February 13, 2004

February 13, 2004 | WebMemo on Federal Budget

The Family Budget Protection Act: A Bold Step to Fix the Federal Budget Process

Responsible lawmakers have long been searching for ways to get federal spending under control. In addition to eliminating unnecessary spending, the other essential step is to fix the broken budget system that encourages runaway spending. The Family Budget Protection Act (FBPA), introduced this past week by Representatives Jeb Hensarling (R-TX), Paul Ryan (R-WI), Chris Chocola (R-IN) and Christopher Cox (R-CA), presents an enormous opportunity for Congress to create a budget process that encourages belt-tightening.

The Coming Crisis

Federal spending is out of control. Total spending recently topped $20,000 per household for the first time since World War II, as discretionary spending has leaped 39 percent since 2001 and mandatory spending has reached 11 percent of the Gross Domestic Product for the first time ever. In the absence of comprehensive spending reforms, the baby boomers will soon collide with Social Security and Medicare to produce a sea of red ink, leading to massive tax increases or the termination of most federal programs.

Averting this budgetary crisis will require the courage to make the difficult and sometimes unpopular spending cuts. Lawmakers willing to take a tough stand need a budget process that helps rather than hinders them and that is not stacked in favor of excessive spending. But Congress is still saddled with an outdated budget process that was created in 1974, when the federal budget was only one-third of its current size.

A New Process

The FBPA's authors recognize that our current budgetary challenges cannot be adequately addressed with a thirty-year-old budget process that has been punched full of holes by successive Congresses.

For example, Congress spends the first nine months of each year enacting a budgetary blueprint, writing thirteen detailed appropriations bills, and passing other mandatory and tax legislation. The President is not formally brought into the process until the final bills reach his desk for a signature or veto. The FBPA would bring the President into the budget debate early in the year by converting the budget resolution into a binding law requiring a Presidential signature. Contentious debates on the size of government would be settled in March, rather than in October, when delays risk government shutdowns.

The FBPA also would put real caps on both discretionary and mandatory spending. Comprising two-thirds of all federal spending and growing by 7 percent annually, mandatory spending can no longer be taken off the table during the budget process. Caps have successfully kept discretionary spending under control in the past and can work for mandatory programs as well.

The FBPA would improve budget prioritization by creating a commission to scour the federal budget for waste, fraud, and abuse to eliminate. The commission's recommendations would be put to Congress, without amendment, for an up-or-down vote to approve or reject the entire package. Rather than singling out one program at a time for reform, which puts lawmakers and other program advocates on the defensive, this approach asks all lawmakers to accept reforms in some of their preferred programs. This is the same model successfully used fifteen years ago to close obsolete military bases.

Time to Get Serious

Representatives Hensarling, Ryan, Chocola and Cox deserve applause for laying out a comprehensive proposal to repair the federal budget process. This proposal should be examined by every member who is serious about spending control and value for the taxpayer dollar. With the current budget process so biased in favor of accelerating spending, this could turn out to be the most important budget bill of the year.

Brian M. Riedl is Grover M. Hermann Fellow in Federal Budgetary Affairs in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

Heritage Budget Research

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About the Author

Brian M. Riedl Grover Hermann Fellow in Federal Budgetary Affairs
Thomas A. Roe Institute for Economic Policy Studies