Congress Should Streamline Budget Process

Along with all the attention the federal budget is receiving these days, the budget process itself is coming under greater scrutiny. Both the House and Senate budget committees held hearings recently to discuss how to reform the budget process. The panels featured former budget directors and academics, but curiously, there was little talk of fixing the immediate problem of budgetary gridlock.

The primary objective of federal budgeting is to ensure that national priorities, like education and food safety, are adequately funded. But in the recent House hearing, witnesses instead focused on inventing new ways to restrict funding, as if the purpose of the federal budget process is, first and foremost, to reduce the debt and deficit. The witnesses before both committees suggested that Congress should reform the budget process by placing arbitrary caps on federal spending and cutting mandatory spending.

In the Senate hearing, witnesses focused on moving to a two-year budgeting cycle. In principle, biennial budgeting would allow lawmakers to focus on budgeting for one year and then spend the second year performing oversight of federal programs. This seems unlikely.

Each budget would be subject to more intense political battles under biennial budgeting, as the stakes of victories and defeats would be doubled, with double the money on the table to fund programs for twice as long. Under such a process, there would be even less motivation to compromise, as program funding levels would be locked in longer. (It should be noted that there is nothing in the current budget process that prevents appropriators from funding the government in two-year increments should they choose to do so.) Moreover, since social needs change with economic ups and downs and events like natural disasters occur unexpectedly, federal appropriators sometimes need to revise spending levels outside of the normal budget process. A biennial budget process would only increase the instances in which Congress would have to circumvent budget rules and hastily assemble spending packages that might not receive proper scrutiny from Congress or the public.

Biennial budgeting would do little to increase oversight; oversight is handled by other (non-budget) committees. Congress’s concerns about the effectiveness and efficiency of federal programs can be addressed under the current process. [For more on biennial budgeting, see our article here.]

1994 marked the last time the budget process followed a regular schedule and all twelve spending bills were approved before the end of the fiscal year. In the past seven years, only four budget resolutions were approved by conference committees. This has prompted observers ideologically opposed to higher spending to blame the process for an outcome they don’t like (more spending) and to advocate for more spending restrictions, such as caps, supermajorities, and automatic spending cut triggers, or biennial budgeting.

However, it would be a mistake to permanently reshape the federal budget process in an effort to fix a short-term problem. The nation’s debt and deficit problems, as shown in a chart by the Center on Budget and Policy Priorities, are primarily caused by the Bush tax cuts (which are currently set to expire at the end of 2012), two wars financed by debt, and lower revenues due to the recession. When the wars end and the tax breaks expire, the “budget crisis” will disappear (although the need to contain medical costs will remain).

Indeed, much of the current national debt is the result of instances when Congress decided to ignore the rules (like paying for two wars through supplemental appropriations). Congress routinely votes to extend the Bush tax cuts, to delay the expansion of the alternative minimum tax, and to refuse to reduce payments to doctors under Medicare, all of which cost the government hundreds of billions of dollars. Fixes for the underlying problems require reforms in the tax code and mandatory spending programs; neither of these problems can be addressed through a modified appropriations process.

Also important to consider: the budget process is slow because of the checks and balances built into the process – which requires (at least on paper) budget resolutions, authorizations, and appropriations, any one of which can hold up funding for federal programs. In addition, the president can veto any budget Congress produces. As Alice Rivlin, the first director of the Congressional Budget Office, said in the House Budget Committee hearing, “Our Constitution was not designed for efficiency.”

The current budget process may be broken, but not in the ways described by hearing witnesses. The budget process does not work because it is not open and does not support citizen participation. When the budget “process” becomes a series of continuing resolutions that are crafted at the last minute behind closed doors, democracy is frustrated. Outside public interest stakeholders have little chance of having their voices heard in the final stages of debate, while campaign contributors and high-priced lobbyists are always available to guard their special interests. If we are going to change the budget process, let’s create one that is more transparent, more democratic, and more reflective of the investments that the majority of Americans say they want.

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