December 2011

MY VIEW: Gene Steuerle

On Tuesday, December 5, President Obama went to Oswatomie, Kansas, where Teddy Roosevelt in 1910 had made one of his most famous speeches. Democrats, the current president would have us think, are following in the tradition of Teddy Roosevelt in pushing for higher taxes on the rich and temporary Social Security tax breaks for the middle class.

This debate over the relationship between government and the rich has been part of every presidential contest for more than a century. But myths and misunderstandings pervade attempts to compare 2012 and 1910 with policy prescriptions in mind. Chief among the myths propagated by both political parties is that, for better or worse, larger and more engaged government has come about through taxing the rich.

In reality, Democrats today can't solve our nation's many budgetary woes primarily by taxing the rich, and Republicans risk alienating the middle class when they try to spare the rich from sharing the additional burdens most Americans soon must bear. But neither side is facing the truth head on: a full accounting reveals that the middle class simply can't be spared.

For perspective, let's return with President Obama to the Progressive era, stretching roughly from the late 19th century through the early 20th and bestrode by such figures as Teddy Roosevelt and Woodrow Wilson. Early in that period, the federal government was small, spending mainly on the postal service and benefits for Civil War veterans. The tax system was based largely on tariffs and excises on selected products, paid mainly by consumers. Since most income and trade weren't taxed, receipts couldn't finance more than a small government.

Meanwhile, the Industrial Revolution boosted the power of industrial barons at home and nation-states abroad. Whatever one's view on the danger of vesting too much power in government, more was needed to countervail these other forces. And, except during the war years, the initial growth in government was fueled by higher taxes on the rich and on businesses. Ratified by constitutional amendment in 1913, the modern income tax excluded most households and collected more from corporations than individuals for decades. From this initial correlation between larger government and more progressive taxation sprang the myth that the two always go hand in hand.

Fast forward a bit. For the last six decades, government's growth has been financed not by raising taxes on the rich and business, but by broadening taxes to most of the population. Gradually, most of the middle class has ended up paying income tax, though other offsets have kept income tax revenues from rising much relative to national income. In both the United States and Western Europe after World War II, almost all revenue increases have derived from taxes with relatively flat, not progressive, rates: Social Security taxes here and elsewhere, and value-added taxes in most other countries. Meanwhile, the top rate of income taxation—90 percent or more just after World War II—has been reduced first to 70 percent, then 50 percent, then between 28 and 40 percent. Despite the huge political rift now over where within that 28 to 40 percent range we should end up, many earlier tax cuts were sponsored or supported by both political parties.

Now look at taxes compared to spending today. The federal government is spending about $31,000 per household and collecting $19,000 in taxes—a gap that economic growth by itself barely influences.

Deficits like these are the stuff of economic nightmares. Something—no, a lot of things—must give.

Much of that give has to come from forgone spending, mainly slowing down the growth rate for health care and retirement costs. But spending is distributed more progressively than taxes, so spending cuts would largely hurt the middle class, which from far left to far right claims it shouldn't be affected at all. The Occupy Wall Street crowd, for instance, asks the "99 percent" only what they should demand from the "1 percent," while Tea Party supporters largely appeal to middle-class opposition to paying more taxes.

Both political parties face a dilemma. President Obama and the Democrats pretend that if they channel Teddy Roosevelt and go after the rich, all will be well and we can further extend middle—class tax cuts. But, of course, very progressive taxation can't support modern governmentâ??not because the rich can't pay more, but because most income in the economy resides with that 80 percent of the population that is neither poor nor rich.

Meanwhile, Republicans want to substitute incomplete math with new math. How can they possibly demand a huge amount from the middle class without asking for similar sacrifices from the rich? Even if the red team agrees to cut spending on everyone, the rich wouldn't feel much of a pinch until they have to pay more taxes since government transfers don't make up a large portion of their income.

Both political parties are bucking the basic arithmetic that compels shared sacrifice by almost everyone. Let both parties aspire to the leadership qualities they admire in Teddy Roosevelt, but not under the delusion that the problems vexing larger government today are the same as the ones the most famous Rough Rider took on a century ago.

Gene Steuerle is a member of the board of directors of the Committee for a Responsible Federal Budget. He also is a senior fellow at The Urban Institute, co-director of the Urban-Brookings Tax Policy Center, and a columnist for Tax Notes Magazine.

