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Hearing of the Committee on Rules

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

Statement of Congresswoman Karen McCarthy (D-MO)

Good afternoon Mr. Chairman, Ranking Member, and members of the committee.

My state of Missouri is among the 23 states across the country that have benefitted from biennial budgeting. Missouri began using a mixed biennial budget process several years ago (94-95 biennium). The day-to-day operations of the state continue to be authorized on a yearly basis, but our capital improvements budget -- about $700 million -- operates on a biennium.

As one who served on the Missouri House Appropriations Committee for a dozen years, I know first hand that moving to a biennial capital improvements budget can improve the planning of major capital investments, and result in improved programmatic oversight.

As with the Missouri experience, I believe a biennial budget will improve both our fiscal and programmatic management at the federal level, and enable us to become more efficient and more productive with appropriate oversight.

While there is a noticeable lack of empirical evidence on either side of the argument, reports from state budget officers around the country offer compelling testimony to the cost savings associated with biennial budgeting. The direct cost savings involved with preparing a budget every two years, such as materials, supplies, and printing may well be said to be worthwhile in itself. States that have switched from an annual to a biennial budget are all reporting savings ranging anywhere from slight to significant to half the price. As representatives of our constituents responsible for achieving greater efficiencies at the federal level, these direct cost savings cannot be ignored.

But even more meaningful are reports of indirect savings associated with planning and program performance. Less time spent on budget negotiations results in more time for activities that are too often neglected or overlooked. For example, state agencies have been able to improve program execution, management practices, and valuable measurement indices. This is not only resulting in better success rates with regard to goals and cost projections, but it is also creating a better informed legislature capable of introducing thoughtful, well conceived legislation aimed more effectively at addressing those issues of greatest concern. Every legislator in this House can appreciate the advantages of time and oversight. And every resident of every congressional district in the United States will benefit from well executed programs and public policies based on sound, unharried judgement. As we continue to streamline the federal government and operate more like a business, long term planning tools increasingly need to be employed. Some may take issue that two years is not sufficiently long term, but I would suggest in our quarterly report-driven world that a biennial budget process would be beneficial.

One final point that is not often mentioned is that the improved predictability of a federal biennial budget would facilitate the budgeting processes of state and local governments. While it is true that biennial projections will prove slightly less accurate than annual forecasts, supplementary bills and adjustments can be made to adapt to changing economic conditions when circumstances warrant, and discretionary programs at the state and local level will, at the very least, rest assured that their funds have been authorized and are not subject to dramatic or politically motivated changes.

I strongly believe a biennial budget would improve the productivity and effectiveness of our federal government. This is an opportunity, as we begin a new millennium, to ensure that we do so with renewed emphasis on cooperation, results, and efficiency.



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