[Analytical Perspectives]
[Budget Reform Proposals]
[15. Budget Reform Proposals]
[From the U.S. Government Printing Office, www.gpo.gov]
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15. BUDGET REFORM PROPOSALS
The budget process should be transparent, accountable, and orderly.
The current budget process could benefit from reforms that help achieve
these goals. No one change can fix the budget process, and process alone
cannot address important fiscal issues. Nevertheless, process changes
can be a key factor in the effort to control spending. Starting with A
Blueprint for New Beginnings and continuing with subsequent budgets,
this Administration has consistently proposed changes to the budget
process that are designed to improve budget decisions and outcomes. This
chapter updates the Administration's proposals and describes additional
reforms proposed by the Administration.
Controlling Entitlements and Other Mandatory Spending
Mandatory Spending Control.--The Administration proposes to require
that all legislation that changes mandatory spending, in total, does not
increase the deficit. The five-year impact of any proposals affecting
mandatory spending would continue to be scored. Legislation that
increases the current year and the budget year deficit would trigger a
sequester of direct spending programs. The proposal does not apply to
changes in taxes and does not permit mandatory spending increases to be
offset by tax increases. Table 15-1 displays the President's mandatory
spending proposals.
Table 15-1. MANDATORY PROPOSALS
(Cost/Savings (-) in millions of dollars)
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Total,
2006 2007 2008 2009 2010 2011 2006-11
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Medicare................................................................... ......... -2,452 -5,485 -7,948 -9,343 -10,663 -35,891
Pension Benefit Guaranty Corporation Reform................................ ......... ......... -4,195 -4,181 -4,164 -4,140 -16,680
Outlay Effects of Tax Proposals \1\........................................ ......... 532 871 1,243 1,375 1,519 5,540
Commodity Program Changes.................................................. ......... -1,081 -1,079 -945 -965 -917 -4,988
Arctic National Wildlife Refuge, Lease Bonuses............................. ......... ......... -3,502 -2 -503 -3 -4,010
User Fee Proposals......................................................... ......... -315 -488 -610 -614 -718 -2,745
Grants to States for Chronically Ill....................................... ......... 250 375 493 506 523 2,146
Unemployment Insurance Integrity Legislation............................... ......... ......... -482 -515 -365 -376 -1,738
Temporary Assistance for Needy Families.................................... ......... 40 149 425 473 488 1,575
Federal Employee Health Benefits Program................................... ......... -34 -134 -231 -306 -367 -1,072
Medicaid/State Children's Health Insurance Program......................... ......... 504 -190 -523 -691 -567 -1,467
Cover the Kids............................................................. ......... 100 100 100 100 100 500
Other Proposals............................................................ 69 84 -143 -115 -284 -362 -751
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Total.................................................................. 69 -2,372 -14,203 -12,811 -14,781 -15,843 -59,580
Total, 2006 and 2007..................................................... ......... -2,303 ......... ......... ......... ......... .........
Memorandum: Further Hurricane Response
National Flood Insurance (emergency)..................................... 5,040 560 ......... ......... ......... ......... 5,600
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\1\ Affects both receipts and outlays. Only the outlay effect is shown here.
Long-term Unfunded Obligations.--The Administration proposes new
measures to address the long-term unfunded obligations of Federal
entitlement programs. As discussed in Chapter 13 of this volume,
``Stewardship,'' spending by the Government's major entitlement
programs, particularly Social Security and Medicare, is projected to
rise in the next few decades to levels that cannot be sustained, either
by those programs' own dedicated financing or by general revenues. The
Administration's proposed measures are designed to begin addressing
these challenges.
In the Medicare Modernization Act (MMA) of 2003, Congress provided for
a more comprehensive review of the Medicare program's finances and
required the Medicare trustees to issue a warning when general revenue
Medicare funding is projected to exceed 45 percent of Medicare's total
expenditures. The President's Budget proposes to build on this reform by
requiring an automatic reduction in the rate of Medicare growth if the
MMA threshold is exceeded. The reduction would begin as a four-tenths of
a percent reduction to all payments to providers in the year the
threshold is exceeded, and would grow by four-tenths of a percent every
year the shortfall continued to occur. This provision is designed to
encourage the President and the Congress to reach agreement on reforms
to slow Medicare spending and bring it back into line with the threshold
established by the MMA.
