17 May Budget Process Reform Committee Hearing #2: Top 10 Takeaways in Budget and Appropriations
By: Jack Rametta
While there was agreement that the system is broken, differences of opinion emerged over specific ideas to reform the budget process at the second hearing of the Joint Select Committee on Budget and Appropriations Process Reform. Expert witnesses included G. William Hoagland, Bipartisan Policy Center senior vice president, and Donald R. Wolfensberger, a BPC fellow whose testimony reflected his own views.
Committee Chairman Steve Womack emphasized that reforms should be “outcome neutral” (i.e., refrain from endorsing or favoring specific policy outcomes, such as decreasing taxes or increasing spending), but several other members diverged from that view and discussed specific proposals to reduce debt and deficits. At the hearing, it became clear that the committee faces a long road ahead to consensus, not only to developing a package of reforms, but on deciding what the desired outcomes of their proposals should be. Despite the differences, hopefully frustration with the current system will lead to bipartisan compromise on a reform package.
The other witnesses were Emily Holubowich and Matt Owens of the Convergence Project. Some ideas brought up at the committee’s first hearing, such as biennial budgeting, were again a focus, while other proposals, such as the Convergence group’s “Budget Action Plan,” were aired for the first time before the committee.
Here are the top 10 takeaways from the hearing:
1. Biennial Budgeting Featured
Hoagland presented the case for biennial budgeting, emphasizing that it has a long history of bipartisan support. “All Presidents from Ronald Reagan to Barack Obama have supported biennial budgets,” Hoagland argued in his testimony, and current Office of Management and Budget Director Mick Mulvaney has also indicated support for the idea. Some members of the committee suggested that biennial budgeting could give Congress more breathing room to gets its work done on time, while others raised concerns about planning for budgets two years in advance. Congress has enacted three two-year budget deals since the Budget Control Act of 2011, so even if biennial budgeting is not currently in statute, the approach is a familiar one. Of the proposals being considered by the JSC, this one seems to have significant bipartisan momentum.
2. Possible Sticks: No Budget = No Recess vs. No Budget = No Pay
The idea of withholding congressional pay or preventing congressional recesses to enforce budget deadlines was discussed for a second time. Views differed over which rule change would be the most effective. One concern aired was that the “no budget, no pay” proposal could face constitutional issues (depending on how it is framed). Some experts also emphasized that because Congress can write (and rewrite) its own rules, sticks are not always effective.
3. Possible Carrots: Ease the Filibuster for Appropriations Bills
Another idea presented by Hoagland was to waive the Senate’s filibuster rule on the motion to proceed to the consideration of appropriations bills, but only after a biennial budget agreement is passed. This carrot would incentivize appropriations committee members to form bipartisan coalitions to get bills passed, if the normal committee process were to fail.
4. Debt Limit Debated, Again
The debt limit was discussed, once again, at the second hearing and disagreement persisted over its historical effectiveness. Several reform options were briefly discussed, including the Gephardt rule, the McConnell rule, and a simple repeal of the debt limit. The Bipartisan Policy Center is currently working to develop a consensus proposal.
5. What Should be Inside and Outside of the Appropriations Process
The committee debated, once again, what should be included in and what should be excluded from the annual (or biannual) appropriations process. Some members noted again that large portions of federal spending are overlooked and thus not regularly reviewed. As it stands, only discretionary spending is covered, leaving mandatory spending, revenues, and tax expenditures on autopilot. Recent history serves as evidence that this situation often leads to major programs only receiving serious review and reform once every several decades.
6. Congress’s Long History of Budget Dysfunction
Wolfensberger testified about Congress’s long history of budget dysfunction and the many attempts that have been made to remedy the process. In particular, he emphasized the necessity of buy-in from all of the key players. Otherwise, leaving certain individuals or entities out of the negotiations can lead to dysfunction.
7. Automatic CRs Debated, Again
Members of the committee returned to the idea of automatic continuing resolutions. Some experts criticized the idea, as those from the first hearing did, arguing that auto-CRs could put the discretionary budget on autopilot. Hoagland suggested that the committee consider auto-CRs that decrease in funding over time, an approach that might add additional pressure to the process. BPC’s Domenici-Rivlin budget process reform report endorsed a version of automatic-CRs implemented in tandem with biennial budgets.
8. Proposals to Reform the Budget Committees
Members asked witnesses what can be done to fix the budget committees, which some have proposed disbanding. Hoagland proposed refocusing the budget committees on a biennial budget process and tying budget resolutions to debt limit increases. Owens proposed reforming the membership of the budget committees such that all parties involved have buy-in in the process (congressional leadership, in particular) and are not incentivized to duck the system. This proposal is similar to a recommendation made by BPC experts.
9. Experts Reiterate Process Reform Can’t Provide Political Will
As in the first hearing, experts reiterated that process reform cannot provide the political will necessary to make tough choices. Further, it was pointed out that only 27 percent of current senators and 16 percent of current House members have not served long enough to see the budget process work. Therefore, any process reforms that are made without buy-in from bipartisan majorities in both chambers will be unable to overcome the hyper-partisanship that undermines the current system.
10. Experts Emphasize Negative Effects of Budget Dysfunction
The costs of budget process failure have been documented across an array of different federal agencies, such as the Department of Defense. Holubowich emphasized these costs in her testimony, noting that the broken process has real impacts, not just on federal agencies, but on everyday Americans and their families. In particular, delays in funding for health programs make services more difficult to provide and plan for, and ultimately increase costs to taxpayers.
A comment by Hoagland laid bare the stakes for members of the select committee: “…failure to reach some consensus would once again telegraph to the American public that Congress was not willing to address its most obvious, fundamental, Article I responsibility and, the result would be a further erosion of confidence in this critical institution.”
