Proposed Rewrite of the Congressional Budget Process
Frequently Asked Questions
Q: Why take a comprehensive approach to budget process reform as opposed to tackling smaller legislative measures?
A: In many ways, the budget process operates as a system that, when properly structured, should reinforce fiscal discipline within itself. The current budget process is rife with loopholes through which Congress has been able to avoid its budgetary duties and responsibilities to taxpayers. Taking a piecemeal rather than holistic approach to reform has the potential to leave a good number of the current system’s failures in place. That being said, should Congress choose to implement smaller changes to the congressional budget process, it would still be a step in the right direction.
Q: How do you expect these reforms to succeed when Congress has failed to operate successfully under the current budget process? Isn’t Congress’s failure at budgeting due more to a failure of political will than a broken budget process?
A: Current practices create major complications and disincentives to tackle the important job of budgeting, and thus encourage lawmakers to avoid this responsibility. A better process would reinforce the desire of many for better budgeting.
To begin with, our proposal would align the fiscal year with the calendar year and appropriations legislation would be considered on a biennial basis – both of which would give Congress additional time to complete its appropriations process, authorization bills, and oversight. Congress would be prohibited from enacting a continuing resolution lasting longer than one year even with the adoption of a biennial/two-year appropriations process. Our proposal would allow the establishment of binding spending and debt limits with expanded budget enforcement tools – including the use of multiple reconciliation bills to enact major legislation. This would ensure compliance with agreed-upon fiscal targets and also give policymakers the ability to account for and address automatic spending.
The plan would prohibit the use of common budget gimmicks that do not result in real savings and thus should not be used to offset increases in spending. Members of Congress would also have the ability to strike budget waivers that may be included in the rules that govern consideration of legislation. It would also make it more difficult for Congress to pass spending and tax bills before the budget is agreed to.
Q: What does this plan do to address the deficit and debt?
A: We are proposing a substantial overhaul of the congressional budget process that would empower Congress to put the Nation on a long-term, sustainable, fiscal trajectory. Among the solutions put forward, our proposals would provide greater transparency so that policymakers are more mindful of the fiscal impact of their decisions; strengthen budget enforcement to help prevent Congress from disregarding agreed upon budget limits; account for the true costs of government programs, functions, and regulations; and reverse the current biases within the system that promotes higher spending.
Q: Does this plan offer a way to balance the budget?
A: Yes. Congress would have multiple tools to help achieve real fiscal discipline – including stronger enforcement procedures, controls over automatic spending, long-term spending and debt limits, a reversal of the higher spending biases inherent in the current budget baseline, and greater transparency for policymakers on the fiscal consequences of their legislative efforts.
Additionally, the proposal calls for the establishment of a National Commission on Budget Concepts to review the concepts and definitions underlying the Federal budget and periodically make recommendations on potential reforms to Congress and the President. Among its duties, the Commission would be charged with reporting on how Federal portfolio and capital budgets could be implemented and their implications with respect to balancing the budget.
Q: Why will moving the fiscal year to match the calendar year improve the budget process?
A: Congress needs additional time to complete its budget process before a new fiscal year begins. This proposal would better reflect the schedule of Congress and provide more time to get the work done. Unlike past efforts that have changed the budget calendar, our proposal aligns the fiscal year with Congress’s legislative schedule.
Q: Why does your proposal not include specific limits on discretionary spending and direct spending?
A: The decision as to what specific limits should be set will be part of future budget resolutions debated and approved by Congress. This proposal is designed to create an efficient, effective, accountable, and transparent process that will ensure Congress has the necessary budget tools to achieve sustainability within Federal fiscal policy.
Q: How does this plan implement biennial budgeting?
A: This proposal is responsive to the broad bipartisan support of Members of the House of Representatives for biennial budgeting. It recommends Congress divide the current twelve annual appropriations bills into two tranches of six each in the first and second year of a Congress – each bill funding government functions in their areas on a biennial basis. The annual concurrent budget resolution would stagger 302(a) allocations for six of the twelve appropriations bills each year, providing allocations for two years at a time.
After a set period of time, Congress would be required to review and evaluate whether a biennial budgeting framework had been successful. That review process would include a report from the Government Accountability Office (GAO) on the effectiveness of biennial budgeting.
Q: Why move the timing of the President’s formal budget request to after the congressional budget resolution is reported by the Budget Committees?
