provision may be waived unless supported by three-fifths of the Senators duly chosen and sworn. No motion to waive germaneness on reconciliation bills shall be agreed to unless supported by three-fifths of the Senators duly chosen and sworn, which super majority shall be required to successfully appeal the ruling of the Chair on these matters which include the points of order on extraneous matters and matters not properly reported from a committee ." U.S. Congress. Senate. Senator Robert C. Byrd and legislative language of the Byrd Rule, Congressional Record, (October 24, 1985): S 14032. 60

are arrogating to themselves by votes of a mere handful of Senators - a majority of a committee quorum.

The Senate must protect itself from this attack by its own committees...88

Thus, Byrd argued that the full Senate must protect minorities from even smaller minorities in committee.89 To preserve the three-fifths test of the filibuster, the

Byrd Rule imposed the same test on extraneous or non-germane amendments.

Thus, former Counsel and Minority Staff Director of the Senate Budget

Committee, Bill Dauster, describes motions to waive germaneness as "mini filibusters."

The Byrd Rule also took super-majority budget rules several steps farther than

Gramm-Rudman as initially enacted. For the first time, the three-fifths test was also applied to appeals of the ruling of the presiding officer (with respect to the applicability of the point of order raised) and to amendments within the Budget

Committee-reported budget reconciliation bill.90 The Byrd Rule was adopted by a unanimous vote of 96 to 0, following clarification by Senate Majority Leader

88 Ibid. 89Although, as discussed above, Section 306 has precisely the effect the Byrd Rule is intended to prevent; that is, Section 306 allows a simple majority of the Budget Committee to change the budget rules and protects this decision with a super-majority budget point of order on the floor. 90 The germaneness requirement for amendments to budget reconciliation bills had previously only applied to floor amendments. This latter provision is the only super-majority budget rule that potentially disciplines committee majorities. It has been used by the Democrats, when in the minority, to strike provisions of Republican majority budget reconciliation bills since 1994. 61

Dole, in response to a question by Senator Thurmond, sponsor of the textile amendment, that it did not apply to the pending reconciliation bill.91 (Apparently,

Thurmond's view was that the Senate must be protected from attack by its committees and the misuse of the reconciliation process, but not until after his textile amendment was adopted.)

Budget Rules Post-1985

Despite enactment of Gramm-Rudman, Congress failed to make much progress on triple-digit deficits until the late 1990s. Congress revisited the Budget Act in

1987 to fix constitutional deficiencies in the sequester process (necessitated by a

Supreme Court decision striking down the sequester), stretch out the Gramm-

Rudman deficit reduction goals, and further toughen the Act's enforcement mechanism. Most notably, the rule governing appeals of the ruling of the presiding officer was changed to require a super-majority of sixty Senators to

91 The Byrd Rule did not become law until April 7, 1986 because a final agreement on the 1985 budget reconciliation bill was held up over the financing of the Superfund toxic waste clean-up program. On December 19, the Byrd Rule was further modified by Senate Resolution 286, offered by Senator Alan Simpson (R-Wyoming) and others including Senator Domenici was adopted by voice vote, to extend the Rule to conference agreements and amendments in disagreement between the two houses. (See U.S. Congress. Senate. Debate on and language of S. Res. 286 (modification of the Byrd Rule), Congressional Record, (December 19, 1985): S 18255. 62 override a ruling.92 In the fall of 1990, President George H.W. Bush struck an agreement with the entirely Democratic-controlled Congress to weaken the deficit goals and sequester process, while once again broadening the scope of the super- majority budget enforcement mechanism. This agreement, the Budget

Enforcement Act (BEA), refined Gramm-Rudman's super-majority enforcement mechanisms and extended their reach to mandatory (including entitlement) spending programs and revenues.93

The Senate revisited the budget rules several times in subsequent years, including

1993, 1996, 199794,2002, 2003 and 2004, and extended most of the super-

92 As noted in Chapter Two, this is a tougher standard than that governing the Standing Rules of the Senate. The Standing Rules only require a majority of Senators, provided a quorum is on the floor. 93 In 1990, the BEA established separate caps on discretionary (appropriated) spending for domestic, defense and international affairs programs and established "firewalls" prohibiting the transfer of funds among them. The caps and the firewalls were enforced with new super- majority budget points of order. In addition, the BEA established "pay-go" to restrain entitlement spending and revenue reductions by requiring any new spending or tax cuts to have a financing mechanism. Pay-go was likewise enforced with a super-majority budget point of order. (See Title XIII of the Omnibus Budget Reconciliation Act of 1990, Public Law 101-508, November 5, 1990.) This approach was superior to the deficit targets and sequester of the original Gramm-Rudman because it set limits on the spending that Congress actually controlled. Before, Congress chased set deficit amounts, the success of which was determined more by the performance of the economy than any action by Congress. 94 In the Balanced Budget Act of 1997, a budget reconciliation bill worked out between the Clinton Administration and the Republican Congress, all points of order in the Budget Act were made permanent law but the sixty-vote requirement for spending-related points of order was extended only through the end of fiscal year 2002. In 2002 and 2003, the sixty vote requirement was again extended for fiscal years 2003 and 2004. One of the many misunderstandings by most Senators and staff members about the spending budget points of order is that they did not understand that only the sixty-vote requirement expired for a month and a half in the fall of 2002 - not the points of order themselves. As a result, there was no 63 majority budget enforcement rules up to the present. (In some instances the super-majority voting requirements were extended in Senate-passed budget resolutions or other legislative vehicles following their expiration in the Budget

Act).95 However, the so-called "Pay-Go" rule,96 first enacted in the BEA, along with the supermajority points of order to enforce it, has expired.

debate at the time about the possibility of returning to the pre-Gramm-Rudman majority waivers of those points of order. 95 Most recently the discretionary spending caps and the super-majority enforcement mechanisms were extended in the fiscal year 2005 Defense Appropriations bill, the first appropriations bill for fiscal year 2005 enacted, after the Senate failed to pass the conference agreement on the budget resolution for that fiscal year. The budget provision was added in the conference committee on the Defense bill under orders from the House and Senate Republican leadership. In addition, S. Res. 445, Senate Committee Reorganization Resolution, passed on October 9, 2004, moved sole jurisdiction for "measures affecting the budget process" to the Budget Committee. 96 The pay-go rule requires that increases in mandatory spending; i.e., spending not subject to annual appropriations, and tax cuts be paid for with mandatory spending cuts or tax increases. Despite the rule and its super-majority enforcement mechanism, the Congress did not pay for the Bush tax cuts in 2002, 2003 nor the Medicare Prescription Drug Benefit legislation enacted in the fall of 2003. Controversy over the extension of the pay-go rule doomed the fiscal year 2005 budget resolution in the Senate, where a bi-partisan majority favored extension of pay-go but the Republican leadership did not want to be required to pay for pending tax cut bills, subsequently enacted prior to the fall election. 64

Chapter Four: Analysis of Budget Points of Order and Motions to Waive the Budget Act 1985-94

Although the public choice literature is heavy on prescriptive conclusions, it is light on empirical tests of the theory.97 To help address this imbalance, I analyzed the 140 votes on motions to waive the budget rules in the Senate from enactment of Gramm-Rudman to the end of the 103rd Congress in 1994. At that time, the first Republican Congress in forty years was elected on a party platform with the public choice title, Contract with America.9 8

I chose to conclude the empirical part of my study at the end of the 10 3rd

Congress because the leadership and the formal and informal rules of

Congressional fiscal decision making thereafter changed significantly. For example, Bob Keith, another CRS budget expert, points out that Congress intervened to change the "pay-go score card" (which tracks whether new mandatory spending and revenues are paid for) by legislative fiat six times

97 Green, Donald, and Ian Shapiro, Pathologies of Rational Choice Theory (Hartford: Yale University Press, 1994): p. 11. 98 See Appendices, Summary Table Al. The sources for this table and the issue tables derived from it are published and unpublished CRS reports and memos, an unpublished data base maintained by the Senate Budget Committee, the Congressional Quarterly Almanacs for the relevant years, Congressional Budget Office cost estimates, committee bills and reports, as well as the Senate floor debate on each motion. Dollars in this and other tables and throughout this text are generally nominal dollars; i.e., not adjusted for inflation (which was very moderate during the study period-the largest annual GDP deflator for FY 86-94 is only 3.9% and the annual average is only 2.65%). However, constant dollars are provided in tables and text where appropriate; e.g., discussing savings from budget points of order. 65 between 1994 and 2002.99 In addition, the House adopted a rule requiring a two- thirds majority to raise income taxes (a plank in their election platform) at the

°°0 beginning of the 104th Congress.

Thus, I concluded the empirical part of this study in 1994 to allow a purer test of the effect of super-majority budget points of order unmuddied by the effects of the change in leadership in both Houses to unified Republican control. However,

I also draw on a more limited unpublished study conducted by the minority staff of the Senate Budget Committee examining the motions to waive the Budget Act through 2002 as well as examine significant developments with respect to the

Budget Act and super-majority voting requirements in the Senate through the beginning of the 10 9th Congress.

I chose not to review budget enforcement in the House of Representatives because the House Rules Committee routinely waives all budget points of order when fashioning the rule for floor consideration of legislation. The Rules

Committee determines which bills are brought to the floor, limits debate time, controls the number and type of amendments allowed, and waives points of order

99 Keith, Robert, Techniques for Preventing Budget Sequester, Congressional Research Service Report (Washington, D.C.: GPO, March 8, 2002). 100See House Rule XXI(c)(5). This amendment to Rule XXI has been re-adopted in all subsequent Congresses. 66 that may be raised under House rules. 0l° In addition, because rules governing floor consideration are adopted by a simple majority vote in the House, super- majority budget points of order are of little consequence in that body.

In contrast, the Senate has no committee with authority equivalent to the House

Rules Committee, hence the establishment of special procedures in the Budget

Act to waive points of order in that body. Further, most legislation on the floor of the Senate has no protection from Members offering amendments, whether or not they are germane to the measure under consideration.

