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Hearing of the Committee on Rules

"Biennial Budgeting: A Tool for Improving Government Fiscal Management and Oversight"

Statement of Congressman Michael N. Castle (R-DE)

I THANK AND APPLAUD THE RULES COMMITTEE FOR CONTINUING TO FOCUS ON THE PROBLEMS AND ANSWERS ASSOCIATED WITH BUDGET PROCESS REFORM. OUR ABILITY TO MAINTAIN BUDGET SURPLUSES, PROVIDE TAX RELIEF, RESTORE THE SOCIAL SECURITY TRUST FUND AND REDUCE THE OVERALL SIZE AND SCOPE OF THE FEDERAL GOVERNMENT IS DIRECTLY LINKED TO A CREDIBLE AND RESPONSIBLE BUDGET AND APPROPRIATIONS PROCESS.

THE FEDERAL BUDGET IS IN REMARKABLY GOOD SHAPE DESPITE SOME CONTINUED BAD BUDGET PRACTICES IN 1999 BY BOTH THE PRESIDENT AND CONGRESS. WE'VE ELIMINATED BUDGET DEFICITS THAT PLAGUED US FOR LONG, BUT NOW, IF WE FOCUS ON THE BUDGET PROCESS, WE CAN DO EVEN BETTER.

ONE OF THE PROBLEMS THAT WE FACE IN THE HOUSE OF REPRESENTATIVES IS THAT, UNFORTUNATELY, THE FEDERAL BUDGET PROCESS IS STILL BROKEN. AS FAR BACK AS 1993, THE INSTITUTIONAL PROBLEMS WITH THE CURRENT PROCESS WERE BEST DESCRIBED BY THE JOINT COMMITTEE ON THE ORGANIZATION OF CONGRESS. "THE ANNUAL APPROPRIATIONS PROCESS IS CUMBERSOME AND TIME CONSUMING. ANNUAL APPROPRIATION BILLS ARE CONSIDERED UNDER MAJOR TIME CONSTRAINTS IN THE HOPE OF COMPLETING ACTION BY THE START OF THE FISCAL YEAR. FOR AGENCIES, THE ANNUAL APPROPRIATIONS PROCESS REQUIRES A NEVER-ENDING ROUND OF HEARINGS, MARKUP SESSIONS, CONFERENCE REPORTS AND PLANNING FOR THE NEXT YEAR'S ROUND OF HEARINGS", IT WROTE.

CONGRESS HAS A CLEAR CONSTITUTIONAL RESPONSIBILITY TO CONDUCT OVERSIGHT TO IMPROVE THE EFFICIENCY, ECONOMY AND EFFECTIVENESS OF GOVERNMENTAL OPERATIONS AND PROGRAMS. THE FACT IS, THE ANNUAL APPROPRIATIONS PROCESS IS SO TIME CONSUMING, THAT THE AUTHORIZATION PROCESS, WHERE MOST PROGRAMMATIC OVERSIGHT IS CONDUCTED, HAS BEEN NEGLECTED AND IS SHORT- CHANGED.

CONGRESS NOW IS CLEARLY SPENDING TOO MUCH TIME ENGAGED IN PARTISAN FIGHTING FOR MUCH OF YEAR OVER SPENDING INCREASES. FOR MUCH OF 1999, CONGRESS DELAYED ACTION ON BILLS THAT INCLUDED LARGEST PROGRAMS - LABOR, HHS, EDUCATION, AND COMMERCE, JUSTICE, STATE. THIS ALLOWED CONGRESS TO SAY IT WAS NOT EXCEEDING THE SPENDING LIMITS SET IN 1997.

IT IS ALSO NOT ABLE TO PASS 13 SEPARATE APPROPRIATIONS BILLS ON TIME, AND TO RECONCILE DIFFERENCES BETWEEN CONGRESS AND PRESIDENT. AS A RESULT, OMNIBUS BILLS ARE THE PRODUCT WE END UP WITH. THIS YEAR THE OMNIBUS, INCLUDED A TOTAL OF FIVE BILLS (D.C., COMMERCE-JUSTICE-STATE, INTERIOR, LABOR-HHS AND FOREIGN OPERATIONS) THAT TOTALED $151 BILLION. THIS NEEDN'T BE THE CASE.

INCLUDING BIENNIAL BUDGETING AS A PRIME COMPONENT OF MY FIVE-POINT PLAN ON HOW TO CHANGE THE WAY THE FEDERAL GOVERNMENT BUDGETS AND KEEP FISCAL RESPONSIBILITY IN CHECK, I HAVE IDENTIFIED OTHER AREAS WE CAN IMPROVE.

