Hearing of the
Subcommittee on Legislative and Budget Process
on Biennial Budgeting
Good Morning. I appreciate the opportunity to testify today regarding biennial budgeting.
My experience regarding biennial budgeting comes primarily from my service as the President Pro Tempore in the Ohio State Senate.
First, I encourage anyone with an interest in this issue to review the analysis on biennial budgeting conducted last year by the General Accounting Office at the request of the Rules Committee. Ohio was one of the three states the GAO investigators reviewed.
For background, Ohio has what might be called a split biennial budget cycle in that the timing of of the budget is different for the operating and the capital budgets. In the first year of the session, the legislature adopts two 1-year operating budgets, and since the mid-1980s the legislature has adopted a 2-year capital budget in the second year of the cycle.
In recent years, the practice also has been to include adjustments to the operating budget in the capital budget. In other words, the capital budget, while limited in the amount of funds it is provided, is often used as a "release valve" to address budget problems not addressed in the even year budget. Biennial budgeting in Ohio does have some advantages. Because the really tough funding decisions are only debated once every two years, state legislators have more opportunities to focus on legislative fixes to funding issues and their oversight roles.
However, it might not be easy to translate Ohio state budget laws, practices and experiences to the federal level. State budgets are generally more constrained than the federal budget, as a result of balanced budget requirements and borrowing restrictions. In Ohio, all spending must be in compliance with a balanced budget requirement in the State Constitution.
Moreover, Governors generally have much broader authority than the President to limit spending. In Ohio, the Governor has extensive line item veto authority to control spending, and there are many fewer officials with direct involvement with budget issues.
There is also a Controlling Board which serves as the primary budget control in the off year. The Board is a joint legislative-executive body with broad authority over state fiscal activities, including transfers, emergency spending and establishing new line items. It's hard to imagine a similar body being established with a similar makeup and role in Congress.
It must also be remembered that the entire FY 2003 Ohio state budget is roughly the same size as this year's Commerce, State Justice Appropriations bill.
If the biennial budget process in Ohio was enacted in Washington, imagine the complications inherent with trying to manage one of the really big annual appropriations bills like Labor/HHS for a two-year period.
There is also the stark difference of scale between state and federal legislatures. 132 state legislators making biennial funding decisions that affect 11 million Ohioans is a comparatively easy task compared to the consensus which would be required for 535 Members of Congress to make biennial funding decisions that affect 281 million Americans.
Proponents of biennial budgeting believe that the federal government would benefit from a biennial budget process because it would allow Congress more time to pursue true oversight and investigations without having to constantly be involved in the budget process.
Any time savings in the biennial budget would depend on a willingness of the Congress to make few changes in the off year, and the ability of the Congress and the President to reach agreement on how to design and enforce the off-year process.
I understand the desire of some Members of Congress to attempt to streamline the operation of the federal government by switching to a biennial budget, especially when audits continually detail real problems with funding and management at many of our agencies.
However, based upon my experiences in Ohio, I do not see a federal biennial budget as a silver bullet to our budgetary problems. But I appreciate the leadership role this Committee has taken in reviewing the different ways we can improve the process.
Regardless of what procedure is used, Congress will always have to make the tough decisions and maintain a true commitment to fiscal responsibility to make the appropriations process more efficient.
Mr. Chairman, I thank you for the opportunity to testify before this committee and would be happy to try and answer any questions you may have.
