Bipartisan Group Introduces Budget Process Reform Improvement Act of 2011
A bipartisan group of Representatives has introduced the Budget Process Improvement Act of 2011 in an effort to provide "improved accuracy and transparency" to the federal budget process. The bill has two main components -- new rules on budget scoring and accounting and moving the budget process to a biennial system.
The first part of the bill has five sections:
- Require CBO and JCT to study two decades worth of budget impact instead of the current ten-year budget scoring.
- Require OMB to issue a report each year that looks at areas of the budget that are currently considered "unbudgeted." An example of this would be Fannie Mae and Freddie Mac.
- Require the Department of Treasury, with OMB consulting and any policy-related agency, to analyze and issue "performance reviews" of each tax expenditure at least once every four years. Tax expenditures, which are basically spending programs in the tax code, are not currently reviewed.
- Implement accrual accounting for areas of the budget such as federal retirement.
- Require CBO, consulting with JCT, to issue revenue projections each year for the next decade.
Reviewing tax expenditures is one of major reforms proposed in Getting Back in the Black. This would be a major, positive change and we are pleased to see this idea continue to gain traction. Getting Back in the Black also offered recommendations on accural budgeting for programs such as federal retirement.
Additionally, this bill would move the budget process to a biennial system, something that CRFB President Maya MacGuineas has testified on previously. The idea behind a biennial process is that it would free up more time for Congress to review the budget and better focus on oversight of the effectiveness of federal programs.
The bill comes on the heels of another budget process reform package spearheaded by House Budget Committee Chairman Paul Ryan (R-WI). Improving the budget process is gaining prominence in the wake of the failure of the Super Committee and as Congress struggles to keep the budget process on track. While budget process reform is important and can play a role in putting the country on a sustainable fiscal path, process reform cannot replace the need for specific policy actions and tough decisions on the part of policymakers. This theme was echoed repeatedly at Tuesday's Peterson-Pew forum.
Bipartisan efforts like this should be commended and we hope to see more such efforts.
There are plenty more ideas to reform the budget process as well. Tuesday's event featured the release of four new papers exploring multi-year budgeting, performance budgeting, fiscal rules, and budgeting for emergencies.