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Enzi's Proposals Would Improve the Budget Process

Oct 8, 2019 | Budget Process

Senate Budget Committee Chairman Mike Enzi (R-WY) has developed a series of draft budget process reforms. As we’ve explained before, the current budget process is broken. We commend Chairman Enzi’s effort to begin fixing the process, and we encourage policymakers in both parties to work with Chairman Enzi on adopting a better budget process.

Chairman Enzi’s latest recommendations build on proposals from 2016 and follow a series of hearings this year. The recommendations include moving to biennial budgeting, creating a special reconciliation process to achieve specified debt-to-GDP targets, spinning off caps on discretionary spending and debt limit increases from budget resolutions into separate legislation, reforming the Budget Committee, and increasing accountability from other committees. We discuss several of these proposals below.

Biennial Budgeting

Currently, budget resolutions are supposed to be enacted annually, although lawmakers have only enacted concurrent budget resolutions three times in the last ten years. Chairman Enzi’s proposals would instead move to a form of biennial budgeting, whereby Congress would adopt budget resolutions early in odd-numbered years and approve appropriations legislation covering the entire two-year window in the following months. Policymakers could make adjustments in the second year of the biennium through supplemental appropriations legislation.

The Committee for a Responsible Federal Budget has long supported such a change. While biennial budgeting is unlikely to have a major impact on responsible policymaking, it can help ensure that Congress has adequate time to pass budgets and appropriations bills, better insulate the budget process from election-year debt-binges, leave various factions with less time to harden into irreconcilable positions, and leave more space for Congress and the President to focus on oversight and policy development.

Debt-to-GDP Targets

Under Chairman Enzi’s proposal, lawmakers would set a goal for debt subject to the debt limit and debt held by the public in the budget resolution as well as the assumed level of Gross Domestic Product (GDP). This implies an agreed ratio of debt-to-GDP targets in the budget resolution, which appear to be explicit as well.

The Committee for a Responsible Federal Budget strongly supports setting debt-to-GDP targets, which we proposed in our 2009 report Red Ink Rising, our 2010 paper Getting Back in the Black, and many times subsequently. Setting a fiscal goal is an incredibly important first step toward achieving long-term sustainability. In addition, federal debt expressed as a share of the economy is the most meaningful measure of debt and is the gold standard used by economists of all stripes.

Budget Resolution Spending Caps and Debt Limit Hikes

Though concurrent budget resolutions (passed by both chambers) represent an agreed-upon fiscal agenda and establish several House and Senate rules, they do not have the force of law. Among our ideas to strengthen the budget resolution, we discussed ways to make parts of the resolution binding – which Chairman Enzi would do in a creative way.

Specifically, the proposal would automatically ‘spin off’ a joint resolution from the concurrent budget resolution to set discretionary spending limits and increase the debt limit for a two-year period. This legislation would carry the full force of law once signed by the President.

This proposal would increase the incentive to pass a budget resolution and would reduce the likelihood of a dangerous debt limit standoff. It would also help ensure that discretionary spending levels are considered in the context of the overall budget and that spending is limited to the amount set forth in the budget resolution.

Expedited Deficit Reduction

Under current law, budget resolutions allow Congress to expedite certain legislation under a process known as reconciliation, which is especially powerful in the Senate. Chairman Enzi would keep traditional reconciliation while also creating an additional reconciliation process that must decrease deficits to help achieve the debt-to-GDP levels set in the budget resolution. This version of reconciliation would take place during the second year of the biennium and include safeguards to ensure it would not just create another reconciliation process to pass partisan legislation with the threat of loopholes that would add to debt levels.

Reforms to the Budget Committee and to Coordinate with Other Committees

Chairman Enzi proposes making committees more accountable in several ways. This includes enhancing the clarity of their legislative work plans and reporting publicly on how well they are staying within their budget boundaries. Simply having the committees say what they’re going to do and letting the public know if they’ve stuck to their own plans may help them stay on track.

The proposal also includes significant changes to the Senate Budget Committee itself. For one, it would be renamed the “Fiscal Control Committee” under the proposal, to emphasize its newfound focus on controlling debt and deficits. Its membership would also be expanded to include the Chairs and Ranking Members from the Appropriations and Finance Committees. While they would be added as ex officio, non-voting members, their input as the heads of the primary tax and spending committees will be valuable in developing fiscal plans.

Improve Budget Enforcement

Chairman Enzi’s proposal contains a handful of provisions designed to make it more difficult for Congress to waive or ignore its own rules and requirements pertaining to the budget process. For instance, Budget Committee chairs would be required to publicly present reports from the Congressional Budget Office (CBO) detailing the total cost of legislation passed out of their respective committee.

The proposal would modify existing rules to allow for “surgical” objections to provisions included in pending legislation that allow for more spending, for instance by raising discretionary spending caps or imposing unconventional scoring rules that obscure the true amount of spending in legislation. Current rules stipulate that such provisions cannot be considered on the Senate floor unless they were approved by the Budget Committee or are offered as amendments to pending legislation. However, objecting to the inclusion of such provisions currently prevents further consideration of the entire underlying bill.

In addition, Chairman Enzi’s proposal would prevent individual senators from waiving all such “surgical” points of order against pending legislation with a single motion, as is common practice under existing budget rules.

Improve Fiscal Projections

Chairman Enzi’s proposal also includes provisions that would improve fiscal projections and legislative cost estimates provided by CBO. One such provision would require CBO to include interest costs in its scores of pending legislation – a proposal we have long supported, though we have also called for including interest for formal scoring and enforcement purposes. This would give legislators a more comprehensive understanding of the fiscal impact of pending legislation.

The proposal would also make two key improvements to CBO’s “baseline,” which is the standard projection against which the budgetary effects of legislation are measured. First, irregular funding that circumvents budget controls would no longer be automatically assumed to continue. Second, funding that has already been appropriated would be incorporated into the baseline at the most recently enacted level. Both of these changes are intended to improve the baseline as a measure of government spending and revenue under current law.

Other Proposals

Highlighting the above features doesn't mean that other ideas don't matter, far from it. Nearly every component of the package appears to encourage the pursuit of consensus-based budgeting and appropriations. A Congress that cooperates more may be less prone to partisan mudslinging and vicious vitriol. Some examples of other ideas:

  • Improve CBO access to executive branch data
  • Require CBO to publish important information underlying its cost estimates
  • Have CBO report to Congress on the accuracy of its past estimates and submit plans detailing current and future transparency initiatives
  • Establish “portfolio reviews” of related programs across committee jurisdictions
  • Replace “Vote-a-rama” in the Senate with an orderly amendment process

It’s Time to Fix the Budget Process

Chairman Enzi’s proposals do not pretend to fix all budgetary and process challenges facing the federal government and Congress. The package focuses on ideas within the Budget Committee’s jurisdiction that have the potential to gain broad bipartisan support in the near term rather than ambitious proposals that may never be enacted.

There are of course many other ideas out there to improve our budget process, prevent government shutdowns, reform the debt limit, and even fix the overall political system (see our FixUS project).

One thing is certain: the current budget process is not working, and the time to adopt a better process is now. Chairman Enzi’s proposals represent good-faith efforts to find bipartisan consensus on improvements to our budget process. These proposals could reduce missed deadlines, enhance accountability, prevent excessive crisis budgeting, improve budget outcomes, and increase the prospects for bipartisan cooperation and effective governance.