"My Views" are works published by members of the Committee for a Responsible Federal Budget, but they do not necessarily reflect the views of all members of the committee.

Note: This article was originally published as a Government We Deserve column at the Urban Institute.

Tax Policy Center Estimates Newt Gingrich's Tax Plan

A few days ago, the Tax Policy Center (TPC) came out with a distributional and revenue score for Newt Gingrich's tax plan.

It is similar to Rick Perry's plan in that it gives taxpayers a choice between staying in the current tax system and paying in a new flat tax system. However, Gingrich's plan differs in a few respects. While estimates of Perry's plan have assumed that the 2001/2003 tax cuts would expire in the current system, TPC believes that Gingrich would extend the tax cuts. Gingrich would also have lower rates in the flat tax system for individuals (15 percent) and corporations (12.5 percent) than Perry's single 20 percent rate. Finally, unlike Perry, Gingrich would retain the Earned Income Tax Credit and the Child Tax Credit.

Other features of the tax system that are similar to Perry's include providing a very generous standard deduction and dependent exemptions, allowing immediate expensing of all capital investments, eliminating capital gains taxes, and retaining the mortgage interest and charitable deductions.

TPC's analysis shows significant revenue loss from the plan. Looking only at 2015, TPC finds the plan would lose $1.28 trillion relative to current law (2001/2003 tax cuts and AMT patches expire)  and $850 billion relative to current policy. In getting to these numbers, TPC did make some assumptions that would worsen the fiscal impact of the tax plan. First, they assumed that Gingrich's corporate tax rate cut would not be accompanied by any reductions in corporate tax expenditures (since none have been identified). If aggressive enough, base broadening and other corporate reforms could be sufficient to bring the rate down to 25% or so on a revenue neutral basis -- making the cost of reducing the rate to 12.5% about $100 billion cheaper in 2015.

Second, the revenue numbers assume that taxpayers are able to pick their optimal tax system in 2015. If taxpayers could, say, only switch between systems once per lifetime (as Perry proposed), it would affect the revenue number somewhat. Assuming that everyone paid under the flat tax system, TPC estimates revenue losses at $1.25 trillion relative to current law and $830 billion relative to current policy.

Click here to see the full TPC analysis, including distributional tables.

A Helpful Budget Breakdown

CBO has gotten into the infographic game this year with some good results. Two days ago they released an infographic containing a basic breakdown of the budget and historical trends.

It breaks down this year's spending and revenue levels by source and goes into detail to define each part of the budget. It also details spending, revenue, and deficits as a percentage of GDP in certain years over the past four decades, along with debt levels and historical averages for all of these over the past decade. Additionally, it provides links to other important CBO publications, like their August baseline, long-term outlook, 2011 Budget Options, and analysis of the President's budget.

All in all, the infographic is a helpful resource for people to understand the basics of the budget and the composition of both spending and revenue. Click here to see the CBO infographic, and to see more information about the future budget outlook check out CRFB's PowerPoint Averting a Fiscal Crisis.

Sen. Lieberman Floats Idea on Meaningful Deficit Reduction

Update: Sen. Lieberman's proposed legislation was introduced today. Click here to read CRFB's reaction.

Senator Joseph Lieberman (I-CT) is floating an idea which would reinstate the authority given to the recently failed Super Committee to any group of twelve bipartisan lawmakers. Lieberman's legislation would require a vote on a bipartisan proposal that reduces the deficit by at least $4 trillion and would thus avoid the sequester. It would allow the recommendations proposed by a group of twelve to operate under expedited procedures. Extending the authority of the Super Committee would keep the pressure on Congress to enact meaningful "Go Big" style deficit reduction in an effort to stabilize and lower the national debt, and enact cuts in a meaningful way as opposed to the across the board style seen by the sequester.

With the Super Committee having failed, Congress spending time racing to extend more than $300 billion in expiring policies, and trying to figure out how to avoid the $1.2 trillion sequester, Lieberman’s idea would offer a fast track process. This is something that is valuable for a bipartisan plan by removing many of the stall tactics that plague the Senate and would thus move Congress in the direction to pass something we truly need - a full fiscal plan. Our goal should be to stabilize the debt and put it on a downward path. But we should not do this with arbitrary across the board cuts; rather we should do it through a thoughtful, comprehensive fiscal plan.  Forcing a vote on a plan where the size would guarantee a stable and downward path for the debt would be a huge victory. Lieberman’s proposal would be a good first step, one that Congress should seriously consider. We hope that the administration and leaders of both parties continue to focus on our fiscal problems and come up with a solution. Extending the authority of the Super Committee to those who truly want a bipartisan deficit reduction agreement will surely help to keep the pressure on.