Budget Points of Order and Motions to Waive in the Senate

A Senator may raise a point of order against any measure or procedure on the grounds that it violates a Senate rule. In effect, a point of order is an objection by one or more Senators that the legislative activities of one or more other Senators is not permitted under the Constitution, the Standing Rules of the Senate, the

Budget Act, or some other rule previously adopted by the body. The Senate, unlike the House, is a "continuing institution,"1 '02 and its "standing" rules remain

101Keith, Robert, Techniques for Preventing Budget Sequester, Congressional Research Service Report (Washington, D.C.: GPO, March 8, 2002). 102 The Senate is often described as a continuing institution because, pursuant to the Constitution, only one-third of its members stand for election each new Congress (every two years). However, there is some controversy about this matter. During the period of 1948 to 67 in effect until amended or repealed.'0 3 (The House adopts its rules every two years at the beginning of each new Congress).

The presiding officer decides whether the point of order is valid based on the rule in question and relevant precedents (the previous actions of the Senate). The presiding officer is usually a junior member, chosen so that the newest members of the body can learn Senate rules and precedents. The Parliamentarian as well as

Senate staff members in the Office of the Parliamentarian advise the presiding officers. Since the Parliamentarian is an expert on Senate rules and precedents and junior Senators are in the process of learning them, it is in reality Senate staff that almost always makes the call on the validity of a point of order.

1975, a group of liberal Senators, wanting to amend the cloture rule, argued that the Senate rules should be open to amendment by majority vote at the beginning of each new Congress. Republican Vice President Richard Nixon and Democratic Vice President Hubert Humphrey, while presiding at the beginning of sessions of Congress, ruled in favor of these liberal Senators. No vote was taken on Nixon's ruling, but Humphrey's was not sustained by a majority of the Senate. (See Riddick Interview.) Legal scholars Catherine Fisk and Erwin Chemerinsky argue that there should be a distinction drawn between maintaining the continuity of personnel and the continuity of rules and law: Arguably, because the Senate is a continuing body, its rules should continue from session to session. This response is based on several unsupported and untenable assumptions. First, it assumes that because two-thirds of the senators continue to serve after each election, the Senate as a whole would be regarded as a continuing body. But the latter does not follow from the former. Each session of the Senate is given a new number. Each session may elect new officers. In every other way, each new Senate is treated as a new body." (Fisk and Chemerinsky, "The Filibuster," p. 251) Possibly in recognition of this ambiguity, the Senate rules themselves specify that the rules are continuing from session to session. Senate Standing Rule V, paragraph 2 states that "The rules of the Senate shall continue from one Congress to the next Congress unless they are changed as provided in these rules." 3 Senate Standing Rule V, paragraph 2. 68

Budget points of order are unique in that under the Budget Act the presiding officer, in determining the validity of a budget point of order also relies on the estimates of the Senate Budget Committee. By precedent, the estimates of the

Budget Committee are those of the Committee's chair who may or may not follow the estimates of CBO. Thus the Budget Committee Chair has broad discretion in enforcing budget points of order through the "scoring" powers granted him under Section 312 (a) of the Budget Act. For example, in 1995, after the Republicans had retaken the Senate majority by the slimmest of margins,

Senator Domenici used his scorekeeping powers to prevent a point of order by

Senator Graham (D-Florida) from being successfully raised against a provision in the fiscal year 1996 budget resolution that saved money in the Social Security program. Senator Domenici and the majority did not have to defend against the point of order with sixty votes, which they probably did not have in the narrowly divided Senate, because Graham's point of order was ruled invalid.

Following the Republican take over of the Congress in 1994, the Chairmen of the

House and Senate Budget Committees began to more aggressively exercise their score-keeping powers; i.e., powers to determine the cost to the U.S. Treasury of a particular measure. (The 1974 Budget Act granted this power to the Budget

Committees. By Senate precedent, the Chairman of the Budget Committee may 69 unilaterally exercise this power'04). They instructed the Congressional Budget

Office (CBO) to change the scoring of legislation, drafted language in major spending bills directing OMB to score bills as they desired, and engaged in impromptu scoring of amendments on the Senate floor. For example, in 1998, the

Chairmen of the House and Senate Budget Committees instructed CBO to follow

OMB in determining the cost of the fiscal year 1999 Defense Appropriations bill.

The resulting "scoring" allowed the Defense Appropriation Subcommittee to spend an additional $2 billion in outlays. When Senator Harkin, ranking member of the Labor, Health and Human Services (Labor, HHS) Appropriations

Subcommittee, discovered this "directed scorekeeping," and that OMB scoring would add billions to his bill as well, he asked Senate Budget Committee

Chairman Domenici to similarly adjust the Labor, HHS cost estimates. Domenici refused to do it and argued that his decision was based purely on policy considerations; that is although the OMB defense scoring method was superior,

CBO was the better choice for the Labor, HHS bill. However, when Harkin objected to taking up the Conference Report of the Energy and Water

Appropriations Subcommittee, which Domenici also chaired, Domenici found policy grounds to rescore one education program yielding a few hundred million

104 Conway, Jack, Professional Staff Member of the Senate Appropriations Committee and the Committee's long time, in-house budget expert. Conway was previously a staff member of the Senate Budget Committee, interview with the author, March 1, 2004, Washington, D.C. 70 dollars more for the Labor, HHS bill. Recognizing that no tactic would result in equal treatment for the two bills, Harkin graciously accepted the less than completely generous scorekeeping largess, and dropped his objections to the

Energy and Water bill.

Notwithstanding their broad discretion, Chairmen of the Senate Budget

Committee relay heavily on super-majority budget points of order to supplement their scorekeeping powers. Although Domenici could add money to the defense bill during action on the bill in the Appropriations Committee, any subsequent attempt by another Senator to alter the scorekeeping assumptions would be subject to a super-majority budget point of order on the floor.

As discussed in Chapter Two, the decision of the presiding officer may be appealed and overturned by a majority vote of Senators in all cases except budget points of order which, since passage of the "Gramm-Rudman fix" in 1987, require a super-majority of sixty votes. The clear public and legislative professional perception was that the 1987 fix was to cure the constitutional issues relating to which entity - the General Accounting Office or OMB - could order the sequester or automatic spending cuts. Only a few insiders recognized that

Gramm-Rudman's enforcement powers and those of Senator Lawton Chiles, then 71 the Budget Committee Chairman, were simultaneously enhanced. Thus, it is more difficult to overturn the Chair's ruling on a budgetpoint of order than on a point of order relating to the StandingRules of the Senate.

Once the presiding officer has ruled, a budget point of order in the Senate may still fall on a motion to waive the rule in question. Sixty votes are required to waive nearly all budget points of order. (See the Table 1 for a list of points of order their purpose, whether they are technical or substantive, whether they are permanent law and the votes necessary to waive them.)

Findings:

During the study period, the one hundred and forty votes on whether or not to waive the Budget Act were 4.6% of all recorded votes in the Senate (See Table

2). Most of the time, the Senate failed to waive budget points of order - only 38 motions to waive were successful. Almost three-quarters (73%) of all motions to waive the Budget Act were unsuccessful; that is, the point of order was sustained.

(See Table 2).

For the period post-Gramm-Rudman through 1994, super-majority budget points of order were sustained even more often -- 81% of the time. An unpublished staff 72 report of the Senate Budget Committee found remarkably consistent results when reviewing the same data over a longer period, post-Gramm-Rudman through

2002. This report found that super-majority budget points of order were sustained

87% of the time.l05 Thus, over time, super-majoritybudget points of order have proven to be an ever more effective deterrent to amendments on the Senatefloor.

105U.S. Congress. Senate. Committee on the Budget, "Have Super Majority Budget Act Points of Order Been Effective?" (Unpublished staff report, U.S. Senate, 2002). l - - - -

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Table 2: Motions to Waive the Budget Act Approved or Rejected Post Gramm-Rudman (December 12,1985) through the 103rd Congress, 2nd Session (1994) Motions to Waive Budget Votes Votes 1~ot Motions Act: Waived: Waive(1: No. of to Percentage Percentage Percent.ige Recorded Waive of Total of Total of Tot, Votes in Budget Recorded No. Motions to No. Not Motions to Year Senate Act Votes* Waived Waive Waived Waive

1986 354 22 6.2% 12 55% 10 45% 1987 420 23 5.5% 10 43% 13 57% 1988 379 1 0.3% 1 100% 0 0% 1989 312 13 4.2% 4 31% 9 69% 1990 326 13 4.0% 2 15% 11 85% 1991 280 5 1.8% 1 20% 4 80% 1992 270 25 9.3% 3 12% 22 88% 1993 395 31 7.8% 2 6% 29 94% 1994 329 7 2.1% 3 43% 4 57%

Total 3065 140 4.6% 38 27% 102 73%

* Four votes to waive the Budget Act were by voice vote, all in 1986. 76

Which Senators Raise Budget Points of Order?

The Chairman or Ranking Member of the Budget Committee most often raised budget points of order - nearly four in ten times (37%).106The next most prolific were the Chairmen, but not the Ranking Members, of the Appropriations and

Finance Committees, accounting for 24% and 17%, respectively, of all points of order raised. All other Senators combined accounted for 33% of points of order raised -- less than the Budget Committee leadership alone.

Senator Phil Gramm, chief sponsor and author of Gramm-Rudman, was the outlier. Absent any committee turf to protect or expand, he raised a total of thirteen budget points of order which is almost 10% of the total. Gramm, however, followed the general pattern of committee interests coming to dominate

106 In seven of these fifty three instances (all during the first two years following enactment of Gramm-Rudman), no point of order was actually raised. Under Section 303(c) of the Budget Act, the Budget Committee reported these motions to waive, all of which the Senate subsequently approved. This procedure only applied to Sec. 303(a), which prohibits the consideration of most authorizing legislation prior to the adoption of the Budget Resolution setting overall spending and revenue levels. The committee-reported waiver of Sec. 303(a) has not been used since 1987 and was repealed in the 1997 budget reconciliation bill, the Balanced Budget Act. Senators had largely ceased to raise this budget point of order since it was one of only a few that still could be waived by a majority vote after 1985 and the general waiver section of the Budget Act, Sec. 904, also covers Sec. 303(a). In addition, the committee- reported waiver did not obviate the need for a floor vote, thus adding another step to an already fairly complicated waiver process. 77 the process over time (As, over time, Gramm rose in seniority in the Senate107).

