[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]
H.R. 114, THE BIENNIAL BUDGETING AND APPROPRIATIONS ACT OF 2011
=======================================================================
LEGISLATIVE HEARING
(RHRG-112-A)
before the
SUBCOMMITTEE ON
LEGISLATIVE AND BUDGET PROCESS
of the
COMMITTEE ON RULES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
SECOND SESSION
__________
JANUARY 24, 2012
__________
Printed for the use of the Committee on Rules
----------
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COMMITTEE ON RULES
DAVID DREIER, California, Chairman
PETE SESSIONS, Texas LOUISE McINTOSH SLAUGHTER,
VIRGINIA FOXX, North Carolina New York
ROB BISHOP, Utah JAMES P. McGOVERN, Massachusetts
ROB WOODALL, Georgia ALCEE L. HASTINGS, Florida
RICHARD NUGENT, Florida JARED POLIS, Colorado
TIM SCOTT, South Carolina
DANIEL WEBSTER, Florida*
Hugh Nathanial Halpern, Staff Director
Miles M. Lackey, Minority Staff Director
------
Subcommittee on Legislative and Budget Process
PETE SESSIONS, Texas, Chairman
VIRGINIA FOXX, North Carolina ALCEE L. HASTINGS, Florida
ROB WOODALL, Georgia JARED POLIS, Colorado
DANIEL WEBSTER, Florida
DAVID DREIER, California
Towner French, Subcommittee Staff Director
Lale M. Mamaux, Minority Staff Director
------
Subcommittee on Rules and Organization of the House
RICHARD B. NUGENT, Florida, Chairman
ROB BISHOP, Utah JAMES P. McGOVERN, Massachusetts
TIM SCOTT, South Carolina LOUISE McINTOSH SLAUGHTER,
DAVID DREIER, California New York
Katharine Troller, Subcommittee Staff Director
Keith Stern, Minority Staff Director
----------
* Tom Reed of New York was elected to the Committee on April 5, 2011
and served until he resigned on June 14, 2011 to serve on the Committee
on Ways and Means.
C O N T E N T S
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January 24, 2012
Page
Opening Statement of the Honorable Pete Sessions, Chairman of the
Subcommittee on Legislative and Budget Process of the Committee
on Rules....................................................... 1
Prepared Statement of........................................ 4
Opening Statement of the Honorable Jared Polis, a Member of the
Committee on Rules............................................. 5
Opening Statement of the Honorable David Dreier, Chairman of the
Committee on Rules............................................. 6
Statements of Members:
Young, Honorable C.W. Bill, a Representative in Congress from
the State of Florida....................................... 13
Price, Honorable David E., a Representative in Congress from
the State of North Carolina................................ 15
Prepared statement of.................................... 18
Whitfield, Honorable Ed, a Representative in Congress from
the State of Kentucky...................................... 20
Prepared statement of.................................... 22
Ribble, Honorable Reid J., a Representative in Congress from
the State of Wisconsin..................................... 31
Prepared statement of.................................... 34
Stivers, Honorable Steve, a Representative in Congress from
the State of Ohio.......................................... 36
Prepared statement of.................................... 39
Statement of Witnesses:
MacGuineas, Maya C., President, Committee for a Responsible
Federal Budget, and Director, Fiscal Policy Program, New
America Foundation......................................... 42
Prepared statement of.................................... 45
Lilly, Scott, Senior Fellow, Center for American Progress.... 49
Prepared statement of.................................... 53
Statements Submitted for the Record:
Conrad, Honorable Kent, a Senator in Congress from the State
of North Dakota............................................ 9
Hastings, Honorable Alcee L., a Member of the Committee on
Rules...................................................... 25
Additional Materials Submitted for the Record:
Joint letter from the Senate Committee on the Budget, dated
October 14, 2011........................................... 10
Letter from the Bipartisan Policy Center, dated April 15,
2011....................................................... 62
Letter from Citizens Against Government Waste, dated April
19, 2011................................................... 63
H.R. 114, THE BIENNIAL BUDGETING AND APPROPRIATIONS ACT OF 2011
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TUESDAY, JANUARY 24, 2012
House of Representatives,
Subcommittee on Legislative and Budget Process,
Committee on Rules,
Washington, DC.
The subcommittee met, pursuant to call, at 10:15 a.m. in
Room H-313, The Capitol, Hon. Pete Sessions (chairman of the
subcommittee) presiding.
Present: Representatives Sessions, Foxx, Dreier, and Polis.
OPENING STATEMENT OF THE HONORABLE PETE SESSIONS, CHAIRMAN OF
THE SUBCOMMITTEE ON LEGISLATIVE AND BUDGET PROCESS
The Chairman. The subcommittee will come to order. I want
to welcome everyone today to our first subcommittee hearing of
the 112th Congress, and I want to thank Ranking Member Hastings
for helping me with his continued assistance for the
subcommittee. I also want to say that I am sorry that Alcee is
not well today and that Jared Polis will be in his stead.
Welcome, and thank you for taking time to be here.
Mr. Dreier. Very sad.
The Chairman. I also want to thank the young chairman of
the Rules Committee, David Dreier, who is an energetic
proponent for biennial budgeting and is a sponsor, the lead
sponsor of this measure that we are considering today. And I
think that as we hear from David and others on this panel, we
will see where this is an idea that not only has great merit
but one which we should be moving forthrightly through this
Congress.
This hearing before the Subcommittee on Legislative and
Budget Process will examine H.R. 114, the Biennial Budgeting
and Appropriations Act of 2011. Biennial budgeting has been a
topic of reform since 1977 in the United States, and we will
see the interest that surrounds that and the ideas which I
believe today make it very important for us to discuss for not
only the success of our budgeting process but the success of
the American people. Perhaps John Adams may have exaggerated a
bit when he said, and I quote, ``But when progress has been
made, it has been because policymakers have absorbed lessons
from past experience and applied them in ways that have
improved our processes for governance.''
Ladies and gentlemen, that is a good quote, and we should
learn from not only the past but also good ideas for the
future. The budget process can be an effective tool and in fact
should be done more effectively. But, as we see, biennial
budgeting alleviates, I think, the burden that this Congress
faces every year to beat multiple deadlines in both the budget
and appropriations processes. That is the question and the
test: Can we make both of these processes work to better our
circumstances?
So the hearing today is going to examine that question. We
have several distinguished Members of Congress, and obviously
outside witnesses, who would choose to make comments and
provide us with policy aspects for this important issue. This
hearing is not intended for the analysis of budget specifics,
funding initiatives or priorities, but, rather, to step back
and to look at the budget process and to look at recent
interaction between the houses of Congress with the executive
branch and to find out where we can be more effective in this
process.
Most of us who are sitting on the dais or testifying this
morning have a fairly established belief that biennial
budgeting will or could be seen as a useful tool. I don't know
whether our fiscal house would be better or worse by its use,
but we want to examine that. But I do know that today marks the
1000th day since the Democratic-controlled Senate has passed a
budget, meaning it is a tough process, and meanwhile Congress
has failed to pass appropriations bills in a timely manner
since fiscal year 1997, which was 15 years ago. Once again,
that tells you how difficult the process is.
Are we at a point where the consensus of this legislative
body is where we no longer should make hard choices to support
the fiscal health of this Nation? That is a good question. And,
obviously, if the process has not worked for 15 years, it is a
question that we should answer. I think we do need to look at
the process and make the hard choices to ensure that our
government works properly.
Do we employ further reforms such as biennial budgeting in
an effort to reverse the course of the last 1000 days? I would
say we should build in some process that works well and that
the American people can count on, as well as the two bodies as
we move forward.
I understand all too well the need for ideological
attentiveness. I do understand that we have and see things from
different lenses and different angles, but at least the current
House leadership has put forward ideas allowing for a
deliberative process.
On January 17th of this new year, Majority Leader Harry
Reid's deputy chief of staff and policy director all but
admitted that Senate Democrats would again not even begin the
work on a budget in the Senate. I think that is a betrayal of
congressional process. I believe we need a clear record that
the American people can have confidence in and that both bodies
should find a way to work together through proper planning.
Most importantly, we must become more efficient as a
government. And I am a cosponsor of H.R. 114 because I believe
that utilizing the same long-term planning, just as I did in
the private sector for 16 years, allows us to prepare more
effectively for the future. If we intend for government to be
effective and efficient, we need to give them not just the
tools, but the money and the authority to work properly.
The Congress cannot direct this country on a day-to-day or
month-to-month existence, focusing not on the best fiscal
practices, but really just on the short-term needs of the two
parties. Longer Federal contracts provide the best opportunity
to save taxpayers' dollars and dedicating more time to
oversight. However, we have effective people in our government
who can manage their business. We need to give them the tools
where they can do that and make long-term decisions in the best
interests of not just the American people but the taxpayer
also.
I believe that at a time of skyrocketing debt and
unparalleled spending, we must look for other solutions. We
must look above the deadlock of partisanship that has mired our
budgetary process, and we must make progress. Biennial
budgeting may be just one of those solutions, and I will commit
that this subcommittee will continue to pursue not only this
idea but other ideas or plans that others, Members of Congress
or those outside of Congress, have.
I am looking forward to listening to our colleagues and
experts so that I can hear their testimony. And obviously I
want us to know that Chairman David Dreier has pushed this idea
for many, many years, and he today has made sure that he would
make himself available for any remarks and to help us to
understand his great idea.
[The statement of Mr. Sessions follows:]
Prepared Statement of the Honorable Pete Sessions, Chairman,
Subcommittee on Legislative and Budget Process
The Subcommittee will come to order.
Good morning and thank you for coming to our first Subcommittee
hearing of the 112th Congress. I would like to welcome Ranking Member
Hastings and thank him for his continued assistance as this
Subcommittee moves forward with hearings. I would also like to thank
Chairman Dreier who is an energetic proponent for biennial budgeting,
and is the sponsor of the measure we will be considering today. I hope
he finds this hearing informative.
This hearing before the Subcommittee on Legislative and Budget
Process will examine H.R. 114, the Biennial Budgeting and
Appropriations Act of 2011. Biennial budgeting has been a topic of
reform since 1977 in the United States and as we see from the interest
in this hearing, it continues today.
