Oct 05 2011
By: Douglas Holtz-Eakin and Gordon Gray
Let’s face it, budgeting is boring, or at least it’s supposed to be. The congressional budget-resolution process is supposed to produce top line spending and revenue numbers that everyone can agree on, letting the rest of Congress fight over how to divide it up. Understandably, the process is necessarily contentious, but with over $1 trillion in discretionary budget authority to divvy up among competing programs, the public expects Congress to plan responsibly. Sadly, the public is routinely disappointed.
Congress hasn’t agreed to a budget in years. Indeed, for the first time since 1974, neither chamber bothered to pass a budget in 2010. The absence meaningful budget deliberations of late has undermined what has been a shared goal expressed by both parties to rein in our nation’s finances. A series of ad hoc, opaque processes has replaced what should be — at least as in aspiration — an orderly process. The change contributes to a mounting disquiet among our nation’s creditors.
Enter the new(ish) ranking member of the Senate Budget Committee, Jeff Sessions, and the Honest Budget Act. The Act is a serious attempt to wade into the budget process to address the fundamental flaws that have allowed Congress to avoid the difficult trade-offs that are the essence of governing in a fiscally constrained environment. Instead of fiscal commissions that produce really impressive congressional paperweights or one-off “supercommittees,” Senator Sessions’s proposal would force Congress into the business of budgeting and prioritizing, without the usual gimmicks considered tricks of the budget trade.
In the absence of a budget resolution, the Congress is not bound by any enforceable spending limits. While the divided chambers served to limit discretionary spending in the last debate over the CR, the brinksmanship that brought the government within hours of a shutdown is not the ideal exercise of the power of the purse. Nor is the opaque agreement worked out by members of the Appropriations Committee that established discretionary spending limits, again in the absence of a budget resolution, the year before. Seeking to address this string of failures, the Honest Budget Act strengthens the Senate rules to induce Congress to budget first, and spend later.
The failure to plan future spending levels is but one of the most glaring failures in the budget process. Routine abuse of “emergency designations” has allowed spending that should have been responsibly offset to bypass budget enforcement. For example, Congress evidently failed to foresee spending for the decennial census, and thus designated $210 million in Census spending as an emergency. In 2010, Congress added $59.3 billion to the debt ostensibly to finance “emergencies,” but in reality to avoid statutory PAYGO. This does not include the $485.8 billion “emergency” associated with the end-of year tax compromise. Unforeseen indeed.
The use of emergency designations is among the more obvious means to bypass budget enforcement. Congress has availed itself to more creative means of budget gimmickry to avoid the strictures of budgeting. Unrealistic estimates of loan programs, phony rescissions, and programmatic changes in appropriations bills are among the myriad opportunities for tomfoolery in budgeting that allows Congress to finance new programs or initiatives without making the necessary tradeoffs. The Honest Budget Act includes a series of provisions that address the abuse of these loopholes in the budget process to keep the process honest and on the level.
With much attention focused on the “supercommittee” and thirteen-figure savings goals, it’s easy to forget that process matters. It’s also worth asking why we have found ourselves waiting for 12 of our nation’s 535 elected representatives to come up with a grand budget bargain within a few short months, a timeline that has historically proven too compressed for Congress to pass appropriations bills in a timely fashion. This is not the right way to run a railroad. Congress should take the Honest Budget Act to heart and get back on track.
— Doug Holtz-Eakin is president and Gordon Gray is director of fiscal policy at the American Action Forum.