He raised nine of his points of order in the first three years following enactment of Gramm-Rudman (four points of order in 1986, five in 1987, three in 1989, and one in the following years for a total of thirteen). 10 8

Overall, 103 (or almost three-quarters) of total points of order raised were brought by members of the majority or minority committee and party leadership. Not only did these members of the leadership raise most of the points of order, they were more successful than other Senators. The leadership succeeded 87% of the time in sustaining their points of order. The rank and file Senators succeeded only 49% of the time.10 9 Concerning points of order raised by Senators in the leadership, majority-party raised budget points of order were only slightly more successful (92% of the time) than minority party-raised budget points of order

(85% of the time). Bipartisan, leadership-raised budget points of order were unstoppable-succeeding 100% of the time." 0 Thus, budget points of order became a powerful tool when raised - especially when wielded by a Senator in the leadership, regardless of party status.

107 Gramm secured a seat on the Finance Committee and became chairman of the Banking Committee as well as chaired the Republican Senate Campaign Committee in the 1994 election cycle. 18 See Appendix A: Issue Table la. 109See Appendix A: Issue Table lb. 1 0 See Appendix A: Issue Table 1c. 78

Which Types of Measures are Subject to Budget Points of Order?

Since the raising of budget points of order is discretionary, it is important to determine which types of measures invite use of this legislative tool. Measures affecting spending were most often the subject of budget points of order, accounting for 40% of the total. Revenue measures and budget process reform were next in line at 19% and 20%, respectively, followed by combined spending and revenue measures at 16%. Measures affecting federal regulatory authority came in last at 5%.'

The ostensible purpose of Gramm-Rudman was to curb deficit spending.

Although spending measureswere most often subjected to budget discipline,it does not necessarilymean that disciplinewas aimed at curbing deficit spending.

First, almost four out of ten (39%) of measures subject to budget points of order had no deficit effect (either plus or minus) whatsoever. 12 Sixty-one percent of measures subject to points of order did have some deficit effect, but only 43% had measurable costs to the U.S. Treasury.13

1ll See Appendix A: Issue Table 2bi. 112 See Appendix A: Issue Table 2bii. 113 See Appendix A: Issue Table 2biii. I define "measurable costs" as any scoreable costs by CBO -- as little as $2 million in cost for the measures studied here. 79

It follows that this budget enforcement mechanism is responsible for surprisingly small potential and actual savings. Over the nine year period, first-year savings in outlays were only $74.12 billion. (Two thirds of these savings were in 1993 and were on unsuccessful motions to waive the Budget Act on amendments to reduce the tax increase in the 1993 Budget Reconciliation Act). This amount is only about enough money to cover the outlays for the first two Iraq supplemental appropriations in 2003 and 2004. (In constant dollars, a third supplemental appropriation for the war in Iraq could be squeezed in.)'14

Budget points of order were even raised against nineteen measures that saved the taxpayers' money. Even in these cases, the results above held - the point of order was sustained two-thirds of the time - and 68% of these measures actually saving money were rejected.' 15

One argument for super-majority budget points of order is that they redress

Senators' inability to filibuster reconciliation bills on which floor debate is limited to only twenty hours.' 16 I looked at points of order raised against budget reconciliation bills. In the years (six out of nine) when reconciliation bills were

114 See Appendix A: Issue Table 2aiv. Also see footnote 1 on page 12 for a discussion of this comparison in constant dollars. 115 See Appendix A: Issue Table 2avi. 116 See the debate on the adoption of the Byrd Rule, Congressional Record (October 24, 1985): beginning on p. S 13998. 80 considered, only about one in three points of order were raised when reconciliation legislation was on the floor. Clearly a super-majority of points of order raised did not redress Senators' inability to filibuster provisions of or amendments to budget reconciliation bills.

Examining the specific points of order raised against provisions of or amendments to reconciliation bills is also instructive. Three quarters of these points of order were sections 305(b)(2), 310(g), or 313 (Byrd Rule) of the Budget

Act. All of these points or order, with the exception of Sec. 313 (b)(l)(B), are purely technical. Only one in four points of order, a grand total of nine over the entire period, was substantive. Of these nine, eight were Sec. 31 0(d)(2) points of order which bar amendments to reconciliation bills that are not deficit neutral and thus actually affected the deficit reduction goals of the reconciliation bills." 7

I also examined which category of spending measures faced the discipline of

Gramm-Rudman. Defense spending measures were subject to budget points of order only three times over the period and were waived every time. 18 Domestic spending measures were challenged sixty-eight times and the points of order were waived only one out of three times (32%). The small number of combined

117 See Appendix A: Issue Tables 2bi and 2bii. Also see the footnote to the Issue Table 3a. 118 See the discussion of the specifics of the defense measure in footnote 2 on page 12. 81 defense and domestic spending measures (nine) had the same fate as domestic spending measures - points of order were waived only one-third of the time.119

I also disaggregated domestic measures subject to budget points of order to see which domestic programs were winners and which were losers. Points of order against transportation bills were almost never sustained - in fact, 80% or all but one point of order against transportation bills were waived. Conversely, points of order against transfer amendments, whether transferring defense funds to domestic spending or tax cuts to domestic spending cuts, were never waived.

Housing measures met the same fate, with all points of order raised against them sustained. 120

Thus, there is little evidence that the Gramm-Rudman enforcement mechanisms protected the public purse. The largest category of appropriated (discretionary) spending, defense was almost never subject to its discipline. Most budget points of order (59%) were raised against measures with no measurablecost to the

Treasuryand were even raised againstamendments that saved money.

119See Appendix A: Issue Table 2ci. 120 See Appendix A: Issue Table 2cii. 82

Which Types of Budget Points of Order were Raised?

The Budget Act includes scores of possible budget points of order. Twelve different sections of the Budget Act were actually raised during the period.2'

Section 311(a), prohibiting amendments on the floor inconsistent with the revenue and spending assumptions in the Budget Act or budget resolution (even deficit neutral amendments), was most often raised - 28%, or almost a third of all points of order during the period. The next most commonly raised point of order

(18% of the total) was Section 306, a purely technical point of order which requires a supermajority on the floor, but not in the Budget Committee, to change the budget rules.122

As many as half of the points of order raised were purely technical (for example,

Section 306, which prohibits a change in budget rules absent sixty votes on the

Senate floor). The other half were substantive [most often Section 31 1 (a), violating the spending or revenue assumptions in the Budget Act or that year's budget resolution]. However, a substantiveviolation did not mean that any additionaldollars were at issue - manypoints of order were raised against deficit-neutral measures in conflict with the specific assumptions applicable in thatyear 's budget resolution.

121 See Table 1 and Appendix A: Issue Tables 3a and 3b. 122 See Appendix A: Issue Table 3a. 83

What is the Significance of the Super-Majority Requirement?

The same three-fifths super-majority required to waive the Budget Act is also required to invoke cloture and end debate in the Senate. Although the number of cloture votes (one hundred and seventy one) and votes to waive the Budget Act

(one hundred and forty) was in the same range, the results of the votes were not.

Cloture was successful almost 40% of the time, while motions to waive the

Budget Act were successful only slightly more than one-quarter of the time.123 If the small number (seventeen, or 12% of all points of order) of majority budget points of order is excluded from the data, fully 81% of all super-majority budget points of order were sustained.1 24

Richard Kogan of the Center for Budget and Policy Priorities (and previously a senior House Budget Committee aide) argues that there is less political cost to a

Senator voting to sustain a budget point of order than voting to limit debate. He argues that: "Senators who filibuster one attractive tax cut after another can be branded in the media - and perhaps in attack ads at election time - as unreasonable politicians who are unwilling to allow a fair vote on important legislation. It is far more defensible for 41 Senators to vote against overriding the

123 See Appendix A: Issue Table 4a. 124 See Appendix A: Issue Table 4b. 84

Senate's own rule to maintain fiscal discipline ... than to vote to maintain continual filibusters."'2 5

The votes on motions to waive the Budget Act also had a larger margin of victory. About half (53%) of cloture votes achieved a majority but not a super- majority, compared to only 16% of motions to waive the Budget Act.

Although during the first ten years post-Gramm-Rudman there were only twenty three motions to waive the Budget Act achieving a majority of Senators voting but not a super-majority of all Senators, an unpublished Budget Committee study found that over the next nine years the number more than doubled to fifty. The percentage of motions to waive the Budget Act receiving a majority but not a super-majority also increased from 16% to 22% of all votes on motions to waive the Budget Act. This record is an interesting subset of motions to waive the

Budget Act; providing the clearest evidence of majority preferences denied.126

125 Kogan, Richard "Will the Senate's 'Pay-As-You-Go Rule' Make Budget Plans Less Costly?" (Working Paper, Center on Budget and Policy Priorities, Washington, D.C., April 7, 2003). Both actions referred to by Kogan have the same effect of denying an up or down, majority vote on a measure. 126 Other motions to waive the Budget Act in this study did not receive majority support. Neals-Erik Delker argues with respect to the congressmen legally challenging the House's three-fifths tax rule, "It is hard to imagine how the plaintiffs suffered a concrete injury by having legislation defeated by a greater margin than it otherwise would have been under majority rule." Delker, Neals-Erik, "The House Three-Fifths Tax Rule," n. 113. The same could be said for sponsors of motions to waive the Budget Act, although the option to raise 85

The subsequent study suggests that as party majorities narrowed and preferences polarized from 1995 through 2002, majorities were more often thwarted by the budget rules.'2 7

During my study period, motions to waive the Budget Act receiving a majority but not a super-majority were almost evenly divided between technical and substantive points of order raised. Most were raised by the leadership (61%)

Almost half (48%) were spending measures, followed by budget process reform

30%). Seventy percent had some deficit effect, while 57% had measurable costs.' 28

Waivers of the Budget Act are much more difficult to achieve and have a larger margin of victory than votes on cloture. Thus, the Budget Act super-majority voting requirements were a more powerful tool than the filibuster for the exercise of minority power in the Senate. Since budget enforcement tools were most often wielded by the leadershipto enforce Senate rules and not to controlspending, the minorityprotected is a privileged one, indeed.

budget points of order present additional opportunities to block legislation on purely deficit reduction grounds. 127 U.S. Congress. Senate. Committee on the Budget, "Have Super Majority Budget Act Points of Order Been Effective?" (Unpublished staff report, U.S. Senate, 2002). 128 See Appendix A: Issue Table 4c. 86

Chapter Five: Conclusions (Bad Ideas Have Bad Consequences)

I began this study under the assumption that the Gramm-Rudman super-majority voting requirements were fundamentally unfair, since Senators only selectively enforced the budget rules. The empirical results in Chapter Four supported this assumption, finding great disparity in the types of legislative measures subjected to Gramm-Rudman's discipline. For example, in the first nine years post-

Gramm-Rudman, Senators raised points of order only three times against defense measures (and then only when defense provisions were part of a larger, omnibus bill) and waived them every time. By contrast, almost all of the budget points of order raised against spending measures targeted domestic spending bills and they were almost always sustained.

