Washington Matters
A Plan to Fix the Budget Process
A Plan to Fix the Budget Process
The current process doesn't work. Here's a plan to fix it.
By Richard Sammon, Senior Associate Editor, The Kiplinger Letter
January 8, 2010
Early next month, President Obama will release a massive budget document proposing all types of federal spending for the 2011 fiscal year beginning Oct 1. It will be some 2,000 pages long and cover nearly $4 trillion in planned spending. That’s trillion with a t.
Release of the budget is the start of the federal budget process, probably the easiest step in a long, byzantine and largely busted routine that consumes months of Congress’ time each year, with most of the work conducted outside of the public view. The annual budget tends to be in the news only when some examples of outrageous pork projects bubble up to the surface. And annual earmarked funding for pet projects is barely newsworthy as all of the pork combined amounts to less than a half of one percent of the budget. Truly a smidgen.
This year will be no different. The modern budget process began with the Budget Reform Act of 1974, which was aimed at bringing some sense and light to a then very secretive annual budget operation that had almost no brakes on spending. It didn’t work. Instead, the process has gotten steadily worse, especially in recent years. Congress almost never finishes its budget work on time, having to rely to Band-Aid measures each year to keep the government from shutting down.
Maybe the strangest thing is how the budget process creates multilayered and duplicative debates. Many of the same budget issues are fought over at great lengths. The first time is in the annual congressional budget resolution that serves as a general spending blueprint. Many of the same budget issues return in full force in authorization bills that essentially say it’s OK for money to be spent by all the various federal agencies, sub-agencies and programs. Then the very same debates are rejoined a third time in the annual appropriations bills and supplemental budget bills that unleash the real money.
The budget resolution -- the spending guide -- is supposed to pass by April 15, a deadline so routinely missed it might as well be removed from the books altogether. Sometimes a budget resolution is not even agreed to at all because of partisan showdowns or because the votes are not there to pass it. It’s nonbinding anyhow -- no power of law. It has limited ultimate affect, except in proposing spending limits in general areas, such as defense, science research and social welfare.
The 12 regular spending bills covering the entire federal bureaucracy and federal programs in every state are all supposed to be signed into law by Oct. 1, just weeks after Congress’ monthlong August recess. Usually only a handful of appropriation bills -- often the easies ones -- make it past the finish line on time.
Other stuck spending bills are then rolled into giant omnibus or catchall measures, often several thousand pages and containing hundreds of billions of dollars’ worth of spending. No one really reads omnibuses before they vote on them. They check for a few provisions they care about and then vote without knowing the vast majority of details. Sometimes the omnibuses are not approved until four, five and even six months into the very same fiscal year they are supposed to apply. That leaves federal agencies in limbo, not knowing how much they have to spend. Invariably they spend less the first half of the year, then rush more money out the door in haste to catch up.
Here’s two simple changes to the budget process that could do a world of good. One would be to change the date of the fiscal year, making it the same as the calendar year. Instead of Oct. 1, it would be Jan. 1. Three months of additional time could give members a little more opportunity to understand the trillions of dollars they are approving. But couple this with an ban on the stop-gap measures used to keep the government going when Congress misses the deadline. Require that the government be shut down unless all the bills are passed before Congress goes home for Christmas.
A second would be to change the whole authorization and appropriation process. Congress could easily agree to make most authorization bills multiyear bills and to make the appropriations bills cover more years than only the next fiscal year. That would free up congressional committees to do more pressing work before the nation. If special circumstances require more money after a two-year spending bill is passed, Congress could pass an addendum or a supplemental. No big deal.
Retired Sen. Pete V. Domenici, R-N.M., a longtime Budget Committee chairman respected for his knowledge of all types of budget arcana, once urged Congress to adopt biennial budgets to help unclog the budget process and allow committees to tackle other work.
He was almost laughed at by his colleagues.
A two year system would mean less leverage, power and influence for chairmen and members of the powerful appropriations committee – the people who hold the purse strings. They rather like hauling agency heads and others before their panels each and every year to let them know who’s boss.
The same is found in the truly bizarre way Congress goes about authorizing funding for the Homeland Security Department, which was created by merging nearly two dozen distinct federal programs and offices. A mind-boggling 88 committees and subcommittees have jurisdiction over some part or other of the department that was created after the 2001 terrorist attacks.
There was an early effort by House and Senate leaders to have just one panel in charge of overseeing the department. That went over in lead balloon fashion. It made eminent sense to have one committee handle the new department, but that would have meant all those other panel chairmen and panel members would be stripped of some of their power. That’s a good way to put a chairman in a foul mood.
