24 Apr 2018 Budget Process Reform Committee Hearing #1 (April 17, 2018): Top 10 Takeaways in Budget and Appropriations, Economics and Finance

By Jack Rametta 

At the first hearing of the Joint Select Committee on Budget and Appropriations Process Reform, discussion centered on what the goals of the committee should be and whether reforms should focus on achieving specific policy outcomes (e.g., reducing the U.S. debt burden) or simply improving the budget process. The witnesses at the hearing were Martha Coven, a Princeton University professor and former Office of Management and Budget official, and Douglas Holtz-Eakin, American Action Forum president and former Congressional Budget Office director.

Here are the top 10 takeaways from the hearing:

Frustration with a Broken Budget Process

Everyone agreed that the budget process is broken and needs reform. Several members noted that Congress has not passed all of its appropriations bills on time since Fiscal Year 1995, over 20 years ago. Members expressed differing views on the causes of this breakdown.

Fixing the Budget Process is Not a Panacea

To no one’s surprise, the hearing once again showed that Congress’s budget and appropriations problems are rooted in deep, longstanding policy disagreements. The expert witnesses emphasized that while fixing the budget process may enable Congress to better enforce budget and appropriations agreements, process reforms will not resolve core ideological differences or create the political will to make tough choices.

Effectiveness of Debt Limit Up for Debate

The utility of the debt limit as a fiscal policy tool was called into question during the hearing. In particular, Sen. Sheldon Whitehouse (D-RI) likened the debt limit to a “bear trap,” which if accidently triggered, could have dire consequences. Not all members shared that view, with some praising the debt limit as a tool for the minority – particularly in the House – to force debate about fiscal policy issues.

Biennial Budgeting on the Table

Biennial budgeting may be a concept whose time has come. Both expert witnesses recommended that the committee consider the idea and several of the members either raised or praised it. The bipartisan budget agreements of 2013, 2015, and 2018 (which were each two-year deals) are indications that Congress can handle biennial budgeting, which was also recommended in BPC’s Domenici-Rivlin Budget Process Reform proposal.

Syncing Congressional Calendar with Budget Calendar

Expert witness Martha Coven asserted that Congress tends to “get things done” in December, usually to wrap up before the holiday season. She suggested that Congress shift the beginning of the fiscal year to January (from October), encouraging members to finish budget and appropriations decisions before the holidays.

Discontent with Budget Power Concentrated in Leadership

Omnibus appropriations packages pulled together by a small leadership group – usually on a tight deadline and with limited time for debate – have become commonplace. Several members expressed frustration with this situation and suggested various ways that the committee structure could be empowered to take back some control from leadership.

Debate over Whether Budget Process Should Expand to Cover Revenues, Mandatory Spending

The current budget process only deals in a meaningful way with discretionary spending, which comprises only one-third of federal spending. There is no prescribed opportunity to debate mandatory spending (i.e., entitlements) and revenues, both of which remain on autopilot. Some members argued that the budget process should cover all spending and revenues, while others focused on specific areas, such as tax expenditures, that they believe are unjustly excluded.

Automatic Continuing Resolutions Criticized

Automatic continuing resolutions – a commonly cited proposal to prevent government shutdowns – did not find favor with either of the expert witnesses. Coven stated that if Congress were to enact auto-CRs, then “you might as well disband the appropriations committees,” meaning that such a policy would remove a major incentive to completing appropriations work.

Aggravation with Budget Gimmicks

Several members expressed frustration with budget gimmicks, often employed to make proposals look more fiscally responsible when scored by the Congressional Budget Office or the Joint Committee on Taxation. Those gimmicks make it difficult to find a common basis of fact in negotiations. Holtz-Eakin stated that while Congress could legislate the gimmicks away at any time, these mechanisms often act as “grease to skid the wheels” in negotiations.

Bipartisan Agreement on Misuse of Reconciliation

Members on both sides of the aisle acknowledged that while budget reconciliation is a legitimate tool, the process has been misused for partisan purposes by both parties. Several ideas to restore reconciliation to its original purpose were proposed, including strengthening the Byrd rule and reserving reconciliation for legislation that reduces the deficit