January 29, 2016 | Commentary on Budget Process, Federal Budget, Federal Spending

Congress Should Spend More Time Budgeting, Not Less

Government-by-crisis may be the new normal, but it’s highly frustrating—both on Capitol Hill and off.  

Some propose easing brinksmanship budgeting by giving Congress fewer budget deadlines to meet. One popular proposal, called biennial budgeting, would extend the budget cycle from one year to two. Proponents argue that this would free up valuable congressional time for oversight and other critical activities. That’s doubtful.

Lawmakers don’t find themselves under the budgetary gun because the Congressional schedule is too packed to follow regular order. Rather, government-by-crisis arises due to deep disagreements over the proper role of the federal government.  

Tensions run higher today than in the past in part because the main battleground is getting proportionally smaller.  Discretionary spending—the part of the budget where Congress exercises most of its policymaking muscle—is shrinking as a percentage of both the federal budget and the economy as a whole. Discretionary spending is projected to drop from 6.5 percent of GDP in 2016 to 5.2 percent in 2026.

Traditionally, both parties would deal with the discretionary budget through compromise—meaning each side would agree to accept the other’s spending increases. That’s becoming much harder to do when federal debt stands at $18.9 trillion and annual deficits are projected add an additional $9.4 trillion over the next decade.  

At the same time, the Budget Control Act’s approach—a $1.2 trillion fallback sequester paired with spending caps—has proved to put too much strain on the discretionary budget if lawmakers are unwilling to fundamentally rethink the activities and size of federal agencies. The congressional earmark ban further reduced opportunities for lawmakers to grease the wheels of the budget process.

Meanwhile, mandatory spending remains largely shielded from congressional debate precisely because few action-forcing deadlines prompt Congress to review this part of the budget, which is on auto-pilot and growing rapidly. Mandatory spending now accounts for more than two-thirds of all federal expenditures and is projected to grow from 13.3 percent of GDP to 15.0 percent by 2026.  

As mandatory spending grows and primary deficits rise, interest payments on the debt are expected to increase from 1.4 percent to 3.0 percent of GDP over the same period. Biennial budgeting would likely mean that Congress would spend even less time considering reforms to programs driving the country’s growing fiscal problems.

Without grappling with the key drivers of spending and debt, proposals that shield Congress from more frequent debate merely sweep important policy debates under the rug for even longer. They are unlikely to result in a more deliberate approach. To the extent that biennial budgeting reduces interactions that force Congress to acknowledge the nation’s unsustainable fiscal trajectory, this proposal, if adopted, could do more harm than good.

Furthermore, the current budget process evolved as a rational response to key elements of the political environment. It reflects the fact that rising deficits (usually incurred due to war) should focus attention on the budget. Second, it reflects a desire by Congress to assert its budgetary powers.

Though new fiscal challenges may call for changes to the budget process (entitlements, not war spending, will likely continue to drive deficit growth), changes to the budget process should not erode the power of the Budget Committees or Congress.  

Under a biennial budget process—one that exempts annual spending decisions—the Budget Committees will lose a significant amount of their already limited power.  Congressional budgets will likely turn into two-year aggregate spending agreements (similar to the Bipartisan Budget Acts of 2013 and 2015) losing any focus on the long-term. At the same time, the most significant check that Congress has on the administration is the aggregate amount of resources provided to any agency. Under a proposal that includes biennial spending decisions, power will shift to the administration as Congress will have limited opportunities to revisit spending decisions.

Annual budgeting has an inherent value, as well. The process of writing a budget forces lawmakers to come out of their silos, think about the larger fiscal issues, and consider the fiscal consequences that may outlast their time in office. 

In recent years, each member of the House has faced at least two votes on the nation’s fiscal trajectory each term in office. In the Senate, where the annual budget process has been ignored, members are rarely put in a position to think about larger fiscal issues. Rather than forcing innovative thought on the budget, biennial budgeting would likely produce budget resolutions of lower quality and with more rhetoric than substance. 

We understand why members of Congress would not want to produce a budget every year. The fiscal situation is becoming more severe. Producing a credible balanced budget while continuing to support the current scope of government is becoming more difficult.

The solution to resolving government-by-crisis is not to lessen opportunities for confronting the size and composition of the federal budget. Rather, it is to address the forces that drive unsustainable spending and shrink congressional power.  

Congress should adopt reforms that put the budget on a path to balance by reforming metastasizing programs like Social Security, Medicare and Medicaid. And it should reclaim its Constitutional authority by exercising more oversight over agencies and holding government bureaucrats accountable for mismanagement of public funds and responsibilities.

 - Paul Winfree is the director of the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

 - This piece originally appeared in The Hill.

About the Author

Paul Winfree Director, Thomas A Roe Institute for Economic Policy Studies and Richard F. Aster Fellow
Thomas A. Roe Institute for Economic Policy Studies

Romina Boccia Deputy Director, Thomas A. Roe Institute for Economic Policy Studies and Grover M. Hermann Research Fellow
Thomas A. Roe Institute for Economic Policy Studies

This piece originally appeared in The Hill's "Congress Blog"