However, I was surprised to discover that super-majority budget points of order were more likely to be used to protect money bills than to curb them.

Neither the advocates of the Gramm-Rudman enforcement mechanisms nor I expected these new rules, for example, to enhance the power of the Democratic

Senate leadership to raise taxes. Nor did the Republican majority Senate intend in 1985 for the procedural protections afforded budget reconciliation bills to be used by the George W. Bush administration to pass trillion dollar tax cut bills with no offsetting spending cuts or tax increases to cover their costs. 87

Below I discuss the major findings of this study, supplemented with evidence from other related studies. I also discuss budget data and legislative events in the twenty years following enactment of Gramm-Rudman, which brings the study to the present and affords a longer time frame to evaluate the claims of Gramm-

Rudman's supporters.

Gramm-Rudman Rules Were Used to Protect, Not Curb, Money Bills

The use of budget points of order to block floor amendments was probably most critical to the passage of President Clinton's 1993 budget reconciliation bill

(OBRA 93). Budget points of order were raised eighteen times, more often than against any other measure during the ten years after Gramm-Rudman's enactment. Twelve or two-thirds of these points of order were raised by the

Democratic leadership to protect Clinton's only successful fiscal policy initiative in the first year of his presidency. Five of the twelve points of order were sustained notwithstanding majority votes to waive the Budget Act. OBRA 93 passed with not one Republican vote - the first and only time in post-war congressional history that the majority party passed major legislation with absolutely no support from the opposition. That tax increases made up at least half of the deficit reduction achieved in the bill makes this achievement even 88 more remarkable (Republicans, including Senate Minority Leader Robert Dole, argued that taxes accounted for 72% of deficit reduction in the package 29).

Gary Cox and Mathew McCubbins argue in Legislative Leviathan that House party leadership is a cartel that usurps the rule-making power of the House to advance their agenda. They note that "parties have an advantage over other cartels in that they can adopt rules that bind all groups smaller than a House majority (and impede even House majorities)."130 Likewise, the Senate party leadership quickly turned rules intended to reduce the budget deficit into a means to advance their broad policy agendas. The Republican Party leadership in Senate did not develop Gramm-Rudman, although they quickly embraced it."'3 By 1993, the Democratic Party leadership also apparently came to appreciate the power of the Gramm-Rudman rules to thwart majorities and achieve their party's policy agenda. (By contrast, the Chairmen and Ranking Members of the Budget

Committee, the custodians of the budget rules, often acted on a bipartisan basis to successfully protect their committee's jurisdiction).

129 U.S. Congress. Senate. Senator Robert Dole, Congressional Record, (June 24, 1993): p. S 7869: "This is not a $518 billion deficit reduction package. It is $345 billion and $250 billion of that is taxes. Only $83 billion are spending cuts ... " 130McCubbins, Mathew D., Legislative Leviathan (Berkeley: University of California Press, 1993): p. 278. 131 See the remarks of Majority Leader Robert Dole during the initial September 25 - October 10, 1985 Senate floor debate on Gramm-Rudman. U.S. Congress. Senate, Congressional Record, (1985): pp. S 12082-13114. 89

The peculiar features of the Senate as an institution help to explain the unintended effects of Gramm-Rudman. Prior to Gramm-Rudman, Senate rules provided for few means for the leadership to control floor debate. Gramm-Rudman super- majority rules filled a vacuum in an institution with no Rules Committee comparable to the House and no germaneness requirement (except for appropriations, budget resolutions, and reconciliation bills, the first of which could be waived with a majority vote).

Likewise, although the stated purpose of the Byrd Rule was to prevent committee majorities (small minorities of the whole body) from controlling floor majorities, in practice the rule was used more often to block floor amendments than to strike committee amendments from budget reconciliation bills. A Congressional

Research Service study of the Byrd Rule from 1985 to 1998 found that points of order were raised forty seven times while ten budget reconciliation bills were pending. The Byrd Rule proved a powerful tool of the leadership with thirty six or 77% of the points of order sustained; seventeen times to strike committee amendments in the bill and nineteen times to block floor amendments' 3 2

132 Keith, Robert, The Senate 's Byrd Rule Against Extraneous Matter in Reconciliation Measures, CRS Government Division, (Updated September, 1998). 90

Thus, rules intended to curb spendingand tax increasesresulted in a meansfor the leadershipto wieldpower more effectivelyand not necessarilywith regard to fiscal policy ends.

Budget Points of Order Are Not Even Handed and Favor Special Interest Legislation

Gramm-Rudman rules are unfair because they are not applied evenhandedly.

Some measures that could not meet the sixty-vote test are given a pass and other measures similarly lacking in support are subject to budget discipline.

Substantive points of order are most often raised and sustained against domestic spending measures that do not enjoy super-majority support in the closely divided

Senate.

For example, in 1987, the conference agreement reauthorizing the federal housing programs serving low and moderate income tenants, S. 825, was stalled and almost defeated on a point of order raised by conservative senator Bill Armstrong

(R-Colorado). Armstrong had been a critic of the bill during previous deliberations in the Senate Banking, Housing and Urban Affairs Committee on which he served as a minority member. During Senate floor consideration, he joined other conservatives who tried and failed to garner a majority (but had 91 gotten more than forty votes) for amendments to reduce the scope and cost of the bill.

After an agreement between the House and Senate had been reached and the conference report had passed the House with a nearly unanimous vote of 391-1,

Armstrong raised a point of order on the Senate floor. The conference report included three minor provisions that had mandatory costs of $47 million in budget authority and less than a quarter of that amount in outlays. 133 These three provisions amounted to $15 million, or less than one tenth of one percent of the total spending authorized in the bill. In addition, since the total authorization level in the conference agreement was less than that year's appropriation for the same housing programs, most Democrats and some Republicans argued that the bill saved money. The motion to waive Armstrong's budget point of order against the conference agreement garnered a majority of 53 votes, seven votes short of the super-majority required.

Four days later, the Chair of the Housing and Urban Affairs Subcommittee and the bill's chief author, Senator Alan Cranston (D-California), attempted to

133 Mandatory funds are those that the federal government must pay without further action by the Appropriations Committee. Mandatory appropriations include entitlements which require funds to be spent for benefits to an entitled group or entity. 92 remove the mandatory spending provisions from the bill, which would have eliminated the budget point of order raised against it. Senator Armstrong objected to removing the provisions, and the bill failed a second time to garner a super-majority.1 34 After the conference agreement was altered to meet the objections of conservatives by limiting or eliminating entirely new housing programs, it was finally passed by the Congress in December 1987 on the last day of the session and was signed into law by President Reagan shortly thereafter.

Conversely, Senators often do not raise points of order against measures supported by well-organized and well-financed interest groups, knowing that the legislation likely could not pass the super-majority budget test if Senators are compelled to vote. For example, less than a week after Gramm-Rudman became law on December 12, 1985, the Senate passed the conference report on the Farm

Bill, H.R. 2100, on December 18. The total spending authorized in this bill was about $170 billion over five years or significantly more than the housing bill discussed above. In addition, mandatory spending, not dependent on future appropriations, accounted for about 80% of the bill's cost. Although the bill was

134 See Appendix B, votes on November 13 and 14, 1987. Note that the point of order raised was Sec. 311 and the measure in question had mandatory costs of $10 million in outlays. Thus, these two votes, although the point of order was raised on what is arguably a technicality, qualify as "substantive", not "technical", affecting the deficit and measurably increasing the deficit if waived. 93 potentially subject to numerous budget points of order, none were raised and the bill was signed into law on December 23, 1985.

However, on March 13, 1986, Senator Harkin (D-Iowa) took to the Senate floor in protest against a budget point of order raised by Senator Gramm (R-Texas) against an effort to fix a technical glitch that had resulted in small, family farmers receiving a reduction in the appropriation for farm aid. Gramm described the issue as "the first real vote on Gramm-Rudman." Harkin retorted:

This is not the first test of Gramm-Rudman. ... Is it not true that the farm bill itself that we passed last December was subject to Gramm-Rudman because it was $2.5 billion over budget for fiscal year 1986? I am informed by the Budget Committee that this is true... A lot of people were very scared that I was going to raise a point of order... Where was the chairman of the Budget Committee? Where was the junior Senator from Texas at that time to raise a point of order against the farm bill itself which he did indeed say it was subject to a point of order under Section 311... They say this is the first real test. That was the first real test. But now why do I point this out in detail? I point it out because the Farm Bill goes to a lot of farmers. It goes to the rich as well as poor, and to the big as well as the small. What we are talking about here goes to those farmers least able to get the credit they need. This goes to the small farmer. This goes to the poor farmer. If I have ever seen a class-conscious attempt in this body, this is it. 135

135 U.S. Congress. Senate. Senator Tom Harkin, Congressional Record, (March 13, 1986): pp. S 2252-53. 94

As a harbinger of future points of order to be raised and votes to be taken, this

Gramm point of order was sustained by a vote of 61 to 33. The Farm Bill increased the budget deficit by $2.5 billion in fiscal year 1986, but the amendment which was defeated on the Gramm point of order had no outlay in

1986, as a loan program, had only minor costs in future years.136

The fact that Senate rules enforcing budget priorities would advantage the beneficiaries of the status quo is relatively obvious but important to prove empirically. The results were actually intended by the sponsors of the Gramm-

Rudman legislation, if not by the super-majorities that voted to make the process law. Steve Bell, Republican Staff Director of the Senate Budget Committee at the time Gramm-Rudman was enacted, commented in a recent interview that "the supermajority [voting requirement] may be many things, but above all it is fundamentally conservative. That is, it makes change harder in the Senate, thus empowering those who either favor the status quo, or who would resist any further 'deterioration' through legislative activism."'137

136 In 1986, direct farm loan programs were off-budget. The only cost occurred two years after the loans were appropriated, when the interest rate subsidy plus any loan default costs were reimbursed to the federal government. Subsequently, credit reform changed the way federal loan programs were scored, requiring that the present value of subsidy and default costs be paid for in the year the loan amounts were appropriated. (See the Federal Credit Reform Act of 1990, Title V of the Congressional Budget Act of 1990.) 137 Bell, Steve, former Staff Director of the Senate Budget Committee in 1985, follow-up e- mail on February 23, 2004 to an interview on February 19, 2004. 95

Ironically, Gramm-Rudman was intended to change the status quo of triple digit

deficits. Using "fundamentally conservative" super-majority voting rules to

affect change presents a serious conundrum for public choice activists.

