This is an original post for BP50 by Gordon Gray of the American Action Forum.
Over the last decade, fiscal policy debates have been largely trivial. For all the government shutdowns, credit downgrades, or threatened defaults, debt and deficits continue to grow. Periodic attempts to grapple with unsustainable deficits have revealed the limits of both parties’ appetites for deficit reduction. There has been no mandate for policymakers to deliver to their constituents anything other than some incremental tweaks to the diet of lower taxes and higher spending to which they and, candidly, the American public has grown decadently accustomed. It shouldn’t surprise that a nation with an obesity problem is resistant to the public-finance equivalent of diet and exercise. Yet sometimes, simplest is best. For budgeting, simplest is just honestly following the law. Such an approach could facilitate more deliberate approaches to annual funding measures, deficit reduction, and debt limits.
While successive administrations and Congress have let the public fisc deteriorate, the basics of governance have become more fraught along the way. Federal agencies regularly operate under continuing resolutions – formulaic extensions of previously enacted funding levels – because Congress does not consider annual funding bills with any degree of timeliness or deliberation. Rather, Congress typically gives itself periodic deadlines for hashing out fiscal policy differences within and between its respective parties and chambers, fails to meet them, and then gives itself more time to procrastinate.
The “budget process” is enshrined in federal law, and even includes a neat, orderly timetable for considering a budget resolution and follow-on appropriations acts. The timetable now appears quaint, given how loosely Congress follows it. Nevertheless, having exhausted all manner of other process gimmicks, perhaps it’s time to stop trying to be creative and go back to basics. At least try it out for a year.
Specifically, Congress should debate and enact a budget resolution, but, sticking with the theme, the content should be bare-bones. The Congressional Budget Act prescribes the content of a budget resolution, and it is fairly minimal – a few specifications for tax, spending, and debt levels, the potential for reconciliation instructions, and little else. Budget resolutions do not need to be vision statements, campaign platforms, or expansive documents. Rather, Congress should put the current Congressional Budget Office baseline – the budget and economic outlook under current law – in the budget, put it on the floor of the House, and let members debate it. Whether they acknowledge it or not, the members eventually agree on topline spending figures anyway – they just end up doing so embarrassingly late in the game, once they enact omnibus spending bills or continuing resolutions.
In addition to serving as a deliberate vehicle for determining spending levels, the budget resolution could include instructions to each congressional committee to reduce deficits by a modest amount, at least, say, $1 billion per committee. This would empower each committee to look within its jurisdiction for policy changes that meet those instructions. They could be vastly more ambitious, but they don’t have to be. Committees could ignore the instructions and phone it in – or they could endeavor to be forums for policy development if they so choose.
Lastly, the budget should include reconciliation instructions to increase the debt limit to a level consistent with the CBO baseline. Members don’t have to vote for it, and they could amend it, but at least it would be available as a legislative vehicle for avoiding default.
In the Senate, putting the budget resolution on the floor means going through “vote-a-rama,” a process characterized by late nights and endless roll-call votes. This is an acknowledged pain-point, and any overhaul of the Congressional budget process should mitigate this feature of Senate debate. But reforming the Congressional Budget Act is beyond the scope of this exercise, because it appears beyond the grasp of the current Congress. In the House, where the floor is more strictly majoritarian and thus more tightly controlled by leadership, putting a relatively content-free budget resolution on the floor would also be challenging.
Congress and successive administrations have accomplished surprisingly little for all the trouble they have tended to cause in public finance. Event-driven budgeting has failed to engender sincerity around fiscal policy…it has just created more events.
When the alternative is willful dysfunction, perhaps policymakers should embrace their inner slacker, stop being creative, and just follow the law.
Gordon Gray is the Vice President for Economic Policy at the American Action Forum. Read more about Gordon here, and follow him on Twitter @GordonGrayDC.