In addition to this Medicare-specific control mechanism, the
President's Budget proposes to establish a broader enforcement measure
to analyze the long-term
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impact of legislation on the unfunded obligations of major entitlement
programs and to make it more difficult to enact legislation that would
expand the unfunded obligations of these programs over the long-run.
These measures would highlight proposed legislative changes that appear
to cost little in the short run but result in large increases in the
spending burdens passed on to future generations.
First, the Administration proposes a point of order against
legislation which worsens the long-term unfunded obligation of major
entitlements. The specific programs covered would be those programs with
long term actuarial projections, including Social Security, Medicare,
Federal civilian and military retirement, veterans disability
compensation, and Supplemental Security Income. Additional programs
would be added once it becomes feasible to make long-term actuarial
estimates for those programs.
Second, the Administration proposes new reporting requirements to
highlight legislative actions worsening unfunded obligations. These
requirements would require the Administration to report on any enacted
legislation in the past year that worsens the unfunded obligations of
the specified programs.
Budget Discipline for Agency Administrative Actions.--A significant
amount of Federal policy is made via administrative action, which can
increase Federal spending, often on the order of tens of billions of
dollars in entitlement programs such as Medicare or Medicaid. Although
known costs are incorporated into the budget baselines of various
programs, agencies frequently initiate unplanned for and costly
proposals. Often, these costs are not reflected in the baseline, or are
not accompanied by other actions that would pay for the proposed change.
This results in increased spending and deficits.
Controlling these costs is integral to the Administration's commitment
to reducing the deficit and enforcing fiscal discipline. Toward that
end, the Director of the Office of Management and Budget issued on May
23, 2005 a memorandum to all Executive Branch agencies implementing a
budget-neutrality requirement on agency administrative actions affecting
mandatory spending. Discretionary administrative actions in entitlement
programs, including regulations, program memoranda, demonstrations,
guidance to States or contractors, and other similar changes to
entitlement programs are generally required to be fully offset.
Exceptions to this requirement are only provided in extraordinary or
compelling circumstances.
Table 15-2. DISCRETIONARY CAPS AND ADJUSTMENTS
(Amounts in billions of dollars)
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2006 \1\ 2007 2008 2009 2010 2011
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Proposed Discretionary Spending Categories:
Discretionary Category:
Defense Category (Function 050):
Budget authority.............................. 432.4 459.7 482.1 NA NA NA
Outlays....................................... 502.2 468.4 467.9 NA NA NA
Nondefense Category:
Budget authority.............................. 411.0 410.4 412.6 NA NA NA
Outlays....................................... 456.9 452.3 436.6 NA NA NA
Proposed Cap Adjustments:
SSA Continuing Disability Reviews:
Budget authority.......................... NA 0.201 0.213 NA NA NA
Outlays................................... NA 0.201 0.213 NA NA NA
IRS Tax Enforcement:
Budget authority.......................... NA 0.137 0.207 NA NA NA
Outlays................................... NA 0.129 0.203 NA NA NA
Health Care Fraud and Abuse Control:
Budget authority.......................... NA 0.118 0.183 NA NA NA
Outlays................................... NA 0.118 0.183 NA NA NA
Unemployment Insurance Improper Payments:
Budget authority.......................... NA 0.040 0.040 NA NA NA
Outlays................................... NA 0.034 0.040 NA NA NA
Subtotal, Nondefense Category, with Adjustments:
Budget authority.............................. 411.0 410.9 413.3 NA NA NA
Outlays....................................... 456.9 452.7 437.3 NA NA NA
Discretionary Category:
Budget authority.............................. NA NA NA 916.6 928.4 940.5
Outlays....................................... NA NA NA 916.1 979.1 992.5
Highway Category:
Outlays......................................... 33.5 37.1 38.7 39.9 NA NA
Mass Transit Category: \2\
Outlays......................................... 5.8 7.3 8.5 9.3 NA NA
Total, All Discretionary Categories:
Budget authority.................................. 843.3 870.7 895.4 916.6 928.4 940.5
Outlays........................................... 998.3 965.6 952.3 965.3 979.1 992.5
Project BioShield Category:
Budget authority.................................. ........ ........ ........ 2.2 ........ ........
