Hearing of the
Subcommittee on Legislative and Budget Process
on Biennial Budgeting
Senior Fellow, Center on Budget and Policy Priorities
Madame Chairman, I appreciate the opportunity to testify before the Committee on biennial budgeting. I am a Senior Fellow at the Center on Budget and Policy Priorities, but my views on biennial budgeting are informed primarily by the 25 years I previously spent working for Congress, 20 of them on the staff of the House Budget Committee.
With your permission, I would like to submit for the record my testimony and also an analysis of biennial budgeting prepared last year by Robert Greenstein, the Executive Director of the Center, which concludes that problems surrounding biennial budget may outweigh its benefits.
Mr. Greenstein cited five reasons to be wary of biennial budgeting: he concluded, and I agree, that—
- budgets would be prepared too far in advance;
- biennial budgeting might protect the status quo by slowing the incremental process of re-ordering priorities that now occurs annually;
- biennial budgets and appropriations bill will likely be revised frequently, but possibly under less rigorous budgetary review;
- biennial budgeting is not likely to lead to better congressional oversight; and
- the fact that almost all large states budget annual, and in many cases moved from biennial to annual budgets, suggests that biennial budgeting is not necessarily practical.
In my prepared testimony, I make similar points: as I see it—
- authorizing committees are not hindered in conducting agency oversight;
- the appropriations process constitutes oversight;
- annual budgeting facilitates changes in budgetary priorities;
- current law allows biennial budgeting – let's experiment;
- biennial budgeting can lock in policy mistakes;
- be wary of changing budget projections;
- biennial budgeting will strengthen the executive at the expense of Congress;
- be responsive to the electorate.
Authorizing committees are not hindered in conducting agency oversight. Authorizing committees can be as involved with the details of program implementation and the oversight of their agencies as they wish. Some committees take a far more active role than others. Perhaps if Congress held Monday and Friday votes, Members would be available for more oversight work. In return, Members might be able to return to their districts for a larger number of one-week or two-week blocks of time.
The appropriations process constitutes oversight. In addition, the Appropriations Committee uses the annual bills to make sure that agencies implement the law — both appropriations and authorization law — the way Congress intends. The appropriations process starts with detailed annual hearings and consideration or agency budgets and activities. This annual review is made more potent by that fact that Appropriations controls the purse strings. Oversight likely would be weakened, not strengthened, by biennial budgeting. It seems ironic to call off an effective, the Appropriations Committee, in the name of greater oversight.
Annual budgeting facilitates changes in budgetary priorities. Even when the overall budget situation is calm and the estimates are stable, Congress has shown that it desires to change budget priorities — increasing funding for some programs and decreasing funding for others — with considerable frequency.
Current law allows biennial budgeting – let's experiment. There is nothing in current law that prohibits the President from requesting two years of appropriations at a time rather than one, nor is there anything that prevents Congress from granting that request or appropriating biennially on its own. Even budget resolutions could be biennial without any change in law.
Don't lock in policy mistakes. While budget estimates and policy needs may change slowly from year to year, they may change very quickly. For example, from the time President Reagan submitted his first budget in 1981 to the time he submitted his second in 1982, his administration went from projecting an imminent balanced budget to projecting huge and growing deficits. In Reagan's second year, Congress and the President agreed to substantially scale back the phased-in tax cuts that had just been enacted but had not yet gone into effect. History suggests that it harder to scale back spending increases or tax cuts after they have gone into effect.
Be wary of changing budget projections. In January of 1998, CBO projected a total budget surplus of $660 billion over the ten-year period 1999-2008 if Congress adhered to the caps on appropriated spending. By January of this year, CBO's projected total budget surplus over the same period had increased six-fold, to $3.9 trillion. With long-term estimates this volatile, it seems unlikely that Congress can or should prepare budgets on the basis of forecasts even one-year out of date, much less two. In situations like this, biennial budgeting, were it actually adhered to, would leave the budget far behind both the changing estimates and the changing policy concerns of the public.
Biennial budgeting will strengthen the executive at the expense of Congress. It is not surprising that presidents favor biennial budgeting. After all, it will allow agency budget offices to devote more time to budget execution and less time to budget preparation; it will provide greater planning horizons within the agencies; and it will very likely lead to greater delegation of the actually implementation of programs to agencies. The agencies will almost certainly need more flexibility than they now have to meet changing conditions over a biennium.
I believe that biennial budgeting will strengthen the executive branch and make it more efficient, at the expense of congress. This might possibly produce better, or at least more rational and efficient, budget outcomes, and rationality and efficiency have merit. But in this case I think rationality and efficiency would come by making budget execution more distant from the people of the United States. The outcomes will be less appropriate to a democratic republic with a legislature that functions as a true legislature, rather than as a parliament. Broadly speaking, annual budgeting may not produce better budgets, but I firmly believe it produces better democracy.
Be responsive to the electorate. Most biennial budget proposals, including the one described by the Rules Committee in anticipation of this hearing, require that we put together federal budgets only in the odd numbered years. Experience suggests that we are more responsive to our constituents during election years. For better or worse, we should be willing to vote on tax cuts, on health care reforms, on education funding, and on other matters during election years. We shouldn't design a system that takes us a step farther away from the people we represent.
