A fiscally responsible budget resolution should abide by the following principles:
Set a meaningful fiscal goal with a plan to meet that goal
Develop the budget based on a responsible and credible fiscal goal, such as reducing deficits to 3% of GDP or reducing debt below 100% of GDP.
Set out a plan to meet that goal, free of gimmicks or unrealistic assumptions.
Include plans to address mandatory spending and raise revenue
Include significant and achievable savings targets to slow the growth of mandatory spending programs, along with credible examples.
Include a plan to reform the tax code in a pro-growth manner while honestly addressing expiring tax provisions, raising revenue relative to current law, and devoting any dynamic growth to deficit reduction.
Provide for fiscally responsible reconciliation
Include reconciliation instructions to significantly reduce, not increase, deficits.
Ensure reconciliation is measured relative to CBO’s current law baseline and uses CBO scoring, rather than relying on alternative baselines or estimates.
Ensure consistent instructions between the House and the Senate.
Avoid using reconciliation for one-time borrowing on permanent provisions.
Set responsible, achievable, and enforceable discretionary spending levels
Set realistic discretionary levels that slow the growth of spending while appropriately integrating and tapering off one-time mandatory appropriations.
Responsibly budget for emergency spending.
Enforce the PAYGO requirement that legislation not add to the deficit
Include requirements to fully offset – or ideally include 2-for-1 offsets – for any bill that reduces revenues or increases mandatory spending.
Maintain and strengthen fiscally responsible budget rules.
Rely on credible and realistic assumptions
Use economic assumptions from the Congressional Budget Office.
Avoid relying on large, unspecified savings or other rosy assumptions.
Improve the budget process and budget enforcement
Ensure strict enforcement of budget resolution spending and revenue levels, and make it harder to waive budget limits with stricter procedural controls.
Strengthen prohibitions of fake savings and other budget gimmicks.