Perhaps John Adams may have exaggerated a bit when he said, ``But
when progress has been made, it has been because policymakers have
absorbed lessons from past experience and applied them in ways that
have improved our processes for governance.'' The budget process can be
an effective tool. But can biennial budgeting alleviate the burden that
this Congress faces every year to meet multiple deadlines in both the
budget and appropriations processes? That is the question that our
hearing today will seek to answer through the testimony of several
distinguished Members of Congress and our outside witnesses.
This hearing is not intended for the analysis of budget specifics,
funding initiatives and priorities, but rather to step back and look at
the budget process, to look at the recent interactions between the
Houses of Congress, and with Executive Branch, to see where we can
provide for more effectiveness.
Most of us who are sitting at the dais or testifying this morning
have a fairly established belief that biennial budgeting will or will
not be a useful tool. I don't know whether our fiscal house would be
better or worse as a result of its use. But, I do know that today marks
the 1,000th day since the Democratic-controlled Senate last passed a
Budget. And meanwhile, Congress has failed to pass appropriations bills
in a timely manner since Fiscal Year 1997; 15 years ago.
Are we at a point where the consensus of this legislative body is
that we no longer should make hard choices to support the fiscal health
of this Nation? Do we employ further reforms, such as biennial
budgeting, in an effort to reverse the course of the last 1,000 days,
or should we resign the budget process to the scrapheap of historical
Congressional reforms?
I understand all too well the need for ideological attentiveness.
But, at least the current House Leadership has put forward ideas and
allowed for a deliberative process. On January 17th of this New Year,
Majority Leader Harry Reid's Deputy Chief of Staff and Policy Director
all but admitted that Senate Democrats would again not even begin work
on a budget. That is a shameful betrayal of a Congressional process
that has a clear track record of driving down wasteful spending through
proper planning.
Most importantly, we must become more efficient as a government. I
am a cosponsor of H.R. 114 because I believe that utilizing the same
long-term planning as the private sector allows us to prepare more
effectively for the future. The Congress cannot direct this country on
a day-to-day or month-to-month existence, focused not on the best
fiscal practices, but by short-term spending bridges. Longer federal
contracts provide the best opportunity to save taxpayer dollars, while
dedicating more effort to oversight.
I believe that at this time of skyrocketing debt and unparalleled
spending, we must look for solutions. We must rise above the deadlocked
partisanship that has mired our budgetary planning in hopelessness.
Biennial budgeting may just be one of the solutions and I will commit
that this subcommittee will continue to pursue any and every proposed
plan that will restore order to our fiscal house.
I am looking forward to listening to our colleagues and experts
testify so I will yield back my time and recognize Chairman Dreier, a
staunch supporter of biennial budgeting during his tenure in Congress,
for any opening remarks he may have.
The Chairman. So at this time I would like to, if I can,
defer to the gentleman, Mr. Polis.
OPENING STATEMENT OF THE HONORABLE JARED POLIS, A MEMBER OF THE
COMMITTEE ON RULES
Mr. Polis. Thank you, Mr. Chairman. I join Chairman
Sessions in welcoming our distinguished witnesses here today.
Thank you for appearing before our subcommittee hearing on H.R.
114, the Biennial Budgeting and Appropriations Act of 2011, so
welcome to our subcommittee. Again, I think this idea certainly
has some merits. I, however, don't believe it is a fix-all or
somehow remedies all the problems we have with our budgetary
process; and certainly while it has advantages, it also has
disadvantages, and I look forward to exploring those here
today. And many Members will benefit from this information
because I think it will be a close call between the advantages
and the disadvantages that we will explore over the course of
this hearing. Ultimately, it doesn't solve the primary issues
with the dysfunction around our budgetary process. It doesn't
mean that it is not or can't be a constructive step in its own
right. Obviously if this body wanted to, we could agree to a
budget in 1 day or 1 week, but the budget process by its very
nature is intensely political. We bring different values to
that discussion, and we have vociferous debates about the
merits of our respective budgets.
Even under this proposal in the off years, Congress would
still be required to make necessary changes, consider
supplemental spending, and would continue to argue over
authorizations and other revisions within the budget. So, too,
the fundamental challenge that this Congress has to balance the
budget is not affected one way or the other by this particular
proposal, and I would hope that Congress and perhaps even the
subcommittee can, in fact, take up reforms that would lead to a
balanced budget and not just more predictability over time and
some of the other factors that this affects.
If both parties want to work together to ensure a smooth
budget process, they can do so now. They could also do so under
this proposal. This does not in any way, in my opinion, lead to
a better outcome with regard to budgeting. But, again from a
predictability perspective and other factors, we look forward
to exploring both the benefits and the costs of this particular
approach.
We know that in a Federal budget process, we have a
political debate, and making the Federal budget biennial won't
stop those debates. It won't necessarily reduce our workload.
It will, for better or worse, transfer some power to the
executive branch, which would have additional leeway during the
off years, and that is a theme to explore here.
We have ample evidence from the States which we will look
forward to discussing during the hearing as well. It is my
understanding that 19 States have a biennial process, some of
which only have a legislature that meets biennially; others
have a legislature that meets both years, but the budget
process is only biennial. And we will look forward to receiving
and being the beneficiaries of some of the learning from those
States that have both processes.
My home State of Colorado has an annual budgeting process,
but we will look forward to hearing about the evidence from the
States about whether this leads to less time spent on
budgeting, less overhead for budgeting, a better budget, a more
balanced budget, et cetera.
We really should be discussing the ways to use a Federal
budget to create jobs, order our economy, and balance the
budget, and I believe some structural changes to our budgetary
process are needed to lead to a better outcome. Again, this
discussion today should be an interesting one. I look forward
to receiving the testimony about whether our budgetary process
should be annual or biennial, and I am hopeful that we can
subsequently engage in a discussion of some of the more serious
issues concerning our lack of success in balancing our Federal
budget and in getting the House, the Senate, and the President
on one page. I thank the chairman for his time, and I yield
back.
The Chairman. I thank the gentleman from Colorado not only
for his comments, I recognize he has private sector experience
where he has seen the attributes of not only necessary and
early budgeting but also perhaps an opportunity to have an open
mind that he has. Today I am also honored to have the chairman
of the full committee, a man who is dedicated to making sure
that we follow not only regular order, but have ideas that are
shared among not just our colleagues but really the general
public as well, and I would like to recognize the gentleman for
such time as he would wish to----
Mr. Dreier. Do you want to recognize Ms. Foxx first?
The Chairman. I would. I will go to the gentlewoman from
Grandfather, North Carolina, the gentlewoman, Ms. Foxx.
Ms. Foxx. Thank you very much, Mr. Chairman. I agree with
you that we should defer to the chairman of the full committee.
I have no comments. I would be happy to hear from Chairman
Dreier.
OPENING STATEMENT OF THE HONORABLE DAVID DREIER, CHAIRMAN OF
THE COMMITTEE ON RULES
Mr. Dreier. Thank you very much, Mr. Chairman, and let me
say this is a very interesting perspective, sitting where I am
right now. I have never sat in this chair before in my life,
but it is nice to be here. And I want to just make a couple of
very brief comments.
I thank you, Chairman Sessions, and Mr. Polis. I think that
for the record we should say that Mr. Hastings, whom we are
sorry is not well, the ranking member of the subcommittee, is
an enthusiastic supporter of this issue, and I am----
Mr. Polis. Would the gentleman yield for a moment?
Mr. Dreier. I am happy to yield.
Mr. Polis. I am not sure that that characterization is
correct. I think he, too, like myself, has an open mind, but I
would not--I have not received word from the ranking member
that is a strong supporter of this initiative.
Mr. Dreier. Well, I have. I have received that word, if I
could reclaim my time, and I have been told that Mr. Hastings
is an enthusiastic supporter of the notion of biennial
budgeting. And obviously if he were here, he could speak for
himself, and so anyway--but if I could proceed, I just, in
thinking about this issue, I am here because of a couple of
appropriators. One, the former chairman of the committee who is
sitting before us, and the other a former member and chairman
of the Subcommittee on Health and Human Services, Mr. Regula.
Mr. Young and Mr. Regula approached me probably a decade
and a half ago when we were talking about the issue of biennial
budgeting, and I was surprised because traditionally there has
been opposition from members of the Appropriations Committee on
this issue, believing somehow that going to a biennial process
undermines the sword of Damocles, the power over the purse, as
Madison put it in Federalist number 48, to do it on an annual
basis, and that is the only way to adequately do oversight.
When these two great appropriators, Chairman Young and Chairman
Regula, indicated to me that they believed not only could it
save money but it would enhance the ability for the
Appropriations Committee to do greater oversight on this
issue--and if you look at the 1974 Budget Impoundment Act, I
ran for Congress just actually three years after the 1974
Budget Impoundment Act was put into place. And if you look at
what has happened since that time, Democrats and Republicans
alike recognize the budget process itself is broken. Steps need
to be taken. And we all know the overused Einstein quote: The
definition of insanity is doing the same thing over and over
and over again, expecting a different result.
But the fact of the matter is, how many times since the
establishment of the 1974 Budget Impoundment Act have we
successfully been able to complete the entire budget and
appropriations process? Very, very rarely has that happened.
Now, I will say that I understand that there is a wide
range of views. I have read the opposition. I just last night
read the study from the Center on Budget Policy, I have read
from the Council of State Legislatures, there has been a mixed
view from that Laboratory of the States on this. Some States
have gone from annual to biennial, some have gone from biennial
back to an annual process, and so I think that it is important
to have an open mind on this.
I think it is also important for us to realize that there
are a number of people who have been opponents in the past and
are now enthusiastic backers. Ed Whitfield and Charlie Bass and
lots of other people, lots of Democrats have joined working
together on this issue in the past. We worked with Pete
Domenici, the former chairman of the Budget Committee, and you
remember, Ed, those meetings we had repeatedly with Chairman
Domenici as we were working to pass this measure--and you do,
too, Bill--in the early part of this decade. Actually it was
May 16th of 2000, we got over 200 votes, the highest number of
votes we have ever gotten on any budget process reform measure
on the House floor when we offered this as an amendment 12
years ago this coming May. And one of the strong opponents of
biennial budgeting has been the current chairman of the Senate
Budget Committee, Kent Conrad. Kent Conrad has done a 180-
degree. He and I have had several discussions in which he said,
I was a strong opponent of biennial budgeting, but I believe
that it is absolutely essential for us to move towards a
biennial process if we are going to have a chance to tackle the
challenges that Mr. Polis has correctly raised that need to be
done.
Obviously, job creation and economic growth are very, very
important. Working towards fiscal responsibility is important.
