Joint Select Committee on Budget and Appropriations Process Reform Committee Hearing #3 (May 24, 2018): Top Three Takeaways in Budget and Appropriations, Economics and Finance

By Jack Rametta

The third hearing of the Joint Select Committee on Budget and Appropriations Process Reform – entitled “Content, Timeliness, and Enforcement” – focused on a key fixture of the budget process: the budget resolution. Specifically, debate centered on ways that the budget resolution could be reformed to increase its usefulness and enforceability as a consequential, consensus-driven, bipartisan budget tool.

As the Bipartisan Policy Center has noted, Congress has failed to pass a concurrent budget resolution before the statutory April 15th deadline in every year since Fiscal Year 2004. And when budget resolutions are enacted (usually late), they are oftentimes wielded as merely partisan instruments to enable the reconciliation process, a process capable of evading the Senate’s 60-vote filibuster rule (that applies to most major legislation). Budget resolutions that are not actual blueprints for the government spending and revenues represent a serious drift from the original purpose of the tool.

Expert witnesses at the hearing included James C. Capretta, Bill Dauster, Maya MacGuineas, and Joseph White.

Here are the top three takeaways, and our read on where the committee may be heading:

1. Possibility of Reform: Improvements to Debt Limit

The possibility of reforming the debt limit in tandem with changes to the budget process stood out as a new and useful idea from the hearing. Expert witnesses Capretta and Dauster offered specific proposals to connect budget resolutions to debt limit extensions, thus allowing policymakers to link changes in the debt limit directly to their policy plans (rather than increasing/suspending the debt limit after the fact). These proposals would operate similarly to the Gephardt Rule, which was in effect for many years in the House and tied a debt limit increase to passage of a budget resolution. Specifically, budget resolutions have always contained future debt limit figures, so a vote for a budget resolution could automatically extend the debt limit to the level agreed upon in the legislation. Dauster’s proposal went further, suggesting that should Congress fail to pass a budget resolution, the president would be empowered to request an extension of the debt limit, subject to a vote of congressional disapproval.

These proposals prompted significant interest from the committee and could serve as the basis for a bipartisan approach to the debt limit. Among many potential reforms to the budget resolution (some of which are listed below), improving the process for debt limit extensions stands out. Progress on this front has the potential to not only elevate the budget resolution as a consequential instrument, but also contribute to “disarming” the “bear trap in the bedroom,” to quote from Dauster and Senator Sheldon Whitehouse (D-RI), and further connect the budget process to difficult fiscal policy decisions, as Congressman Jodey Arrington (R-TX) suggested.

2. Budget Resolution Has Drifted from Original Purpose, Misused in Current Form

Members and experts offered an array of criticisms of the budget resolution mechanism (listed in the table below), highlighting two broad themes: First, the budget resolution has drifted from its original purpose, as a consensus-driven tool for planning budget decisions. Budget resolutions are now oftentimes wielded not as productive planning tools, but rather, as partisan weapons. The budget resolution’s ability to enable the reconciliation process (which is capable of evading the Senate’s 60-vote filibuster rule) has incentivized both parties to use budget resolutions for explicitly one-sided purposes – sometimes for policies that overtly add to the deficit.

Second, the budget resolution doesn’t currently require buy-in from most of the players who will necessarily be involved in annual budget negotiations. Crucially, members of key committees in the Senate are not included on the budget committee, and the president doesn’t have a seat at the table at this stage in the process. This lack of buy-in incentivizes various leaders to ignore budget resolutions altogether and focus instead on large negotiated omnibus deals (such as the Bipartisan Budget Acts of 2013, 2015, and 2018).

Sample Criticisms of the Budget Resolution

Budget resolutions are not necessarily consensus-driven or bipartisan (since they require only a simple majority in the Senate).Budget resolutions passed without bipartisan support often lead to gridlock later in the budget process, since one party did not buy into the blueprint. Ultimately, partisan budget resolutions are frequently ignored in bipartisan spending and revenue negotiations.
Budget resolutions do not usually receive buy-in from all of the key parties involved in the budget process (e.g., relevant committee chairmen, congressional leadership, the president). These leaders inevitably influence the outcomes of fiscal policy decisions. If they lack a stake in a budget resolution passed at the beginning of the process, then the process starts off on the wrong foot.
Most of the figures in budget resolutions are not binding. Because budget resolutions lack impact, members of Congress can be inclined to ignore them altogether.
Budget resolutions only cover 10 years and do not consider the medium to long term. Budgetary decisions are often made with little reference to, or consideration of, long-term consequences.
Budget resolutions often produce “vote-a-ramas,” where members sequentially vote on a series of items that are of little practical consequence.Members of Congress are forced to go on-the-record with scant time for consideration about politically charged proposals that have little or no chance of passage.

These issues are not necessarily fatal, or even unjustifiable, but they do give members cause to “hate” the budget process and budget resolutions in particular, according to Dauster. Member’s dislike for the process matters because a successful budget process relies on their buy-in. What could be done to reform the budget resolution to address these issues?

3. Make Budget Resolutions Biennial, Change Committee Membership, and Other Reform Ideas

Some key reform proposals that have merit were revisited at the committee’s third hearing. For instance, the proposal to make budget resolutions biennial was the key focus of G. William Hoagland’s testimony at the committee’s second hearing, and the discussion continued in this session. Additionally, adjusting the membership of the budget committees and reforming the budget resolution to account for long-term spending and revenue were both previously debated by the committee and warrant further consideration.

Experts at the hearing also mentioned numerous other potential reforms to the budget resolution (included in the table below), details for many of which can be found in MacGuineas’s testimony in particular.

Some Potential Reforms to the Budget Resolution

Adjust the membership of the budget committees to provide for necessary buy-in of budget resolutions
Restrict rules around reconciliation to prevent partisan gaming
Make the budget resolution a vehicle for establishing spending caps
Add long-term fiscal goals to the budget resolution
Change rules that guarantee debate on amendments to budget resolutions to address “vote-a-rama”
Make budget resolutions about the details, not just the topline figures

What will the committee ultimately recommend to Congress?

Based only on the committee’s three public hearings to date, it’s difficult to determine the shape their recommendations will ultimately take on, assuming they reach consensus.

If they do reach consensus, however, it seems possible that they will find common ground among the proposals that were aired publicly and repeatedly – proposals like biennial budgeting, reforming budget committee membership, and reforming the budget resolution and debt limit process.