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Monday, September 16, 2019

ANALYSIS/OPINION:

It’s been 25 years since Congress last followed each step of the budget process. In that time, the federal debt held by the public has increased nearly fivefold.

Clearly, lawmakers need to revive the budget process and reduce spending.


Sen. Mike Enzi, Wyoming Republican and Senate Budget Committee chairman, released in July four discussion draft proposals intended to reshape the budget process. Mr. Enzi’s desire to reform the budget process is commendable, but these proposals are unlikely to help Congress meet the fiscal challenges facing our country. Indeed, the centerpiece of the discussion drafts — biennial budgeting — could make matters worse.

A broken federal budget process is not the main reason for the nation’s rapidly increasing debt. The blame for that falls squarely on the government spending much more money than it is taking in. Growing entitlement spending is a large part of the problem, but a lack of fiscal responsibility on the part of Congress has also played a role.

That’s where the budget process comes in.

Mr. Enzi’s plan starts with the budget resolution itself. The first discussion draft calls for biennial budgeting, to replace the annual budget resolution. The biennial resolution would still set enforceable levels of spending, revenues, and debt as it does now. However, if Congress passed the resolution, a bill setting discretionary spending levels and raising the debt limit for two years would automatically be sent to the president for approval or veto.

Biennial budgeting would not improve the budget process. Congress has operated under de-facto biennial budgets since fiscal 2014, and it has done nothing to stop the cycle of continuing resolutions, massive omnibus spending bills, and government shutdowns.

Lawmakers would engage in the nation’s broader fiscal outlook less often under a biennial process, meaning that when they make specific funding decisions, they will do so without the relevant context of the full budgetary picture.

Setting discretionary spending levels for two years codifies the dysfunction that has played out under the Budget Control Act of 2011. Budgeting even a year in advance is difficult. Trying to budget two years ahead of time would inevitably lead to more ad hoc spending increases in the second year of the biennium. These one-off spending decisions waste money and make it harder for constituents to hold Congress accountable.

Automatically increasing the debt limit is also the wrong approach. Sure, it would spare lawmakers from making a politically unpopular vote. But the debt limit is an important mechanism for forcing action to confront our nation’s worsening fiscal path. Reaching the limit is an opportunity to correct course with spending and entitlement reforms. Automatically increasing the debt limit undermines it.

The one positive of Mr. Enzi’s biennial budget plan is that it would provide for a special reconciliation process in the second year of the biennium if the government were off track to meet its deficit targets.

This reconciliation opportunity could be an important tool to reduce spending. However, there is nothing to enforce it. If lawmakers can’t pass legislation to meet the budget resolution levels, there is no backstop — such as sequestration — to make sure the government meets the resolution’s deficit targets. Without strong enforcement mechanisms, it is unlikely that Congress would make any necessary spending cuts.

Another element of Mr. Enzi’s plan would require the Congressional Budget Office to include interest costs in its estimates of how much proposed legislation will cost. This would give lawmakers a more accurate accounting to consider.

The discussion draft would also make changes to Senate budget enforcement and debate procedures. These changes might make the Senate function more smoothly, but they would not affect the budget outlook.

Mr. Enzi’s plan will not fix the broad fiscal problems facing the country. The discussion draft should serve as just that: a starting point for more work and collaboration. Bolder reforms are necessary to divert the nation’s looming debt crisis.

Justin Bogie is a senior policy analyst in The Heritage Foundation’s Grover M. Hermann Center for the Federal Budget.


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