8 Great Ways To Grapple With Gimmicks
In recent years, lawmakers have frequently used budget gimmicks to get around rules designed to maintain budgetary discipline -- if they pay attention to them at all. Whether through sleights-of-hand to comply with rules on paper only or simply ignoring rules all together, lawmakers have undermined the integrity of budget enforcement regimes. Today the Better Budget Process Initiative released a paper entitled "Strengthening Statutory Budget Enforcement" that recommends several ways to close loopholes in budget rules and make it harder for lawmakers to ignore them.
The report has 8 specific recommendations:
Strengthening enforcement of existing rules
1. Establish a separate point of order against provisions to exclude costs from PAYGO
2. Prohibit legislation blocking any sequester enforcing statutory PAYGO or discretionary caps
Restrict the use of phony offsets
3. Prohibit the use of spending cuts with no real savings
4. Restrict the use of timing gimmicks to claim savings within the budget window
5. Prevent the use of artificially inflated baselines to claim savings
6. Prohibit double-counting of increased revenues and spending cuts involving trust funds
Ensure all costs are subject to budget discipline
7. Limit the use of Overseas Contingency Operations as a slush fund
8. Expand the deficit-neutrality requirement in PAYGO to apply to debt service
These policies would help shut down many avenues that lawmakers have used to get around budget enforcement, including exemptions from pay-as-you-go (PAYGO) rules, using empty spending cuts and war spending to get around spending caps, using timing shifts, and double-counting savings involving trust funds.
If policymakers are going to have budget enforcement regimes, they should make sure the rules are not as easy to game. The report concludes that if they feel the budget rules are too restrictive, they should acknowledge the cost of relaxing them and include these fixes to prevent gimmickry (for example, by trading sequester relief for cuts elsewhere in the budget and rules to make it harder to game the spending caps). These recommendations would make budget enforcement more meaningful and make it more difficult for lawmakers to further worsen the budget outlook.
Click here to read "The Better Budget Process Initiative: Strengthening Statutory Budget Enforcement"
For additional budget process resources including specific options for reform, visit our Better Budget Process Initiative home page.