Mr. Chairman and Members of the Committee, I am pleased to have this opportunity to discuss biennial budgeting and other budget reform proposals. While I regret not being able to be with you personally in Washington, I appreciate your willingness to do this by video.

In my first term as Congressman from the 16th District in California during the 95th Congress, I had the honor to introduce the very first biennial budgeting bill in the House in 1978. I reintroduced the legislation in subsequent years, with over 40 cosponsors. I am pleased that some 20 years later, in the year 2000, the Committee on Rules and the House is now seriously considering this important reform.

As you know, there have been a number of studies and hearings over the years on serious budget reform issues, including biennial budgeting. I personally participated in a number of hearings before both the Budget and Rules Committees. Reform Task Forces of the Rules Committee were headed up by our former colleagues ? Congressman Butler Derrick and Congressman Tony Beilenson. I do hope that you and your staffs will take the time to analyze all of this previous good work in order to get both a sense of the history of this proposal as well as the various viewpoints of the Members.

It suffices to say that one Member’s reform is another’s demise. Reform proposals are often viewed as threats to the status quo and Committee jurisdictions. But when the existing budget process is not working effectively or efficiently, it makes sense to consider possible improvements. The challenge for this Committee is to determine whether the reforms will give the Congress the opportunity to truly improve the way it does the business of the people, or whether continuing crisis is the only political alternative. While a biennial budget will not resolve all of the current budget problems, it will, in the very least, provide a more rational time frame for responsible budgeting. And after all, establishing a process for controlling spending is why the budget was established in the first place.

The modern day budget process itself developed in the cauldron of political intrigue, disputes and concerns that produced the Congressional Budget and Impoundment Control Act of 1974. While the principal goal of the legislation was to restrict the President’s ability to impound spending, Congress realized that it could not limit the President without taking steps to control its own spending habits.

The original authors tried hard to bring some order to the Congressional decision-making process. They were hamstrung by the imperative to protect all existing centers of power and to make the new process appear as benign as possible. The drafters of the Budget Act knew the new process would have a difficult time working, but they also recognized that Congress could not continue to operate without any overall budget constraints.

While the first budgets were the result of extensive negotiations between the leadership and the key Chairmen, as deficits continued to grow, it was obvious that stronger steps had to be taken. This dilemma was ultimately confronted through a series of legislative and negotiated agreements focusing on increased budget enforcement. Having participated in most of those early budget summits as a Member and then Chairman of the Budget Committee, the results of many of these changes are reflected in the existing budget process:

The Balanced Budget and Emergency Deficit Control Act of 1985 ? the so-called Gramm-Rudman Law ? established deficit reduction targets and enforcement procedures (sequestration); the 1987 Budget Agreement negotiated between Congress and the Reagan Administration produced further deficit reduction targets; the 1990 Budget Agreement negotiated between Congress and the Bush Administration established fixed discretionary caps and the pay-as-you-go requirement; the 1993 Omnibus Budget and Reconciliation Act extended discretionary spending caps and pay-go requirements through 1998; and the 1997 Balanced Budget Act further extended discretionary spending caps and pay-go requirements through 2002.

The purpose of these reforms was very simple ? it was obvious that, absent strong enforcement tools, the targets set for deficit reduction would never be achieved. There is no question in my mind that were it not for the reforms built into law by the various budget and reconciliation proposals over the years, we would have no balanced budget today.

While it must be emphasized that reforms alone cannot substitute for the substantive decisions that have to be made on budget policy, they can assure that once those decisions are made, they will be carried out.

The point is that reforms can make a difference to the efficiency and effectiveness of the budget process if they are carefully designed and implemented. Of course, any reform is only as good as a majority vote on the floor of the House. Since any requirement can be waived by the Rules Committee, supported by a majority vote of the Members, it is essential that for any reform to succeed, it must enjoy the support of the leadership, the key Chairmen and ranking Members of Committees, and a strong bipartisan cross-section of both parties.

In addition, I do not have to remind you that there are no silver bullets in the budget process. For as long as I can remember, there have been Members searching for that one simple and elusive answer to all of the budget burdens that have to be confronted ? a Constitutional amendment to balance the budget, the line item veto, the Gramm-Rudman law, and on and on. There has always been the hope that somehow the budget process could be saved with a single legislative act of some kind. That is not the case.

The budget process is a legislative process, and in that reality lies both its strengths and its vulnerabilities. Nothing can replace the fundamental trust between Members that is essential to making any budget process work. When good members like Bill Gradison and Bill Frenzel were my ranking Members on the Budget Committee, we enjoyed and maintained a relationship of trust and confidence that no reform can replace. If somehow you can restore that kind of personal trust in the budget process, than there isn’t a reform you can enact that will not work. In the absence of that trust, few if any reforms can succeed.

