October 20, 2014

Posts on budget process

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Monday, April 21, 2014 - 11:17 AM

All dressed up and nowhere to go.

That’s the sad situation with the federal budget process.

We now have 10-year budget proposals from President Obama and the House of Representatives. They are quite different and would be very difficult to bring together in the best of circumstances. That doesn’t really matter, however, because there is nothing in the process to force a negotiation.

The President’s budget is merely advisory, although it has value in providing the administration’s vision of fiscal policy over the next 10 years.

The House budget is only one essential element in producing a concurrent congressional budget resolution. The other essential element is a budget from the Senate. And that is where the process ends this year because the Senate has decided not to write its own budget.

Some may consider this a politically smart move on the part of Senate Democrats because it allows them to take shots at the House Republicans’ budget, distance themselves from unpopular aspects of the President’s budget and avoid taking a stand on anything that might prove inconvenient in this fall’s elections.

Others may say that having a budget...

Tuesday, March 25, 2014 - 9:49 AM

Last Thursday, Congressman Reid Ribble invited The Concord Coalition to host a panel of experts on Capitol Hill to talk with congressional staffers gearing up for the annual budget process. Despite the ideological differences on the panel, there was a strong consensus that the process is broken and on ways in which it could be improved.

Gridlock has repeatedly brought our nation to the brink of crisis in the past few years. In October, Congress even temporarily shut down the government and brought the country within days of defaulting on at least some of its financial obligations. According to the GAO, a previous standoff over the debt ceiling cost the Treasury $1.3 billion in FY 2011 alone.

“The political process is the problem,” said Ed Lorenzen, a former aide to Democratic leader Rep. Steny Hoyer and now a senior advisor at the Committee for a Responsible Federal Budget. Lorenzen added that lawmakers “are not willing to make tough choices” that are necessary to resolve the country's long-term fiscal challenges.

Gordon Gray, director of fiscal policy at the American Action Forum and a former aide to Republican Sen. Rob Portman, agreed. He said that while some of the talk about the broken process is an attempt by politicians to absolve themselves of...

Friday, February 14, 2014 - 11:46 AM

The House Budget Committee last week approved a bill on a bipartisan 22-10 vote that would switch the annual congressional budget process to a biennial (two-year) cycle.

The legislation, introduced by Rep. Reid Ribble (R-Wisc.), a committee member, has attracted 100 co-sponsors, roughly a third of whom are Democrats. The Concord Coalition has commended Rep. Ribble for pursuing this option.

The difficult struggle each year to pass appropriation bills has made it harder for lawmakers and federal agencies to focus on structural problems in the budget and develop more responsible long-term fiscal policies.

Ideally, biennial budgeting would help Congress improve its allocation and oversight of discretionary spending, which makes up one-third of the budget.

During the first year of a 2-year cycle, lawmakers would set funding levels for federal agencies. Congress would then use the second year to concentrate on oversight, examining how federal agencies administer various programs, how effective the programs are and whether...

Tuesday, July 9, 2013 - 5:39 PM

The Obama Administration released its Mid-Session Review (MSR) of the budget on Monday. It would be nice to say that this update arrived just in time to clinch the deal on a fiscal sustainability plan, or even a plan to get through the rest of the year, but sadly that is not the case.

There are no apparent negotiations going on between the House and Senate to work out their differences over next year's spending levels, let alone any broader deal involving the President. Certain mechanical functions are grinding forward, such as the release of the MSR and approval of a few appropriations bills, but these are disjointed efforts with no attempt at coordination.

We no longer have "regular order" so much as we have regular chaos. A tacit decision seems to have been made to take no action on the budget until a crisis is at hand, which is not likely to occur until the end of the fiscal year on Sept. 30.  And even then, the "fix" might be to simply push things forward just enough to reach the next crisis point – raising the debt ceiling - later in the fall.

Within that context, the MSR means little. Still, it is useful to have the administration reiterate its most recent proposals with updated numbers.

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Tuesday, April 16, 2013 - 12:09 PM

Is the federal budget heading for unsustainable deficits or unsustainable surpluses?

It all depends on the long-term assumptions. 

Last week, the Government Accountability Office (GAO) issued an update of its long-term fiscal outlook for the federal government. As in prior reports,  GAO found that an extension of current law (the Baseline Extended simulation) leads to rising and eventually unsustainable debt “driven by a fundamental imbalance between revenue and spending, which, on the spending side, is driven by the aging of the population and rising health care costs.”

On the other hand, the President's Office of Management and Budget (OMB) released a new estimate last week showing that an extension of President Obama's budget policies would not just be sustainable but would lead to growing surpluses that would eventually pay off the national debt.

Not that OMB thinks this will actually happen. In fact, OMB calls the end result “unrealistic and undesirable.”

As explained by OMB in the Analytical Perspectives of the 2014 Budget, “These projections are not intended to be a prediction of future legislative action, nor are they intended to reflect explicit policy proposals for the years beyond 2023; rather, they are a mechanical extrapolation of the Budget policies.”

But in...

Monday, April 8, 2013 - 11:25 AM

Opening Day for the baseball season has come and gone in Washington but for the budget season it comes on Wednesday, when the President officially unveils his Fiscal Year 2014 proposals. Will he get a hit or be sent back to the bench?