Memorandum: 2006 Enacted Emergency Supplementals
Budget authority.................................. 58.4 ........ ........ ........ ........ ........
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\1\ The discretionary emergency budget authority provided in Division A, Title IX, and in Division B of the
Department of Defense Appropriations Act, 2006 (P.L. 109-148) for: Defense contingency operations related to
the Global War on Terror, response to the Gulf Coast Hurricanes, and pandemic influenza preparedness is
displayed separately on a memorandum line.
\2\ Includes outlays from discretionary budget authority.
Controlling Discretionary Spending
Discretionary Caps.--The Administration proposes to set limits for
2006 through 2011 on net discretionary budget authority and outlays
equal to the levels proposed in the 2007 Budget. Legislation that
exceeds the discretionary caps would trigger a sequester of non-exempt
discretionary programs. Table 15-2 displays the total levels of
discretionary budget authority and outlays proposed for 2006 through
2011. This approach would put in place a budget framework for the next
five years that ensures constrained, but reasonable growth in
discretionary programs. For 2006 through 2008, separate defense
(Function 050) and nondefense categories would be enforced. For 2009-
2011, there would be a single cap for all discretionary spending. In
addition, a separate category for transportation outlays financed by
dedicated revenues would be established for 2006 through 2009 at levels
consistent with those enacted in the Safe, Accountable, Flexible,
Efficient, Transportation Equity Act: A Legacy for Users (SAFETEA-LU).
Program Integrity Cap Adjustments.--An improper payment occurs when
Federal funds go to the wrong recipient, the recipient receives an
incorrect amount of funds, or the recipient uses the funds in an
improper manner. Approximately 86 percent of improper payments are
overpayments. The Administration has made the elimination of improper
payments a major focus. Federal agencies have aggressively reviewed
Federal programs to evaluate the risk of improper payments and have
developed measures to assess the extent of improper payments. Processes
and internal control improvements have been initiated to enhance the
accuracy and integrity of payments and to report the results of these
efforts, pursuant to the Improper Payments Information Act of 2002 (P.L.
107-300).
The results of the agency assessment have been aggregated into a
Government-wide report entitled Improving the Accuracy and Integrity of
Federal Payments. (The full text of the report can be found at http://
www.whitehouse.gov/omb/financial/fia--improper. html.) In 2005, the
agencies reported a total of $37.3 billion in improper payments. This
represents a 3.3 percent improper payment rate. Nearly 80 percent of
those improper payments are in four programs: Medicare, Earned Income
Tax Credit, Old-Age, Survivors, and Disability Insurance, and
Unemployment Insurance.
In the context of the Administration's efforts to eliminate improper
payments, the Administration is proposing adjustments for spending above
a base level of funding within the discretionary levels for several
program integrity initiatives, specifically for continuing disability
reviews (CDRs) in the Social Security Administration, Internal Revenue
Service (IRS) tax enforcement, the Health Care Fraud and Abuse Control
Program (HCFAC) in the Centers for Medicare and Medicaid Services and
Unemployment Insurance improper payments in the Department of Labor.
These cap adjustments provide an effective way to ensure that limited
resources are applied to activities that reduce errors and generate
program savings.
In the past decade, there have been a variety of successful efforts to
ensure dedicated resources for program integrity efforts. These efforts
include cap adjustment funding for Social Security continuing disability
reviews and integrity efforts associated with the Earned Income Tax
Credit (EITC). These initiatives have led to increased savings for the
Social Security and Supplemental Security Income programs and an
increase in enforcement efforts in EITC. For example, the Social
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Security Administration reports that every $1 expended on CDRs has
produced a $10 return to taxpayers. The Administration's proposed
adjustments for program integrity activities will total $496 million in
budget authority in 2007 and $643 million in budget authority in 2008.