Our constitutionally mandated responsibility of congressional
oversight is critically important, and so there are so many
things that I believe we can do. Biennial budgeting is not a
panacea to all the ailments of society. I am the first to admit
that. But I do believe that these, exploring new ideas--I don't
know that we are going to end up with a complete, complete
process that is biennial. Maybe we begin with incremental steps
on this. Maybe that is a first step because States have had a
mixed view on this. But I do believe that it is time for us to
really get off the dime and move ahead because of what we
recognize. I mean, Virginia is wearing the 1000 days button,
Pete talked about the fact that we have gone 1000 days without
action in the Senate.
You know what? We all have responsibility for the problems
that have taken place. I mean, I happen to think that this past
year we have done pretty well. We passed a budget. We have
tried our doggonedest to get the appropriations process
through, but with our hands tied it has been difficult for all
of us. So I want to express my appreciation to Bill Young and
to Ed Whitfield, whom I know are both here, Mr. Chairman, as
proponents of this. And my very dear friend David Price is not
as enthusiastic on this issue, I know, as a member of the
Appropriations Committee, but we very much wanted to hear from
him. We are going to hear from Reid Ribble, who is a member of
the Budget Committee and has embraced this notion as well, and
Mr. Lilly is here, and I know we are going to have other
witnesses.
We wanted to have both perspectives, and so you have put
together what I think will be an interesting first subcommittee
hearing that we have had in this Congress, and I appreciate
that and look forward to hearing from our witnesses, Mr.
Chairman. Thank you.
The Chairman. Chairman Dreier, thank you very much. I think
that there are perhaps--and if we had given you another 10
minutes, I am sure you would have alluded to it--I think the
American public has a say in how we are seen, that we should
understand that the public needs to have confidence in what we
do. And secondly, managers of the government, the business of
all the agencies, they need the assurance that Congress cannot
only hear from them, but give them the necessary tools to act
efficiently.
Obviously, the vice chairman of this subcommittee, the
gentlewoman, Ms. Foxx, has a dynamic and distinguished
background in the free enterprise system as well as government,
and I want to thank her for not only being here today but
lending her time and talent to this effort.
Without objection, I would like to enter into the record
two statements, one from the gentleman Kent Conrad and a joint
letter of Patty Murray and Jeb Hensarling. Without objection,
that will be entered into the record.
[The statement of Senator Conrad follows:]
[The joint letter from the Senate Committee on the Budget
follows:]
Prepared Statement of the Honorable Kent Conrad, a Senator in Congress
From the State of North Dakota
I want to thank Chairman Dreier and Ranking Member Slaughter for
inviting me to submit testimony to the House Rules Committee on the
subject of biennial budgeting.
Throughout my tenure as Senate Budget Committee Chairman, I have
been focused on ways we could improve and reform the congressional
budget process. For years, I opposed reforms that involved moving to a
biennial budget, because I felt the federal government, like any large
business or organization, needed to establish a budget each year. But I
now believe the time for biennial budgeting has come.
This past fall, I held a hearing focused on biennial budgeting.
Based on testimony at that hearing and further discussions with Budget
Committee Members, both Democrats and Republicans, Ranking Member
Sessions (R-AL) and I sent a letter to the Joint Select Committee on
Deficit Reduction recommending a switch to biennial budgeting. I am
submitting a copy of that joint letter and request that it be included
in the Committee record for this hearing.
My reason for supporting biennial budgeting is clear. The current
budget process is simply not working. It has become increasingly
difficult to pass and conference a budget resolution, particularly
during election years. Year after year, we face continuing resolutions,
omnibus bills, supplementals, and, increasingly, threats of shutting
down the government. At the same time, we see far too little oversight
of federal agencies and programs. Biennial budgeting won't solve all of
these problems. But it could help.
It is important to remember that Congress has effectively moved to
biennial budgeting already. In fact, since 1998, budgets have been
passed in only two election years--in 2000 when Senator Domenici was
Chairman of the Senate Budget Committee and 2008 when I was Chairman.
Moving to biennial budgeting would allow Congress to spend more
time on oversight. Under the current system, as soon as the budget
process ends for one fiscal year, the next year's process has begun.
This leaves little time for Congress to focus on authorizations and
oversight, or to examine mandatory spending and tax policy with the
rigor that these parts of the budget require. Biennial budgeting would
appropriately shift Congress's attention to longer-term budgetary
issues and the oversight that is critically needed in this era of
constrained federal resources. It would result in more accountability
from the Executive Branch--ensuring that scarce federal resources are
being used efficiently and effectively.
Moving to biennial budgeting could also result in a reduction in
the use of continuing resolutions and omnibus bills. And it would allow
for better long-term planning by federal agencies and programs.
Several variations of biennial budgeting have been proposed. As
Senator Sessions and I noted in our joint letter, we believe the most
effective biennial budgeting framework would include the following
elements: In odd-number years, the President would submit a two-year
budget and Congress would pass a two-year budget resolution. Congress
would focus on authorizations and oversight when not budgeting. The
Budget Committees would conduct performance-based reviews of federal
programs. These reviews would examine discretionary and mandatory
spending programs, as well as tax expenditures and other revenue-
related policies. And the Budget Committees would issue a report and
other materials in the off year detailing the findings and conclusions
of the Committee, including recommendations regarding underperforming
federal programs.
The Senate Budget Committee did not have agreement on whether
appropriation bills should be enacted on one- or two-year cycles, or a
combination of one- and two-year cycles. However, many members of the
Committee support biennial appropriations as well as biennial budgets.
As I noted, biennial budgeting won't solve all of our budget
problems. Ultimately, the nation's long-term fiscal imbalance will only
be solved with a bipartisan, comprehensive, and balanced deficit and
debt reduction agreement. But biennial budgeting could make a positive
contribution toward fiscal discipline. And there is growing bipartisan
support in both the House and Senate for changing to a biennial budget
cycle.
Again, I want to thank Chairman Dreier and Ranking Member Slaughter
for inviting me to submit testimony on this critical budgeting issue.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. At this time I would like to acknowledge and
welcome the first panel that we have, obviously three
distinguished Members of Congress, as Chairman Dreier had
alluded to. Perhaps they come with agreement or not, but they
come with ideas, and this subcommittee hearing today, and what
we are trying to do in this process is to hear from people who
are deeply engaged in that process.
As a former member of the Budget Committee, I have my own
opinion, but today we are going to look at those who have their
opinions based upon vast service to this United States
Congress. And I would like to welcome Congressmen Bill Young,
Ed Whitfield, and David Price as they come to testify today.
And by way of introduction, Chairman Young, thank you for
taking time to address this important issue. You were the last
chairman of the Appropriations Committee to oversee a balanced
annual budget. That is important. And those who have a steady
hand on that wheel understand how hard that is. He is also
cosponsor of the biennial budgeting bill that is before us
today.
Congressman Ed Whitfield serves on the Energy and Commerce
Committee, and obviously he is a long-time advocate for the
biennial budgeting and has worked with David Dreier to
introduce H.R. 114.
And I am delighted to have David Price, our friend who is a
well respected member of the Appropriations Committee,
currently serving as the ranking member of the Subcommittee on
Homeland Security. Congressman Price is also co-chair of the
Democratic Budget Group. So we welcome all three of you. I
would like to acknowledge the gentleman, Mr. Young.
STATEMENT OF THE HONORABLE C.W. BILL YOUNG, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF FLORIDA
Mr. Young. Mr. Chairman, thank you very much. I think that
it is appropriate that this subject be discussed openly and in
a legislative forum because it certainly has a lot of merit. At
least I believe so. And Chairman Dreier and I have worked
together on this issue now for many, many years, and we don't
see any political advantage or political disadvantage. This has
nothing to do with politics. It has to do with getting our work
done.
Article I, Section 9 of the Constitution makes it very
clear that appropriations bills are must-pass legislation. Too
often we end up not passing an appropriations bill, but we pass
a CR or we lump a lot of appropriations bills into an omnibus
or a mini-omnibus. In my opinion, that is not a good practice,
whether it is a governmental agency, whether it is the Defense
Department--and they would be very big on this issue--or
private business or even in your home. You have got to be able
to plan. You can't just jump from one issue to another when you
are planning your financial stability in your family, your
business, or your government agency.
If appropriations bills don't pass, it is hard to plan.
Now, we have passed 2-year appropriations bills. This is not
something that is new. I would give you this example. In
calendar year 2010 we didn't pass appropriations bills. We
ended up in 2011 and passed most of the appropriations bills
from the previous year on a CR. One of the few exceptions was
the defense appropriations bill. So we actually introduced that
bill, it became part of H.R. 1. It was conferenced with the
Senate in the regular process, and we did pass a good bill. I
want to give my friend and my colleague Congressman Norman
Dicks a lot of credit. He was chairman after Jack Murtha's
untimely death. Norm Dicks was chairman of the subcommittee,
and as usual we worked together to produce a bill. Whoever is
chairman or ranking member, we work together to produce the
defense bill. The problem was that Chairman Dicks had a good
defense bill, but couldn't get it on the floor. Leadership
wouldn't even let him go to the full committee with it. And so
that didn't pass.
So the early part of 2011, we did take up H.R. 1, which was
the defense bill for fiscal year 2011. Then after we completed
that, we began the process for the 2012 defense bill, and we
passed that. We went through the regular order, we went to the
Senate and conferenced with our Senate colleagues. We had a
good bill. We had a very large bipartisan vote in the House and
the Senate, and so we actually did pass in 1 year 2 years of
appropriations for national defense.
With regard to being able to plan ahead, one of the issues
that we have in defense budgeting is you start a project, you
stop a project, you terminate the project. Termination costs
are very expensive. By being able to budget for at least 2
years, you can plan ahead a little better and try to avoid
having these programs that stop-start-stop-start, which, as I
said, are very, very expensive.
Now, there are some who might think the Constitution says,
well, you must appropriate every year. It doesn't say that. To
the contrary, I looked very closely to make sure that my
recollection was accurate, because I read the Constitution on a
regular basis, especially the part about appropriations.
The founders of our great system, our constitutional
system, included in Article I, Section 8 of the Constitution
this language: ``To raise and support armies, but no
appropriation of money to that use shall be for a longer term
than 2 years.'' Now, the founders didn't say you had to do it
for 2 years, but they did say you can't do it for longer than 2
years. This says to me that they made it possible for a 2-year
budget process and for 2-year appropriations bills. So I think
we are on good constitutional grounds to do this, and I think
the effectiveness of a 2-year budget should be pretty much
recognized.