Budget Points of Order Did Not Produce the Budget Surplus (Which Was Caused More by Tax Revenue Increases than Spending Restraint)

Had the super-majority budget rules produced the budget surplus of the late

1990's, perhaps the lack of evenhandedness in its application should be forgiven.

But there is no evidence for this conclusion.

On the contrary, the evidence points in the opposite direction. First, the

magnitude of aggregate spending increases and revenue reductions caused

directly by super-majority points of order raised and sustained is small. As

discussed earlier, the total savings are only $74.12 billion post-Gramm-Rudman

through 1994, barely enough to cover the cost of the 2003-2004 Iraq

supplemental defense appropriations. Looked at another way, the total savings from Gramm-Rudmanare only 0.07percent of total outlays over the same period. 138

138 See Appendix A: Issue Table 2av. 96

Also, contrary to the common wisdom among conservatives, increases in taxes in the 1990 Budget Summit, the 1994 budget reconciliation bill, and in tax collections in the mid-nineties were not matched by spending increases. For example, Reagan's OMB Director, Jim Miller, wrote in 1994 that "[s]everal economists looked at this question and concluded that, in the main, the federal government tends to spend increased revenues rather than using them to reduce the deficit."13 9

Following more than a decade of triple-digit deficits (commencing with the passage of the first Reagan budget and tax bills in 1981), the budget shortfall reached its highest nominal level in 1992 at $290 billion. Notwithstanding CBO projections of continuing deficits at the passage of each ensuing budget reconciliation bill in 1994 and 1997, there was a surplus of $236 billion by 2000.

During that eight-year period, revenues grew by 86%, while spending outlays increased by only 30% (due to real reductions in defense and funding increases in domestic spending that were held below the rate of growth of the economy).

139 Miller III, James C, Fix the U.S. Budget Urgings of an "Abominable No-Man (Stanford: Hoover Institution Press, 1994): p. 134. See also the 1987 study prepared by the staff of the Congressional Joint Economic Committee: Vedder, Richard, Gallaway, Lowell, Frenze, Christopher, "Federal Tax Increases and the Budget Deficit," 1947-1986: Some Empirical Evidence". 97

According to Jim Blum, former CBO Acting Director and a long-time senior staff member at CBO, "The extraordinary growth in revenues was led by individual and corporate income taxes, both of which doubled ... On the other hand, outlays grew only about half of the rate of growth in the GDP. ...Defense spending actually fell in nominal terms from $303 billion in 1992 to $295 billion in 2000.

While non-defense spending rose by 38 percent during this period, this was considerably less than the growth in GDP which was close to 60%."'14

(Nondefense, discretionary spending - including domestic and international -- grew in nominal terms from $231 billion in 1992 to $320 billion in 2000, while mandatory spending, including Social Security, Medicare and means-tested entitlements grew in nominal terms from $649 billion to $951 billion over the same period. Interest on the debt, the last element of the federal budget, grew from $199 billion in 1992 to $223 billion in 2000 in nominal terms - a reduction from the high of $244 billion in 1997141).

Thus, the unexpected surplus of the late 1990s was driven largely by revenue increases, whether by tax rate increases or tax revenue increases fueled by economic growth, as the current deficits are driven by the trillion dollar tax cuts

140 Blum, Jim, E-mail response on May 12, 2004 to a follow-up question to an interview conducted on April 29, 2004. 141 Historical Tables, Fiscal Year 2003 Budget of the United States Government, (Washington, D.C.: GPO, February 2002). 98 proposed by the current White House.'42 In both cases, defense spending restraint in the 1990s and increases in this decade have played only a supporting role.

These findings support the Senate position in 2004 on the extension of the pay-go rules - that is, the Congress should be required to pay for both spending increases and tax cuts.

There is Little Evidence that Budget Points of Order "Chilled" Floor

Activity

When presented with the findings in Chapter Four, Alan Cohen, a longtime senior staff member of the Senate Budget Committee and currently of the Finance

Committee, argued that while the direct savings from budget points of order were small, the rules had a "chilling" effect that could not be easily measured. That is,

Senators are deterred from offering amendments that increase the budget deficit, realizing that they cannot achieve the super-majority necessary to overcome a budget point of order.

Certainly, the super-majority hurdle is one that Senators and their aides consider when plotting floor amendment strategy. However, in reviewing other research and databases, I found some evidence that floor activity in general was

142 It is interesting that the last budget surplus prior to the 1998-2002 surplus was in 1969, following the enactment of a 10% tax surcharge to pay for the Vietnam War. 99 diminished but none that the number of amendments to tax and spending bills dropped.

Overall, the total number of recorded votes in the Senate on floor amendments in the five years prior to enactment of Gramm-Rudman (1980 through 1985) were

2,566, with a yearly average of 513 and a range of 292 (1984) to 546 (1980). The number of floor amendments in the five years after enactment of Gramm-Rudman was 2,076, with a yearly average of 415 and a range of 280 (1991) to 420 (1987).

Thus, the total number of recorded votes declined by less than 500 votes over the entire five years following enactment of Gramm-Rudman, the yearly average declined by less than 100 per year and the range was nearly unchanged. Further, the post-Gramm-Rudman year 1995 holds the record for the fifteen-year period

1980 to 1995, with 613 recorded votes (1995 also holds the record during the ten- year period 1992-2002 for hours in session, which I suspect is the best explanation for the number of recorded votes143 ).

With respect to money bills, I have constructed two tables from data gleaned from two articles to shed some light on Cohen's argument. The first table looks at

143 " 1 0 4 th Congress Overview," 1995 CQ Almanac, p. 1-5 and "Session Overview," 2001 Congressional Quarterly Almanac, p 1-7. 100 floor amendments to budget resolutions and the second at floor amendments to appropriations bill, pre- and post-Gramm-Rudman. 44

Appendix A: Issue Table 5a examines floor amendments to budget resolutions nine years before and after enactment of Gramm-Rudman. There is a slight increase in total floor amendments to budget resolutions from 137 to 170 over that period. Surprisingly, the greatest change is in the percentage of successful amendments, which increases substantially from 27% to 68%. Clearly this finding does not point to a chilling effect, although possibly it is evidence of greater leadership control of the amendments offered.

From 1991 to 1999, when I worked in the Senate, the Budget Committee chairmen of each party and the Democratic and Republican leadership carefully plotted strategy for floor debate on budget resolutions. A well-drawn plan was necessary because debate is limited on budget resolutions to fifty hours, with no filibuster permitted. The average number of floor amendments is 22 before and

19 after enactment of Gramm-Rudman. Thus the average number of floor amendments decreased, but not by much, after Gramm-Rudman. This result is

144 Suttle, Jennifer, "Congressional Budget Resolutions: Formulation, Content and Historical Information," CRS Report for Congress (Updated December 3, 1996): pp. 19-20; and James V. Saturno, "302(b) or Not 302(b): Congressional Floor Procedures and House Appropriators," Legislative Studies Quarterly 19, no. 3 (August, 1994): p. 392. 101 likely due to limits on overall debate coupled with a two hour limit, equally divided between proponents and opponents, on most amendments. Given time for opening statements for floor managers and the like, about 20 amendments would normally be expected. Thus we have an example when rules matter -- in consistently predicting roughly the number of floor amendments to budget resolutions -- but have no real policy consequence. (The number of floor amendments to budget resolutions soared after the advent of the "vote-a-thon"'4 5 in the late 1990s. Once time on a budget resolution or budget reconciliation bill is exhausted, a round of voting on remaining amendments commences. Senators vote on amendment after amendment for hours with little or no explanation of the measures. The ensuing confused voting results, of course, makes great fodder for future opposition campaign ads.)

Appendix A: Issue Table 5b looks at the number and characteristics of floor amendments to appropriations bills in the Senate in the six years pre- and post-

Gramm-Rudman. This table shows little variation in the total amendments - there were 145 amendments between 1980 and 1985, which made up 5.7% of all

145 A "vote-a-thon" is the popular name for the many votes taken on amendments to budget reconciliation bills after the limited time for debate expires. Under reconciliation, time for debate is limited to 20 hours but not time for voting on amendments. When Senators realized in the late 1990s that they could still offer amendments on reconciliation bills after time for debate expired, large numbers of amendments were and are offered with no debate, not even an explanation of the amendment by its author. Needless to say, the vote-a-thon is not the Senate at its deliberative best. 102 floor amendments on which there was a recorded vote. The total number dropped slightly to 136 in the years between 1986 and 1991, but the percentage of all floor amendments was actually slightly higher at 6.6%.

However, what is striking about these results is a shift in the type of amendment offered on the Senate floor to appropriations bills. The table shows that the number of neutral amendments that had no fiscal impact (compared with net spenders and net savers) increased dramatically after Gramm-Rudman was enacted. Neutral amendments increased from 51% of all floor amendments to appropriations bills from 1980 to 1985 to 83% in the period between 1986 to

1991. Because neutrality alone is not sufficient to avoid a point of order, most of these amendments were probably subject to a super-majority budget point of order.146 Senators offset them anyway after Gramm-Rudman became law.

Apparently it is the rules, or the Senators' understanding of the rules, that matters.

The enforcement mechanism, such as Gramm-Rudman's super-majority points of order, may be less important.

