Core
Business World, 23 September 2014
No president would willingly have a reenacted budget in place of a new one. Such behavior is irrational, indefensible and idiotic.
Last week, the House majority warned the political opposition on the possibility of a reenacted budget. If the opposition continues to raise the question of quorum until Budget Secretary Butch Abad honors his commitment to submit the list of legislators who benefited from the Disbursement Acceleration Program (DAP), Congress approval of the 2015 budget would be stalled, hence there is strong likelihood that the 2014 national budget would be reenacted, he warned.
A reenacted budget would mean the President would have a carte blanche authority to declare the capital outlays component of the 2014 budget (estimated at P391.4 billion) as “savings” and use the same for whatever programs and projects the President wants, he added.
Is the majority floor leader’s interpretation of a reenacted budget right or wrong? Absolutely wrong.
The logical and reasonable interpretation of a “reenacted” budget is that it includes only the personnel services (salaries, wages and employee benefits for existing personnel) and relevant miscellaneous and other operating expenses (such as payment for utilities, supplies, transportation, and the like).
The capital outlays component of the prior year’s budget cannot be deemed “reenacted.” It’s simple logic: one cannot appropriate the same sum of money for the same project twice. For example, an appropriation for a 100-kilometer highway funded in 2014 cannot be used for the same highway in 2015.
If the appropriation is used for another project not previously authorized by Congress, that would violate the constitutional provision that no money shall be paid out of the Treasury except in pursuance of an appropriation made by law.
Put simply, if the President uses the reenacted budget to fund new budget items (a program or a project) not previously authorized by Congress, he is violating the principle of separation of powers enshrined in the Constitution. The President proposes the budget while Congress authorizes it by passing the general appropriations law.
The two recent Supreme Court decisions on the Priority Development Assistance Fund (PDAF) and the Disbursement Acceleration Program (DAP) have changed the policy environment. The Supreme Court has clearly delineated what legislators and the President can and can’t do. I doubt if the President is willing to risk another constitutional challenge before the Supreme Court.
Those who would like an expansive power of the President may ask: how come Mrs. Gloria Macapagal-Arroyo was able to get away with reenacted budgets (three of the nine fiscal years) during her watch? The answer is that the House and Senate leadership did not challenge Arroyo’s unconstitutional acts before the Supreme Court. The Court can only act on matters brought before it for resolution.
The fact that Mrs. Arroyo got away with a loose interpretation of a “reenacted” budget does not necessarily mean that what she did was constitutional.
Ironically, the same House and Senate leaders that lord it over Congress today were the same people who allowed Mrs. Arroyo to get away with violating the Constitution. They willingly, ungrudgingly, and unabashedly allowed the President to usurp the congressional power of the purse. They let Mrs. Arroyo violate Congress with impunity.
Who’s bound to lose if Congress fails to pass the budget on time? Is it (A) the President, (B) the economy as a whole, (C) political majority, or (D) the political opposition? It’s (A), (B) and (C) but not (D).
The Executive Department will be forced to operate on a much smaller budget than planned. New programs and projects proposed for 2015 will be unfunded. In the absence of a new budget law authorized by Congress, the proposed P437.5-billion public infrastructure outlays cannot be implemented.
Public construction will be stunted, as the P391.4 billion appropriations in 2014 will be deemed frozen. Given the country’s serious backwardness in public construction, the Aquino administration cannot afford to have zero budget for new roads, bridges, urban transits, airports, seaports, irrigation canals, and so on for one whole year.
There will be no hiring of personnel for population-related activities such as education, health care, and police protection.
Clearly, the President and the political majority will be the major losers should Congress fails to pass a new budget. Hence, it is idiotic why they will settle for a reenacted budget.
Local governments should not worry with a reenacted budget. The Internal Revenue Allotment (IRA) is automatically appropriated. For 2015, the IRA will total P389.9 billion, up from P358.1 billion in 2014.
Foreign and domestic creditors need not worry too since debt service is automatically appropriated.
Legislators should see the wisdom of the limited interpretation of budget reenactment, which is to avoid disruptions in the delivery of essential public services. That is why only personnel services and regular maintenance and other operating expenditures are deemed reenacted.
The reenactment of the budget should not be used to expand the budget making and implementing powers of the President from what the framers of the Constitution have originally intended.
The President and Congress should continuously, incessantly, strive to have a new budget approved every year. Legislators should draw from the sound budget rules they prescribed for local governments through the Local Government Code of 1991.
The Local Government Code requires local councils — in the case of provinces, the Sangguiniang Panlalawigan (SP) — to work nonstop until a new budget is passed.
The local budget rules states that: “In case the SP fails to pass the ordinance authorizing the annual appropriations at the beginning of the ensuing fiscal year, it shall continue to hold sessions, without additional remuneration for its members, until such ordinance is approved, and no other business may be taken up during such sessions.”
Here’s another local budget rule: In the event the local budget is reenacted, “only the annual appropriations for salaries and wages of existing positions, statutory and contractual obligations, and essential operating expenses authorized in the annual and supplemental budgets for the preceding year shall be deemed reenacted and the disbursement of funds shall be in accordance with the preceding budgets.”
A reenacted budget is a fallback option but not a desirable one. The first-best option is to have a new budget approved by Congress every year.
How can the emerging budget impasse be avoided? The first-best option is for Budget Secretary Abad to honor his promise to legislators to produce the list of members of Congress who benefited from the controversial DAP and by how much. It is a reasonable request from an administration that is supposed to be open and transparent.
But should Mr. Abad refuses to budge, the Speaker has to do the next best thing: produce a quorum every session day.
The Filipino people expect their representatives to work day and night and even on weekends to make sure that a new national budget is passed every year. After all, the annual budget is the single most important piece of legislation that they are expected to approve. In the extreme case, legislators should not go on vacation or leave for abroad until they have done their main task — to pass the budget.
At the very least, what the people’s representatives are expected to do is show up in Congress to form a quorum. I don’t think the Filipino people expect them to engage their colleagues from the opposition in some intelligent and meaningful conversations. They just want their representatives to show up. Is that too much to ask?
