Concord Coalition Looks at Budget Process Reform Proposals
From the President's recent deficit-reduction framework to policy forums on Capitol Hill, budget process reform has recently become an increasingly popular issue in the world of politics. A recent release from the Concord Coalition offers insight into this issue and analyzes the strengths and weaknesses of several budget process proposals.
Among the proposals examined in the release is Red Ink Rising, a report released in December 2009 by the Peterson-Pew Commission on Budget Reform that lays out a plan to stabilize the debt at 60 percent of GDP. The proposal establishes specific deficit targets enforced by a trigger that would require automatic spending cuts if the targets were missed. The Commission continued its work on budget process reform with a second report released in November 2010 -- Getting Back in the Black -- that built upon the Commission's earlier work by detailing a specific framework to meet those fiscal targets.
Other proposals considered by the Concord Coalition are:
- McCaskill-Corker CAP Act: Starting in 2013, this bill would gradually cap spending over a 10 year period until it reached 20.6 percent of GDP, the historical average.
- Paul Ryan's Proposal: House Budget Committee Chairman Paul Ryan's budget proposal called for a binding cap on total spending as a percentage of the economy. The House budget resolution, which was based on Chairman Ryan's proposal, would reduce spending over 10 years to 20.5 percent of GDP and then to 19.9 percent of GDP by 2021.
- President Obama's Debt Failsafe Trigger: The "debt failsafe" proposed in the President's deficit-reduction framework would require automatic spending cuts if projections of the deficit-to-GDP ratio averaged more than 2.8 percent during the second half of the decade. Social Security, Medicare, and low-income programs would be exempted from the spending cuts.
- Bipartisan Policy Center's SAVEGO Proposal: This proposal calls on Congress to set annual savings targets to reach a specific deficit reduction goal. SAVEGO would require separate annual savings targets from each of three portions of the budget -- savings from a cap on discretionary spending, savings from health care programs, and savings from other mandatory spending, reductions in tax expenditures, and other increases in revenue.
The report goes on to further explore the "mixed track record" of budget process reforms, specifically noting the importance of putting everything on the table, setting realistic and bipartisan targets, and the danger of including exemptions and loopholes. It also states that the proposals from the Peterson-Pew Commission and the Bipartisan Policy Center "represent the most complete and thoughtful alternatives with the greatest chance for success."
Emphasized throughout the report, however, is the underlying theme that process reforms cannot replace tough policy decisions.
"To be effective, a process proposal must still be accompanied by an honest discussion of the policy changes that will be necessary to comply with the targets. Budget process reform is a useful starting point, but it is no substitute for these difficult choices. Whether it is the existing budget process or a new process, deficit reduction requires elected officials to lead by saying which programs will be cut and which taxes will be raised."
Click here to read the full release.