146 These amendments typically paid for additional spending in one Appropriation Subcommittee's bill by cutting spending in another Subcommittee's bill. Such an amendment violates a Subcommittee's "allocation" and is subject to a section 302(f) super-majority budget point of order. 103

Public Choice Explanations of the Surplus Are Weak or Nonexistent

Explaining the surplus in the late 1990s is a theoretical problem for public choice scholars. If their explanation for the cause of deficit spending is correct, it should also explain the cause of surpluses. Why did federal spending not grow to consume all of the additional revenue as public choice theory would predict?

One public choice economist, Russell Sobel, does take issue with what he terms

"simplistic public finance explanation[s]"147 by individuals such as Blum of the late 1990s budget surplus. Sobel argues that the surplus was caused by a

"substantial reduction in the growth of interest group activity at the federal level beginning in the late 1980s." He even asserts that his data shows a ten-to-one ratio of changes in interest group activity to changes in federal spending - that is, ten dollars more in campaign contributions results in one additional dollar in federal spending.

Sobel supports his conclusion with data showing a drop off in political contributions by political action committees (PACs), the largest single category of which is corporate PACs. However, he completely ignores the growth in "soft money" contributions by corporations to the political parties that more than offset

147 Sobel, Russell S., "The Budget Surplus: A Public Choice Explanation," (Unpublished paper, Department of Economics, West Virginia University, November 19, 2001 draft). 104 any reduction in "hard money" contributions to candidates. Political scientist

Charles Stewart noted ten years prior to the reemergence of the budget surplus in

1998 that the public choice literature sought only to explain with increasing rigor and parsimony the tendency for Congress to increase spending while ignoring numerous counter examples. He suggests that "this inattention probably stems from [their] interpretation of budget control as a public good, which is therefore inherently under produced."148 I would add "and under-examined," particularly since the four major successful efforts to reform the congressional budget process in the twentieth century149 were all enacted in the name of budget control.

A very different approach to the study of Congress might develop if the underlying value judgment of scholars was that it is the expansion of spending to meet national priorities, not its control, that is the under produced public good.

Interestingly, Anthony Downs, a political scientist often claimed as one of the fathers of public choice scholarship, argued over forty years ago that federal government spending in the U.S. was too low. His line of reasoning was that when citizens in a democracy are presented with a choice between public and

148 Stewart, Charles III, Budget Reform Politics (Cambridge: Cambridge University Press, 1989): p. 296. 149 These were in 1921 (The Budget and Accounting Act creating the Bureau of the Budget, now OMB and the presidential budget), 1974 (The Budget and Impoundment Control Act), 1985 (Gramm-Rudman) and 1990 (The Budget Enforcement Act). 105 private spending, they will choose private spending because businesses have the ability to market their product and the government does not:

[S]ince the government is under constant pressure to cut expenditures, it cannot afford to use the resources advertising the benefits of its policies. In this respect it differs from private concerns which must advertise in order to encourage voluntary purchase of their products. ...The outcome is a tendency toward elimination from the budget of all expenditures that produce hidden benefits. ...Clearly, this situation causes government budgets to be smaller than they would be if voters were perfectly informed about all benefits and costs, however remote. s5

Downs predicted that this tendency would increase:

"As society grows more complex, the role of governmental action becomes relatively more significant.... Furthermore, as society grows more complex, the remoteness of possible government action increases." Thus, government budgets in complex, industrialized societies will fall farther and farther behind in "[allocating] resources to those remote benefits which are of increasing importance to the welfare of the citizenry. ... If the society were suddenly confronted by an external threat heretofore latent, its chronic tendency to underinvest in remote benefits might prove extremely deleterious, if not fatal." 5'

I quote Downs at length in order to illustrate the very different conclusions that public choice scholars reach, all assuming rational decision makers and a democratic process, but differing dramatically in their definition of a public good and, implicitly, in the value judgments they make about the proper role of government.

1 50 Downs, Anthony, "Why the Government Budget is Too Small in a Democracy," World Politics 12, no. 4 (July, 1960): pp. 553-4. 151 Ibid., p. 563. 106

Super-Majority Voting Requirements Increase Hold-Out Costs and Special Interest Provisions in Money Bills

The public choice legal scholars McGinnis and Rappaport raise the possibility of super-majority voting requirements actually increasing special interest spending due to increased "hold-out" costs. 52 Hold-out costs, as the term implies, are an increase in the cost of attracting a sufficient number of votes under super-majority voting rules. McGinnis and Rappaport quickly dismiss this argument, but there is credible anecdotal evidence that hold-out costs do increase when a legislator must achieve super-majorities, especially when he or she must attract votes from the other side of the isle.

The 1992 tax bill, H.R. 11, is a good example of legislation which picked up special interest tax provisions in the conference committee as it became clear that the bill faced several super-majority hurdles. Conservative Democrat from Texas and chairman of the Senate Finance Committee, Senator Lloyd Bentsen, was managing the conference agreement on the Senate floor. He had to achieve cloture and waive a budget point of order - a dual super-majority test. His task was made more difficult by a closely divided Senate, requiring him to recruit

Republicans, assuming no Democrats defected. In a feat of legislative virtuosity,

152 McGinnis, John 0. and Michael B. Rappaport, "Supermajority Rules as a Constitutional Solution," William and Mary Law Review 40, no. 365 (February 1999): p. 404. 107

Bentsen twice cobbled together winning super-majorities and achieved passage of the conference agreement. His staff assured me repeatedly that President George

H.W. Bush would sign the bill because the Republican special interests that mattered to Senate Republicans and the White House had been taken care of in

H.R. 11. Ultimately, Bush vetoed the tax bill - but only after he lost the election to the Democratic governor of Arkansas, Bill Clinton and his political obligations declined dramatically. Another case study - with a Republican majority this time

-- was the Medicare Prescription Drug legislation enacted in the fall of 2003. In order to survive a similar dual super-majority test, the Senate leadership (by virtue of a one seat majority) had to attract no less than nine Democrats. The bill became loaded up with billions of dollars of special interest provisions - chiefly favorable Medicare payment rates for Medicare health providers in selected geographic areas. A senior Senate staff member for a fiscally-conservative

Democratic Senator confided off the record that "we had to vote for the bill, we had gotten a lot of special Medicare payment provisions. By the time we had second thoughts, the press release was already out."

Budget Points of Order Are Mainly a Procedural Defense on the Floor:

If super-majority budget points of order do not restrain spending, what is their purpose? Why have Senators repeatedly extended the points of order? Why did 108 the passage of a budget resolution for fiscal year 2005 founder over the specifics of the super-majority budget point of order which requires the Congress to pay for tax cuts and entitlement spending increases? The controversy over this "pay-go" point of order is particularly puzzling in light of the fact that, since 1994, the

Republican-led Congress has routinely directed OMB to erase any excess spending or revenue shortfall from the "pay-go scorecard" that would trigger across the board cuts in entitlement programs to make up the difference.

One explanation is that the points of order allow Senators to "have it both ways" -

- take credit for enacting and extending seemingly tough budget restraint mechanisms while Congress routinely directs OMB to adjust the pay-go scorecard. While this conjecture is likely true, it is not the whole story. As political scientist Richard Forgette points out in his study of the House of

Representatives, The Power of the Purse Strings: Do Congressional Budget

Procedures Restrain?,'53 the budget rules are a "procedural defense." In his study,

Forgette finds that the "allocations" (dollar limits on the amount of discretionary spending set by the budget resolutions and imposed on the Appropriations

Committees) do not restrain spending. That is, House appropriators would not have spent more had the budget process not existed.

153 Forgette,Richard, The Power of the Purse Strings:Do CongressionalProcedures Restrain? (Westport: Praeger Publishers, 1994). 109

Indeed, the old budget ceilings on discretionaryspending set by the President's budget request have becomefloors set by the budget resolutions. The allocations to the appropriations subcommittees have the perverse effect of providing a strong incentive for the subcommittee chair to spend every penny provided through the budget process. Any unspent allocation is viewed by noncommittee

Senators as an open invitation to offer floor amendments to spend the excess.

As a former Appropriations Committee staff member in the mid- to late 1990s, I can attest that the allocations to my subcommittee, Labor HHS, were fully spent

(or well hidden) prior to bringing the bill to the Senate floor. Any additional spending desired by noncommittee members and, more importantly, the Clinton

Administration, was ultimately added on top of our allocation in conference committee. Billions of dollars for education and other programs favored by the

White House were routinely added to the Labor, HHS bill at the end of the legislative process.1 54

Thus, the allocations serve appropriators as a procedural defense against unwanted floor amendments. Keith Kennedy, the Staff Director of the Senate

Appropriations Committee before and after the passage of Gramm-Rudman,

154See conference agreements on Labor, HHS Appropriations bill from 1995 through 2000. 110 confirmed this finding, stating in an interview that the super-majority budget points of order enhanced the power of the Appropriations Committee. He said the ceilings on spending and the super-majority points of order were powerful tools for protecting Appropriations bills on the floor. 55 Schick's prediction in

1980 that appropriators would be transformed from "guardian" of the budget to just one more "claimant" for resources from the Budget Committees has turned out to be incorrect because of the unanticipated new powers provided to appropriators by the allocation process established in the original Budget Act. 56

These new powers were enhanced and reinforced by the Gramm-Rudman super- majority budget points of order which also extended enforcement of the appropriations committee's allocation to the subcommittee level. In a second study with CRS appropriations expert, James Saturno, Forgette concludes that the allocation process "has altered the relative policy control of Appropriations

Committee members and noncommittee members."'157

The Forgette-Saturno finding is particularly interesting in light of Barbara

Sinclair's analysis of changes in the floor activity of Senators from the 1950s

155 Kennedy, Keith, Ibid. 156 Schick, p. 424. 157 Forgette, Richard and Saturno, James, Ibid., p. 389. 111 through the 1980s The Transformation of the U.S. Senate, Sinclair found an overall increase in amendments offered, with an increasing share offered by noncommittee members and junior Senators.15 8

Sinclair argues persuasively that, in the post-World War II period, Senate committees lost much of their autonomy: "Senate decision making is less committee-centered than it used to be ... Senators are much less willing to accept committee decisions with only perfunctory review. The floor has become a significant arena, one in which legislation is subject to scrutiny and, frequently, alteration." 15 9

Gramm-Rudman was debated and enacted by a Senate whose committee leadership had experienced nearly four decades of diminishing power and autonomy. The very fact of Gramm-Rudman may be the most powerful proof of

Sinclair's argument. The amendment was offered to a revenue bill reported from the powerful Finance Committee, by a first-term Senator who had recently switched political parties and was not even a member of the committee of jurisdiction. In fact, Phil Gramm had sought membership on the Budget

158 Sinclair, Barbara, The Transformation of the U.S. Senate, (The John Hopkins University Press, 1989). '59 Ibid., p. 138. 112

Committee but was denied a seat by the Republican leadership. In addition, the

Gramm-Rudman amendment was not initially embraced, if not outright opposed, by the Republican leader, Bob Dole (R-Kansas) and the chairman of the Budget

Committee, Senator Pete Domenici (R-New Mexico) and the Reagan

Administration (especially the Department of Defense, whose leadership continued to argue against Gramm-Rudman until Reagan signed the measure into law).

