Budget Process and Rules
This weekend in The New York Times, former Chairman of the Council of Economic Advisors Glenn Hubbard and the Hudson Institute's Tim Kane challenged both parties' approach to dealing with one of our of nation's most important problems and suggested ways to help maintain fiscal discipline.
Senators John Thune (R-SD), Tim Kaine (D-VA), Rob Portman (R-OH), and Chris Coons (D-DE) have introduced the Intergenerational Financial Obligations Reform (INFORM) Act, a bill that would encourage responsible budgeting by increasing the scope of federal budget analysis.
On May 19, the debt ceiling was reinstated as the Treasury Department began to use extraordinary measures to prevent running up against the debt limit. Extraordinary measures are expected to be exhausted sometime this fall, also when the current continuing resolution (CR) funding the government is due to expire. In addition, both parties are looking to alter the sequester in some form for future years and will have to figure out what to do with it then.
Last week, the House Budget Committee released a package of budget process reforms consisting of seven different pieces of legislation.
As the Senate worked on its FY 2014 budget resolution, which passed by a 50-49 vote late last week, hundreds of amendments were filed in a process commonly referred to as “vote-a-rama.” Most of the amendments that actually received a vote were largely symbolic, establishing non-binding “deficit-neutral reserve funds” to make it procedurally easier for Congress to make changes in the future.
Yesterday, the Fix the Debt Campaign had a event with two roundtables bringing together many health policy and tax experts from across the political spectrum to discuss two of the central issues involved in the current budget negotiations.
Yesterday in a blog post, IMF's Fiscal Affairs Director Carlo Cottarelli stressed the need for fiscal transparency on the part of governments around the world in attaining a comprehensive debt-deal. By fiscal transparency, Cottarelli means the necessity for governments to make fiscal information accurate and readily available.
With Congress in recess until after the elections, a plan to replace the fiscal cliff with a comprehensive debt deal will have to get done during the lame duck session. With less than five weeks to work with, Congress might look to the Bipartisan Policy Center's new Framework for a Grand Bargain for recommendations on how Congress could avoid the fiscal cliff, while ensuring it is committed to a debt deal in a limited time frame.
The use of dynamic scoring is one of the most contested issues in the budget world. We highlighted the pros and cons of using it and the issues associated with incorporating it into the budget process in a paper earlier this year.