But I would just close on this one point, Mr. Chairman. For
those of us, especially who are appropriators, we get
criticized in the media considerably; well, why did this
happen, why did that happen? This contract really blew out of
proportion or this contract doesn't work.
In order to get the proper oversight, you have got to have
time. Getting a bill written, with all of the hearings, with
all of the process of going to subcommittee, going to the full
committee, going to the floor, and then going to conference
with the Senate, it is very time consuming. Now, if we had a 2-
year process, we could spend 1 year doing the oversight that we
get criticism about for not doing enough oversight. Well, there
are only so many hours in a day. We should do more oversight,
and I would like to do more oversight on the subcommittee that
I chair. If we had a 2-year process, I could spend a whole year
doing oversight and finding out about those problems,
hopefully, finding out about those problems that might come
back to bite us later on. But when your time constraints are a
problem, that is not always possible.
So you could appropriate one year and do a year's worth of
oversight, which in my opinion would be very, very cost
productive for the taxpayer and would make much more efficient
Federal agencies that could plan ahead a little bit more than
they can plan ahead today, especially with the use of so many
CRs and a lot of uncertainty in where we are going.
That is my story today, Mr. Chairman. Thanks for the
opportunity to relate it.
The Chairman. Chairman Young, thank you very much, and I am
sure you are going to stick to the process that you have
outlined because there should be a better result that comes
from that. I want to thank you for taking time to be with us
today to lend your not only insight but the advantages of your
service to this great Nation, and in particular to the men and
women of our military who protect this great Nation every
single day.
The gentleman Mr. Price is recognized.
STATEMENT OF THE HONORABLE DAVID E. PRICE, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NORTH CAROLINA
Mr. Price. Thank you, Mr. Chairman. It was almost a dozen
years ago that I testified before this distinguished committee
about a proposal very similar to the one before us today.
Circumstances, however, are very different. There had been
multiyear budgeting--budget agreements enacted in 1990, 1993,
and 1997--and the economy was doing very well. All this had
produced several years of balanced budgets, and we were paying
down more than $400 billion of this Nation's debt.
Now it is not the same. Following a decade of net zero
economic growth, trillions of dollars in lost tax revenues, two
unpaid-for wars, a necessary but expensive government response
to the great recession, and after a year in which admittedly
worst of congressional budget politics has been on full
display, it is understandable that the idea of biennial
budgeting would once again hold some appeal for Members in
search of solutions to our current woes.
I, in particular, have deep respect for my good friend
David Dreier who has championed this proposal. There is no
question that his concern for the well-being of our institution
is as great as any Member of this House. But I have to say that
I believe this is a flawed remedy, a remedy that might actually
be worse than the disease.
I am, of course, the first to agree that the congressional
budget and appropriations processes have eroded significantly.
The pressures of divided government, a polarized electorate,
the increased use of the Senate filibuster, and the general
subjugation, I fear, of Congress' power of the purse to
partisan political consideration have greatly delayed the
enactment of our annual spending bills and have increased our
reliance on bloated omnibus packages. But biennial budgeting
would do nothing to address the underlying causes of this
dysfunction and would likely make matters worse by weakening
congressional oversight of the executive, by jacking even more
decisions up to the leadership of both parties, and by
increasing our reliance on supplemental appropriations bills
considered outside the regular order.
Most importantly, biennial budgeting would weaken Congress'
power to shape national priorities by conducting effective
oversight of the executive branch. Proponents of biennial
budgeting claim that it would, quote, ``free up Congress to
conduct oversight in the off year.''
Now, that claim is supremely ironic, for the most careful
and effective oversight Congress conducts is through the annual
appropriations process where an agency's performance and needs
are reviewed program by program, line by line. That is
oversight. It is probably the best oversight we conduct. An
off-year oversight would be less, not more, effective, because
it would be, in a word, impotent, further removed from actual
funding decisions.
Supporters also like to note that four recent Presidents,
George W. Bush, Bill Clinton, George H.W. Bush and Ronald
Reagan, all supported biennial budgeting. Why are we not
surprised? Of course they did. If this suggests that the
proposal is not a partisan issue, it should warn us it
definitely is an institutional issue. Of course, Presidents
would support a free pass every other year from a legislative
process that could make or break their agenda, just as they
tend to support the line-item veto. They love it. A ban on
congressional earmarks, they love that, too, and other
challenges to Congress' authority vis-a-vis the executive
branch.
Now, I am aware of the charge that opponents of biennial
budgets are merely defending Appropriations Committee turf. I
am sensitive to that, because I am a senior appropriator. But
the annual work of appropriations serves the entire institution
and its place in the constitutional balance of power. That is
the fundamental truth about appropriations if it works the way
it should, and in one respect it could make the work of
appropriations leaders less accountable. Faced with outdated
and unworkable funding levels for individual programs in the
second year of a biennial appropriation, each Federal
department will be forced to present the Appropriations
Committee with countless requests to reallocate or reprogram
their annual budgets. Typically, those requests are granted or
denied solely by the Appropriations subcommittee chairmen and
ranking members without debate, without amendments, without
votes, without public scrutiny.
Off-year budget problems that could not be handled through
reprogramming requests would necessitate supplemental
appropriations bills. We already enact supplemental bills when
unforeseen emergency needs crop up after an appropriations bill
has been enacted.
Budgeting 2 years in advance can only lead to a greater
mismatch between the country's needs and agency budgets. In
fact, the whole purpose of a biennial budget could be
undermined by the proliferation of supplementals in off-years.
Perversely, we would have replaced the deliberative and
democratic process of annual appropriations with supplemental
bills that are sporadic, rushed, and heavily controlled by
leadership.
In fact, our experience last year should lead us to
conclude, if anything, that the annual appropriations process
might be the best chance we have for the kind of bipartisan
cooperation that will be required to get a handle on our long-
term fiscal situation.
Where the supercommittee failed to come to agreement even
on the basic terms of a long-term deficit reduction package,
the Appropriations Committee produced two year-end
appropriations packages that, while far from perfect, produced
significant budget savings. And they were drafted, considered,
and approved on a bipartisan basis, and both Chairman Rogers
and Ranking Member Dicks are due a great deal of credit for
that.
So for reasons practical as well as institutional, biennial
budgeting isn't any better an idea today than it was a decade
ago. It would be a mistake to allow recent budget disagreements
to lure us toward a supposed remedy that actually would make
the appropriations process less systematic, less flexible, and
less potent. It isn't the congressional budget process that is
in need of repair, it is our collective will to make difficult
and politically costly decisions.
So I urge colleagues to reject the siren song of biennial
budgeting, to redouble our efforts to address the underlying
causes of our long-term fiscal challenges. Thank you.
The Chairman. Mr. Price, thank you very much not only for
your ideas but also your voice today. This subcommittee, as
well you know, the Rules Committee is the sounding board for
Members as part of the process who agree and disagree, and your
testimony years ago as well as your testimony today is
something that I believe we have to take into account. With
that said, we also believe looking at the issue and the idea to
make it better is important. So thank you for taking time to be
with us today.
[The statement of Mr. Price follows:]
Prepared Statement of Congressman David E. Price (NC-04)
A dozen years ago next month, I testified before this distinguished
Committee about a proposal very similar to the one you are considering
today. The circumstances could have not been more different: the
enactment of multi-year budget agreements in 1990, 1993, and 1997,
coupled with a growing economy, had produced several years of balanced
budgets and allowed us to pay down more than $400 billion of the
national debt. The consequences of the George W. Bush Administration's
fiscal policies had not yet been foreseen.
Following a decade of zero net economic growth, trillions of
dollars in lost tax revenue, two unpaid-for wars, and a necessary but
expensive government response to the Great Recession--and after a year
in which the worse of congressional budget politics have been on full
display--it is understandable that the idea of biennial budgeting would
once again hold some appeal for well-intentioned Members in search of
solutions to our current woes. I have a deep respect for my good friend
Chairman Dreier, whose concern for the well being of our institution is
as great and as genuine as any member of this House. But this is truly
a case in which the remedy is worse than the disease.
I am the first to agree that the congressional budget and
appropriations processes have eroded significantly in recent years. The
pressures of divided government and a polarized electorate, the
increased use of the Senate filibuster, and the general subjugation of
Congress's ``power of the purse'' to partisan political considerations
have greatly delayed the enactment of our annual spending bills and
have increased our reliance on bloated omnibus packages.
But biennial budgeting would do nothing to address the underlying
causes of this dysfunction--and would likely make matters worse by
weakening congressional oversight of the executive, jacking even more
decisions up to the leadership of both parties, and increasing our
reliance on supplemental appropriations bills considered outside of the
regular order.
Most importantly, biennial budgeting would weaken Congress's power
to shape national priorities by conducting effective oversight of the
Executive Branch. Proponents of biennial budgeting claim that it would
``free up'' Congress to conduct oversight in the off year. That claim
is surprisingly ironic, for the most careful and effective oversight
Congress conducts is through the annual appropriations process, when an
agency's performance and needs are reviewed program by program, line by
line. Off-year oversight would be less, not more, effective because it
would be, in a word, impotent, further removed from actual funding
decisions.
Supports like to note that four recent presidents--George W. Bush,
Bill Clinton, George H.W. Bush, and Ronald Reagan--all supported
biennial budgeting. Of course they did! If this suggests that the
proposal is not a partisan issue, it should warn us that it is
definitely an institutional power issue. Of course Presidents would
support a free pass every other year from a legislative process that
could make or break an administration's agenda--just as they tend to
support the line-item veto, a ban on congressional earmarks, and other
challenges to Congress's authority vis-a-vis the Executive Branch.
It is often asserted that opponents of biennial budgeting are
merely defenders of Appropriations Committee turf. As a senior
appropriator, I am naturally sensitive to these charges. But the annual
work of appropriations serves the entire institution and its place in
the constitutional balance of power. And in one respect it could make
the work of appropriations leaders less accountable: faced with
outdated and unworkable funding levels for individual programs in the
second year of a biennial appropriation, each federal department will
be forced to present the Appropriations Committee with countless
requests to reallocate, or ``reprogram,'' their annual budgets.
Typically, those requests are granted or denied solely by the
Appropriations Subcommittee Chairmen and Ranking Members without
debate, amendments, or votes--and without public scrutiny.