Transportation Category.--The Administration's proposal for
discretionary caps includes separate outlay categories for spending on
Federal Highway and Mass Transit programs that are consistent with the
funding levels enacted in SAFETEA-LU. The transportation levels will be
financed by dedicated revenues through 2009. Table 15-3 shows the
levels, taking into account the revenue aligned budget authority (RABA)
adjustment as authorized in SAFETEA-LU. The RABA adjustment is
calculated based on changes in estimated Highway Trust Fund receipts,
and results in either an increase or decrease in the Highway Category
funding level enacted in SAFETEA-LU. For 2007, the RABA adjustment is a
positive $842 million.
Table 15-3. TRANSPORTATION CATEGORY FOR HIGHWAYS AND MASS TRANSIT SPENDING
(Amounts in billions of dollars)
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2006 2007 2008 2009
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Transportation Category: \1\
Highways: \2\
Obligation Limitations.............................................. 36.8 40.4 40.9 42.6
Outlays............................................................. 33.5 37.1 38.7 39.9
Mass Transit:
Obligation Limitations.............................................. 6.9 7.3 7.9 8.4
Outlays \3\......................................................... 5.8 7.3 8.5 9.3
Memorandum:
Discretionary budget authority for Mass Transit included in the
Nondefense Category:
Budget authority.................................................... 1.6 1.6 1.9 2.0
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\1\ The SAFETEA-LU levels enacted for Highway and Mass Transit programs apply through 2009.
\2\ Includes adjustments to levels authorized in SAFETEA-LU of $842 million in 2007 for revenue aligned budget
authority (RABA) calculation and $122 million in FY 2007-2009 for National Highway Traffic Safety
Administration (proposal to fund NHTSA completely from the Highway Trust Fund instead of portion from General
Fund, as authorized in SAFETEA-LU).
\3\ Includes outlays from discretionary budget authority.
Advance Appropriations.--An advance appropriation becomes available
one or more years beyond the year for which its appropriations act is
passed. Budget authority is recorded in the year the funds become
available and not in the year of enactment. Too often, advance
appropriations have been used to expand spend
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ing levels by shifting budget authority from the budget year into the
subsequent year and then appropriating the budget authority freed up
under the budget year discretionary cap to other programs. The effect of
these advance appropriations is to limit the amount of discretionary
budget authority available in subsequent years, thereby reducing future
funding options available to both Congress and the President. From 1993
to 1998, an average of $2.3 billion in discretionary budget authority
was advance appropriated each year. In 1999, advance appropriations
totaled $8.9 billion and increased to $23.4 billion in 2000.
Because this budget practice distorts the debate over Government
spending and misleads the public about spending levels in specific
accounts, the President's budget proposals and the 2002 Congressional
Budget Resolution capped advance appropriations at the amount advanced
in the previous year. By capping advance appropriations, increases in
these and other programs can be budgeted and reflected in the year of
their enactment. For 2008, the Administration proposes a cap on advance
appropriations of $23,715 million, which includes the Department of
Energy's FutureGen project and an already enacted advance appropriation
for the Corporation for Public Broadcasting.
In addition, the Administration proposes to score the second year
effect of appropriations language that delays obligations of mandatory
budget authority as advance appropriations that count against the
discretionary caps. Appropriations acts often include provisions that
delay obligations of mandatory BA from one year to the next. The first
year is appropriately scored as a discretionary savings because it is
included in an appropriations act and it reduces spending in that year.
However, this is usually a temporary delay, and the funds become
available for spending in the second year. Under this proposal, the
second year impact would be treated as an advance appropriation and
scored against the discretionary caps. This would correct an
inconsistency in the current practice where savings are scored in the
first year, but the second year impact is reclassified in the subsequent
budget as mandatory and not scored against the discretionary caps.