A: The Constitution gives Congress the power of the purse. Congress should go first in developing budget policy. Over the course of many years and many congresses, the Legislative Branch has ceded too much of its budgetary authority to the Executive Branch. We have given the President too much power, which has weakened the representative framework of our democracy, and created a scenario in which Congress is essentially responding to the President’s budget. That is completely backward and antithetical to the Constitution’s goal and framework.
Q: What does this plan do to reconciliation?
A: This plan would preserve and expand the current reconciliation process. There would be no limit on the number of reconciliation bills that could be considered under a single budget resolution – enabling Congress to consider multiple reconciliation bills in each of the three categories of spending, revenue, and debt. It would clarify that reconciliation directives can carry over from session to session and Congress to Congress. Further, an enhanced reconciliation process would be triggered should it be determined that the current debt trajectory would exceed established long-term debt targets.
Q. Does this proposal restrict emergency spending?
A. Nothing in this proposal would prevent Congress from providing funds to address an emergency. This proposal calls for reforms that affirm that emergency-designated appropriations are intended to meet urgent, unanticipated, targeted, and temporary conditions that threaten life, property, or national security.
Q: Under the changes you are proposing to the Congressional Budget Office baseline, what will happen to long-standing programs – including automatic spending programs – whose reauthorizations could require accompanying spending reductions to keep from increasing projected future deficits?
A: The various changes we are suggesting to the baseline are to provide similar treatment for expiring spending programs as is already provided for expiring tax/revenue provisions. A decision as to whether expiring programs must be offset when reauthorized would be a decision left to Congress and the Executive Branch at the appropriate time.
Q: Why are you eliminating Statutory Pay-As-You-Go rules that were put in place to enforce fiscal discipline?
A: Statutory Pay-As-You-Go addresses only legislation that would increase the deficit. It does nothing to compel action to reduce the deficit or put the government’s budget on a fiscally sustainable path. This creates the illusion of budget discipline by ratifying existing budget deficits as the measure of fiscal responsibility.
Since Pay-As-You-Go was enacted in 2010, the Federal Government has accumulated nearly $7.5 trillion in new debt in seven years – about $1 trillion per year on average. Our proposal would replace Pay-As-You-Go with a process for establishing binding limits on spending and debt.
Q: Does this plan cut spending on entitlement programs?
A: Absolutely not. Nothing within these proposals would enact direct changes to the Nation’s automatic spending programs. There would, however, be greater accounting for the impact of automatic spending on the Nation’s budget. Policymakers would also have a process – should they choose to use it – through which they could address unsustainable automatic spending and act to save and strengthen programs that are, right now, on track to be insolvent within the next decade or so.
Q: How are spending and debt limits set through the joint resolution that is sent to the President following the adoption of a concurrent budget resolution in Congress?
A: Whether to send the President a joint resolution establishing spending and debt limits is entirely up to the discretion of the Congress when drafting its budget. When Congress adopts a budget resolution, there would be the opportunity to send to the President for signature a joint resolution that would put in law limits on spending and debt based on the parameters established in the approved budget. The final vote on the concurrent resolution on the budget would be considered a final vote on passage of the joint resolution, so the joint resolution would not require a separate vote.
If the President does not sign the joint resolution establishing the new spending and debt limits, the concurrent resolution on the budget would continue to serve as the basis for congressional budget enforcement.
Q: How is your “spin-off” joint budget resolution proposal – creating a budget the President could sign or veto – different from similar proposals in the past?
A: Past proponents of a joint budget resolution pursued the worthy goals of promoting early negotiation between the President and Congress on overall budget levels and then – if an agreement could be reached – giving those levels the force of law. This proposal agrees with those principles – with one important distinction. In this plan, in keeping with promoting Congress’s power of purse, Congress would adopt its own budget first. Then the President would be invited to accept the congressional budget’s overall fiscal path by signing legislation establishing enforceable spending and debt limits. This would preserve the Legislative Branch’s role as the policymaking institution, while still creating a forum for potential agreement on fiscal policy between the Congress and the Executive.
Q: How do you address the debt limit?
A: Our proposal would change enforcement of a debt limit so that it tracks debt as a percentage of gross domestic product (GDP) rather than a fixed dollar figure. This approach is a more economically useful measure to limit the Federal debt because it better reflects the Nation’s ability to finance its debt than does either a fixed dollar value that has little connection to the Nation’s fiscal health or a debt limit suspension period that has no connection whatsoever.
Q: How do you respond to those that say there is no way to address our long-term budget problems without adding more revenue to the equation?