Off-year budget problems that could not be handled through
reprogramming requests would necessitate supplemental appropriations
bills. We already enact supplemental bills when unforeseen emergency
needs crop up after an appropriations bill has been enacted. Budgeting
two years in advance will only lead to a greater mismatch between the
country's needs and agency budgets. In fact, the whole purpose of a
biennial budget could be undermined by the proliferations of
supplemental in the off-years. Perversely, we would have replaced the
deliberative and democratic process of annual appropriations with
supplemental bills that are sporadic, rushed, and heavily controlled by
leadership.
In fact, our experience last year should lead us to conclude, if
anything, that the annual appropriations process may be the best chance
we have of the kind of bipartisan cooperation that will be required to
get a handle on our long-term fiscal situation. Where the
Supercommittee failed to come to agreement even on the basic terms of a
long-term deficit reduction package, the Appropriations Committee
produced two year-end appropriations packages that--while far from
perfect--produced significant budget savings and were drafted,
considered, and approved on a bipartisan basis.
For reasons practical as well as institutional, biennial budgeting
isn't any better an idea today that it was a decade ago. It would be a
mistake to allow recent budget disagreements to lure us toward a
supposed ``remedy'' that would make the appropriations process less
systematic, less flexible, and less potent. It isn't the congressional
budget process that is in need of repair--it is our collective will to
make difficult and politically costly decisions. I urge all of my
colleagues to reject the siren song of biennial budgeting and redouble
their efforts to address the underlying causes of our long-term fiscal
challenges.
The Chairman. Our next witness is from Kentucky, a senior
member of the Energy and Commerce Committee, and I want to
thank Mr. Whitfield for his long-term support not only of this
bill, but really working with David Dreier as he has moved
forward on the ideas to make sure that they are well balanced,
that they include not just Appropriations members, but also
those who are in close association with the commerce of this
country to keep it moving forward. There may be lessons
learned, but I want to thank the gentleman and would ask that
he go ahead and present his testimony now, the gentleman Mr.
Whitfield.
STATEMENT OF THE HONORABLE ED WHITFIELD, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF KENTUCKY
Mr. Whitfield. Chairman Sessions, thank you very much, and
Mr. Polis, Ms. Foxx, and my friend David Dreier. This is one of
those issues that people do have very strong views on, and I am
really pleased to have the opportunity to testify on the
Biennial Budget and Appropriation Act of 2011.
I would say that in 1974 when Congress passed the
Congressional Budget and Impoundment Act, which was intended to
give the President and Congress a timeline on which to base a
budget and appropriations bill, that during the 36 years since
that time Congress has met the deadline for completion of a
budget resolution only six times. And just last year the House
passed a fiscal year 2012 budget, the Senate was unable to act;
and of course the Congress before that, that Congress was
unable to act. So we have gone for over 1000 days without a
Federal budget. And I might also say that according to CBO,
Congress has provided $290 billion in fiscal year 2010 for
programs whose authorizations have expired.
Now, I don't see this as a panacea to solve our economic
problems, our unemployment problems, the partisanship problems
that we have in the U.S. Congress. But I do firmly believe in
the discussions that I have had with a lot of people in my
district, recognizing that Kentucky is only one small rural
State, but Congress gets such bad publicity when they do not
finish their appropriation process, when they do not have a
budget, and I genuinely believe that part of the reason people
have such little respect for this institution is the fact that
every time we fail to do this--and we fail to do it
frequently--the national news media totally focuses on the
inability to pass a budget, to finish appropriation bills.
And I had asked my staff, evidently the last time that we
actually finished all appropriation bills in the House and the
Senate, signed by the President, was 1997. We did it in 1995
and 1989. But there is something broken about this system, and
I have the greatest respect for my chairman of the
Appropriations Committee, Mr. Rogers of Kentucky, and Mr. Price
of North Carolina, and all of them who serve on the
appropriation process, but I genuinely believe in my view that
the appropriators drive the Congress.
Now, we all know that leadership can do anything that it
wants to do, and I can't imagine the leadership of the Congress
being any stronger than it has been in the last 6, 7, 8 years,
because the leadership controls everything. But in my view this
gives opportunity--one of the things I find so frustrating, I
have talked to a lot of appropriators, not Mr. Price on this
issue, but talk about how when they are unable to finish their
appropriation bill, they go on an omnibus bill or they go to a
supplemental or whatever, a CR or whatever. Inevitably, since
everyone knows that this bill has to move, all sorts of
authorized legislation is put in there without adequate
oversight, without adequate hearings, and I believe that it
contributes significantly to bad legislation that we pass, bad
changes that we pass without sufficient forethought of the
consequences of it. And if you have--as Chairman Young said,
the people who wrote our Constitution certainly had in mind
that we could go to 2 years if we wanted to, and there is no
question with the complexity of government today, with the
amount of money being involved, I would think the appropriators
would love to have an opportunity to one year focus on budget,
focus on appropriation, and then next year do their oversight,
which would also give the authorizing committees more time
because every single year the whole Congress, the whole
administration, is caught up in the budget process, the
appropriations process. And as I said a while ago, I genuinely
believe that this is a major reason why the American people
have such little respect for the United States Congress as an
institution.
And I know it is not a panacea, but Mr. Dreier mentioned
that in 2000 we did have the vote, and I remember how pleased
we were that Mr. Young, as chairman at that time, voted for the
legislation. The vote was 201 to 217, and I do remember certain
Democrats who were really quite vocal at that time. Mr. Doggett
of Texas was one. Mr. DeFazio was one. I remember Bobby Clement
of Tennessee who is no longer with us. But, I mean, I could
talk about this issue for a long time, as I know all of you
could. And I am delighted that some of the freshmen members are
going to be here testifying today, too, but I do thank the
Rules Committee for providing us an opportunity, because
whether we go to a biennial system or not, I think it is
important for the American people to at least have the debate
and have the transparency of what is perceived to be the
problem by many of us. And with that, Mr. Chairman, thank you
for the opportunity to be here.
The Chairman. Mr. Whitfield, thank you very much.
[The statement of Mr. Whitfield follows:]
Prepared Statement of Congressman Ed Whitfield (KY-01)
Thank you, Mr. Chairman, and thank you, Members of the Committee,
for giving me the opportunity to be here to testify before you today.
As you know, we currently find ourselves in the midst of uncertain
and difficult economic times.
Our challenged budget process, which led us to the brink of a
government shutdown earlier this year, hampers our ability to
effectively solve these economic problems.
While the White House says we are on the road to economic recovery,
families in my District, the First Congressional District of Kentucky,
are still struggling to hold onto their jobs, their home and their
health care.
While the national unemployment rate has fallen to 8.5%, Kentucky's
unemployment rate remains at an alarming 9.4%.
In fact, many counties in my District have an unemployment rate
that is even higher then Kentucky's state average.
Adding to our economic troubles is the national debt, which has
skyrocketed over the past few years, reaching almost $15.3 trillion
today.
In fact, Doug Elmendorf, the Director of the Congressional Budget
Office, said that ``U.S. fiscal policy is on an unsustainable path to
an extent that it cannot be solved by minor tinkering.''
So, in order to maintain our global competiveness it is essential
that we drastically reduce our federal spending.
One way to eliminate wasteful government spending is to reform and
streamline our budget process.
In 1974, Congress passed the Congressional Budget and Impoundment
Act, which was intended to give the President and Congress a timeline
on which to base a budget and appropriations bills.
As we well know, even when followed, the Budget Act has resulted in
an annual rush which results NOT ONLY in a poor process, but also
reduces the amount of time available for careful oversight and
management of existing federal programs.
During the 38 year history of the Budget Act, Congress has met the
deadline for completion of a budget resolution only six times.
Just last year, the House passed a Fiscal Year 2012 budget; however
the Senate failed to act and Congress has gone for over 1,000 days
without a federal budget.
With these procedural problems in mind, I joined Representative
Dreier in introducing H.R. 114, the Biennial Budgeting and
Appropriations Act of 2011.
I started working on biennial budgeting with my friend and
colleague Chairman Dreier back in the 106th Congress, when he offered a
biennial budget proposal as an amendment to H.R. 853, the Comprehensive
Budget Process Reform Act of 1999. The amendment vote was close, 201 to
217, and I haven't stopped supporting the idea since. I am very pleased
that the issue is gaining momentum again.
Specifically, H.R. 114 will require the President to submit a two-
year budget and Congress would consider a two-year budget resolution
and a two-year appropriations cycle.
I believe that a biennial budget cycle will result in better
scrutiny of federal spending and the elimination of wasteful and
duplicative government programs because in one year the House can focus
on making the programs better or eliminating them, and in the next year
the House can focus on the spending levels for those programs.
Such oversight is badly needed. According to CBO, Congress provided
$290.8 billion in Fiscal Year 2010 appropriations for 250 statutes
whose authorizations had expired.
That money should be scrutinized more thoroughly by Congress,
especially if the authorizing committees allowed the authorizations to
expire.
Streamlining the budget process will allow Congress more time to
concentrate on other important legislative issues, such as reducing
overall federal spending and spurring economic growth so that America
will remain globally competitive and our economy will get back on
track.
Thank you again, Mr. Chairman and Members of the Committee, for
permitting me to testify before you today.
At this time, I would be happy to answer any questions you may
have.
The Chairman. And for each of you who have taken time to be
here today, I want to thank you for your words. I also would
note that you have written remarks, and I would ask, without
objection, that those be entered into the record, and I want to
thank you. I would go first to the gentlewoman, the vice
chairman of the committee, Ms. Foxx.
Ms. Foxx. I just want to say that I have learned a lot this
morning from the presentations that have been made by the panel
members. It has been very enlightening, and I want to thank you
all for the effort that you have put into working to improve
the process that we are working under. I think we have a lot of
work to do to educate Members, as well as the public, about our
process and about the challenges that we face, so I just want
to say thank you to you all for what you are doing.
I think, as Chairman Dreier has said, it is important that
we hear all the perspectives that are out there, and I think
that the hearings that this subcommittee is going to hold and
that the Rules Committee will hold also, will help bring to the
fore some important issues that we need to be dealing with.
It is distressing to me that we see the polls that say
Congress is held in such low esteem. I don't think they are
warranted because I think we have great people here on both
sides of the aisle who want to do good things, who come here
with the intention of making the process better and serving the
people that they represent. So I hope that we can do some
things that will improve our status in the eyes of the American
people, because we learn how to do things more effectively. So
thank you, Mr. Chairman.
