Event Recap: Budget Process Reform - Senate Perspectives

Sep 23, 2016 | Budget Process

On September 19, our Better Budget Process Initiative hosted Budget Process Reform - Senate Perspectives on Capitol Hill. The event featured a keynote speech from Senate Budget Committee Chairman Mike Enzi (R-WY) focused on his recommendations to fix the budget process. A panel discussion followed, moderated by Ben Weyl, Editor of Politico's Budget and Appropriations Brief, that included:

  • Charles S. Konigsberg, Principal at the Federal Budget Group
  • Ed Lorenzen, Senior Advisor at the Committee for a Responsible Federal Budget
  • Dr. Roy T. Meyers, Professor of Political Science and Affiliate Professor of Public Policy at University of Maryland, Baltimore County
  • Dr. F. Stevens Redburn, Professorial Lecturer in Public Policy and Public Administration at The George Washington University

The proceedings were broadcast live on C-SPAN and can be watched here.

Chairman Enzi opened by laying out the problems with the budget process, saying it has worked properly only four times in the last 40 years since the Congressional Budget Act of 1974 was signed into law. He touted the budget that Congress put together last year but bemoaned the fact that it was violated just five months later by the Bipartisan Budget Act of 2015, which added $76 billion to the debt. Then he lamented mandatory spending being on auto-pilot and the growing share of mandatory spending as a proportion of the budget. In addition, he discussed the problem of using unspent emergency money as an offset for new spending.

Enzi continued, explaining how the budget formats in the executive and legislative branches don't match up, making comparisons difficult. He referenced his past work with the late Sen. Ted Kennedy to consolidate and streamline pre-school programs as an example of the problem of programs with similar goals stretching across the jurisdiction of many committees in Congress, therefore making management and oversight challenging.

Enzi expounded on his penny plan to address the debt and suggested that without action, increased interest rates will cause major problems in the future as our debt will become unsustainable. He went on to talk about the effect of economic growth on revenue and argued that increasing growth will be an important part of fixing the debt.

He provided context for his proposed solutions for the budget process, telling the audience about the process reform hearings held by the Senate Budget Committee (we have previously written about them here and here). He then laid out his proposals:

  1. Institute new rules requiring that the budget resolution be made available to the public before the first day of committee markup and require amendments to the budget resolution to be filed before the committee markup begins.
  2. During floor consideration of the budget, there should be an amendment filing deadline and a limit to the total number of amendments split equally between Democrats and Republicans to end the practice of “vote-a-rama” in which the Senate votes on numerous amendments to the budget with little time for review.
  3. There should be an automatic waiver for budget points of order on legislation that has “de minimis” spending or tax cuts that violate rules.
  4. Points of order against legislation with major amounts of new spending or tax cuts in violation of the budget resolution should require a two-thirds majority to override.
  5. There should be a requirement that after the budget resolution is adopted, the Senate can only consider appropriations bills until August recess with limited exceptions, subject to a two-thirds majority override.
  6. The Budget Committee should have the power to create subcommittees for the purpose of reviewing specific portfolios of spending and tax policy.
  7. A budget concepts commission should be created to review government accounting practices.
  8. Congress should set enforceable long-term fiscal targets with medium-term goals to keep us heading in the right direction.
  9. A bipartisan commission should be established to make recommendations for policy changes to meet the fiscal targets with an automatic up-or-down vote in Congress on the commission's recommendations.
  10. Congress should switch to biennial budgeting.

Following Enzi's remarks, the panel dissected his ideas. Charles Konigsberg expressed support for Enzi's goals. Ending vote-a-rama is important and could be done by prohibiting amendments that don't affect spending, revenues or budget procedure. He commented that it might be useful to have a budget concepts commission address the issue of distinguishing between the operating and capital budgets to ensure that we are properly accounting for long-term investments. He then asserted that biennial budgeting would be positive from the perspective of the executive branch, but that it may give up some of the effective oversight that happens during the annual appropriations process. With regard to dedicated floor time for appropriations, he said that the real challenge is the filibuster and non-germane policy riders, so reforms should be targeted to address these hurdles. He argued that we should get rid of the debt ceiling, think about automatic continuing resolutions to avoid shutdowns, and restore PAYGO budgeting rules. Finally, he advocated for doing away with budget functions and instead having the budget resolution focus on high level categories such as defense, discretionary, and mandatory.

