What is an “Omnibus Spending Bill” and Why is it Different than What You Think?

 In Economy, Politics

Before everyone jumps off the Trump train over the spending bill, there are a few things you should know. Once upon a time, when Congress actually worked together, 12 appropriation bills would be created to fund discretionary spending in the government.  The trend became to jam all the items in one big bill called an Omnibus Spending Bill because the various factions of the Congress refused to pass the needed 12 appropriations bills to keep the government running. With Trump’s signature, Congress now has until September 30 to come up with appropriations for a budget. Which they won’t do, and will likely just pass another continuing resolution.

In other words, we have not had an actual “budget” for some time now.

First, there are two different parts to the Federal Budget: Mandatory Spending and Discretionary Spending. Mandatory spending is for programs such as Medicare and Social Security. These are regulated by law and are over and above the appropriations process. Discretionary spending is supposed to be from 12 appropriations bills passed by Congress for things such as the Military, grants, agriculture, etc. The Omnibus Bill signed yesterday is for those programs- the discretionary part of the budget.

Brush Fire Managment

There is a difference between a budget and an Omnibus Spending bill. Congress now uses “continuing resolutions” to fund the government in a piecemeal fashion rather than an actual budget. They do that because they can’t work together and everyone is pushing their own agenda rather than for the good of the United States. They are moving from crisis to crisis rather than having a genuine budget that would reduce the pork.

Let’s view this here:

“The budget and spending process of the United States federal government is a complex one. The United States budget process traditionally begins when the President of the United States submits a budget request to Congress. The Budget and Accounting Act of 1921 requires the President to submit the budget to Congress for each fiscal year, which is the 12-month period beginning on October 1 and ending on September 30 of the next calendar year. The current federal budget law (31 U.S.C. § 1105(a)) requires that the President submit his or her budget request between the first Monday in January and the first Monday in February. However, it is Congress that actually establishes the budget, as the U.S. Constitution (Article I, section 9, clause 7) states that “No money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of Receipts and Expenditures of all public Money shall be published from time to time.” The President does not sign the final budget. “

Now let’s look at what happened during the Obama administration (and sometimes even before):

2013 Shutdown

The president is required to submit his budget the first Monday in February. In 2013, Obama didn’t turn his budget in until April 10, 2013. The House and Senate were unreconcilable on their versions, and adding a third one made it impossible to work together.

Congress tried to go with the regular appropriations process, but it became impossible for the factions to reconcile their differences. So they passed “continuing resolutions.” The government shut down for 16 days in 2013 while parties bickered. When they did finally pass a continuing resolution, it only funded the government until a short time into 2014. The one in 2018 now has a deadline of the end of the fiscal year- September 30.

Note: These “continuing resolutions” also tend to RAISE THE DEBT CEILING, which is how the 2018 Omnibus Bill ended up at $1.3 Trillion. Congress has continually “suspended” the debt ceiling in favor of getting things through the legislature.

In Obama’s 2009 Omnibus Bill,  there were 8,500 earmarks. Call that pork barrel politics, if you like. But enough heat was generated over it that Obama promised to do something about the “pork.” He didn’t, by the way. As long as the use of Omnibus Spending Bills is in play, special interest spending will continue.

Does the President have “discretionary” power over the funds in the Omnibus Bill? Yes

Presidents can use their INFLUENCE over any items that have been appropriated, depending on the agencies involved. Obama used his to influence spending in agencies that were advancing his agenda.  In short, there is little information to tell us how appropriated money is actually spent. But there are still some rules.

Duke U noted,

“Nevertheless, while it is up to Congress to appropriate funds, it is also true that the President and the executive branch enjoy considerable discretion as to how those funds are spent. Existing studies tell us how the President formulates the budget and how Congress acts on the budget requests he submits. Surprisingly, we know relatively little about how the money, once appropriated, is actually spent.”

Example of limitations: Funds cannot be transferred from one account to another. According to Vanderbilt“Some agencies, such as the Department of Defense, have limited authority to transfer a percentage of funds among their accounts (Tollestrup 2014, 13). Such authority usually comes with the requirement that the agency notify the appropriate committees in Congress when they do so.”

Moving money WITHIN an account is not as “observable” because the actual total of money remains the same. Funds can also be “deferred” or spent  at another time. Congress can “rescind” funds by legislative action as well (which means that they actually CAN withhold monies from Sanctuary cities).

The Office of Management and Budget has control over apportioning the funds to the specific agencies. There are a lot of gray areas that Presidents and even Congress can use to influence spending, but there is also a lot of paperwork required.

“These decisions are an omnipresent component of agency management across presidential administrations. What managers do with the spending discretion inherent in the executive function is structured by their understanding of the law, their beliefs about the continuing wishes of committees, and their views about what is best for their organization and policy. The bulk of what happens with spending is not reviewed by congressional committees or staffs. Voluminous reporting requirements and the annual appropriations process provide committees regular opportunities to learn about agency choices if they choose to but managing the details of spending is difficult.”

Lump Sum Appropriations

From the beginnings of American history, lump sum appropriations have been a source of contention. Jeffersonian Republicans wanted legal restraints, while the Federalists wanted Executive discretion. They soon realized the making too many laws over the funding of specific appropriations was going to produce a quagmire of miniscule laws that would hamstring the government from working at all.

So we have today a mix of both: mandatory spending and discretionary spending. So does the President have the ability to use the funds as he chooses? Yes, to a point. President Trump was not happy with the Omnibus Spending Bill of 2018, and voiced his displeasure up until he actually signed it at the last minute.  He can’t take money from the Jordan Wall, for example to make his own wall, depending on where those monies are appropriated. But within the budget there are likely places where he can adjust the way the monies are spent.

All of that depends on what happens on September 30, and whether Congress is able to actually pass a real “budget.” Not holding our breath on that one.

Showing 7 comments
  • charlotte k
    Reply

    WE NEED TO STAND WITH PRESIDENT TRUMP .
    DON’T JUMP ! STAY !

  • John Heide
    Reply

    The way I read it, President Trump can use some on the money in the omnibus bill for the tunnel from New York to New Jersey, to help build THE WALL ON the southern border.
    Is this correct?

    • Faye Higbee
      Reply

      Yes that’s correct. He can’t switch accounts for things, but within certain accounts he has a lot of leeway

pingbacks / trackbacks
  • […] Presidents can use their influence over any items that have been appropriated, depending on the agencies involved. Obama used his to influence spending in agencies that were advancing his agenda.  In short, there is little information to tell us how appropriated money is actually spent, and in eight years we never found out what Obama did with the monies in his Omnibus bills, did we?!  Link […]

  • […] Presidents can use their influence over any items that have been appropriated, depending on the agencies involved. Obama used his to influence spending in agencies that were advancing his agenda.  In short, there is little information to tell us how appropriated money is actually spent, and in eight years we never found out what Obama did with the monies in his Omnibus bills, did we?!  Link […]

  • […] Presidents can use their influence over any items that have been appropriated, depending on the agencies involved. Obama used his to influence spending in agencies that were advancing his agenda.  There is little information to tell us how appropriated money is actually spent, and in eight years we never found out what Obama did with the monies in his Omnibus bills, did we?!  Link […]

  • […] Presidents can use their influence over any items that have been appropriated, depending on the agencies involved. Obama used his to influence spending in agencies that were advancing his agenda.  There is little information to tell us how appropriated money is actually spent, and in eight years we never found out what Obama did with the monies in his Omnibus bills, did we?!  Link […]

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