A. ESTABLISH A TWO YEAR APPROPRIATIONS STRATEGY:

 

  • LESSEN OPPORTUNITIES FOR FISCAL IRRESPONSIBILITY;
  • REDUCE PARTISAN WRANGLING;
  • INCREASE CONGRESS' LACK OF COORDINATED OVERSIGHT RESPONSIBILITY THAT IS OFTEN NEGLECTED
  • ALLOW CONGRESS TO FOCUS ON OTHER IMPORTANT DOMESTIC PRIORITIES LIKE EDUCATION AND HEALTH CARE
  • THIS IS ESPECIALLY IMPORTANT IN A YEAR LIKE THIS ONE WHERE THERE ARE ONLY 100 LEGISLATIVE DAYS AND THE HOUSE, SENATE AND PRESIDENCY ARE ALL UP FOR ELECTION.
  • IN OFF YEARS, CONGRESS WOULD BE ABLE TO REVIEW HOW FUNDS ARE ACTUALLY SPENT AND MAKE MORE INFORMED DECISIONS

B. RETIRING FEDERAL DEBT TO STRENGTHEN ECONOMY

 

  • THE CURRENT PUBLIC DEBT IS ROUGHLY $3.7 TRILLION AND REFLECTS THE GOVERNMENT'S BORROWING FROM THE PRIVATE SECTOR (I.E. FROM BANKS, PENSION PLANS, PRIVATE BONDHOLDERS, ETC.)
  • CHANGES IN PUBLIC DEBT HAVE IMPORTANT ECONOMIC IMPLICATIONS -- AFFECTING INTEREST RATES, PRIVATE-SECTOR INVESTMENT, NATIONAL SAVING AND ECONOMIC GROWTH.
  • IN THE PAST THREE YEARS, THE FEDERAL GOVERNMENT HAS PAID DOWN THE NATIONAL DEBT BY $300 BILLION AND CONGRESS WILL PAY DOWN $131 BILLION THIS FISCAL YEAR.
  • BY RETIRING DEBT, THE FEDERAL GOVERNMENT IS LEAVING MORE MONEY IN THE ECONOMY TO ENABLE BUSINESSES TO INVEST AND GROW.
  • SPEAKER HASTERT HAS COMMITTED HIMSELF AND THE REPUBLICAN CONGRESS TO OFF THE PUBLIC DEBT BY 2015. I STRONGLY SUPPORT THIS PLAN AND WOULD LIKE TO WORK WITH THE SPEAKER TO ACCOMPLISH IT.

C. BRING PRESIDENT INTO BUDGET PROCESS EARLY IN THE YEAR

 

  • MAKING BUDGET RESOLUTION CONCURRENT WOULD FORCE CONGRESS AND PRESIDENT TO AGREE ON BUDGET TOTALS EARLY IN THE YEAR AND ALLOW WORK TO BE COMPLETED EARLIER.
  • THIS WAY THE PARTISAN BICKERING WOULD BE ENDED UP FRONT AND THE AUTHORIZATION AND APPROPRIATIONS PROCESSES WOULD GO A LOT SMOOTHER- ALL PARTIES WOULD HAVE A STAKE IN GETTING BUDGET DONE ON TIME.

D. SET ASIDE EXTRA FUNDS IN A BUDGET RESERVE ACCOUNT

 

  • ESTABLISH A BUDGET RESERVE ACCOUNT, LIKE STATES' RAINY DAY FUNDS THAT WOULD INCLUDE POSSIBLE EMERGENCY SPENDING DOLLARS IN THE BUDGET.
  • FUNDS FOR NATURAL DISASTERS AND MILITARY EMERGENCIES WOULD BE AVAILABLE WHEN NEEDED WITHOUT HAVING TO RESORT TO OTHER BUDGET GIMMICKS.

E. ELIMINATE FUNDING DECEPTIONS

 

  • CONGRESS AND PRESIDENT MUST ELIMINATE CREATIVE USE OF ACCOUNTING GIMMICKS TO DISGUISE WHAT IS ACTUALLY BEING SPENT:
    1. FORWARD FUNDING -- BORROWING FROM THE NEXT FISCAL YEAR TO PAY FOR PROGRAMS IN THIS FISCAL YEAR.
    2. 13 MONTH FISCAL YEARS -- EXTENDING THE FISCAL YEAR ONE MONTH TO MAKE THE BUDGET NUMBERS WORK OUT...
    3. DECLARATION OF EMERGENCIES: WE HAVE TO STOP USING THE "EMERGENCY" DESIGNATION AS A WAY TO SPEND MORE MONEY LIKE WE HAVE IN THE PAST. LAST YEAR, FUNDING FOR THE CENSUS WAS DECLARED AN EMERGENCY, CLEARLY AN ABUSE OF THE BUDGET PROCESS.

IF WE FOLLOW THIS FIVE POINT PLAN, WE SHOULD STAY ON A FISCAL RESPONSIBLE TRACK. WE WILL MAINTAIN A BALANCED BUDGET, PROVIDE MORE THAN ADEQUATE FUNDING FOR PROGRAMS LIKE DEFENSE AND EDUCATION, ALLOW US TO CONSIDER AFFORDABLE TAX CUTS, AND PROMOTE PROGRAMMATIC OVERSIGHT BY AUTHORIZING COMMITTEES, AND PROVIDE CONGRESS WITH MORE TIME TO DO THE JOB RIGHT. IF IMPLEMENTED CORRECTLY, THE PROCESS OF MOVING TO BIENNIAL BUDGETING CAN PROMOTE A MORE EFFECTIVE AND EFFICIENT GOVERNMENT, A LESS CHAOTIC BUDGET PROCESS, AND ULTIMATELY MORE FAITH IN OUR CONSTITUENT'S BELIEF THAT THE CONGRESS CAN PROPERLY MANAGE OUR NATION'S BUDGET THE BEST WAY POSSIBLE. I LOOK FORWARD TO CONTINUING TO HELP THE BIPARTISAN PUSH TOWARDS FORWARDING AND ULTIMATELY IMPLEMENTING BIENNIAL BUDGETING.

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