Steve Redburn said that the process is fragmented by jurisdiction, and tax and spending decisions are made separately even if they address the same policy goal. He summarized the portfolio budgeting approach put forward by Enzi, which would allow Congress to consider most or all tax and spending provisions aimed at achieving similar goals at the same time. Previously, Paul Posner, Redburn's co-author, discussed this method at our Fixing the Budget Process event in April.

Roy Meyer agreed that hurdles to passing appropriations should be addressed, but that the largest problems are structural issues in Congress that lead to inefficient budgeting and strong disagreements between the parties. He said these issues are compounded when elected officials have disagreements about budget measurements, which a budget concepts commission could address. He cited a Brookings Institution paper by CRFB Board Members Rudy Penner and Barry Anderson and listed many of the tasks a commission should take on: determining the best measures for debt/deficits, how dynamic scoring should be used, whether public/private entities should be included in the budget, proper accounting for capital expenditures, whether the current trust fund approach accurately measures finances of entitlements and infrastructure programs, the extent to which accrual accounting should be used in federal budgeting, if other risks such as global warming should be accounted for in the budget, the most accurate way to compare tax preferences and regular spending, and correct accounting of fees.

Ed Lorenzen discussed fiscal goals, citing CRFB President Maya MacGuineas's testimony before the House Budget Committee earlier this year. He explained that there is no "right" fiscal goal, but that a good fiscal goal should: be aggressive enough to address the long-term debt but realistic enough to achieve. A fiscal goal must be paired with effective enforcement mechanisms to ensure compliance, or else Congress might take credit for setting the goal without following through. Ideally a fiscal and enforcement tools are paired with a deficit reduction package. Alternatively, a goal can be set with action to achieve it following. This could be done with the existing budget process by requiring presidential and congressional budgets to include enough savings to achieve their goals and require reconciliation instructions to actually achieve such savings. Another tactic would be to require the President to submit a correcting proposal if the budget were to veer to far from the goal, or have an outside commission produce a proposal. In either case, the recommendations could be fast-tracked to an up-or-down vote in Congress. He referenced a bill introduced by Senators Joe Manchin (D-WV), Mark Kirk (D-IL) and David Perdue (R-GA), as well as one by Sen. Dan Coats (R-IN) that would establish such commissions.

Lorenzen suggested that fiscal goals could be enforced by "sticks" or "carrots." He cited a broad-based spending cut and/or revenue increase as an example of the "stick" approach and suspending the debt ceiling if goals are met as a possible "carrot" approach. He also commented that PAYGO was restored in law in 2010, but Congress consistently exempts costs of legislation from PAYGO enforcement. If Congress were required to take a separate vote each time they exclude costs from PAYGO and increase the debt limit by the proportional amount, it could make PAYGO more effective.

Questions from the moderator focused on the partisan makeup of support for budget process reform, turf challenges to achieving portfolio budgeting, the example of the Budget Control Act's fiscal goal, and sequestration as an enforcement mechanism. Konigsberg pointed out that the Senate Finance Committee is an example of portfolio budgeting on health programs with jurisdiction over both spending and tax provisions. Lorenzen contended that although sequestration is flawed, it has forced policymakers to make tradeoffs. Meyer chimed that it is impossible for Congress to make itself do things that it doesn't want to do, which is what politically painful triggers aim for. Lorenzen concluded by saying that while process reforms would not solve our fiscal problems, reforms which improve transparency and accountability of the process could help produce more positive results.

We are encouraged to see the Senate Budget Committee engaging in bipartisan discussions and Chairman Enzi putting forward substantive recommendations for reform. To read our summary and commentary of his proposals on Senate procedure, check out Senate Budget Procedures - Prospects for Reform. To keep up with our budget process work, see our Better Budget Process Initiative page.