Hearings of the
House Committee on Rules
H.R. 853, The Comprehensive Budget Process Reform Act of 1999
Mr. Chairman, Mr. Moakley, thank you for inviting me to testify before the Committee on Rules on HR 853, the Comprehensive Budget Process Reform Bill of 1999.
Because the bill is comprehensive — because it is so wide-ranging---it is important to understand how the provisions of this bill interact.
I will address only some of the provisions of this bill in my testimony, and leave many others unmentioned. With your permission, I'd like to summarize my major concerns orally, but I ask that you include my entire testimony, which explains the reasons for my concerns, in the record of this hearing.
Mr. Chairman, I have long been a believer that if "it ain't broke, don't fix it." We last made major changes to the budget process in the Budget Enforcement Act of 1990. Since 1992, this process has helped us move from a deficit of nearly $300 billion to a surplus of more than $100 billion. A budget process that helps us improve the bottom line by $400 billion in seven years ought to enjoy the presumption that it's working rather well.
If there is a congressional majority that can agree on an overall plan, this process allows that majority to make a budget plan and implement it. And it gives us sufficient enforcement tools so that the broad outlines of a plan can largely be ladi down for a period of years.
Let me summarize my specific concerns with this bill, and then draw attention to three aspects of the bill that I favor.
Three Major Concerns
- The first is with the provision of this bill that weakens the statutory Pay-As-You-Go requirement.
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The second is with the "automatic continuing resolution," or "automatic CR."
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The third is with the move to "joint" rather than a "concurrent" budget resolution.
These concerns are fundamental and cannot be addressed by tweaking the bill.
Weakening Pay-As-You-Go. This bill would repeal the requirement that entitlement increases or tax cuts must be fully offset. It will allow projected on-budget surpluses to be used as offsets. I will talk about tax cuts for simplicity, but entitlement increases are equally problematic. Here's the problem — suppose a tax cut is enacted that uses up all of the projected on-budget surpluses. If the projections are over optimistic, Congress will be faced with several choices, all unpleasant: a large tax increase; a large entitlement cut; a large discretionary spending cut; or a large sequester of selected entitlements, principally Medicare, farm price supports and crop insurance, Title XX social service grants to states, child support enforcement payments to states, and mineral leasing and other "shared receipt" payments to states.
It is not wise to wipe out the entire on-budget surplus, or even a large fraction of it, before we deal with Social Security and Medicare solvency. It is not safe to rely on projections far into the future that are notoriously unreliable. It is not fair to put discretionary appropriations on the chopping block because of entitlement increases or tax cuts. It is not appropriate to permit cuts in the outyear discretionary caps to create room for tax cuts or entitlement increases. It is especially not appropriate to assume that discretionary spending will be frozen in place in perpetuity at a level below the existing discretionary caps for this year, which everyone knows are too tight. And it is s unfair to Medicare and farm programs to put those entitlements at risk of sequester whenever Congress finds ways to increase discretionary spending, including for legitimate emergencies such as Kosovo funding or natural disasters.
Automatic Continuing Resolution. This provision turns all existing discretionary appropriations into permanent "capped entitlements," funded at the prior year's appropriations level. Congress will no longer need to pass or even consider appropriations bills. Right now, failing to appropriate is mostly unthinkable, but with an automatic CR, failing to appropriate may become routine.
The risks here are institutional. Congress uses "must-pass" appropriations as a way to refine its priorities each year, to make agencies more responsive to congressional concerns, to get the President's attention on items he may be ignoring, even to enact policies only tangentially related to funding. It is poor tactics for us to give up this congressional power, to give up our "must-pass" vehicles. It is also unwise to allow 41 senators to kill regular appropriations bills via filibuster or allow the President to kill a regular appropriation through a veto, whenever they prefer the status quo. Such power tramples on the rights of the majority.
Joint Budget Resolution. This provision is seductive. I view the negotiation between the President and Congress in 1997, which led to the Balanced Budget Act, as constructive and worth emulating. Nevertheless, I oppose this provision for two strong reasons. The first is that I believe requiring Presidential involvement will only slow down the budget process in the many years in which the President, the Congress, or both, do not have a strong desire to reach early agreement on the budget. And when they share such a desire, the experiences of 1993 and 1997 show that we don't need a joint budget resolution to bring us to the negotiating table. In short, this change will not help, and it may do harm.
In addition, a joint budget resolution starts us down a slippery slope. The joint budget resolution is not supposed to enact actual spending or tax law. But once the President and the leadership find themselves negotiating over a real statute, not a planning document, they will probably succumb to the temptation to legislate, or mandate, the fruits of their negotiation. If this happens, the power over major budgetary details could slip away from the committees and most members and gravitate toward the President and the Leadership.
Diminishing the Budget Resolution: This bill seeks to engage the President in the congressional budget process and to make the budget resolution a law, but at the same time, it diminishes the end result of all this extra effort. This bill would take from the budget resolution the 20 functional levels that the resolution now sets and remove the reconciliation directions to the committee report. The remaining resolution would be barebones: a statement of aggregate spending, aggregate revenues, and the resulting surplus or deficit.
If we want to engage the President in the congressional budget process, presumably we want the end result to be a resolution which allows the appropriators to build a budget on this there is some accord. But the end result of this process is less than what we have now, and hardly the foundation for a budget the President and Congress have agreed upon.
