Congress Considers Voting Away Its Budget Obligations

COMMENTARY Budget and Spending

Congress Considers Voting Away Its Budget Obligations

Nov 15th, 2018 5 min read

Commentary By

Paul Winfree @paulwinfree

Director, Roe Institute for Economic Policy Studies

Romina Boccia @Rominaboccia

Director, Grover M. Hermann Center for the Federal Budget

Justin Bogie @JustinBogie

Senior Policy Analyst in Fiscal Affairs

David Ditch

Research Assistant, Grover M. Hermann Center for the Federal

A powerful joint select committee has proposed moving from annual to biennial budgeting. ablokhin/Getty Images

Key Takeaways

The bill would do very little of substance and its core proposal, “biennial budgeting,” would lead Congress to pass two-year budgets instead of annual budgets.

It would further reduce the opportunities for Congress to exercise its constitutional responsibility to oversee and control federal spending.

America can no longer afford such excuses. It needs—and deserves—courage, leadership, and action.

Congress should be using the lame-duck session to do meaningful work. Unfortunately, it’s doing the opposite: seeking to cut its future workload while leaving long-term problems unresolved.

On Wednesday, the Joint Select Committee on Budget and Appropriations Process Reform unveiled draft legislation designed to change the way Congress exercises its constitutionally-granted power of the purse. The bill would do very little of substance and its core proposal, “biennial budgeting,” would lead Congress to pass two-year budgets instead of annual budgets.

This proposal is entirely unsuited to address the coming U.S. fiscal crisis, which will soon be unavoidable if legislators fail to act. With time running out in the current session of Congress, the forthcoming legislature will be obligated to take more decisive action to stop out-of-control spending and deficits.

When the Joint Select Committee was created as part of the Bipartisan Budget Act of 2018, the underlying reasoning for budget process reform was undeniable. Since the current process began with the Budget Act of 1974, Congress has been serially unable to meet basic deadlines for passing budget resolutions and spending measures. This problem has been evident during divided and unified government alike, and there is more than enough blame to spread among both political parties.

Compounding this problem is the fact that the portion of spending controlled through the annual process has been declining, as spending on mandatory programs like Medicare, Medicaid, and Social Security has continued to grow on autopilot.

The end result is that Congress has not been properly managing its power of the purse.

Recognizing this problem has rarely been at issue. Budget analysts of every political and ideological stripe have bemoaned late and/or nonexistent budget resolutions, Congress’ perpetual reliance on “continuing resolutions” and “omnibus” bills to fund the federal government, and the exploding national debt.

A stumbling block has been a lack of consensus on how to fix these problems, and yet the work of the Joint Select Committee shows that merely reaching “consensus” is insufficient.

The most commonly cited budget reform idea—and the basis for the Joint Select Committee’s new proposal—is biennial budgeting. Under this model, rather than producing a budget every year, Congress would only produce a budget every two years, or once for every session of Congress.

Proponents of biennial budgeting say it would reduce the amount of time both Congress and federal agencies would need to manage the spending process during the second year, freeing up time for other work. In reality, it would further reduce the opportunities for Congress to exercise its constitutional responsibility to oversee and control federal spending.

Continuing resolutions and sky-high deficit spending would almost certainly continue under biennial budgeting. In fact, spending would likely increase, since Congress would pass more supplemental appropriations and lobbyists would have an added incentive to put extra effort into influencing a two-year spending package.

Moreover, by reducing opportunities for the Senate to pursue budget reconciliation, Congress would neglect a key fiscal tool to adjust mandatory spending, which is the key driver of debt.

It comes as no surprise that under the proposal, Congress would be relieved from having to produce a budget during an election year. Legislators are not shy about wanting to avoid the most important part of their jobs when that very job is at stake. Instead of calling this proposal “The Bipartisan Budget and Appropriations Reform Act,” legislators would be more honest if they had called it “The Congressional Workload and Responsibility Reduction Act.”

The best evidence against biennial budgeting is already staring us in the face: Congress has essentially been operating on a biannual budget cycle for the last several years. Ever since passage of the Budget Control Act of 2011, bipartisan budget deals have been made on a two-year basis. Yet where have these biennial deals gotten us?

The national debt is rapidly approaching $22 trillion. Annual deficits are projected to exceed $1 trillion in the very near future, likely as soon as the 2019 fiscal year. Since fiscal reforms rarely happen, Congress should not bother to spend political capital on legislation unless it would have a meaningful impact, and legislators should certainly stay away from policy changes that are likely to do more harm than good.

Instead of voting away its obligations, Congress should work to pass several nonpartisan policy prescriptions, such as:

  • Implementing a cap on noninterest spending. This would force the House and Senate to focus the federal government on core priorities, and would increase control over mandatory programs.
  • Eliminating fiscal gimmicks and closing loopholes that bust budgets year after year. So-called “changes in mandatory programs,” many of which are used to trade fake spending cuts for real spending increases, have added tens of billions to the national debt in recent years. Emergency and disaster spending has also ballooned and completely avoids budgetary scrutiny. By ending fraudulent changes in mandatory programs and putting reasonable fiscal controls on disasters, Congress can ensure that spending caps are actually followed.
  • Tackling unauthorized spending. Congress spends hundreds of billions of dollars every year on programs whose authorizations have lapsed, often decades ago. Requiring authorizations for all spending would force authorizing committees to do their jobs and either continue, sunset, or end programs, rather than allowing them to roam the land in a zombie-like fashion.
  • Improving accountability and transparency in federal budgeting.Measures to this end include accounting for interest costs when scoring legislation, incorporating the cost of market risk in federal loan and loan guarantee programs, and properly accounting for trust fund transfers.

There is no denying that passing significant fiscal reforms through a divided Congress would be incredibly difficult. Some in Congress have used that as an excuse for failure.

But America can no longer afford such excuses. It needs—and deserves—courage, leadership, and action.

This piece originally appeared in The Daily Signal