Early indications are that he will at least put the ball in play, and that’s a promising start.

Some Republican leaders in Congress have already declared, in effect, that the President’s budget is a whiff or a foul ball at best. Even among Democrats, there are those who seem to regard the forthcoming budget as a sacrifice bunt because of its apparent concessions to Republicans on entitlement cuts.

Clearly, there will be a vigorous debate. However, there is reason to be optimistic that the President’s budget may help move budget discussions in the right direction.

If preliminary reports are correct, the budget will include a mix of spending cuts and revenue increases that would bring the deficit down to 1.7 percent of GDP by 2023. That’s higher, but more realistic, than the House Republicans’ balanced budget goal and more ambitious than the Senate Democrats’ goal of bringing the deficit down to 2.2 percent of GDP.

 In other words, it aims for a compromise, albeit one closer to the Senate Democrats’ goal, which is hardly surprising.

The key, of...

Friday, March 30, 2012 - 1:38 PM

 

Sometimes it can seem like none of our elected representatives are willing to buck their own party leaders, let alone vote for something because it’s for the good of the country, rather than serving some ideological purpose.

That’s why bipartisan support this week in the House to use the Simpson-Bowles commission recommendations to guide the 2013 budget was like a breath of fresh air. No, the amendment did not come close to passing, but the 38 members who broke ranks and voted aye are true heroes of fiscal responsibility. Political considerations took a backseat to doing the right thing, and we enthusiastically commend these brave men and women for stepping up and being counted:

Jim Cooper (D-TN) Sponsor
Steven LaTourette (R-OH) Co-sponsor
Rob Andrews (D-NJ)
Charlie Bass (R-NH)
Dan Boren (D-OK)
Leonard Boswell (D-IA)
Ann Marie Buerkle (R-NY)
John Carney (D-DE)
James Clyburn (D-SC)
Jim Costa (D-CA)
Henry Cuellar (D-TX)
Charlie Dent (R-PA)
Bob Dold (R-IL)
Chaka Fattah (D-PA)
Chris Gibson (R-NY)
Jim Himes (D-CT)
Tim Johnson (R-IL)
Ron Kind (D-WI)
Rick Larsen (D-WA)
Dan Lipinski (D-IL)
Cynthia Marie Lummis (R-WY)
Pat Meehan (R-PA)
Ed Perlmutter (D-CO)
Collin...

Tuesday, September 27, 2011 - 7:49 AM

The “dynamic scoring” debate is back again. Last week the House Ways and Means Committee—chaired by Dave Camp (R-MI), who also happens to be a member of the debt-limit deal’s “super committee”—held a hearing on the subject, calling on the Joint Committee on Taxation’s chief of staff, economist Tom Barthold, to explain why that committee still estimates the revenue effects of tax legislation using “static” methods.

The Washington Post’s Lori Montgomery reported on this “old battle,” wondering out loud whether the super committee will resort to dynamic scoring as a “magic elixir that greases the skids to a more far-reaching compromise.”

Well, unfortunately for certain policymakers, dynamic scoring is not so magical.

“Dynamic scoring” refers to revenue estimates that would be...

Monday, August 1, 2011 - 6:02 PM

In this debt-limit game of musical chairs, the music has stopped and it’s time to grab a seat. The only one available is the deal worked out by congressional leaders and the Obama administration over the weekend. It is not a solution to our nation’s fiscal problems and is far from the “grand bargain” needed to put us on a sustainable path. However, a debt-limit deal needs to get done. This one at least avoids a self-inflicted wound caused by the government’s defaulting on its obligations, and it gives proponents of a grand bargain another turn at bat.

The main flaw in the agreement is that it reflects the continued refusal of our political leaders to confront fiscal reality. Once again, they are leading with discretionary spending cuts while leaving the biggest problems -- entitlement and tax reform -- for another day.

If this is what they have to do to pass a debt limit increase, so be it. But no one should pretend that they have solved anything other than an artificial political crisis. The fundamental fiscal crisis is pretty much unchanged.

A positive element is the proposed special congressional committee charged with finding deficit reductions beyond the initial trillion-dollar down payment. The committee is the only aspect of the agreement that...

Thursday, July 14, 2011 - 10:57 AM

The partisan vortex in Washington is now so strong that it threatens to swallow all rational thought.

As the nation rushes closer to default, politicians are rushing to their respective partisan corners. At times they truly seem more interested in blaming each other for causing a crisis than they are with preventing a crisis from happening. It is little wonder that credit ratings agencies such as Moody’s and Standard & Poor’s have repeatedly questioned whether U.S. Treasury bonds can maintain their AAA status.  The scenario they fear, which becomes more likely by the day, is not so much that the U.S. can’t pay its bills but that it will refuse to do so.

For a brief time last week, President Obama and House Speaker John Boehner appeared ready to challenge their respective political bases. Hopes were raised for a “big deal” that would include essential compromises on popular entitlement programs and tax breaks to reduce the deficit by roughly $4 trillion over 10 years. It was a good idea, but it didn’t last long.

Instead of looking at what the nation might gain in fiscal sustainability, politicians on both sides looked with horror at what they might lose in terms of partisan finger-pointing. A big deal would mean that Republicans could no longer accuse Democrats of trying to kill the economy with...