A: The Congressional Budget Office has indicated that Federal revenue is currently at a record high. Revenue as a percent of gross domestic product is above its 50-year historic average and historically high revenues are expected to continue over the next 10 years. Even with a robust level of revenue coming into the Federal Government, the fiscal year 2016 deficit was still $587 billion and the deficit in 10 years is expected to exceed $1.2 trillion. These high deficits are due to uncontrollable spending growth that far exceeds revenue. The proposals in this discussion draft, therefore, focus on the main drivers of budget deficits, which are uncontrolled automatic spending programs. Congress would be free to meet the debt targets through whichever policies it chooses.
Q: How would “enhanced reconciliation” enforce new limits on debt?
A. Enhanced reconciliation would be initiated early in a new fiscal year if Congress and the President breached debt limits set in law. No new budget resolution would need to be passed in order to proceed, and the Budget Committees would provide instructions to the authorizing committees to develop legislation that would ensure the debt targets were met. Should that process fail, then automatic budget enforcement would occur to ensure adherence with the debt limit.
Q: How does “automatic budget enforcement” work?
Under our proposal, automatic enforcement procedures would be triggered only if Congress and the President failed to agree on legislation that meets previously established spending or debt targets. If any limits are exceeded, the first recourse would be for Congress to pass legislation making specific programmatic and policy changes to offset the overage. If such a bill were not enacted, then and only then would the second level of automatic enforcement come into play, which would consist of a mechanism to bring spending levels in line with spending or debt limits.
Q: The proposal calls for a “limited referral” of automatic spending bills to the House Budget Committee. What does the “limited referral” entail?
A: The referral to the Budget Committee would only allow the Committee to impose a limit on the direct spending provided by the bill or subject the spending to discretionary appropriations.
There is a clear precedent to allow a neutral committee to have a limited referral over bills that would increase direct spending. The 1974 Budget Act authorized the Speaker to refer these bills to the Appropriations Committee. This proposal would simply move the referral to the Budget Committee.
Q: Why should a comparison of debt to the Nation’s gross domestic product (GDP) matter? Why should it be a fiscal goal?
A: Our Nation’s fiscal health and economic health are intrinsically linked. Additionally, our country’s ability to service its existing debt obligations is directly related to our national income as defined by our gross domestic product (GDP). Much like an individual, family, or business that borrows to cover its living expenses or operating expenses, should the amount of debt reach too high a percentage of national income, America could fail to have the resources necessary to meet our debt obligations and/or a situation could emerge in which those from whom we borrow (the general public and other nations) demand higher and higher interest rates in return for lending to us.
By limiting debt as a percentage of GDP, Congress would have a mechanism for tackling the mounting level of debt and ensure fiscal sustainability.
Q: What is the purpose of putting Social Security “on budget”?
A: It removes a common misperception that those programs currently designated as off-budget programs are not part of the budget, do not affect taxpayers, and have no impact on Federal finances.
Q: Why did you not include a Balanced Budget Amendment to the Constitution in your proposal?
A: In drafting this proposal, every effort was made to remain within the jurisdictional scope of the Budget Committee. An amendment to the Constitution would need to come from the Judiciary Committee.
Q: The complexity of the budget process seems to be a real problem. Are you just making it even more complicated with your proposal?
A: Restructuring a complex system is no simple task. What we are proposing, however, is a far better, more efficient, effective, accountable, and transparent approach than the current practice of making ad hoc rules and adjustments as we have seen over the past several years. Moreover, our proposal would make a number of changes to simplify the budget process, including:
- Requiring the House and Senate to adopt the same budget rules;
- Replacing the current 19 budget functions with broad spending categories in the budget resolution; and
- Harmonizing the treatment of emergency spending by the House, Senate, and President.
Q: How does this proposal differ from the numerous other budget process reforms presented in the past?
A: Other proposals have typically started by identifying specific problems in the current process, and then tried to find piecemeal remedies. By contrast, this proposal began with a different approach, one that re-examined the underlying premises and assumptions of Federal budgeting themselves. It raised fundamental questions, such as: Why should the President’s budget come first in the process? What incentives can be created to promote spending control rather than higher spending? What kinds of economic and fiscal changes have occurred since the Budget Act was adopted 42 years ago that demand a thorough rethinking of the budget process? The result is a number of provisions in this plan that have hardly ever been considered before – such as the role of budgeting in sustaining the constitutional system. Others that seem more familiar – such as biennial budgeting – are modified to ensure congressional budgeting remains an active, ongoing process. These are among the reasons why this proposal is more than a budget process “reform”; it is a complete rewrite of budget practices.