To enforce the level of advance appropriations, the discretionary cap
proposal provides that total funding for advance appropriations
(including obligation delays) provided in an appropriations act for 2008
that is in excess of the Administration's limit on advance
appropriations of $23,715 million in 2008 will count against the
discretionary cap in the year enacted, not against the year the funds
first become available.
Federal Pell Grants.--To ensure funding shortfalls do not accumulate
in the Pell Grant program in future years, the 2006 Congressional Budget
Resolution adopted the Administration's proposal to score appropriations
at the amount needed to fully fund the award level set in appropriations
acts, beginning with the 2006-2007 school year, if the amount
appropriated is insufficient to fully fund all awards. The
Administration proposes to continue this scoring rule. Under this rule,
the amount scored would be increased to cover any cumulative funding
shortfalls from previous years and reduced by any surpluses carried over
from previous years, beginning with any shortfalls or surpluses from the
2006-2007 school year. If the amount appropriated exceeds the estimated
full cost, the amount appropriated would be scored against that year,
and the surplus would carry over as a credit against the following
year's cost estimate. In the 2007 Budget, the Department of Education
estimates that a cumulative $273 million surplus will be carried into
the 2007-2008 academic year. For scoring purposes, the funding needed to
fully fund all awards for 2007-2008 is reduced by the amount of this
surplus.
Project BioShield Category.--The Administration proposes a separate
BEA category for budget authority
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for Project BioShield, which received an advance appropriation for 2005
of $2.5 billion and for 2009 of $2.2 billion in P.L. 108-90, the 2004
Department of Homeland Security Appropriations Act. Because the success
of this program in providing for the development of vaccines and
medications for biodefense depends on an assured funding availability,
it is critical that this funding not be diverted to other purposes. The
Administration's proposal to create a separate category will help ensure
that funding for this program is not reduced and used as an offset for
other discretionary spending.
Include Stricter Standard For Emergency Designation in the BEA
When the BEA was created, it provided a ``safety valve'' to ensure
that the fiscal constraint envisioned by the BEA would not prevent the
enactment of legislation to respond to unforeseen disasters and
emergencies such as Operation Desert Storm, the terrorist attacks of
September 11, 2001, or Hurricane Katrina. If the President and the
Congress separately designated a spending or tax item as an emergency
requirement, the BEA held these items harmless from its enforcement
mechanisms. Initially, this safety valve was used judiciously, but in
later years its application was expanded to circumvent the discretionary
caps by declaring spending for ongoing programs as ``emergencies.''
The Administration proposes to include in the BEA a definition of
``emergency requirement'' that will ensure high standards are met before
an event is deemed an ``emergency'' and therefore exempt. This
definition should include the following elements: the requirement is a
necessary expenditure that is sudden, urgent, unforeseen, and not
permanent. These elements, all of which would be used for defining
something as an emergency, are defined as follows:
necessary expenditure--an essential or vital expenditure,
not one that is merely useful or beneficial;
sudden--quickly coming into being, not building up over
time;
urgent--pressing and compelling, requiring immediate action;
unforeseen--not predictable or seen beforehand as a coming
need (an emergency that is part of the average annual level of
disaster assistance funding would not be ``unforeseen''); and
not permanent--the need is temporary in nature.
This definition codifies the criteria for an emergency that have been
the standard for a number of years. It is designed to preclude funds
from being declared an emergency for events that occur on an annual or
recurring basis. For example, even though it is not possible to predict
the specific occurrence of fires, tornados, hurricanes, and other
domestic disasters, it is reasonable to assume that a combination of
domestic disasters will occur in any given year that require funding
equal to a multi-year average for disaster relief. Funding at an
average, therefore, should not be considered an emergency under this
definition. On the other hand, an average level of funding for domestic
disasters will not accommodate the level necessary to address a large
and relatively infrequent domestic disaster, such as Hurricane Katrina.
Under this definition for emergencies, spending for extraordinary events
could be classified as emergency funding. In the end, classification of
certain spending as an emergency depends on common sense judgment, made
on a case-by-case basis, about whether the totality of facts and
circumstances indicate a true emergency.