It’s too bad Domenici’s idea for two-year budgets went nowhere. It would have eased the entire process and given federal agencies some time to plan and execute programs, no doubt improving performance. It seems a bit selfish and self-important and overly territorial for lawmakers to have to hang on to every bit of power they have, even if it is on a small subcommittee. Then again, this is Washington. Clear, logical and straightforward solutions to vexing problems can quickly be killed off in Congress if it means power would be taken away from someone. .
Release of the budget is the start of the federal budget process, probably the easiest step in a long, byzantine and largely busted routine that consumes months of Congress’ time each year, with most of the work conducted outside of the public view. The annual budget tends to be in the news only when some examples of outrageous pork projects bubble up to the surface. And annual earmarked funding for pet projects is barely newsworthy as all of the pork combined amounts to less than a half of one percent of the budget. Truly a smidgen.
This year will be no different. The modern budget process began with the Budget Reform Act of 1974, which was aimed at bringing some sense and light to a then very secretive annual budget operation that had almost no brakes on spending. It didn’t work. Instead, the process has gotten steadily worse, especially in recent years. Congress almost never finishes its budget work on time, having to rely to Band-Aid measures each year to keep the government from shutting down.
Maybe the strangest thing is how the budget process creates multilayered and duplicative debates. Many of the same budget issues are fought over at great lengths. The first time is in the annual congressional budget resolution that serves as a general spending blueprint. Many of the same budget issues return in full force in authorization bills that essentially say it’s OK for money to be spent by all the various federal agencies, sub-agencies and programs. Then the very same debates are rejoined a third time in the annual appropriations bills and supplemental budget bills that unleash the real money.
The budget resolution -- the spending guide -- is supposed to pass by April 15, a deadline so routinely missed it might as well be removed from the books altogether. Sometimes a budget resolution is not even agreed to at all because of partisan showdowns or because the votes are not there to pass it. It’s nonbinding anyhow -- no power of law. It has limited ultimate affect, except in proposing spending limits in general areas, such as defense, science research and social welfare.
The 12 regular spending bills covering the entire federal bureaucracy and federal programs in every state are all supposed to be signed into law by Oct. 1, just weeks after Congress’ monthlong August recess. Usually only a handful of appropriation bills -- often the easies ones -- make it past the finish line on time.
Other stuck spending bills are then rolled into giant omnibus or catchall measures, often several thousand pages and containing hundreds of billions of dollars’ worth of spending. No one really reads omnibuses before they vote on them. They check for a few provisions they care about and then vote without knowing the vast majority of details. Sometimes the omnibuses are not approved until four, five and even six months into the very same fiscal year they are supposed to apply. That leaves federal agencies in limbo, not knowing how much they have to spend. Invariably they spend less the first half of the year, then rush more money out the door in haste to catch up.
Here’s two simple changes to the budget process that could do a world of good. One would be to change the date of the fiscal year, making it the same as the calendar year. Instead of Oct. 1, it would be Jan. 1. Three months of additional time could give members a little more opportunity to understand the trillions of dollars they are approving. But couple this with an ban on the stop-gap measures used to keep the government going when Congress misses the deadline. Require that the government be shut down unless all the bills are passed before Congress goes home for Christmas.
A second would be to change the whole authorization and appropriation process. Congress could easily agree to make most authorization bills multiyear bills and to make the appropriations bills cover more years than only the next fiscal year. That would free up congressional committees to do more pressing work before the nation. If special circumstances require more money after a two-year spending bill is passed, Congress could pass an addendum or a supplemental. No big deal.
Retired Sen. Pete V. Domenici, R-N.M., a longtime Budget Committee chairman respected for his knowledge of all types of budget arcana, once urged Congress to adopt biennial budgets to help unclog the budget process and allow committees to tackle other work.
He was almost laughed at by his colleagues.
A two year system would mean less leverage, power and influence for chairmen and members of the powerful appropriations committee – the people who hold the purse strings. They rather like hauling agency heads and others before their panels each and every year to let them know who’s boss.
The same is found in the truly bizarre way Congress goes about authorizing funding for the Homeland Security Department, which was created by merging nearly two dozen distinct federal programs and offices. A mind-boggling 88 committees and subcommittees have jurisdiction over some part or other of the department that was created after the 2001 terrorist attacks.
There was an early effort by House and Senate leaders to have just one panel in charge of overseeing the department. That went over in lead balloon fashion. It made eminent sense to have one committee handle the new department, but that would have meant all those other panel chairmen and panel members would be stripped of some of their power. That’s a good way to put a chairman in a foul mood.
It’s too bad Domenici’s idea for two-year budgets went nowhere. It would have eased the entire process and given federal agencies some time to plan and execute programs, no doubt improving performance. It seems a bit selfish and self-important and overly territorial for lawmakers to have to hang on to every bit of power they have, even if it is on a small subcommittee. Then again, this is Washington. Clear, logical and straightforward solutions to vexing problems can quickly be killed off in Congress if it means power would be taken away from someone. .
.