House Budget Committee Leaders Discuss Budget Reform Today

House Budget Committee Chair Paul Ryan (R-WI) and Ranking Member Chris Van Hollen (D-MD) will discuss budget process reform today at 1 pm ET at a Capitol Hill forum sponsored by the Peterson-Pew Commission on Budget Reform, a project of CRFB. The event -- “After the Super Committee: Is Budget Process Reform Part of the Answer?” -- will be broadcast live on C-SPAN and @BudgetHawks will live-tweet the proceedings using the #budgetreform hashtag.

The forum will also include the release of four new policy papers that address possible options to improve the federal budget process -- Fiscal Rules and Their Uses, Performance Budgeting, Multi-year Budgeting, and Budgeting for Emergencies.

Ryan and Van Hollen recently teamed up on bipartisan legislation to enhance the ability of the president to rescind individual items in spending bills and Ryan coordinated a budget process reform package that includes several proposals, such as biennial budgeting, spending and deficit caps, and giving the budget the force of law. The Peterson-Pew Commission proposed its own budget process reform package in Getting Back in the Black.

Watch the event live on C-SPAN here at 1 pm ET today and follow on Twitter using #budgetreform.

Paying for the Extenders

With so many provisions set to expire at the end of the year, CRFB has released a new paper that details what lawmakers have to extend and how they can do it in a fiscally responsible way.

The paper sums up numerous policies that are set to expire, including the payroll tax cut, the "doc fix", the AMT patch, unemployment insurance, and numerous provisions related to Medicare payments and tax expenditures. A one-year extension of all of these policies would add $400 billion to the debt over ten years and $2.3 trillion if they were permanently extended (the latter estimate excludes the payroll tax cut and unemployment insurance). The paper says that every policy extension should be paid for, and ideally short-term extensions would be used only to keep in place pressure points for reaching a long-term budget deal. However, lawmakers should avoid using gimmicks to pay for these extensions at all costs, as doing so would be a step backwards for our fiscal responsibility.

We note the encouraging development that most policy extension proposals out there are fully paid for. We have already detailed two Senate Democratic and one Senate Republican payroll tax proposal on our blog. Today, House Republicans officially released their own package which would extend the payroll tax cut, doc fix, unemployment insurance, immediate expensing of capital investments and the Medicare payment provisions. In addition, Sens. Susan Collins (R-ME) and Claire McCaskill (D-MO) offered a bipartisan payroll tax cut extension that they paid for with a millionaire's surtax and repealing oil and gas tax breaks. So far, all these plans identify offsets in an effort to avoid adding to the debt over the long-run.

This morning, CRFB Policy Director Marc Goldwein offered his own suggestion to pay for a one-year payroll tax cut, doc fix, and unemployment insurance extension: switching to the chained CPI. This move would accrue savings to the federal budget in the same areas to which the extensions would accrue costs.

There are a number of ways out there to pay for the policy extensions that Congress is taking up, and we are hopeful that Congress will not only agree to offsets but also make efforts to move toward more comprehensive fiscal reform. As we conclude:

It is reassuring that lawmakers generally appear committed to offsetting not only any new job creation measures, but also policies that have been extended regularly for years. The seriousness of the country's fiscal outlook and recent demonstrations of concern in credit markets about U.S. debt must prompt lawmakers, at the very least, to not add to the debt.

But even fully offsetting the costs of any policy extensions or new measures, Congress and the White House will still have to Go Big in order to enact savings sufficient to stabilize and reduce the debt as a share of the economy while permanently addressing expiring policies. Economically, such a plan would significantly strengthen the economy over the long-term while providing the fiscal space for any additional job creation policies in the near-term. In addition, a Go Big approach would provide market confidence that the U.S. has its debt situation under control, while providing a healthy amount of certainty and predictability currently lacking in the economy.

The expiring provisions, both this year and in future years, offer an opportunity to address the debt under a comprehensive approach. What lawmakers must avoid is using expiring policies to blow another hole in future deficits and debt, like they did last year.