The Chairman. I thank the gentlewoman. Mr. Polis.
Mr. Polis. Yeah I just have a couple questions for the
panel.
First, I would like to ask Mr. Price, I think one of the
items of discussion is how this proposal changes the balance
between the executive and legislative branch. What powers in
practice do you see as being transferred to the executive
branch if this is--if this becomes the way that we do our
budgets?
Mr. Price. Legally no direct transfer of powers would
occur. Practically and politically, I believe that relaxing on
that second year of scrutiny and oversight and moving to more
and more appropriations bills that are removed from the
subcommittee level and jacked up to leadership would enhance
the power of the party leaders in this institution and probably
also increases the incoming fire from the partisan warfare
outside to the appropriations process, neither of which is a
desired result. That has already gone farther than it should.
And, to the extent that occurs, it also, of course, brings in
the White House, whoever the President is.
The trend toward omnibus bills, of course, does some of
this, and we need to return to regular order. Again, I give
Chairman Rogers and Ranking Member Dicks a lot of credit for
the extent to which we did that this year. Omnibus bills do
this, certainly supplementals do, and certainly the kind of
corrections that the agencies ask for in terms of reprogramming
funds. All involve much more party leadership up here and much
more White House involvement from downtown.
Mr. Polis. Thank you. A question for Mr. Whitfield. You
mentioned that something is broken about the system. I think,
you know, with the statistics you indicated about the relative
rarity of a budget ever being agreed to, I think we all agree
that the system needs to be improved. But it seems to me that,
you know, what is being discussed here today is saying, well,
let's parade our failure less often in front of the American
public. I think you mentioned that perhaps the yearly failure
kind of feeds into the perception of the American public that
Congress is dysfunctional. To show our failure off half as
often, you argued, could potentially help improve the
reputation of this body to get things done.
Isn't it more important, though, to actually enact reforms
that lead to a more successful outcome? Whether that is an
annual or biennial success, isn't that more successful? And do
you see this proposal as leading to a more successful outcome
or just parading our failure less often in front of the
American public?
Mr. Whitfield. I see this proposal as leading us to being
more able to complete our work. I don't view it as displaying
our failures less often. I genuinely believe that this reform
would significantly improve the product of the U.S. Congress
both substantively as well as on the appropriation budget's
size.
I have had a lot of discussions with people at CBO as well
as OMB. And Mr. Price is right; every President in recent
memory supported this proposition, because in my discussions
with OMB, they are talking about how they are so inundated each
year with the appropriation process that they are just swamped,
and if they could do it over 2 years, recognizing sometimes you
have emergencies you have to intervene with, that I just feel
it would free up the Congress. We wouldn't be clogged up every
year with this race to finish the job. So I genuinely believe
it would improve the product of the Congress.
Mr. Polis. Thank you. Mr. Chairman, I would also ask, as is
customary, that we keep the record open for 24 hours to allow
Mr. Hastings to submit a statement.
The Chairman. Without objection, we will hold the record
open. I thank the gentleman.
[The statement of Mr. Hastings follows:]
Prepared Statement of the Honorable Alcee L. Hastings, a Member of the
Committee on Rules
Chairman Sessions, on January 24, 2012, Rules Chairman David Dreier
noted during a Legislative and Budget Process Subcommittee Hearing,
that I was ``enthusiastic'' about his bill H.R. 114, the Biennial
Budgeting and Appropriations Act of 2011.
While I am certainly not opposed to Congress debating the merits of
biennial budgeting, and do not believe that biennial budgeting is
necessarily a bad idea, I do think that its disadvantages outweigh its
advantages, and that it ultimately will not work with a budget as
complex and as fraught with partisanship as ours.
Furthermore, I would beg to differ with my colleague from
California's assessment of my ``so called'' enthusiasm for his
legislation--I am not even a co-sponsor of his bill. During the recent
subcommittee hearing, he made that assertion and I would like the
record to reflect his enthusiasm for his own bill is not shared by me.
Mr. Chairman, I also do not see how we can completely transform the
federal budget process in this manner without first trying out a few
test cases. If we are really serious about biennial budgeting, we ought
to identify a few federal programs we can test this out on for a few
budget cycles, before imposing it on the entire federal structure.
The problem with our annual budget and appropriations debates is
not the timeline, but rather the political leadership. Smoothing out a
few procedures here and there is not going to magically make our budget
debates any easier.
I suspect there is a correlation between interest in biennial
budgeting and the level of partisanship here in the House.
If this body really wanted to, we could agree on a budget in one
day. Or even in one week. But the budget is an intensely political
process and that's not going to change if we do it every year or every
other year. And even in the ``off' years, we would still be required to
make necessary changes, consider supplemental spending, and argue over
authorizations and other revisions.
If Republicans were truly committed to working with Democrats and
the President to ensure a smooth budget process, they would do so.
Rather than tying our hands in convoluted budgetary procedures.
If ensuring a smooth process means that Republicans are not going
to try to eliminate Medicare, or pass tax cuts for the wealthiest
Americans, or threaten to default on our national debt, then by all
means let's pass these reform bills.
But we all know the reality of the situation and that is, nothing
is going to happen. Making the federal budget biennial will not stop
the political debates, will not reduce our workload, and will
ultimately result in a huge transfer of power to the Executive Branch,
which by necessity will have greater leeway with the purse strings.
We ought to be about the business of finding ways in the federal
budget to create jobs, to support struggling Americans, and to ensure
that we are not leaving those with the least in these difficult times
to fend for themselves.
In 1940, 44 states practiced biennial budgeting. This number is
down to 19. It is clear that so many states have abandoned biennial
budgeting over the last decade; you cannot responsibly implement a
meaningful budget two to three years in advance.
In closing, I believe that this budget process gimmickry isn't
going to make the Republican Party any more willing to work with
Democrats and the President on these matters. And therefore, I find
this process completely futile.
Mr. Young. Mr. Chairman, I would like to just add one quick
word. I don't want to parade our failures. That is not what I
am about. I want to prevent our failures. I want to get the job
done. And that is what I think we were all sent here to do. So
parading failures, unless you just want to run against Congress
and say, gee, look how bad they are, I don't do that and I
don't think it is really good politics to do that, but some
people do it. We want to prevent the failures, and to do that
we have to work together.
This is not a political thing. This is not a partisan
issue. I don't have any political interest in how we do this. I
am just thinking of a way to get the job done more efficiently
for the Congress, but also for the agencies that we appropriate
for and especially, in my case, the Department of Defense. That
is one place we just don't want a lot of inefficiencies and
make a lot of mistakes.
The Chairman. Mr. Chairman, I am going to give my comments
in just a minute, but I think I read your text, and those were
just words as opposed to writing them down. But I completely
agree with you, and that is once again why we are here and
perhaps why a man with insight who aims at trying to make it a
better process, we are glad you are here.
I would like to recognize, if I can at this time, the
gentleman Mr. Dreier, the chairman of the Rules Committee.
Mr. Dreier. Thank you very much, Mr. Chairman, and let me
first say that I look forward to reading Mr. Hastings'
statement that he as the ranking member of this subcommittee
will submit for the record. And if I exaggerated his level of
enthusiasm and support, I was under the impression that he was
supportive. But I think that Mr. Young makes a very important
point. I do know that Peter DeFazio and Lloyd Doggett and lots
of Democrats are very, very, very enthusiastic supporters of
this notion. Again, not believing it is a panacea, and again I
think we need to soberly look at this, but I do believe that it
does--it is something that is more than worthy of exploration,
and that is why I appreciate the leadership of this
subcommittee pursuing this with the kind of enthusiasm that you
have.
I think that one of the things that led me to introduce
this beyond the inspiration that I got from Bill Young and
Ralph Regula, Ed Whitfield, and so many others has been the
fact that there is a potential for us to bring about great
savings. And I think it gets to what Mr. Whitfield just raised
on this OMB question. I looked at some numbers here last night
as I was perusing this. According to CBO in fiscal year 2010,
Congress appropriated $290.8 billion for 250 expired laws, laws
that weren't even on the books. And I think that that just
underscores the imperative for this kind of oversight.
And it is interesting as I listen to the two appropriators
at the table, Mr. Price and Mr. Young, who share the same goal,
but obviously, I mean, Mr. Price believes that if we don't do
this annually that we undermine the ability for oversight; Mr.
Young believes that if we could do this on a biennial way, we
have more time and opportunity for oversight. And, you know, I,
like Mr. Price, am a proud institutionalist, and I do think
that there is a valid point to look at this Presidential
support and the struggle between the two branches of
government. I think that is a very, very fair and important
question to raise.
And I used in my opening remarks the sword of Damocles does
in fact--you know, in Madison's power over the purse, which is
the wording that they used, is that undermined? I mean, I have
just come to the conclusion that the executive branch knows
that we do have that power, and the fact that we would expend
that year engaging in even greater scrutiny is something that I
think in and of itself poses a situation which would create
even greater concern and necessity for them to respond to the
oversight questions that are raised.
Now, Mr. Price said that this was not an issue of process,
Mr. Chairman; it had to do with the will, our will. And one of
the things that I found when I first introduced this, again,
nearly a decade and a half ago, was that virtually everybody
acknowledged the 1974 Budget Impoundment Act has been a
failure. And I would just like to ask Mr. Price if in fact he
believes that there need to be changes to the 1974 Budget and
Impoundment Act?
You know, one could infer from the testimony by saying that
this is not about process, but rather our will, one could infer
that you believe that we don't need to make changes. And what I
am trying to do is I am trying to explore and look at ways in
which we can do this.
Mr. Whitfield correctly pointed out that only in 3 years
since the establishment of it, have we gone through and
completed the process without continuing resolutions to keep
the government open. So I guess I would ask the question that
frankly most of my colleagues, Democrat and Republican alike,
have said to me that the system is broken. What do you think?
Mr. Price. I am not a huge fan of the budget process, and I
think in many ways it does not serve us well. I believe,
though, that the heart of the system--the heart of the power of
the purse--remains appropriations. And, I see nothing in the
biennial budgeting proposal that would really change the way
appropriations is working except just to cut the process in
half. In other words, I don't see anything here that would make
it easier to adhere to the regular order in terms of
subcommittee performance, the hearings, the markups, the
reporting and passage of bills. They would still take place in
that same 9-month time frame. There would still be--unless we
address the political divisions and dysfunction--I think that
biennial budgeting would be a formula for once again having the
process collapse in the fall and having to revert to omnibus
bills. They would just be 2-year omnibus bills, not 1-year
omnibus bills. I don't see any way here that the basic
difficulties that we have had would be directly addressed.