In addition, the Administration proposes that the definition of an
emergency requirement also encompass contingency operations that are
national security related. Contingency operations that are national
security related include both defense operations and foreign assistance.
Military operations and foreign aid with costs that are incurred
regularly should be a part of base funding and, as such, are not covered
under this definition.
The Administration proposal also would require that the President and
Congress concur in designating an emergency for each spending proposal
covered by a designation. This would protect against the ``bundling'' of
non-emergency items with true emergency spending. If the President
determines that specific proposed emergency designations do not meet
this definition, he would not concur in the emergency designation and no
discretionary cap adjustment or mandatory spending control exemption
would apply.
Baseline
The Administration proposes several changes to Section 257 of the BEA,
which establishes the requirements for the baseline:
Assume extension of all expiring tax provisions in the
Economic Growth and Tax Relief Reconciliation Act of 2001 and
certain provisions in the Jobs and Growth Tax Relief
Reconciliation Act of 2003. This proposal is consistent with
the BEA baseline rules for expiring mandatory spending and for
excise taxes dedicated to a trust fund. Except for a few
relatively small mandatory programs, the BEA assumes that
mandatory spending and excise taxes dedicated to a trust fund
will be reauthorized and extends them in the baseline. The
2001 Act and 2003 Act provisions were not intended to be
temporary, and not extending them in the baseline raises
inappropriate procedural road blocks to extending them at
current rates.
Add a provision to exclude discretionary funding for
emergencies from the baseline. Instead, the baseline would
include emergency funding only for the year in which it was
enacted. The current requirement is for the discretionary
baseline estimates for the budget year and the outyears to
assume the current year appropriated level, adjusted for
inflation. This is reasonable for ongoing programs, where the
need is expected to continue
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into the future. For emergencies, since the need should be for
a short duration, the baseline rules build unnecessary funding
into the baseline estimates for the years after the need has
been addressed and passed. In effect, the current rule biases
the baseline in favor of higher discretionary spending.
Correct the overcompensation of baseline budgetary resources
for pay raise-related costs due to the way in which these
costs are inflated. The current requirement, which provides a
full year's funding for pay raises in the budget year and
beyond, was written when Federal pay raises were scheduled to
take effect on October 1, at the start of each fiscal year.
However, this requirement is now inappropriate because the
effective date for pay raises is now permanently set by law as
the first pay period in January. By treating pay raises that
begin on January 1 as if they take effect for the entire
fiscal year, the baseline overstates the cost of providing a
constant level of services.
Eliminate the adjustments for expiring housing contracts and
social insurance administrative expenses. Most multi-year
housing contracts have expired or have been addressed since
the BEA was first enacted in 1990, so the adjustment is no
longer needed. The adjustment for social insurance
administrative expenses is also inconsistent with the baseline
rules for other accounts that fund the costs of
administration. These programs should not be singled out for
preferential treatment.
Line-Item Veto
A perennial criticism of the Federal Government is that spending and
tax legislation contain too many provisions benefiting a relative few
which would likely not become law if considered as a stand-alone bill.
The persistence of special interest items diverts resources from higher
priority programs and erodes the confidence of citizens in Government.
Appropriations bills, especially those considered at the end of the
congressional session, often attract special interest spending items
that could not be enacted on their own.
The President proposes that Congress correct this state of affairs by
providing him and future presidents with a line item veto that would
withstand constitutional challenge. From the Nation's founding,
presidents have exercised the authority to not spend appropriated sums.
However, Congress sought to curtail this authority in 1974 through the
Impoundment Control Act, which restricted the President's authority to
decline to spend appropriated sums. Although the Line Item Veto Act of
1996 attempted to give the President the authority to cancel spending
authority and special interest tax breaks, the U.S. Supreme Court found
that law unconstitutional. The President's proposal would correct the
constitutional flaw in the 1996 Act.