Line Items: Holidaze Edition

Happy Holidaze – The Christmas trees are up. The lights are lit. The shoppers are roaming the malls. The holiday specials are all over the television. The holidays are here and everyone is feeling festive, except perhaps on Capitol Hill, where lawmakers are in a daze working through their legislative list and checking it twice. They want to wrap up everything with a nice bow on top by the end of the week, but partisan fighting threatens to Grinch up the works.

Another Week, Another Deadline – Just as you can count on “A Charlie Brown Christmas” being shown on TV this time of year, fiscal deadlines have become ubiquitous in Washington nowadays. The continuing resolution funding the federal government expires Friday and Congress is scrambling to complete work on a massive package containing the nine remaining fiscal year 2012 spending bills before then. While negotiators are reportedly close to an agreement on the bill that will cost about $1 trillion, there are several policy riders that must be resolved. Meanwhile, David Rogers reports in Politico that there may be gimmicks involved, with overseas contingency funds possibly used to cover more defense and foreign aid costs.

No One Rolling Over on Payroll Tax Cut – Congress is also facing another deadline; to renew the two percent payroll tax cut for employees that is set to expire at the end of the year. Americans may favor extending the payroll tax holiday, which keeps money in their pockets, but as with most requests for Santa, paying for the gift is the main concern. Last week the Senate rejected competing Republican and Democratic proposals. At the end of the week, House Republicans unveiled a new measure that will be voted on this week. It will renew the payroll tax cut for one year, extend the Medicare doc fix for two years, and extend expanded unemployment benefits for a year. The cost is offset through several policies, such as raising Medicare premiums for high earners, eliminating unemployment and other social benefits for millionaires, extending the federal civilian pay freeze for another year, and changing federal civilian retirement benefits. Democrats prefer using a surcharge on millionaires to help offset the cost, and neither side is showing signs it intends to back down. Read the new CRFB brief on dealing with expiring provisions in a fiscally responsible manner.

Some Progress on Process Reform – Just like that calendar you get as a present – not the most exciting gift but ultimately useful – budget process reform is not at the top of the wish list for those wanting to address the country’s fiscal challenges, but could prove to be helpful in the effort. Last week, Republicans on the House Budget Committee unveiled a package of reforms. One of the measures, which would enhance the ability of the president to rescind individual items in spending bills, has bipartisan support from the top Republican and Democrat on the Committee – Chairman Paul Ryan (R-WI) and Ranking Member Chris Van Hollen (D-MD). That bill will be marked up by the Committee on Thursday. Ryan and Van Hollen will speak at a forum Tuesday on Capitol Hill convened by the Peterson-Pew Commission on Budget Reform, which has offered its own ideas for improving the budget process. In addition, the Senate will vote on competing balanced budget amendments this week. Neither proposal is expected to get the required support to move forward.

Europe Makes a Deal – European leaders gave the world an early Christmas present by averting a meltdown late last week. Most of the European Union, with Great Britain as the notable exception, agreed to stricter fiscal rules. However, there are emerging doubts as the deal is scrutinized more, with some worrying that the deal may not prevent a European collapse, but only put it on layaway.

Key Upcoming Dates (all times ET)

December 13

  • Peterson-Pew Commission on Budget Reform forum - "After the Super Committee: Is Budget Process Reform Part of the Answer" at 1 pm. With House Budget Committee Chair Paul Ryan (R-WI) and Ranking Member Chris Van Hollen (D-MD).

December 15

  • GOP presidential debate in Sioux City, IA sponsored by Fox News at 9 pm.
  • House Budget Committee markup of the Expedited Line-Item Veto and Rescissions Act of 2011 at 10 am.

December 16

  • Continuing resolution (CR) currently funding federal government operations expires.

 December 31

  • Both houses of Congress must vote on a balanced budget amendment to the U.S. Constitution, as required by the Budget Control Act.

January 3, 2012

  • Iowa Caucuses.

January 10, 2012

  • New Hampshire Primary.

January 21, 2012

  • South Carolina Primary.

January 31, 2012

  • Florida Primary.

We Need a War Spending Cap

One of the most popular budget gimmicks in Washington right now is the war savings gimmick.

Because CBO assumes that discretionary spending grows with inflation in its baseline, it assumes that war spending (the technical term is Overseas Contingency Operations, or OCO) also grows over time, even though there is already a drawdown in place. Lawmakers can therefore set "caps" on OCO spending consistent with the drawdown that is currently occuring and use them to claim savings to the tune of about $700 billion. As we have said before, it is a gimmick to take credit for savings for a policy that is already in place. Even worse would be to use these "savings" to offset the cost of policy extensions such as patching the Alternative Minimum Tax or avoiding deep cuts to physician payments, as some are calling on Congress to do.