Mr. Dreier. What about this notion of--I mean the point
that I made, you know, $290.6 billion, over a quarter of a
trillion dollars, appropriated for 250 programs that didn't
even exist. It would seem to me that if you had that year, that
if the Appropriations Committee as well as the authorizing
committees did realize that to really--as Mr. Young has said so
well--to really hone in on these issues and ensure that we
very, very, very carefully expend each taxpayer dollar would
be--I mean, I remember Ralph Regula telling me about the
potential savings. I mean if we are talking about fiscal
responsibility, the one that Ralph--you remember this, Bill--
used to regularly point to is energy costs. If we had the
ability to have a 2-year process and could expend and could
negotiate contracts over a 2-year period of time versus doing
it annually, the savings to the taxpayer dollars would be
tremendous.
And so I mean you look at these kinds of things that can go
a long way toward helping us achieve this goal, and I think
that process-wise as well as getting to what we all share our
concern about, the lack of fiscal responsibility that has
emanated from this place, would be addressed.
Mr. Price. Just a quick three-part response. First of all,
the system does have the flexibility to allow multiyear
budgeting in certain areas. I think it would be fine to move
toward a more multiyear perspective with our budget
resolutions. And, I think Mr. Young's example is a good one. In
defense areas, with the Corporation for Public Broadcasting,
and certain veterans areas, we have done multiyear budgeting.
And, in those targeted instances, I think there is a lot to be
said for that. But tour current system has the flexibility to
permit that now without a wholesale switch to biennial
budgeting.
Secondly, your point about authorizations is very, very
important. It is a scandal that hundreds of programs are
unauthorized. But, I am not sure what conclusion we draw from
that. Do we go to a different authorization process? In many
ways, as Mr. Whitfield says, appropriations becomes the only
vehicle available to fix difficulties with authorizations. And
believe me, when that is done on appropriations bills, it is
with the assent of the authorization leaders.
You know, appropriations isn't just free-wheeling here and
adding measures willy-nilly to appropriations bills. This is
often, and usually done, in cooperation with the authorization
leaders.
If we are talking about what has bogged down around here,
let's think about the Elementary and Secondary Education Act,
let's think about the transportation authorization. Often it is
the annual appropriations that gives us some vehicle for doing
things we need to do on the authorization side.
And finally, when you talk about what kind of oversight has
clout, I can tell you that oversight has more clout when it is
tied to funding decisions. Many, many times--I will just speak
about the Homeland Security bill here--the way we will deal
with problems we uncover in the hearings or in our inquiries
into agency behavior is to tie appropriations to performance.
We will say this money will not be released until we get a
report on A, B, and C.
Mr. Dreier. See, I would argue that you are not actually
giving up that power, though, because the notion that somehow
the Appropriations Committee is just folding is a preposterous
one, because there still is going to be, even though it doesn't
exist at that moment, you still have that power over the purse,
as you correctly say, which is there. You are just saying it
needs to be done immediately.
And I think what Mr. Young and Mr. Whitfield and I are
arguing is that expending more time on this oversight, while
they know full well that they are going to have to contend with
the question of their funding process through you down the
road, I just--I mean you want it to be closer. We are saying
that to have a little more leeway would actually enhance the
final product.
Mr. Price. Well, all I know is that we have a very full
hearing schedule on the year that we are appropriating, which
is every year.
Mr. Dreier. Right.
Mr. Price. I don't think it would be or could be much
fuller in the off year. And in answer to your question, of
course it makes a difference. If these agencies know that you
are writing the bill right that minute, and that there are
going to be some things in that bill that they care about in
terms of conditions they have to meet, performance they have to
display, or that money simply isn't going to be there, you bet
that is more powerful, much more powerful than the implied
notion that you might do something about it a year from now.
Ms. Foxx. Would the gentleman from California yield?
Mr. Dreier. Sure. I am happy to yield.
Ms. Foxx. I thought about saying this even before
Congressman Price raised the issue of the Elementary and
Secondary Education Act, but it certainly makes it even more
relevant. I have advocated for a long time that we could do a
much better job of oversight of Federal expenditures. And I am
a huge fan of accountability and having results-oriented
projects. We could do that if we studied the Constitution a
little more and do what Mr. Young was saying, go back to the
Constitution and devolve to the States most of what we do in
the Federal Government now. We would have plenty of time to do
oversight if we weren't doing education, health care, and all
of those things that are not mandated for the Congress to do by
the Constitution.
So if we want to have lots of time to do oversight and lots
of time to have accountability, then simply get out of doing
the things the Constitution doesn't tell us to do. And the
Constitution does it. We have got the enumerated powers.
And then as an added emphasis, the Founders put in the 10th
Amendment. And they said if we didn't tell you to do it, don't
do it. It is up to the States, it is up to the individuals.
So, Mr. Price, I think the example you used is a perfect
one to say to us we have no business doing this. We will never
be able to give proper oversight as long as we are trying to
run every aspect of everyone's lives in this country. And that
is not what we should be doing. If we would do what the
Constitution tells us to do, and not go beyond that, or
extraordinarily carefully go beyond that by things that compel
us that can't be done by the States, we would be fine in doing
our oversight.
Thank you, Mr. Chairman. I am sorry, I have to go away for
another meeting, but I will return.
The Chairman. I thank the gentlewoman.
Mr. Dreier. Let me just reclaim my time and thank my friend
for her thoughtful contribution. And to say, in conclusion, Mr.
Chairman, for this very important panel, and I look forward to
hearing our other panelists in just a few minutes, that I am--
again, I have read about the opposition and concern that has
been raised. And I think that there are valid concerns. And Mr.
Polis is absolutely right; this is in no way, and I said this
repeatedly myself, a panacea. I mean we need to look at this
very soberly.
I am willing, I don't know that all the cosponsors of my
legislation would go along with this, but I am more than
willing to look at the idea of exploring something that again
opponents of biennial budgeting have said is worth exploring,
and that is maybe building on what Mr. Young talked about in
his testimony, maybe having two or three Cabinet-level agencies
of the Federal Government proceed with a 2-year process to see
how it works. Because I know, again, I read the study from the
National Council of State Legislatures, and at the end they go
through a litany of those States that have gone from biennial
to annual back to biennial, biennial back to annual, and they
have gone back and forth, back and forth. And some have liked
it, some haven't liked it. Some have moved just recently to
biennial over the last several years.
So I mean again, I think that the idea of experimenting
with this idea that has emerged from the laboratory, as the
framers put it, that being the States, is something that I
would be willing to support to ensure that we address some of
the valid concerns that Mr. Price and others have raised.
So thank you very much for that, Mr. Chairman. Thank you
again for having this. This is a very important panel, not that
others aren't, but to have the wisdom of these three gray-hairs
is something that I value and appreciate. Thank you, Mr.
Chairman.
The Chairman. Thank you, Mr. Dreier. I earned all the gray
hair I have got. I too have an opinion about this, which I will
give in 1 minute or less, I hope. And that is I believe that
this process has given lots of good ideas. I am for
transparency; that the American people would see benefit of
what Congress is there and to get their job done. And I think
we have heard the gentleman, Mr. Dreier, talk about there would
be seen as no advantage to any party, but rather the advantage
to the American people. I believe that they should have
confidence in our system. This is simply an experiment. That is
all constitutional government is. And if we dwindle down or
take advantage of that trust that the public has put us in,
then we in fact give away our advantage of a constitutional
government, the ability to have people have confidence not just
in what we do, but the outcome therein.
When I was in business I used to have a vision statement
and a mission statement. I haven't spent a lot of time figuring
it out on this, but I believe the vision statement should be
with respect to this that it be for no one's advantage or
disadvantage; however, that the American people would have
confidence in our work product that we could deliver on a
timely basis. And a mission statement should be something to
enable the government to spend the necessary and needed
resources to run the government efficiently and to follow the
Constitution.
And I think that we have to transcend where we are, and
look at perhaps in a better, brighter way, how we can fix not
just ourselves, but also look at ourselves at the same time and
say we are not in this for power, we are not in this for power
against the President, we are not in this for power against any
agency, but rather the benefit of commonsense utilization of us
working together in at least three sides. There are Republicans
and Democrats, and then there is just those that vote ``no'' on
everything. And I think we have to find a way to let the
American people know that we have accepted this job.
All serious daring begins from within us. And that is why
you are here. You still share the belief, I am sure, the same
reason, Bill, when you were elected, David and Ed, and I know
David Dreier shares this. The same spirit that brought him to
Congress resides deep within him today to make the American
people a little bit better.
I want to thank each of you for your time today, and I will
dismiss this group, this panel at this time.
I would like to at this time welcome a second panel made up
of two freshmen who are not only Members of Congress in the
spirit of constitutional authority, but come, I believe, with
the spirit of what brought them here still very alive and burns
deeply within them.
I would like to, if I can, to have the gentlemen come to
the table. First, Congressman Reid Ribble is a Member of the
House Budget Committee and sponsor of H.R. 3577, the Biennial
Budget and Enhancement Oversight Act of 2011, who along with
our great Budget Chairman, Paul Ryan from Wisconsin, will push
this idea. His legislation shares many of the goals that I
believe Mr. Dreier's bill has before us today.
And also the gentleman, Congressman Steve Stivers, who is a
distinguished Member of this body, is a member of the Financial
Services Committee, a bright young voice about ideas that come
from those back home who elected us. He is focused on debt and
government spending in his first term, and he is a leading
advocate for H.R. 114.
Without objection, your prepared remarks will be submitted
to the record. And I welcome your testimony at this time. I
would refer first to the gentleman, Mr. Ribble.
STATEMENT OF THE HONORABLE REID J. RIBBLE, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF WISCONSIN
Mr. Ribble. Okay. Chairman Sessions, Ranking Member Polis,
and members of the committee, thank you for providing me the
opportunity to testify today on my legislation, the Biennial
Budgeting and Enhanced Oversight Act, number H.R. 3577. I
introduced this bipartisan bill in December with Chairman Ryan,
Chairman Jeb Hensarling, and several of my colleagues on the
Budget Committee, including Representatives Marlin Stutzman,
Todd Rokita, and Frank Guinta. This bill is part of the Budget
Committee's broader process reform effort, and it currently has
30 cosponsors.
