Budget Reform Bill Introduced

Congressman Mike Quigley (D-IL) today introduced important legislation to create a more transparent budget regime towards putting the country on a sustainable fiscal path. The “Transparent and Sustainable Budget Act of 2010” contains several sound ideas for improving the budget process.

In addition to providing for a more accurate accounting of federal expenditures, the bill also requires the establishment of debt and deficit reduction goals. Key provisions include:

  • Establishes a debt reduction target of 60 percent of Gross Domestic Product and a deficit target of three percent of GDP within 10 years.
  • Calls for the prompt consideration by Congress of the recommendations from the White House fiscal commission.
  • Requires OMB to produce a “Quadrennial Fiscal Sustainability Report.”
  • Creates an alternative budget baseline that accounts for spending and revenues through a thirty year budget window.
  • Creates a point of order against measures that would create large deficits outside the 10 year budget window.
  • Develops an accrual accounting system to apply to certain budget areas including retirement benefits and environmental liabilities, as recommended by GAO.
  • Seeks to have Fannie Mae, Freddie Mac, and other similar agencies included in the budget.
  • Requires more transparency and evaluation of tax expenditures.

The lack of a traditional multiyear budget blueprint and the likelihood of a dysfunctional appropriations process this year underscore the need for fundamental budget process reform. Improving the budget process will be essential to enforcing and attaining the fiscal goals that policymakers must adopt now in order to get our fiscal house in order.

The bill wisely acknowledges the need for an effective budget process in dealing with rising debt. CRFB commends Congressman Quigley and the bills co-sponsors for putting forth a sensible proposal that should initiate debate and action.

The Peterson-Pew Commission on Budget Reform recommended the goal of stabilizing the debt at 60 percent of GDP by the year 2018 in the December 2009 report, Red Ink Rising. A forthcoming report will offer a comprehensive set of recommendations for reforming the budget process.