Still, putting in place caps for OCO spending is actually useful in another context: appropriations. POLITICO is reporting that appropriators have been shuffling off some defense and foreign aid spending to the OCO category to clear room for more security spending under the Budget Control Act spending caps. Of course, this is another terrible gimmick, and, ironically, avoiding this gimmick requires setting caps on OCO spending, the same policy that is used in the war savings gimmick. In this context, though, the OCO caps would not be counted as savings, but instead would force Congress to actually abide by the savings they agreed to in August.

When/if the trigger hits, the pressure to put some defense spending under the banner of OCO will be greater, so putting these caps in place is important. Lawmakers should also tighten the definition of OCO spending so any extra headroom that the caps may provide for war spending cannot be used for other defense or foreign aid spending.

To sum up, setting OCO caps and claiming savings for them is a budget gimmick; on the other hand, not setting the caps and using OCO to avoid security spending cuts is also a gimmick. The best case scenario for war spending would be to enact the caps without using the savings to offset other costs or to pay down the $1.2 trillion "trigger" resulting from the failed Super Committee.

Budget process can't stop politicians from playing games and adding to the deficit, but it can at least make it harder and call them out on it. The effort policymakers are exerting to identify gimmicks should instead be put to better use toward finding new ways to identify low-priority spending and make the budget and tax code more efficient. We need real deficit reduction, not gaming.

MY VIEW: Marc Goldwein

In an op-ed for The Atlantic, CRFB Senior Policy Director Marc Goldwein made the case for offsetting the costs of the payroll tax cut, AMT patch, and unemployment benefit extension with the chained CPI. He argued that using the chained CPI, which is widely considered to be the most accurate measure of inflation available, makes both technical and budgetary sense. He also noted that the areas of the budget that the chained CPI would affect correspond to the areas that these policy extensions would affect.

On the technical side of the chained CPI, he wrote:

Every year, wages and prices go up. The government wants to measure this inflation to index everything from Social Security checks to tax brackets. The government makes these measurements by focusing on a "basket of goods" to compile its so-called consumer price index, or CPI.

The weakness of regular CPI is that we don't account for when consumers start changing their relative buying habits. If the prices of apples skyrocket, the regular CPI assumes cost-of-living will go way up. But in the real world, most people just buy fewer apples and more oranges.

Moving to the "chained CPI" corrects for this technical flaw by trying to provide an honest assessment of each month's basket and creating a "chain" between them. Moving to a more realistic measure of inflation would save well over $200 billion over the next decade, including from Social Security, other inflation-index programs, and from the tax code.

Click here to the read the full article.

"My Views" are works published by members of the Committee for a Responsible Federal Budget, but they do not necessarily reflect the views of all members of the committee.

For more on the chained CPI, read the Moment of Truth Project's paper Measuring Up: The Case for the Chained CPI and CRFB blog posts here and here.

Correction on 12/22 to include statement that "My Views" do not reflect the entire organization as a whole.

Questions for the Candidates

This Saturday in Des Moines, Iowa, the Republican presidential candidates will debate for one of the last times before the Iowa caucuses on January 3. The Committee for a Responsible Federal Budget has several questions we would like to see the candidates answer.

  1. Do you support a one-year extension of the two-percent payroll tax cut, and if so, how would you pay for it?
  2. Do you think that Congress should hold an up-or-down vote on the Simpson-Bowles plan to reduce the Federal debt?
  3. Do you support maintaining the “trigger” mechanism that will require $1.2 trillion in spending cuts over ten years due to the failure of the Super Committee to adopt a deficit reduction plan? How would you deal with it as president?
  4. If Congress sent you a tax-reform bill that lowered every American's income tax rate; with a top rate of 25 percent; that eliminated all tax deductions; and that kept these Federal tax revenues steady and did not hurt the deficit; would you sign or veto such a bill? Why or why not?

House GOP Releases Extenders Package with Offsets

Today, House Republicans have officially released their plan to extend the current payroll tax holiday for a year, two years of doc fixes, and a year of extended unemployment insurance. Encouragingly, the proposal joins the ranks of other plan presented over the past week or so in that specific offsets are also included to pay for the costs of policy extensions. CBO has also released a cost estimate of the proposal.