But assuming that a better relationship can develop between the parties and the Administration, I believe that biennial budgeting is one of those reforms that makes good sense for both the Congress and the Executive Branch for the following reasons:

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2. Better budget planning and management. Too many budget decisions by both the Congress and the Administration are made on a short-term basis. Rather than focusing on long-term funding needs, the crisis management approach to budgeting forces ad hoc spending decisions that are not based on any kind of long-range planning. As a consequence, the current process is very inefficient, and the task of budgeting consumes a great deal of time and energy that could be better devoted to addressing programmatic issues from a longer-term and more in-depth perspective. Not only is the Congress constantly in the crunch of making hit-and-miss budget decisions on programs, the Executive Branch is caught in the same turmoil. During the months of September and October, when Congress and the Administration are typically negotiating final appropriations levels for the new year, the agencies and departments of the Executive Branch are beginning the new fiscal year operating under continuing resolutions while also expending great amounts of time developing their budget request for the subsequent fiscal year. The problem is that, until final decisions are made on the current spending year, it is impossible to determine what the spending levels should be for the next. Both the Congress and the Executive Branch need the time to more carefully evaluate current programs, and plan and manage the funding needs of existing programs. Clearly, a two-year budget cycle would provide that needed time.

    

3. Greater program oversight by both the Congress and the Administration. The reality is that very few Committees of the Congress conduct the kind of thorough and essential oversight of existing programs that fall within their jurisdictions. It is only when a scandal occurs or a critical GAO audit is published that Committees take the time to review certain programs, but that’s often too late. Most Committees will work on new authorizing legislation, but give little attention to the thousands of programs currently in the federal budget. The additional year would allow for the Committees to spend the required time reviewing the effectiveness of programs that spend over $1.4 trillion. In addition, the various Appropriations Subcommittees which do their annual reviews of programs under their jurisdiction could do even more careful hearings and studies. The reality is that both the Administration and the Congress have fallen into a pattern each year where the same testimony is presented, the same questions asked, and the same favorite programs funded. It would not hurt either the Members of the Committee or those testifying to be subject to greater scrutiny. The same oversight responsibilities could also be implemented within the Executive Branch. The Office of Management and Budget is supposed to be constantly reviewing the effectiveness of existing programs. But the year-to-year budget process makes this at best a hit-and-miss process. They could use the additional time to better fulfill their responsibilities as well.

    

4. Improved economic projections make two-year budgets realistic. The reality is that the current state of economic and spending projections have improved, so that both the Congress and the Executive Branch have a pretty good idea of what a program can or cannot spend over a two-year period. Indeed, current budgets have gone beyond the five-year projections to ten-year projections. While that is not to say that projections that far out are exact, it is to say that two-year projections are well within the margin of error. It is important that Congress and the Administration always maintain the right to make necessary adjustments. However, it is also important that revisions are limited and based on emergency needs, and not just on additional spending appetites. The one thing that could destroy the two-year budget is if a huge supplemental, covering all 13 appropriations bills, appears every other year. I realize the temptation to do this, but both the President and the leadership must ensure that any supplemental is limited to essential revisions and emergencies.

As with all reforms, a biennial budget will take careful work and preparation. Like any reform, biennial budgeting will not work if the process either becomes too inflexible or too open-ended. For the process to work, the two branches will have to avoid these extremes and find the proper balance under which the major task of budgeting is carried out every two years. That balance will require essential cooperation between the branches.

In addition, there will also have to be an appropriate transition period before the federal government and the Congress converts over to biennial budgeting. It must be recognized that this reform will constitute a very fundamental change in how the budget process operates. A conversion to biennial budgeting will have to take into account the magnitude of the change that would be required, both in terms of the need to make necessary conforming changes to those laws that presume the proposal and enactment of annual appropriations, as well as in terms of the need for Congress and the Executive Branch to develop and implement new practices for proposing, considering, and enacting two-year budgets.

A biennial budget system, built around the two year life of each Congress, offers a better way for Congress to commit itself to continuing fiscal discipline and to better planning for the coming years. Besides improving budgeting and planning capabilities, such a system would allow sufficient time to examine programs and find areas within current-year budgets where responsible cuts, reductions, and funding increases can be made.

The present system is not working. In the very least, this reform will provide the time necessary to move toward more sound, effective, and responsible budget making. Is there a risk involved in enacting this reform? Of course. Is it a risk work taking, considering the crisis of the present budget process? I believe it is. I would urge the Committee to support, and the Congress to adopt, a biennial budget process.