The broken budget process is a democracy reform issue
Kosar is vice president of policy at the R Street Institute, a nonpartisan and pro-free-market public policy research organization. He's also a co-director of the nonpartisan Legislative Branch Capacity Working Group.
It is difficult to overstate how wrecked the federal budget process is. Late last month, President Trump signed a 30-day stopgap funding measure to dodge a government shutdown. This was the second time this autumn that Congress and the president had to resort to such a continuing resolution. Governing through short-term spending bills has become the rule in recent years, and not passing a congressional budget resolution (or spending plan) has become the new normal.
The wrecked process has produced alarming results. The nonpartisan Congressional Budget Office has predicted that our country will have a trillion dollar deficit this year. Payments on the $22 trillion federal debt are more than $325 billion a year — which, to put it in context, is more than quintuple the budget of the Department of Education. Entitlements (Social Security, Medicare, Medicaid, federal workers' retirement benefits and so-called food stamps) account for about 60 percent of all spending. These mandatory outlays have swallowed nearly 90 percent of federal spending. "Fiscal democracy," as scholar Eugene Steurle terms it, is clearly eroding.
Budget reform is a tough nut to crack. Inevitably, fixing the process means tampering with the authority of the Appropriations committees and subcommittees, to say nothing of the congressional Budget committees. Last year, a special joint committee on budget reform spent an entire year trying to hash out bipartisan reforms. Its efforts were scuttled when the Senate's leadership failed to come together to schedule a vote, quite possibly due to objections from particular appropriators.
So it is that the budget process has grown more dysfunctional, and debts worse, to the dismay of nearly everyone on Capitol Hill and in America. It is a wicked collective action problem that will eventually lead the United States into a financial calamity. It's also yet another threat to our democratic norms that is sapping our capacity to direct resources to new problems.
There is a glimmer of hope however. The Senate Budget Committee recently reported a budget reform bill. The Bipartisan Congressional Budget Reform Act would make incremental changes to budgeting. The bill's move from committee to the Senate floor was hailed by the GOP chairman, Mike Enzi of Wyoming:
"This legislation would take several positive steps toward a more active, thoughtful, and functional budget process. It represents a package of necessary, pragmatic, and significant reforms that do not tilt the scales toward any one party, ideology, or policy outcome."
Democrat Sheldon Whitehouse of Rhode Island was also enthused, especially because the bill "includes the first-ever process for bipartisan work on the budget, which would look at the main drivers of federal deficits: revenue levels, tax spending, health spending, and annual appropriated spending. It would also take a much-needed step in neutralizing the threat of a federal debt default."
The law now requires Congress to adopt a budget resolution by April 15 each year. Congress rarely meets this deadline because the budget is so big and complicated. Enzi's bill would give the budget resolution a two-year life span. It also would require Congress to set a limit on the size of the national debt relative to gross domestic product. If that ratio is going to be breached, Congress would be empowered to use the expeditious reconciliation process to trim spending.
The bill also would end the politically toxic debt ceiling dramas, wherein legislators are forced to vote to raise the debt limit lest the country default. Instead, the debt ceiling would adjust automatically based on the budget spending plan. And no longer would the budget be a resolution that could be evaded; the measure would have the president sign it into binding law.
The prospects for the bill are unclear. Nineteen senators have come out in support, but Majority Leader Mitch McConnell and Minority Leader Chuck Schumer may not act without more stepping up. Some Democrats also may have beefs with one provision. As National Journal reports:
"The measure's potential impact on social programs is a sticking point for Democrats. Sen. Bernie Sanders, the ranking member of the Budget Committee and a leading candidate for the Democratic presidential nomination, missed the bill's markup. But he and other senior Democrats on the panel, including Sens. Ron Wyden, Patty Murray, and Debbie Stabenow, oppose a key provision that would force Congress to use budget reconciliation, as it did to overhaul federal tax law in 2017, to cut spending or raise revenue during election years to meet deficit reduction goals. An effort to strike the provision failed in committee, with the bill's supporters in both parties outgunning Democrats."
In the House, Budget Chairman John Yarmuth, a Kentucky Democrat, and ranking Republican Steve Womack of Arkansas both have tried to forge budget reform legislation. Nonetheless, the House still may prove a significant hurdle to reform. It is unclear whether Speaker Nancy Pelosi and the chamber's most potent Democrats want to enact companion legislation or even a close substitute to Enzi's bill.
A failure to move budget reform legislation soon could set back such efforts for years. Enzi will retire a year from now, and his patience and lengthy bipartisan outreach were critical to crafting and building support for his year's measure.
Indubitably, the country would be well served if Congress enacted budget reform that would put an end to feckless and reckless budgeting. An optimist might imagine Republicans and Democrats, who each control half of the Capitol, would see the political advantage of presenting the public with a major policy victory in the election year. Congress overcame partisan rancor to save Social Security and to improve the tax code in the 1980s; maybe our national legislature can do it again.