Congress is getting serious about considering reforms to the dysfunctional budget process. Last month the House Budget Committee held two hearings on the topic that featured testimony from CRFB board members Jim Nussle, Alice Rivlin and Rudy Penner. House Budget Committee Chairman Paul Ryan (R-WI) is reportedly preparing a package of budget process reforms to be considered by the end of the year.
Not to be outdone by their colleagues on the other side of the Capitol, the Senate Budget Committee this morning held a hearing on the topic as well. CRFB President Maya MacGuineas testified in the first panel of the hearing, which looked at biennial budgeting. With Congress having difficulty enacting an annual budget, some have proposed a switch to a biennial process, in which a two-year budget would be approved one year and the next year would be spent on stricter oversight and evaluation of federal spending. MacGuineas first began by stating the obvious, our budget process is broken and reforms are needed. She then noted some of the downsides of biennial budgeting, such as the fear of using supplemental appropriation bills in the off years. However, strict process rules could prevent that from happening. She also offered a number of points in favor of the two-year approach: namely, more time to allow Congress to better focus on national priorities and better use the data collected on program performance, and it would give program managers more time and stability in their budgets. Additionally, MacGuineas noted that other budget process reforms used successfully by other countries, such as multi-year budgeting and portfolio budgeting, which is budgeting using rankings of national priorities, could be useful, especially in helping to carry out a long-term, comprehensive fiscal plan. The Peterson-Pew Commission on Budget Reform offered a detailed package of budget process reforms in the report, Getting Back in the Black.
CRFB board member William Hoagland also testified at the hearing on the second panel. His testimony centered on reforming the so-called "vote-a-rama" process in the Senate, which is a marathon of non-stop votes on amendments to budget reconciliation bills. Hoagland offered the following changes to this process: require a 1-day layover period for resolutions and reconciliation bills and unanimous consent to yield back time on a budget resolution or reconciliation bill; if 50 hours is the time limit, limit each Senator to two amendments and allow the minority party to have the right of first refusal on the first amendment; adopt in statute a clear definition of germaneness; and either do away with Function 920 (allowances) in a budget resolution, or do not allow any amendments to this function on the Senate floor. Finally, he d noted that there may be more "gotcha amendments" in election year budget debates, meaning that a move to biennial budgeting with the budget starting in the odd numbered year might reduce this practice.
If that wasn't enough budget process for one day, the House Judiciary Committee held a hearing today on a Balanced Budget Amendment (BBA) to the U.S. Constitution. CRFB board member Douglas Holtz-Eakin was one of the experts called upon to testify. Holtz-Eakin testified that the U.S. needs a fiscal rule and requiring a balanced budget could be such a rule. He also noted that a sound criticism of BBAs is their inability to deal with factors outside of the government's control, such as wars or the economic cycle. A 2/3 majority vote in Congress to waive the requirement could address this issue. He also noted that enforcement mechanisms have still not been totally thought out and require more discussion. The hearing was important in light of the fact that both houses of Congress must vote on a balanced budget amendment by the end of the year under the debt limit deal that avoided a government default earlier this year. Check out CRFB's Fiscal Toolbox to compare a balanced budget amendment with other process tools.
There are lots of budget process reform ideas out there. The Peterson-Pew Commission's budget reform one-stop shop can help you make sense of it all.