Proposed Changes in Congressional Budget Process Wouldn’t Help Fiscal Discipline

January 24, 2012 at 1:27 pm

House committees this week will consider a series of changes to the congressional budget process that proponents — including Budget Committee Chairman Paul Ryan (R-WI)— say will promote fiscal responsibility; the full House is expected to vote on these bills beginning next week.  We have produced analyses of four of the bills thus far, explaining why they would mark a step backward for the budget process:

  • The Legally Binding Budget Act (H.R. 3575) would bar Congress from considering annual appropriations bills — or any other legislation that would affect the budget — until Congress has passed, and the President has signed, a joint budget resolution for the fiscal year.  This change would likely delay the consideration of appropriations bills and could lead to efforts to combine major legislation into a single massive annual budget bill and bypass most congressional committees.
  • The Biennial Budgeting and Enhanced Oversight Act (H.R. 3577) would move the federal budget from an annual to a biennial cycle and make other changes in the budget process.   While proponents claim that biennial budgeting will lead to more thoughtful and deliberative budgeting, its disadvantages are likely to outweigh its advantages.
  • The Baseline Reform Act (H.R. 3578) would require the Congressional Budget Office (CBO) and the Office of Management and Budget (OMB) to assume, in constructing budget “baselines” that project funding levels for future years, that future annual appropriations will remain frozen indefinitely, with no adjustment for inflation.  This change could weaken fiscal discipline and would establish an unrealistic and misleading benchmark against which to measure changes in funding.
  • The Budget and Accounting Transparency Act (H.R. 3581) would require CBO and OMB to add an extra amount to the budgetary cost that they show for federal loan and guarantee programs, based on the additional amount that private lenders would charge if they, rather than the federal government, issued the loans and loan guarantees.   This proposal is not based on any claim that current estimates of the federal outlays and receipts associated with credit programs understate the actual federal costs of those programs.  Quite the contrary, the legislation would artificially inflate the programs’ estimated budgetary cost and overstate federal deficits.
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