Process and Rules
The Hill | Dec. 10, 2009
In the next few days, the House and Senate will engage in their usual end-of-year dance and vote on two massive omnibus appropriations bills to keep the government funded. The bills will help avoid another series of stopgap Continuing Resolutions that have kept the lights on in much of the federal government since October 1—the start of the new fiscal year. Lawmakers, anxious to leave for the year and smelling the proverbial jet fumes, will consider the omnibus bills “must-pass” since they include seven of the “regular” appropriations bills needed to fund everything from veterans’ benefits to railroad safety.
Once again, the much-vaunted “regular order” has been thrown out the window. But in January, members will return to the Capitol and promise that things will be different. The appropriations bills will be finished on time. But will they? The last time Congress was able to complete all of the appropriations bills individually by the start of the new fiscal year was 1994. Republicans love to blame the Democrats for the mess and Democrats take every opportunity to blame the Republicans. But neither party has managed to find a way to make the trains run on time.
Now, this may all seem like inside baseball, but the impact is serious. Managers of federal programs, already well into developing their next year’s budgets, still do not have their final Fiscal 2010 funding levels. Then there’s the question of whether lawmakers seriously discuss federal priorities when spending programs are lumped into a huge piece of legislation. If Congress cannot not even pass the annual appropriations bills on time, how can we expect it to deal with the unsustainable fiscal path that awaits us over the next decade?
Is there a better way to do things? Can a process be developed that will work even with sharp partisan divides on Capitol Hill? The Peter G. Peterson Foundation, The Pew Charitable Trust and the Committee for a Responsible Federal Budget believe that there is a better way and have established The Peterson-Pew Commission on Budget Reform This commission will make recommendations for how best to improve the nation’s fiscal future.
CRFB Supports Fiscal Task Force
December 9, 2009
The Committee for a Responsible Federal Budget commends Senators Kent Conrad (D-ND) and Judd Gregg (R-NH) on their proposal - released today - to create a Bipartisan Fiscal Task Force.
With the public debt above 50 percent of GDP and rising steadily, and Americans increasingly frustrated with the inability of Washington to deal with the dire situation, some type of commission, task force, or budget summit would be a sensible approach to break through the partisan deadlock to foster fiscal responsibility.
“A bipartisan commission would greatly help politicians address the nation’s long-term fiscal challenges,” stated
Another important benefit of a fiscal commission is that it could create a shared fiscal goal as a focal point for achieving real solutions. The bipartisan Peterson-Pew Commission on Budget Reform, a joint venture of CRFB, the Peter G. Peterson Foundation, and The Pew Charitable Trusts, has been working to develop an appropriate goal for dealing with the growing debt and will release a report, Red Ink Rising: A Call to Action to Stem the Mounting Federal Debt, on December 14 at the National Press Club with a six-step plan.
“Unfortunately, the gridlocked and dysfunctional legislative process has proven unable to deal with the coming fiscal crisis, and time is quickly running out,” said MacGuineas. “Establishing a bipartisan task force that promotes collaboration and honest discourse with an expedited process for considering its recommendations can overcome the polarization and disorder in
For press inquiries, please contact Kate Brown at (202) 596-3365 or firstname.lastname@example.org.
Where Are Those Appropriations Bills?
December 7, 2009
More than two months after the start of Fiscal Year 2010, only five of the twelve appropriations bills necessary to continue government functions have been enacted. Congress’s continued poor track record in fulfilling its fundamental obligation to fund the operations of government in an efficient manner exposes the need for budget process reform.
“If we can’t do something as simple as passing the appropriations bills we review every year, how are we supposed to do any of the heavy lifting on the budget?” asked Maya MacGuineas, President of the Committee for a Responsible Federal Budget.
Although the House has passed all twelve of its appropriations bills, three have not been passed in the Senate, and another four are still being negotiated in Conference committee. Since October 1, these government functions have been sustained by stopgap continuing resolutions (CR), the latest of which is set to expire on December 18th.
“With the health care debate set to take up much of the floor time in the Senate, it’s looking likely that Congress will either pass another CR or again rely on an end-of-year omnibus to wrap up all of its unfinished business just before leaving town,” said MacGuineas. “Budgeting is one of the most basic functions of governing—there really is no excuse for failing to pass these bills.”
“How can federal agencies develop realistic 2011 budgets if they don’t even know what funds they’ll have in 2010? We need to have a serious discussion of how to improve our country’s budget process so that spending bills can receive the attention they deserve.”
For press inquiries, please contact Kate Brown at (202) 596-3365 or email@example.com.
Maya MacGuineas Testimony Before Senate Budget Committee on Bipartisan Process Proposals for Long-Term Fiscal Stability
This paper examines the Obama administration budget reform proposals and evaluates how (and if) they would improve the budget process and restore fiscal responsibility. In particular, the paper examines the administration’s proposed changes to the calculation of the budget baseline and its reintroduction of a statutory pay-as-you-go (PAYGO) framework.
The CBO recently projected a ten-year deficit of $7.1 trillion using a "current law" baseline. But these numbers may prove to be optimistic. CRFB argues that four major assumptions in the baseline are unlikely to materialize, leading to a ten-year deficit of $12.6 trillion. This paper discusses US Budget Watch's own "current policy" baseline, which assumes particular policies do not conform to current law.
Are the rules of thumb and categories we have explicitly and implicitly established in our budget process for resource allocation appropriate and aligned with our overarching fiscal, programmatic, and political goals? Do they establish the right incentives? Or do they create distortions? This paper looks at the bias in favor of mandatory over discretionary spending, tax expenditures, and capital budgeting.