Ironically, Gramm-Rudman became the vehicle for the "money" committees' leadership to recoup some of their lost autonomy on the Senate floor. This finding supports political scientists Mathew McCubbins' and Charles Stewart's arguments that, by the mid-eighties, the party leadership exercised more control over congressional politics, especially budgeting, than was appreciated by congressional scholars who still emphasized the effects of the weakening of committee control in the 1960s and 1970s.'60

Accordingly, in interviews I conducted with the Republican and Democratic Staff

Directors of the Senate Budget Committee during the enactment of Gramm-

160 Stewart, Charles H. III, "The Politics of Tax Reform" and McCubbins, Mathew D., "U.S. Budget Deficits" in Alberto Alesina and Geoffrey Carliner, Politics and Economics in the Eighties (Chicago and London: The University of Chicago Press, 1991): pp. 83-122 and 143- 174. 113

Rudman, Steve Bell and Rick Brandon, respectively, and other key staff such as

Tom Polgar, Senator Rudman's Legislative Director, a recurrent theme was the opportunity the legislation presented to enhance the power of the "money" committees, especially Budget and Finance. 1 In McCubbin's words, "Members of Congress design their institutions to fit their purpose." 162

Although Gramm-Rudman was opposed by the Chairman and Ranking Member of the Appropriations Committees as well as the Democratic Leader, all of whom did not participate in the conference committee on the debt limit, fully one-third of the Senate members of the conference were chairs of appropriations subcommittees.'63 Polgar stated that Senator Rudman always wore two hats -- budgeter and appropriator -- while working on Gramm-Rudman. As Polgar stated, "the tax-writing committees did a good job of taking care of themselves. " 64 Half of the Gramm-Rudman Senate conferees were members of the Finance Committee and five of the twelve were Budget Committee members.

Allen Schick was considerably more prescient when he wrote in 1980 while discussing the new Senate Budget Committee's handling of its first tax bill that

161 Interviews with Steve Bell, Rick Brandon and Tom Polgar, February 19, March 5 and January 20, 2004 respectively and a follow-up e-mail from Tom Polgar on February 24, 2004. 162 McCubbins, Mathew D., Ibid., p. 94. 163 See Appendix C, "Analysis of Gramm-Rudman Senate Conferees." 164 Follow-up e-mail from Tom Polgar, February 24, 2004. 114

"strictly enforced, a revenue target could have turned into a virtual closed rule on a tax bill."'6 5

In short, Gramm-Rudman super-majority voting requirements filled an institutional vacuum in the Senate. Unlike their House colleagues, the leadership lacked the tools - principally the House Rules Committee -- to protect Committee bills from majorities seeking changes on the Senate floor. Gramm-Rudman's sponsors and ideological forefathers did not intend, and it is not obvious, that the process would be captured by the Senate committee and party leadership.

This process only accelerated after 1994. A new phenomenon has emerged - the use of budget reconciliation bills to cut taxes rather than spending.166 The obvious appeal of budget reconciliation is that debate is limited and thus, the bill cannot be filibustered. In addition, the Gramm-Rudman and Byrd Rule germaneness requirements make it impossible to alter the bill on the floor with less than a sixty-vote super-majority. On top of all of this, the Presidential veto

165 Schick, p. 536. 166 Senator Robert Byrd points out in his recent book that the 1981 Reagan tax cut bill were not protected by the limits on debate that the President George W. Bush tax cut bills in 2001, 2002 and 2003 were through use (misuse?) by the Senate Republican leadership of the budget reconciliation process: [I]n stark contrast to the Bush tactics, Reagan's tax cuts were fully debated as a freestanding bill, the Economic Recovery Tax Act. There were twelve days of debate and 118 amendments before the Reagan tax cut finally passed the Senate." Byrd, Robert C., Losing America (New York: W.W. Norton and Company, 2004): p.3 2 . 115 option - at least with respect to tax cuts -- was effectively eliminated with the election in 2000 of a federal government controlled by the Republican Party. In the space of two years, a multi-trillion dollar surplus has been transformed into deep and persistent deficits which the end to war in Iraq will not cure and which will dangerously narrow the policy options available to address the pending shortfalls in the Medicare and Social Security trust funds.

Tom Sliter, who worked for Senator Byrd during Gramm-Rudman's enactment and was a Budget Committee staff member at its inception, asked in an interview,

"Who would have thought that it would be necessary to make it easier to cut taxes? Congress created budget reconciliation to make it easier to do what is difficult - cut spending."'6 7 Incentives to cut taxes are not necessary to address this country's new fiscal problems, but steps to change the budget rules are.

167 Sliter, Tom, staff member of Senator Robert C. Byrd in 1985, interview with the author, May 3, 2004, Washington, D.C. 116

Chapter Six: Prescription for Reform

My prescription is simple - eliminate all super-majority voting requirements on budget points of order as well as time limits on budget reconciliation bills.

Senators would then be permitted to filibuster reconciliation bills like most other spending and tax legislation. Senators could still raise budget points of order but only a simple majority of Senators present and voting would be required to waive them. One Senator, one vote would be restored to fiscal policymaking. The votes of sixty Senators chosen and sworn would be necessary only to cut off debate on money bills.

Budget Resolutions, except budget rule changes, would continue to be debated under current time limits. It is appropriate to retain existing Budget Act incentives to pass a budget blueprint. As stated in the title of the report of the special joint committee charged with recommending reform of Congressional budget procedures in the early 1970s, the Budget Act's original purpose was

"improving Congressional control over budgetary outlay and receipt totals." 168

In addition, to borrow a phrase from Senator Arlen Specter which he has often used to criticize fellow Senators offering Sense of the Senate resolutions when an

168 U.S. Congress. Report of the Joint Committee on Budget Control, Recommendations for Improving Congressional Control Over Budgetary Outlay and Receipt Totals, H. Rpt. No. 93- 147, (April 18, 1973). The term "budget control" meant restoring Congress' power to set budget priorities and fiscal policy vis a vis the President as well as controlling budget deficits. 117 amendment to actually increase appropriations is needed, a budget resolution is only "druthers, not dollars." As a framework for subsequent legislative action, the annual budget resolution neither raises a penny in taxes nor spends a dime of the taxpayers' money. It is when voting on reconciliation bills that Senators shoot with real fiscal bullets.

Once Senators can filibuster budget reconciliation bills, Senators will be forced to vote to end debate if they choose super-majority fiscal decision making. They will no longer have the option to hide behind protestations of fiscal restraint when in fact their objections are substantive.69

Points of order could still be raised but they could be waived by a simple majority. The rule of a conservative minority over fiscal policy will end.

Conservative majorities, indeed, majorities of whatever political stripe, will be free to decide tax and spending policy.

169 This may seem to be a very fine distinction but I believe it is of considerable importance to Senators. An earlier quote by Richard Kogan makes this point as does Carol Cox Wait, the President of the fiscally conservative Committee for a Responsible Budget writing in support of renewing expiring super-majority budget points of order: "Any Senator could filibuster. But the filibuster would be reported very differently than a Budget Act point of order. Filibusters tend to be reported as obstructionist tactics. Budget Act points of order tend to be reported as fiscally responsible actions," Wait, Carol Cox, President, Committee for a Responsible Budget, "Budget Issue Update," (Memo to Board and Members, July 30, 2002). 118

It is not wrong to cast substantive policy issues in fiscal terms. However,

Senators should not be allowed to hide behind fiscal issues when voting to cut off debate on substantive legislation extending health care and income security to the millions of uninsured and unemployed Americans.

A case in point is the recent vote on May 11, 2004 to waive a budget point of order raised against an amendment by Senator Maria Cantwell (D-WA). The amendment extended cash benefits to the 1.8 million unemployed workers who had used up their unemployment insurance (UI) and remained unemployed after twenty-six weeks. The $5.4 billion amendment was offered to a $170 billion

(over 10 years) tax and trade bill, S. 1637, Jumpstart Our Business Strength

(JOBS) Act, "stuffed with corporate and special-interest tax provisions."170

The point of order was raised by Senator Don Nickles (R-Oklahoma), Chairman of the Senate Budget Committee, who argued it violated the budget resolution because spending for the UI program had not been anticipated in the last resolution passed in 2003. That resolution contained a change in the "pay-go" budget enforcement rules. Pay-Go requires that tax cuts and spending increases be paid for with other tax increases or spending cuts when a budget deficit exists.

170 Barshay, Jill, "House Thickets Await Tax Bill After Solid Senate Victory," Congressional Quarterly Weekly 62, no. 19 (May 8, 2004): pp. 1072-76. 119

However, the new rule contained a "special proviso allowing all of the tax cuts and entitlement increases in the budget resolution to be enacted without being paid for. This provision makes the rule toothless..."'7 1 (emphasis in the original)

That is, the rule is toothless if it is intended to reduce the budget deficit, but it puts more bite into the leadership's ability to achieve their fiscal agenda.

Nickles did not assert that the amendment was less meritorious than the other provisions in the bill reported by the Finance Committee, nor did he strenuously argue that the assistance was not necessary. He even brushed aside offers by

Cantwell to address a technical glitch in her amendment. Instead, Nickles simply declared that Cantwell's amendment was subject to a budget point of order, and she must therefore overcome the sixty vote hurdle. The vote on Cantwell's motion to waive the point of order was 59-40 - nine votes more than a majority of

Senator's present and voting but one vote short of the number needed to approve it. 172 Would these forty Senators have filibustered an amendment to provide unemployment benefits for working families without a paying job for half a year or more? Would they have then voted to continue to delay a majority vote on the unemployment assistance?

