Great Minds Think About Budget Process
Rep. Mike Quigley (D-IL) released a report today proposing 15 ways that the federal budget process could be improved to give a clearer picture of the fiscal situation and more focus on achieving long-term stability.
- All taxpaying Americans should receive an itemized receipt from the federal government that shows how their tax dollars are being spent.
- This receipt should include information on both the revenue side and the spending side.
- The Congressional Budget Office and the Joint Committee on Taxation should analyze the second decade budget impact for any bill that they score for Congress.
- The CBO and JCT should provide a net present value (NPV) estimate for any major pieces of legislation for which costs escalate outside the 10-year budget window.
- The Office of Management and Budget should issue an annual report examining our un-budgeted fiscal exposures.
- The President’s Budget and the Congressional Budget Resolution should include specific long-term deficit and debt sustainability targets.
- The OMB should issue a Quadrennial Fiscal Sustainability Review.
- Upon submission of the President’s Budget, the President should be invited to deliver a “Fiscal Sustainability State of the Union” address to a joint session of Congress.
- All tax expenditures that are enacted should “sunset” inside the 10-year budget window.
- The Department of Treasury, in conjunction with the OMB and the relevant federal agency, should issue regular performance reviews of all tax expenditures.
- There should be more data made public evaluating tax expenditures.
- The Department of Defense should be audit-ready by 2014 and required to pass a comprehensive audit by 2015 so that policymakers can conduct effective oversight of Department expenditures.
- All federal spending on security—including military, homeland security, and foreign engagement—should be considered under one unified security budget.
- The Department of Defense should resolve internal control weaknesses and other uncertainties in long-term cost estimates for environmental liabilities.
- More up-front information should be required about the costs of environmental liabilities that would be incurred with the purchase of new assets.
It is good to see that other great minds are working on how to improve the budget process. Many of Rep. Quigley’s recommendations closely parallel those made by the Peterson-Pew Commission on Budget Reform in its latest report, Getting Back in the Black. The result in either case would be a budget process that is more disciplined, forward-looking, and transparent. Notably, like the Commission’s report, Rep. Quigley addresses the need for better information and more transparency regarding the long-term fiscal outlook. Like the Commission, he would have the President present a report annually on the long-term fiscal challenges and how his budget would address them. Rep. Quigley also calls for closer review of “tax expenditures,” the provisions of the tax code that provide special treatment and function much like spending, noting that revenue losses from these provisions now total over $1 trillion annually.
Some of Quigley’s proposals go beyond what the Peterson-Pew Commission has recommended. For example, he would require that the Congressional Budget Office and the Joint Committee on Taxation provide a net present value (NPV) estimate for any major pieces of legislation for which costs escalate outside the 10-year budget window. Additionally, he would have all tax expenditures expire within 10 years of enactment. Another interesting idea--he would have all taxpaying Americans receive an itemized receipt from the federal government that shows how their tax dollars are being spent.
The report is an excellent contribution to the essential conversation on reforming the budget process. It is good to hear another voice observing that the current budget process is not up to the task of supporting the big policy adjustments needed to stabilize the federal debt. Rep. Quigley’s ideas are ones that members of both parties can endorse. We applaud the Congressman for producing such a detailed and thoughtful document and hope it presages a healthy debate and prompt action on reforms such as these.