How Would the Gang of Six Enforce the Rest of their Savings?

One of the criticisms of the plan put forward by the Gang of Six is that it relies on Congressional Committees to report legislation achieving savings without an effective enforcement mechanism requiring the Committees to act. In fact, the process contains innovative enforcement mechanisms which are stronger than existing mechanisms used successfully to implement savings from previous budget agreements.

The process for achieving the savings from reforming entitlement programs and the tax code outlined by the Gang of Six is similar to the budget reconciliation instructions in the existing budget process. The reconciliation process has been used to implement comprehensive budget deals in the past, including the 1990 budget agreement, the 1993 deficit reduction plan and the Balanced Budget Act of 1997. As CRFB board member Barry Anderson notes, it is not unusual to reach agreement on an overall framework first followed by work on legislation implementing the details. That is the process that was followed in each of those examples, and is the approach at the core of the Gang of Six plan.

However, the process established in the Gang of Six proposal contains several innovations which would make it stronger than the reconciliation process in current law:

  1. First, the instructions would be set in statute as opposed to an internal Congressional resolution as occurs with yearly budget resolutions.
  2. Second, the proposal would provide more detailed instructions for several of the Committees than simple savings targets. For example, the Finance Committee is directed to report a permanent “doc fix,” offset by health savings, with additional savings for deficit reduction. The Budget Committee is given detailed instructions to report legislation regarding discretionary spending limits, review for federal health spending, and a debt stabilization process.
  3. Third, the proposal would provide that if a Committee failed to report legislation achieving the required savings, an across-the-board cut in spending in all programs (except those for lower-income families) within that Committee’s jurisdiction would be imposed. This would give Committees a strong incentive to act on legislation which achieves savings through thoughtful policy reforms that set priorities in order to avoid the meat ax approach of an across-the-board cut. In addition, the proposal would give any bipartisan group with at least five Senators from each party the power to introduce a resolution achieving the required savings if either the Finance or Budget Committee fails to act (click here to see what those Committees would be responsible for).

Of course, we’d support making their enforcement mechanisms even stronger. The Peterson-Pew Commission recommended a sequestration approach where spending and tax expenditures would be cut across-the-board if fiscal targets are not met. The most important thing, though, is for policymakers to agree to the policies which will put the debt on a sustainable path. Process reforms can lead our elected officials to water, but only they can agree to drink.

Without the political will it will be impossible to follow through on the savings targets. But this is exactly where the Gang's proposal derives its strength. The Gang's plan reflects a broad consensus with strong bipartisan support of lawmakers who are committed to following through to achieve the savings.

 

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