President Rehashes Tired Old Budget Process Reform Proposals

The Analytical Perspectives portion of President Bush's proposed budget includes a section that outlines seven budget process reform proposals. Six of them are updated versions of proposals from previous years, while one is new, covering earmark reform. In general, these proposals suffer from one or more of the four following flaws:
  • that the administration has demonstrated no leadership regarding them and they have foundered in Congress in the past
  • that Congress has begun acting unilaterally on them, often without assistance from the administration
  • that the administration undermines its good faith by repeatedly violating the terms of its own proposals
  • that they constitute incursions on the authority of the legislative branch to degrees that range from merely self-serving to unconstitutional.
Controlling Entitlements and Other Mandatory Spending The Bush administration proposes imposing mandatory spending controls, limiting long-term unfunded obligations, and providing budget discipline for agency administrative actions. In addition, the proposal would apply the mechanics of PAYGO to various budget categories, principally mandatory spending, but not to tax cuts. The administration would also impose caps on spending for Medicare, Social Security Disability Insurance, and other entitlement programs if and when they approach certain solvency triggering points. In fact, PAYGO had fallen into disuse during the course of the administration's first six budget years, but is currently being resuscitated by the 110th Congress. This is occurring without aid or prodding by the administration, which itself has blatantly violated PAYGO principles, especially with its tax policy. Controlling Discretionary Spending In a similar effort on discretionary spending, the administration proposes discretionary caps, program integrity cap adjustments, continued effort at making improvements in the accuracy and integrity of federal payments, and advance appropriations constraints. It seeks discretionary spending caps for each year until 2012. Defense spending would receive its own cap from 2007 to 2009. From 2010 to 2012, defense would be combined with non-defense spending under one cap. It would also impose methods to control overpayments by federal agencies, in an effort similar to the current controversial IRS tax compliance program. Finally, it would limit the amount of discretionary budget authority that programs have received through advanced appropriations in prior years. As OMB Watch's FY 2008 Budget analysis points out, under the discretionary caps, first homeland security and then defense spending would end up competing and likely crowding out human services and other non-defense spending. The other aspects of this proposal are laudatory, but have not seen any concerted effort at implementation by the administration. Include Stricter Standard For Emergency Designation in the BEA The administration seeks to establish a definition of "emergency requirement" for supplemental spending. Such spending would have to be necessary, urgent, directed at sudden, unforeseen, and temporary crises. One would be hard-pressed to find a starker example of empty administration rhetoric, considering that every dollar of spending on the war in Iraq has come through supplemental funding requests. Even the fitful efforts in Congress to address the administration's own over-reliance on supplemental spending have drawn more attention, though no serious action has been taken in this area. Baseline The administration proposes various baseline assumptions for budgeting purposes, including the extension of its 2001 and 2003 tax cuts, excluding emergency supplemental spending, and eliminating adjustments for expiring housing and social insurance administrative expenses. Assuming such spending and revenue reductions inside the baseline would eliminate the purpose of having a baseline in the first place, which is established to be able to compare the varying costs of different federal policy proposals on the budget. The administration is able to implement these assumptions by fiat in the budgets it submits, and Congress has not challenged these, nor is it expected to. Earmark Reform Repeating a theme President Bush sounded in his 2007 State of the Union address, the administration proposes that earmarks appear in statutory language rather than in committee reports that accompany legislation to ensure that Congress actually votes to approve all earmarks. Noting that earmarks frequently surface in the last stage of the legislative process — in conference committees between the House and the Senate — the administration proposes that "Congress fully disclose all earmarks and provide justification for them, and identify the sponsor, costs, and recipients of each project" and that Congress cut the number and cost of earmarks by at least 50 percent. Here, the administration is, after the fact, urging Congress to adopt reforms that Congress has already recently enacted. The proposal's focus on the number and costs of earmarks is a pointless exercise in seeking to cure the symptom and not the disease. Few sophisticated observers regard earmarks as bad, per se, but agree that long-standing lax processes have enabled abuse and waste. Line-Item Veto Touted as a tool to help presidents pick pork out of legislation and thus eliminate wasteful items and reduce the deficit, the line-item veto that the administration proposes is possibly an unconstitutional incursion on Congress's legislative authority. As we have noted, the Supreme Court declared similar legislation unconstitutional in 1998. Critics also say the Constitution already provides the president with ample opportunity to stop wasteful or excessive spending via the veto, something the current president has not used once in six years of signing spending bills. Nor has he ever used his existing rescission authority, which would allow smaller reductions in spending. Furthermore, opponents say the president's line-item veto proposal could make legislators vulnerable to hardball pressure from presidents who seek to horse-trade votes by threatening to veto a given lawmaker's favored provision. Similarly, it could make it that much harder to strike deals on politically risky legislative packages such as entitlement reform by allowing the president to cherry-pick items out of the bargain after the fact. Other Budget Reform Proposals The budget reform section also includes a grab-bag of proposals, including switching to a joint budget resolution rather than the existing concurrent resolution. This change is designed to facilitate a budget agreement between the president and Congress before individual tax spending and spending bills are taken up. Another change would switch to biennial budgeting, forcing the appropriations process to be done only every other year. To avert government shutdowns, the administration proposes that if an appropriations bill is not signed by October 1 of the new fiscal year, funding would be automatically provided at the lower of the President's Budget or the prior year's level. Finally, to avoid what it calls overlapping and uncoordinated programs, the administration proposes bipartisan Results Commissions to restructure or consolidate programs or agencies to improve their performance and a Sunset Commission to retain, restructure or terminate agencies and programs according to a schedule set by the Congress. Agencies and programs would automatically terminate according to the schedule unless reauthorized by Congress. These proposals attempt to address perceived deficiencies in the budget process but involve limiting the flexibility and authority of Congress in ways that make them politically and constitutionally objectionable.
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