Biennial Budgeting Picks Up Steam in Congress

As reported in The Hill over the weekend, a proposed change to the United States’ yearly budgetary process is gaining steam in the Senate. An amendment to the Senate-passed budget, which passed by a bipartisan 68-31 vote, would create a deficit-neutral reserve fund for changing the federal budget process to a biennial budget system. Biennial budgeting means that instead of having to propose a new budget and pass appropriations bills every year, the Congress would only have to do so every other year, with intervening years used to improve budgetary oversight. CRFB has been supportive of the idea of before (Senator Johnny Isakson (R-GA) has proposed such legislation each year since 2005), but the idea is worth revisiting given the new momentum it has gained recently.

The purpose of the legislation is essentially to afford some respite from the nitty-gritty of the budget battles that occur each fall -- or sometimes throughout the year -- and instead provide legislators with enough time on the off-years to take a deeper dive look into how the budget actually functions. This could have a number of benefits, enabling better oversight, planning, and reform. Furthermore, with a longer view of the budget, lawmakers may also look at longer-term budget targets that will be necessary to get our debt on a sustainable path.

A 2009 staff working paper from the Peterson-Pew Commission (PPC) discusses a few other pros and cons of the process. One pro of the budget process is that having a two-year cycle allows budgetary decisions to be made in off-election years, potentially reducing partisanship in the process. In terms of oversight, an "off" year would allow legislators the time to perform the vital process of combing through spending programs (and tax provisions as well) to better determine which policies are working properly, which ones are not, which ones need improvement, and which ones should be expanded.

When putting biennial budgeting into practice, however, we should use caution. As noted by the Center on Budget and Policy Priorities, it is possible that changing circumstances would lead agencies to need to submit frequent revisions and requests for supplemental appropriations. In fact, if department heads chose to ignore the biennial budgetary process, they could simply continue submitting revisions each year; this could actually lead the budget process to be more piecemeal than before, making matters worse instead of better. This could be addressed, however, by implementing special rules on when supplemental appropriations are suitable, and what constitutes an "emergency" for emergency budget revisions. Another drawback that the PPC paper brings up is that it could make discretionary spending on somewhat of an autopilot like mandatory programs are if lawmakers do not take advantage of the time to conduct oversight.

While there may be both benefits and issues with budgeting biennially, one thing is clear: the current budget process is broken. Reforms to the budget process that give our government better insight into how our budget functions and how to effectively implement strategy and achieve policy changes should be explored. Biennial budgeting is one such reform that offers some promise.