P-Noy sees all evils of re-enacted budget but...

The shutdown of the United States federal government as a direct result of the budget impasse of the White House with the US Congress is a classic example of how gridlock between two branches of democratic institutions can paralyze the entire nation. This was after US President Barack Obama and his Democrat allies in the US Congress wrangled with the Republicans over their proposed 2014 fiscal budget.  Sounds familiar.

Since Monday in the US, some 800,000 American government employees were forced out of work because they cannot be paid out of federal coffers. The shutdown suspends all but essential services in the federal government agencies like those involved in national security, mail delivery, air traffic control and the like. But even the White House has to scale down its operations with skeletal workforce for President Obama.

In fact, President Obama’s previously scheduled state visit to the Philippines on October 11-12 was cancelled as part of the collateral damage of his budget row with the US Congress. Mr. Obama was supposed to stop by Manila and Malaysia on the way back to Washington after attending this year’s Asia-Pacific Economic Cooperation (APEC) Leaders’ Summit to be held next week in Bali, Indonesia.

This is actually nothing new to the US federal government. It happened twice during the term of former US President Bill Clinton in 1995 and in 1996. The federal government put non-essential government workers on furlough and suspended non-essential services from November 14 through November 19, 1995 and from December 16, 1995 to January 6, 1996. For a total of 28 days, the US federal government was paralyzed.

Obama is suffering more or less the same woes that fellow Democrat President Clinton did at the time. The deadlock was the result of conflict between Mr. Clinton and the Republican Congress over funding for Medicare, education, the environment, and public health in the 1996 federal budget.

So even if America is one of the most powerful nations, it is obviously vulnerable also to its own failings of democratic space. It is estimated the US economy stands to lose as much as $300 million each day the federal government stays closed.

Call it our good fortune but the Philippines does not have to suffer the same kind of government paralysis. Although the Philippines has basically the same government system with the US, we have some kind of hybrid of best and worst practices from the federal system of the US government.

Should there be any irreconcilable differences over the annual General Appropriations Act (GAA), our country’s 1987 Constitution provided us some kind of fail-safe mechanism to prevent or avert such paralysis. This is because unlike the US government which shuts down without a new budget law, the Philippine government continues to operate even if Congress fails to approve a budget.
     It is called “re-enacted” budget, or the previous year’s Congress-approved budget that automatically takes effect on day one of the new fiscal year.       

To wit:  Article 6 Section 25 (7) of the 1987 Constitution states: “If, by the end of any fiscal year, the Congress shall have failed to pass the general appropriations bill for the ensuing fiscal year, the general appropriations law for the preceding fiscal year shall be deemed re-enacted and shall remain in force and effect until the general appropriations bill is passed by the Congress.”

But as far as President Benigno “Noy” Aquino III is concerned, the re-enacted budgets of his immediate predecessor were the root of all evil that have bedeviled his administration. More than three years after he took over from former President Gloria Macapagal-Arroyo, P-Noy blamed the re-enacted budgets as having caused much abuse and misuse of the “pork-barrel” funds.

President Aquino discussed this at length in his speech last Tuesday during the grand breakfast gathering of the Brotherhood of Christian Businessmen and Professionals held at the SMX Convention Center at the Mall of Asia in Pasay City. In the question-and-answer forum that followed, P-Noy even went into details how the Arroyo administration went around the re-enacted budgets to squeeze more public funds into their pockets.

With obvious reluctance, P-Noy stopped short of saying though that this nefarious practice obviously is continuing until now under the Priority Development Assistance Fund (PDAF) that is allocated each year in the budget. Each senator gets as much as P200 million a year of PDAF while each member of the House of Representatives gets P70 million. These are on top of the congressional insertions that senators and congressmen are able to incorporate into the annual budget law.

During the nine and a half years of the Arroyo administration, President Aquino noted there was only one time that the annual budget bill was approved “on time” by Congress and signed into law by the President, before the end of fiscal year on 31st of December.

For the rest of the years of the Arroyo administration, the government operated under re-enacted budgets, he cited. Such situation, he explained, created false savings out of funds that were not intentionally released by the Executive Department. This allowed leeway to Executive Department to re-align the savings but unfortunately ended up in the pockets of the corrupt.

During those years, Noy was then a congressman of Tarlac for three consecutive terms and three years as senator. As I gathered, he even filed an Anti-Impoundment bill that sought to restrain the Chief Executive from impounding or stopping the release of Congress-approved budget, especially for projects of lawmakers from the opposition parties.   

P-Noy believes his administration is quietly succeeding to put a stop to this practice of re-enacted budget. By submitting early the annual budget bill to Congress, he can approve it into law on time.

But how our senators and congressmen do politics is no different from their counterparts in the US Congress. We have seen the budget row impasse in the US Congress now causing the paralysis of the American federal government.

While P-Noy sees all evils in re-enacted budget, it has its redeeming value. If it is not, then why was it enshrined in our country’s Constitution?