Specifically, the President proposes a line-item veto linked to
deficit reduction. This proposal would give the President the authority
to defer new spending whenever the President determines the spending is
not an essential Government priority. All savings from the line-item
veto would be used for deficit reduction, and they could not be applied
to augment other spending.
Other Budget Reform Proposals
Joint Budget Resolution.--A joint budget resolution would set the
overall levels for discretionary spending, mandatory spending, receipts,
and debt in a simple document that would have the force of law. Under
the current process, the Congress annually adopts a ``concurrent
resolution,'' which does not require the President's signature and does
not have the force of law.
A joint budget resolution could be enforced by sequesters requiring
automatic across-the-board cuts to offset any excess spending, similar
to the BEA. It would bring the President into the process at an early
stage, encourage the President and the Congress to reach agreement on
overall fiscal policy before individual tax and spending bills are
considered, and give the budget resolution the force of law.
Biennial Budgeting and Appropriations.--Only once in the last 25
years have all appropriation bills been enacted by the beginning of the
fiscal year. Because Congress must enact these bills each year, it
cannot devote the time necessary to provide oversight and fully address
problems in Federal programs. The preoccupation with these annual
appropriations bills frequently precludes review and action on
authorization legislation and on the growing portion of the budget that
is permanently funded under entitlement laws. According to the
Congressional Budget Office, the Congress has appropriated about $159
billion for 2006 for programs and activities whose authorizations of
appropriations have expired.
In contrast, a biennial budget would allow lawmakers to devote more
time every other year to ensuring that taxpayers' money is spent wisely
and efficiently. In addition, Government agencies would receive more
stable funding, which would facilitate longer range planning and
improved fiscal management. Under the President's proposal for a
biennial budget, funding decisions would be made in odd-numbered years,
with even numbered years devoted to authorizing legislation.
Government Shutdown Prevention.--In the 24 out of the past 25 years
in which Congress has not finished appropriation bills by the October
1st deadline, it has funded the Government through ``continuing
resolutions'' (CRs), which provide temporary funding authority for
Government activities, usually at current levels, until the final
appropriations bills are signed into law.
If Congress does not pass a CR or the President does not sign it, the
Federal Government must shut down. Important Government functions should
not be held hostage simply because of an impasse over temporary funding
bills. There should be a back-up plan to avoid the threat of a
Government shutdown, although the expectation is that appropriations
bills still would pass on time as the law requires. Under the
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Administration's proposal, if an appropriations bill is not signed by
October 1 of the new fiscal year, funding would be automatically
provided at the lower of the President's Budget or the prior year's
level.
Results and Sunset Commissions.--The Federal Government's ability to
serve the American people is often hampered by poorly designed programs
or uncoordinated, overlapping programs trying to achieve the same
objective. Today, almost 30 percent of assessed programs have been
determined to be either ineffective or unable to demonstrate results.
And the problem of overlapping programs exists in many areas where the
Government is trying to serve.
From the 1930s through 1984, presidents were permitted to submit plans
for reorganizing Federal agencies to Congress that would become
effective unless the plan was disapproved by either House of Congress.
After the Supreme Court decision in INS v. Chadha (462 U.S. 919), the
authority granted to presidents for submitting reorganization plans
under the Reorganization Act (5 U.S.C. 903) was limited by the
requirement of congressional approval through a joint resolution and by
the scope of what could be proposed. This authority was no longer
available to the President after 1984.
Today, proposals to restructure or consolidate programs or agencies so
they can perform better require a change in law and often face long odds
of being enacted due to a cumbersome process that requires approval from
multiple congressional committees.
To address this problem, last year the Administration transmitted the
Government Reorganization and Program Performance Improvement Act, which
would establish bipartisan Results Commissions and a Sunset Commission.
Results Commissions would consider and revise Administration proposals
to restructure or consolidate programs or agencies to improve their
performance. The Sunset Commission would consider Presidential proposals
to retain, restructure, or terminate agencies and programs according to
a schedule set by the Congress. Agencies and programs would
automatically terminate according to the schedule unless reauthorized by
the Congress.