A fiscally responsible budget resolution should abide by the following principles:
Set a meaningful fiscal goal with a plan to meet that goal
The fiscal goal should, at a minimum, put debt on a downward path as a share of the economy over the ten-year window and beyond.
Set out a plan to meet that goal, free of gimmicks or unrealistic assumptions.
Include a plan to control the growth of mandatory spending
Include significant and achievable savings targets to slow the growth of mandatory spending programs, along with credible examples.
Include reconciliation instructions for all assumed mandatory savings.
Provide for fiscally responsible tax reform
Include reconciliation instructions for pro-growth tax reform that is preferably deficit-reducing and at the very least, deficit-neutral relative to current law.
Devote any increased revenues from dynamic growth to deficit reduction.
Set responsible, achievable, and enforceable discretionary spending levels
Set realistic discretionary levels, complying with Fiscal Responsibility Act caps and showing a path to extending enforceable caps.
Limit emergency and other spending outside the FRA caps and establish criteria for emergency spending.
Enforce the PAYGO requirement that legislation not add to the deficit
Require full offsets for any bill that reduces revenues or increases mandatory spending so that it does not add to the deficit.
Maintain and strengthen PAYGO and other rules prohibiting legislation that would increase the deficit over the medium or long term.
Rely on credible and realistic assumptions
Use economic assumptions from the Congressional Budget Office.
Require “current law” baseline rules for evaluating costs of legislation.
Do not rely on large, unspecified spending cuts.
Improve the budget process and budget enforcement
Ensure strict enforcement of spending and revenue levels in budget resolution and make it more difficult to waive budget limits by stricter procedural controls.
Strengthen prohibitions of fake savings and other budget gimmicks.
