January 26, 2005 | News Releases on
Analyst Proposes Ways to Avoid Budgetary Train Wrecks
WASHINGTON, JANUARY 26, 2005-After nearly 30
years of abuse and loopholes, the federal budget process is broken,
according to an expert at The Heritage Foundation who has authored
a paper proposing several basic reforms.
For the first four months of last year, federal agencies had to
operate without knowing how much money they would receive. As
President Bush neared completion of his 2004 budget request, agency
managers had to lay the groundwork for their 2005 requests without
knowing how much money had been spent in 2003. And in a tacit
acknowledgement of the extent of the problem, Congress declined to
renew the rules by which federal budgets have been assembled since
What's needed, says Heritage's Brian Riedl, is a budget process
that's simple, easy to implement, less prone to loopholes and
designed to encourage communication and cooperation between the
White House and Congress.
Riedl suggests five reforms:
- Place annual caps on total spending rather than bring back
discretionary caps and the pay-as-you-go system. Although
discretionary caps helped restrain spending, they were too easy to
override. PAYGO, with its emphasis on ensuring that any adjustments
in the budget were revenue-neutral -- that any additional costs
were offset by additional revenues -- also limited the potential
for positive change. Instead, Riedl says, Congress and the White
House should establish a limit on total spending, rather than a
program-by-program approach, then work together to meet those
- Promote cooperation with the president. Budget resolutions --
in which Congress sets a cap on total spending -- are not binding.
Riedl proposes that budget resolutions be cast as acts of law,
signed by the president. This would bring him into the process
earlier, establish the spending goals up front and impose
discipline on the process.
- Clarify budget allocations. Make mandatory spending part of the
budgeting process, Riedl says, and eliminate "advance
appropriations and baseline budgeting" -- in which agencies spend
at levels they expect to receive, then claim their budgets were
"cut" if Congress doesn't fund them at those levels.
- Enhance accountability. Congress should: Create an emergency
reserve fund, limit members' years of service on appropriations and
budget committees and prevent government shutdowns by providing
that agencies continue to operate at current funding levels if
their budgets are not approved by the start of a new fiscal
- Promote realistic estimates of the impact of budget decisions.
Implement reality-based scoring of tax proposals that reveals how
they will affect the economy in terms of job creation and other
elements of economic growth.