Congress needs to rethink how it makes a budget

(Editor's Note: This piece first appeared in the Washington Examiner on June 14, 2017.)

Congress has a problem. The federal budget is a mess, and its members have yet to demonstrate the willingness to fix it.

This is a problem because it's their job to budget.

Budgeting requires trade-offs between appropriate levels of taxes and spending. It also forces members to prioritize some programs over others. Doing so is controversial. Some people will be unhappy with the decisions their elected representatives make.

And therein lies the problem.

Members of Congress lack the political will to make difficult budgetary decisions because they don't like making their constituents unhappy. Consequently, they create special procedures that obscure their actions or put off difficult decisions until the future.

The size of Congress's budgetary mess suggests that this is not a new problem. Current levels of spending are unsustainable, and the specter of higher taxes and ever-mounting debt threaten economic growth. Indeed, the consequences of past decisions are reflected in the challenges facing its members today. This means that Congress needs to rethink how it budgets if it wants to achieve a different outcome in the future.

This should be easier than it is. By any standard, the budget process is not working. Congress has not yet written, much less passed, a budget resolution for the upcoming fiscal year. It also appears that the House and Senate will not complete their annual appropriations work by the end-of-September deadline. Finally, the federal debt is nearing its statutory limit once again, driven in large part by unsustainable entitlement spending that continues on autopilot regardless of what Congress does.

Past efforts to reform the budget process failed to prevent Congress from repeating this scenario year after year. Instead of forcing a fundamental re-evaluation of federal commitments during times of budgetary crisis, these reforms made it easier for members to avoid balancing the obligations of the federal government with the resources it commands.

For example, unified budget accounting, first proposed in 1967 by then-President Lyndon Johnson's Commission on Budget Concepts to increase public understanding of the budget, made it possible for Congress to use revenues dedicated to specific programmatic trust funds to pay for spending on other unrelated activities. In doing so, unified budget accounting undermined transparency and encouraged higher levels of spending by reducing the amount of money the government needed to borrow from the public to fund its regular operations.

When forced to act, Congress has relied on multiyear budget accords like the Budget Enforcement Act and, most recently, the Budget Control Act to reduce spending. To achieve their savings, these measures relied on future Congresses' passing appropriations bills in compliance with statutory caps on discretionary spending.

Yet the BEA did not work to the extent that total discretionary spending routinely exceeded its statutory caps. Congress has also repeatedly delayed the BCA's scheduled savings, and the agreement's continued existence now appears to be in doubt. In both cases, shifting congressional attitudes towards fiscal responsibility undermined the automatic budget enforcement mechanisms on which the BEA and BCA relied to ensure that their future savings would be realized.

These examples suggest that reforms intended to depoliticize budgetary decisions are unlikely to be successful over the long term. Simply changing the process by which Congress budgets will not lead to different outcomes in the absence of an underlying determination to reverse the country's fiscal course. In short, fiscal responsibility cannot be forced on an unwilling Congress through procedural means alone.

Acknowledging this fact should lead to more realistic expectations for what current reform efforts can achieve. To avoid repeating the mistakes of the past, reforms should be designed so that members are placed in situations in which they are forced to make difficult budgetary decisions.

This is easier said than done. Identifying innovative ways to increase the costs of continuing to ignore the country's fiscal challenges requires changing how reformers think about budgeting. Too often, they try to separate deliberations on fiscal policy from the political conflict inherent in Congress' broader environment. But conflict over fiscal policy is inescapable today, and efforts to insulate important budgetary decisions from public opinion are likely to be counter-productive. Taking the politics out of budgeting isn't realistic.

Given this, the goal of reform efforts should be to enhance Congress' ability to budget despite this conflict. This means making it easier for members to communicate across their differences as they advocate on behalf of their constituents in the budget process. This, in turn, requires that members acknowledge their differences openly. The budget process should be structured so that those interested in an outcome can freely participate in deliberations when they desire.

Sustainable compromise around fiscal decisions in the current polarized environment is possible only if members and their constituents feel as if their claims are fairly adjudicated in the process.

This dynamic can be created by adopting reforms that accentuate the inflection points in the budget process and that allow for open and fair consideration of all policy ideas. For example, deadlines like the debt ceiling can force members to make tough decisions to budget. In contrast, reforms like biennial budgeting may make sense in theory while still failing to address Congress' underlying debt problem.

It is time for a fresh start in budgeting. The process should be reformed so that members are forced to grapple with the consequences of their decisions. Only then will Congress be able to fix its budgetary mess.