Ripon Forum | April 21, 2009
This past February, four months after the beginning of the fiscal year, Congress passed the last bill needed to fund the government.
But what it finally passed was more than just late — it was sloppy. Instead of offering separate appropriation bills that could be debated thoughtfully and with undivided attention, Congress lumped them into one, gigantic 225-page “omnibus” bill, and hurriedly passed it on the floor.
Does anyone think this bill got the scrutiny it deserved?
Moreover, at a time of near-universal recognition that our entitlement and tax policies are unsustainable, Congress has made no improvements in these areas for the next fiscal year. Our national conversation on this broken system is long overdue. And if we are serious about changing the situation, then budget reform will have to mean reforming the process by which Congress considers, passes, and evaluates its annual budget.
In theory, the federal budget process is straightforward.
First, the President submits his “budget,” which is actually just a recommendation that reflects the administration's own priorities. After the President’s budget, Congress creates a blueprint for itself called a budget resolution. This resolution is developed through the legislative process, but is not presented to the President and hence doesn’t reflect the consensus of both the Congress and the Executive branches. What it is supposed to do is provide a framework for subsequent spending and tax bills. Congress then considers twelve separate appropriations bills, together with any tax and entitlements bills on its legislative agenda that will become law once they are signed by the President.
Our current budget process is the product of several major reforms -- the last was in the 1970s --but in recent times it has failed us in all the most important places.
The first — and most basic — criticism of the budget process is that it doesn’t produce a simple, realistic framework for how government intends to spend in the short term, plan for entitlements, or impose taxes. The President's budget and Congress' budget resolution are both just preliminary steps in the passage of a budget. They can and often do get kicked aside in the scuffle between the appropriations, authorization, and tax writing committees, all of which create different pieces of legislation that combine to form the big fiscal picture.
Moreover, both the President’s budget and the budget resolution make a variety of unrealistic assumptions that render them largely useless. For instance, the president’s fiscal year 2008 budget accounted for negligible spending on the wars in Iraq and Afghanistan, and made the unlikely prediction that Congress would soon allow expiring tax breaks to place billions of dollars in additional tax burden on the middle class.
Nor does the budget process focus efforts on the biggest drivers of deficits and the debt: long-term entitlement spending. Almost everyone knows that in the coming decades, we will be unable to sustain our entitlement commitments and tax policies, but the budget process doesn’t focus on the level of entitlement growth in existing law or, for changes to existing entitlement law, growth that occurs outside of a narrow window of time. Existing budgetary limits are easily evaded by pushing polices outside this budget window or pretending that they will expire when they likely will not. In the end, most of Congress’ time is spent on the 38 percent of the budget that makes up discretionary spending, with barely any formalized oversight on the mandatory side.
“Almost everyone knows that in the coming decades, we will be unable to sustain our entitlement commitments and tax policies, but the budget process doesn’t focus on the level of entitlement growth…”
Step back for a moment and think about what budgets are supposed to do. We’d all like to spend as much as we want, but budgets show us our limits by bringing all of our obligations and revenue sources into one unified picture. An ideal budget would encourage policymakers to take a look at entitlement spending when they adjusted discretionary spending (and vice-versa), weigh the importance of one tax break against other tax breaks, adjust revenue to compensate for new spending, and generally make real tradeoffs across all categories.
The bottom line is that if something is important enough for the government to do, it is important enough to pay for either by raising taxes or cutting other spending. But our budget process is missing this fundamental connection between the parts. Instead, we foster compromise at the level of individual appropriations bills, where the question is simply how to spend money within a narrowly defined area of appropriations. In practice, lawmakers are actually encouraged to stick with their party when they vote on the budget resolution, but then vote with their Districts or States when it comes to the appropriations bills.
Finally, the “teeth” of our budget process — enforcement — have proved themselves largely ineffective. The original pay-as-you-go rules had the force of law and were enforced by automatic spending cuts. The current rules are not legally binding and easily circumvented, whether through waving budget rules, designating phony emergencies, or pushing costs outside the budgetary window.
There has to be a better way to do things.
An improved budget should meet a few basic criteria. It has to be simple and realistic enough to set credible limits on spending and tax bills. The budget process should provide incentives for lawmakers to engage openly in the inherent trade-offs of real budgeting. And they should work within a framework that takes the country's entire fiscal picture into account: entitlements, discretionary spending, and taxes all have to be on the table. And perhaps most importantly, to ensure that we don't make decisions that endanger our country's fiscal health down the road, the budget should give ample consideration to the long-term ramifications of entitlement and tax policies. Finally, a good budget process has to be backed up with tough enforcement mechanisms: whether through enforceable limits on expenditures, some form of PAYGO, or a new mechanism, lawmakers must be held accountable for their budgetary decisions.
To address this critical issue, the Committee for a Responsible Federal Budget, working with the Peterson and Pew Foundations, has assembled a bipartisan team of experts for a budget reform commission. This effort is modeled after a noted 1967 budget concepts commission that laid the foundation for today’s consolidated budget. As our government spends trillions to pull the country back from recession, the crisis in the economy has spilled over into the budget. And once we begin to repair this budgetary damage, we will be hit by a long-term structural imbalance between spending and revenue that requires even harder choices. The need for serious and thoughtful reform has perhaps never been greater.
Jim Bates is the Project Director for the Peterson-Pew Commission on Budget Reform at the Committee for a Responsible Federal Budget. He previously served as Chief Counsel, Deputy Staff Director, and Staff Director of the Committee on the Budget for the U.S. House of Representatives.