171 Kogan, Richard "Will the Senate's 'Pay-As-You-Go Rule' Make Budget Plans Less Costly?" (Working Paper, Center on Budget and Policy Priorities, Washington, D.C., April 7, 2003): p 1. 172 U.S. Congress. Senate. Debate on the JOBS bill in the Congressional Record, (May 11, 2004): pp. S 5184-6. 120

The effect of changing the budget rules is uncertain because of the difficulty of determining what Senators will do, with or without these constraints.

Nevertheless, it is possible to eliminate the option of hiding behind arcane budget rules and to promote open debate on the substantive merits of tax and spending policy.

This proposal would provide strong incentives for Senators to debate at length and work toward the broadest feasible agreement, yet allows the ultimate fiscal decisions to be made, if need be, by majority vote. No rule change can undo the inherent anti-democratic bias in the Senate caused by apportionment which permits "some geographical minorities to block decisions by representatives elected by a majority of their fellow citizens."173 But changes to existing Senate rules that, in the words of constitutional expert Robert Dahl, "compound the power of privileged minorities," which include the budget rules, can and should be changed.

173 Dahl, Robert, How Democratic is the American Constitution? (New Haven and London: Yale University Press, 2001): p. 148. 121

Selected Bibliography

I. Works Cited

Ackerman, Bruce et al., "An Open Letter to Congressman Gingrich," The Yale Law Review 104, no. 6 (April, 1995):1539-1544.

Baker, Ross, "Party and Institutional Sanctions in the U.S. House: The Case of Congressman Gramm," Legislative Studies Quarterly, Volume X, (Issue 3, August, 1985):315-337.

Barshay, Jill, "House Thickets Await Tax Bill After Solid Senate Victory," Congressional Quarterly Weekly 62, no. 19 (May 8, 2004):1072-1076.

Berthoud, John English, "Gramm-Rudman-Hollings: The Fiscal Weapon of Public Choice" (Unpublished Dissertation, Yale University, May, 1992).

Binder, Sarah A. and Steven S. Smith, Politics or Principle? Filibustering in the United States Senate, (Washington, D.C.: Brookings Institution, 1997).

Bloch, Susan Low, "Congressional Self-Discipline: The Constitutionality of Supermajority Rules," Constitutional Commentary 14 (Spring, 1997):1-6.

Buchanan, James, The Demand and Supply of Public Goods (Chicago: Rand McNally and Company, 1968).

, "What is Public Choice Theory?" (Lecture delivered at Hillsdale College, February 3, 2003).

Byrd, Robert C., Losing America (New York: W.W. Norton and Company, 2004).

Crippen, Dan L., "Informing Legislators About the Budget: The History and Role of the U.S. Congressional Budget Office," (Speech at a meeting of parliamentary officials of the OECD, June 7, 2002).

Dahl, Robert, How Democratic is the American Constitution? (New Haven and London: Yale University Press, 2001).

Dauster, Bill, "The Monster that Ate the Senate" (Lecture delivered at Washington College of Law, American University, Washington, D.C., January 13, 1998).

Delker, Neals-Erik William, "The House Three-Fifths Tax Rule: Majority Rule, the Framers' Intent, and the Judiciary's Role," Dickinson Law Review, 100 (Winter, 1996):341-382. 122

Downs, Anthony, "Why the Government Budget is Too Small in a Democracy," World Politics 12, no. 4 (July, 1960):541-563.

Fisk, Catherine and Edwin Chemerinsky, "The Filibuster," Stanford Law Review, 49, no. 181 (January, 1997):181-254.

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and James V. Saturno, "302(b) or Not 302(b): Congressional Floor Procedures and House Appropriators," Legislative Studies Quarterly 19, no. 3 (August, 1994):385-396.

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, "The Use of Supermajority Provisions in the Constitution: The Framers, The Federalist Papers and the Reinforcement of a Fundamental Principle," Seton Hall Constitutional Law Journal 8 (Spring, 1998):363-414.

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-____, "House Rule XXI and an Argument Against a Constitutional Requirement for Majority Rule in Congress," UCLA Law Review 44 (April 1997):327-349. 123

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, "Supermajority Rules as a Constitutional Solution," William and Mary Law Review 40, no. 365 (February 1999):367-410.

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, Foreword to Public Finance in Democratic Process by James Buchanan (Chapel Hill: Chapel Hill University Press, 1987): vii-ix.

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Peterson, Paul E., "The New Politics of Deficits," in John E. Chubb and Paul E. Peterson, The New Direction in American Politics (Washington, D.C.: The Brookings Institution, 1985):365-397.

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Sinclair, Barbara, The Transformation of the U.S. Senate, (The John Hopkins University Press, 1989). 124

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. Senator James McClure, Congressional Record, (October 5, 1985): S 12719.

. Selected Legislative Language of Gramm-Rudman, Congressional Record (Oct. 5, 1985): S 12719.

. Senator Robert C. Byrd. Congressional Record, (October 7, 1985): S 12827.

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. Vote on Amendment No. 730, Congressional Record, (October 9, 1985): S 12988.

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II. Interviews Cited

Bell, Steve, former Staff Director of the Senate Budget Committee in 1985, interview with the author, February 19, 2004, Washington, D.C.

, Follow-up e-mail on February 23, 2004.

Blum, Jim, former Acting Director of Congressional Budget Office, interview with author, April 29, 2004, Alexandria, Virginia.

, E-mail response on May 12, 2004 to a follow-up question to the April 2 9th interview.

Conway, Jack, Professional Staff Member of the Senate Appropriations Committee and the Committee's long time, in-house budget expert. Conway was previously a staff member of the Senate Budget Committee, interview with the author, March 1, 2004, Washington, D.C.

Kennedy, Keith, Staff Director, Senate Committee on Appropriations, 1981-87, 1995-97, 2005, interview with the author, February 19, 2003, Washington, D.C. 127

Muris, Timothy, Executive Associate Director, Office of Management and Budget, 1985-87, currently Foundation Professor of Law, George Mason University, interview with the author, November 15, 2004, Washington, D.C.

Polgar, Tom, Legislative Director to Senator Rudman in 1985, interview with the author, January 20, 2004, Washington, D.C.

Riddick, Floyd M., "Interview # 4, Filibuster and Cloture," interviewed by Donald A. Ritchie, Oral History Project, United States Senate Historical Office, July 27, August 1 and 25, 1978.

Sliter, Tom, staff member of Senator Robert C. Byrd in 1985, interview with the author, May 3, 2004, Washington, D.C. 128

Appendices

Appendix A: Issue Tables:

1. Which Senators Raise Budget Points of Order? a. Sponsors of Budget Points of Order 130 b. Success Rates of Leadership-Raised Budget Points of Order Compared with Budget Points of Order Raised by Other Senators 131 c. Comparison of Leadership-Raised Points of Order by Party Status 132

2. Which Types of Measures Are Subject to Budget Points of Order? a. In General i. Comparison of Types of Measures Subject to Budget Points of Order 133 ii. Comparison of Measures Subject to Budget Points of Order With and Without Deficit Effect 134 iii. Comparison of Measures Subject to Budget Points of Order With and Without Measurable Costs 135 iv. Potential and Actual Savings from Measures against Which Points of Order Were Raised 136 v. Comparison of Savings from Supermajority Budget Points of Order and Total Outlays 137 vi. Results of Motions to Waive the Budget Act on Measures that Save Money 138 b. When Budget Reconciliation is Pending i. Characteristics of Measures Subject to Budget Points of Orders Offered to Budget Reconciliation Bills 139 ii. Points of Order Raised During Consideration of Budget Reconciliation Bills 140 c. Spending Measures i. Comparison of Defense, Domestic and Combined Spending Measures 141 ii. Points of Order Sustained and Waived by Program Type, Domestic Spending Measures 142

3. What Types of Points of Order Are Raised? a. Types of Budget Points of Order by Year 143 b. Comparison of Technical with Substantive Points of Order Raised 144 129

4. What is the Significance of the Super-Majority Requirement? a. Comparison of Votes on Cloture and Motions to Waive Budget Act 145 b. Comparison of Supermajority and Majority Budget Points of Order 146 c. Characteristics of Votes Receiving a Majority, but not Supermajority 147

5. Did Points of Order Suppress Floor Amendments? a. Number of and Action on Floor Amendments to Budget Resolutions in the Senate, 1977-1994 148 b. Number and Characteristics of Floor Amendments to Appropriations Bills in the Senate, Pre- and Post- Gramm- Rudman 149

Appendix B: Motions to Waive Budget Points of Order, Post-Gramm-Rudman (December 12, 1985) through the 103rd Congress, 2nd session (1994) 150

Appendix C: Federal Outlays in Billions of Nominal Dollars 181

Appendix D: Analysis of Gramm-Rudman Senate Conferees 182

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Whose idea was the original provision for waiving budget points of order in Gramm-Rudman? You may recall that it required a joint resolution to waive budget points of order.

Was there any discussion of how great a departure this was from current budget law which required only a simple majority vote to waive budget points of order?

I understand that Senator Byrd raised objections to the joint resolution because it violated the constitutional provision allowing Congress to make its own rules. What do you recall about Byrd's objections and his role in crafting the super- majority provision?

Was there any discussion of the lack of precedent for a super-majority requirement?

Were parallels drawn to cloture requirements? Was there recognition that these rules would affect the Senate more than the House because the House Rules Committee routinely waives budget points of order lying against bills being brought to the floor?

Gramm-Rudman also officially designated the Budget Committee as "score- keeper". Was this to avoid delegation of the interpretation of Senate rules to CBO? Especially in light of the super-majority requirement? Or were the two provisions unrelated?

Was there any discussion of making points of order self-enforcing, rather than relying on a Senator to use his discretion in raising budget points of order?

My research shows that budget points of order were raised mostly by the Budget Committee chair and ranking member and other committee chairs trying to protect jurisdiction. Most points of order had nothing to do with deficit reduction. Does this surprise you?

What is your assessment of the super-majority requirement to waive budget points of order? Is it undemocratic? Does it give too much power to the few "insiders" who understand the arcane budget rules?

In hindsight, do you think the supermajority requirement to waive budget points of order was a good idea?

How, if at all, would you change these rules?