Below is a brief overview of the plan's costs and offsets.

  10-Year Costs
One-year extension of current payroll tax holiday $120 billion
Two-year doc fix $39 billion
Extended unemployment benefits (condensed # of weeks) $34 billion
Extend 100% bonus depreciation & other tax provisions $8 billion
Extend expiring Medicare provisions $3 billion
Sub-Total, Gross Costs $204 billion
Increase fees that Fannie/Freddie charge -$36 billion
Raise Medicare premiums for higher-earners -$31 billion
Extend federal civilian pay freeze for another year (through 2013) -$26 billion
Reform federal civilian retirement -$39 billion
Auction spectrum licenses -$16 billion
Reduce child tax credit fraud -$9 billion
Reform national flood insurance $0 billion
Reduce Social Security overpayments -$3 billion
Reduce Medicare payments for bad debts -$22 billion
Reduce Medicare waste, fraud, & abuse in Affordable Care Act -$13 billion
Reduce spending in prevention & public health fund in Affordable Care Act -$8 billion
Eliminate food stamp & unemployment benefits for millionaires, & other provisions <-$1 billion
Sub-Total, Offsets -$205 billion
Total Deficit Impact -$1 billion

Note: Numbers may not add due to rounding.

More on the Proposed Budget Process Reforms

As we reported on The Bottom Line the other day, Republican members of the House released a set of 10 pieces of legislation they argue would improve the budget process. One of the bills, “The Expedited Line-Item Veto and Rescissions Act,” has bipartisan sponsorship from Rep. Chris Van Hollen. It is exciting to see lawmakers taking such a comprehensive approach to try to reform the country's broken budget process, an effort we've been engaged with for some time through the Peterson-Pew Commission on Budget Reform.

Some of the bills are similar to proposals supported by the Peterson Pew-Commission, and can be found in some form in one of the Commission’s two reports: rescission authority and moving to fair value accounting for government liabilities. Further, CRFB President Maya MacGuineas has also recently testified before both the House and Senate Budget Committees on budget process reform – including on biennial budgeting. You can read the list of changes here, but we will briefly get into some of the meat of the package in this blog.

One measure would change the annual Congressional budget resolution from a concurrent to a joint resolution, meaning that it would now need the signature of the President, and thus would have the force of law. This change would get the President more involved in the budget process, however, it would not force Congress to actually enact a resolution, a problem we've been experiencing in the past two years given all the CR's and possible government shutdowns.

A few other changes fall under the designated category of "Spending Control." These include a bipartisan proposal to give the President enhanced rescission authority (a cousin of the line-item veto), which PPC endorsed in its Getting Back in the Black report. Rescission authority is a good tool for the President to keep Congress honest, although it will not come close to solving our budget problems. Another "spending control" piece is legislation that would limit spending to the rate of inflation, backed up by a sequester (automatic spending cut) of up to four percent of a program's spending.

Other pieces of legislation fall under the category of increasing oversight. Rep. Jason Chaffetz's (R-UT) "Review Every Dollar Act" is one example. The bill requires reauthorization of all federal programs, but it's unclear if tax expenditures are included, move all Pell Grant spending to the discretionary category, require Congressional funding of regulations that require new spending, and require revenue transfers to the Highway Trust Fund to be offset. Because so much of the budget is on "autopilot" -- which leads to significantly less discussion over the merits of certain programs, how to improve them, and what funding levels are necessary -- this bill could create a smarter budget.

Finally, a series of proposals fall into the category of increasing transparency. There are three bills that fall into this category. The first by Rep. Mulvaney (R-SC) would among other things, extend the 10-year budget estimate window for CBO and OMB, and would require OMB and GAO to submit annual reports on "unfunded liabilities." Rep. Garrett (R-NJ) would put GSEs "on-budget" to better show their budgetary impact, bring the US Postal system into balance, and require the use "fair value" accounting principles. The last bill, by Rep. Price (R-GA), would require CBO to produce macro-economic estimates of the impact of "major legislation."

Overall, budget process reform is a needed part of any fiscal reform -- the current system is not working, nor does it serve the public well. However, budget process reform will not fix our fiscal imbalance by itself. For that, lawmakers have to enact changes to federal revenues and spending. That being said, incorporating many of these reforms would certainly help our budget process and may even aid the goal of fixing our looming fiscal problems.