Before I discuss my bill, I would like to commend Chairman
Dreier, Representative Whitfield, and Representative Timothy
Johnson for their work on this matter and for putting forth two
remarkable biennial budgeting bills. I am a proud cosponsor of
both of them. The three of us have taken slightly different
approaches with our legislation, but we all support what is
important: moving to a biennial budgeting process in order to
fix our broken budget system. I look forward to working with
these two gentlemen and others on the committee to reform how
the Federal Government spends hardworking taxpayer dollars.
I came to Congress just over a year ago with a cynical view
of this institution. Having spent a year here, I can report
that my view hasn't changed much. If anything, I am even a bit
more cynical today. It has now been 17 years since Congress
passed all 12 of its appropriations bills under regular order.
We continue to budget and appropriate Federal dollars through
continuing resolutions and omnibuses, failing to allocate
taxpayer money in a deliberate way. With our national debt over
$15.2 trillion, we in Congress cannot afford to treat
Americans' tax dollars with such callous disregard.
The budget process is the perfect platform to have an
honest discussion with the American people about our spending
priorities. But that discussion does not happen with a broken
budget process. To put us on the right track, the Biennial
Budgeting and Enhanced Oversight Act will help control spending
by ending the ad hoc budgeting process, while at the same time
increasing oversight of how taxpayer dollars are spent.
Under my bill, a biennial budget and all appropriations
bills covering both years in the biennium would be passed in
the odd-numbered years. Congress would conduct oversight and
pass multiyear authorization bills in the even-numbered years.
Authorization bills would cover no less than 2 years. The basis
for my bill was the Spending Deficit and Control Act of 2009,
as introduced by Chairmen Ryan and Hensarling. This bill
contained a number of budget reforms, including a biennial
budget.
In my bill, the Biennial Budgeting and Enhanced Oversight
Act, a timetable for the biennial budget and appropriations
bills would follow the timetable for the Congressional Budget
Act of 1974, with Congress being required to complete a
concurrent budget resolution by April 15. This would give
appropriators, I believe, the necessary time to complete their
work.
The budget timetable is one of the primary differences
between my bill and Chairman Dreier's, and Representative
Whitfield's bill, as well as Representative Johnson's bill,
both of which will push the date back for Congress to finish
action on the biennial budget from April 15 to May 15. Last
year, the House passed our budget on April 15, meeting the
required deadline. While I am sure we on the Budget Committee
wouldn't mind having more time to do our work, I believe it is
equally important to give the appropriators ample time to
complete the 12 appropriations bills. By budgeting and
appropriating in a calmer, wiser way, we could end the threat
of government shutdowns, with which we all are too familiar.
The Biennial Budgeting and Enhanced Oversight Act would
help agencies and businesses to plan their future as well. A
biennial budget will allow agencies to plan for multiyear
programs and projects, reducing procurement costs. This
approach will help businesses that work with the various
agencies and need the certainty that comes from a stable budget
environment. The Federal Government has become adept at
creating uncertainty for businesses over the years, and this
needs to stop.
Prior to coming to Congress, I owned my own roofing company
for over 30 years. While I owned my small business, I crafted
3-year budgets because I needed to plan for the future. By
doing this, I was able to buy goods in an orderly manner and
reduce costs. I would have had a difficult time succeeding had
I not taken the time to project what my costs would be in the
coming months and years and then plan accordingly. If I had run
my business the way the Federal Government spends money,
stumbling from budget to budget, the uncertainty would have
decimated my company. This is why I decided to introduce the
Biennial Budgeting and Enhanced Oversight Act, to try to bring
commonsense budgeting practices to Congress.
I thank you once again for inviting me to testify at this
hearing today. I look forward to working with members on the
committee on this very important issue, and I will be happy to
answer any questions you have.
The Chairman. I appreciate the gentleman from Green Bay
being here this morning and lending his private sector
experience to his job and performance in Congress. I want to
thank you very much.
[The statement of Mr. Ribble follows:]
Prepared Statement of Congressman Reid J. Ribble (WI-08)
Chairman Sessions, Ranking Member Hastings, and Members of the
Committee, thank you for providing me with the opportunity to testify
today on my legislation, the Biennial Budgeting and Enhanced Oversight
Act, numbered H.R. 3577. I introduced this bipartisan bill in December
with Chairman Paul Ryan, Chairman Jeb Hensarling, and several of my
colleagues on the Budget Committee, including Representatives Marlin
Stutzman, Todd Rokita, and Frank Guinta. This bill is part of the
Budget Committee's broader process reform effort, and it currently has
over 30 cosponsors.
Before I discuss my bill, I would like to commend Chairman Dreier,
Representative Ed Whitfield and Representative Timothy Johnson for
their work on this matter and for putting forth two remarkable biennial
budgeting bills. I am a proud cosponsor of both of them. The three of
us have taken slightly different approaches with our legislation, but
we all support what is important--moving to a biennial budgeting
process in order to fix our broken budget system. I look forward to
working with these two gentlemen and others on the Committee to reform
how the federal government spends hardworking taxpayer dollars.
I came to Congress just over a year ago with a cynical view of the
institution. Having spent a year here, I can report that my view has
not changed. If anything, I am even more cynical today. It has now been
17 years since Congress passed all 12 of its appropriations bills under
regular order. We continue to budget and appropriate federal dollars
through continuing resolutions and omnibuses, failing to allocate
taxpayer money in a deliberate way. With our national debt over $15.2
trillion, we in Congress cannot afford to treat Americans' tax dollars
with such callous disregard.
The budget process is the perfect platform to have an honest
discussion with the American people about our spending priorities, but
that discussion does not happen with a broken budget process. To put us
on the right track, the Biennial Budgeting and Enhanced Oversight Act
will help control spending by ending the ad-hoc budgeting process,
while at the same time increasing oversight of how taxpayer dollars are
spent. Under my bill, a biennial budget and all appropriation bills,
covering both years in the biennium, would be passed in the odd-
numbered years. Congress would conduct oversight and pass multi-year
authorization bills in the even-numbered years. Authorization bills
would cover no less than two years.
The basis for my bill was the Spending, Deficit, and Control Act of
2009 as introduced by Chairmen Ryan and Hensarling. This bill contained
a number of budget reforms, including moving to a biennial budget.
Under my bill, the Biennial Budgeting and Enhanced Oversight Act, the
timetable for the biannual budget and appropriation bills would follow
the timetable in the Congressional Budget Act of 1974, with Congress
being required to complete a concurrent budget resolution by April 15.
This would give appropriators, I believe, the necessary time to
complete all of their work.
The budget timetable is one of the primary differences between my
bill and Chairman Dreier's and Representative's Whitfield's bill and
Representative Johnson's bills, both of which push back the date for
Congress to finish action on the biennial budget from April 15 to May
15. Last year, the House passed our budget on April 15, meeting the
required deadline. While I'm sure we on the Budget Committee would not
mind having more time to work, I believe it is equally important to
give the appropriators ample time to complete the 12 appropriations
bills. By budgeting and appropriating in a calmer, wiser way, we could
end the threat of government shutdowns, with which we all are all too
familiar.
The Biennial Budgeting and Enhanced Oversight Act would help
agencies and businesses to plan for their future as well. A biennial
budget will allow agencies to plan for multi-year programs and
projects, reducing procurement costs. This approach will help
businesses that work with various agencies and need the certainty that
comes from a stable budget environment. The federal government has
become adept at creating uncertainty for businesses over the years, and
this needs to stop.
Prior to coming to Congress, I owned my own roofing company for
over 30 years. While I owned my small business, I crafted three year
budgets because I needed to plan for the future. By doing this, I was
able to buy goods in an orderly manner, reducing my costs. I would have
had a difficult time succeeding had I not taken the time to project
what my costs would be in the coming months and years and then planned
accordingly. If I had run my roofing company the way the federal
government spends money, stumbling from budget to budget, the
uncertainty would have decimated my company. This is why I decided to
introduce the Biennial Budgeting and Enhanced Oversight Act, to try to
bring common-sense budgeting practices to Congress.
I thank you once again for inviting me to testify at this hearing
today. I look forward to working with Members on this Committee on this
important issue, and I will be happy to answer any questions you may
have.
The Chairman. Mr. Stivers.
STATEMENT OF THE HONORABLE STEVE STIVERS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OHIO
Mr. Stivers. Thank you, Mr. Chairman. I would like to thank
Chairman Sessions and Ranking Member Polis for allowing me to
testify. I would also like to thank Chairman Dreier and
Representative Whitfield for their work on H.R. 114, and
Representative Ribble for his work on H.R. 3577. I am a
cosponsor of both bills.
Just as a matter of background, before I came to Congress I
was a State senator for 6 years in Ohio, where we have a
biennial budget. I was vice chair of the Finance Committee in
Ohio, which has the same jurisdiction as the Budget Committee
and the Appropriations Committee rolled into one in Ohio. So I
have some background working with biennial budgets. And I can
tell you from a perspective as somebody who has done it in a
State that is fairly large and complex with a $50 billion 2-
year biennial budget, it can be done, and there are advantages.
And I have looked at some of the background from some of
the folks who oppose this as well. And they talk about some of
the planning and other problems. I did not experience any of
those. I did experience that it worked. Ohio balanced its
budget. Ohio made tough choices.
You know our current budget process here in Washington is
broken. And I think that is evidenced by the fact that we
haven't had a budget for a thousand days. We have been
operating under continuing resolutions for multiple years. And
the last time that the budget process worked as it was
scheduled to was fiscal year 1997. So just as a way of looking
back, that was 15 years ago, and I was 31 years old at the
time. All of us were a lot younger back then. But that is a
long time for the process not to work.
Even before I came to Congress, I advocated for a biennial
budget. And I think that the bill that Chairman Dreier and
Representative Whitfield sponsored would fix the process,
although not be a panacea.
As I said, in Ohio we have a biennial budget. Nineteen
States have biennial budgets, including Ohio and Texas, that
are fairly large and complex. You know, in the first year of
that biennial budget, Ohio passes the budget. In the second
year, the Finance Committee focuses on oversight. There usually
is a budget corrections bill which we would probably call a
supplemental here. But in fact, it does give the Finance
Committee in Ohio time to do the oversight of the important
State agencies. And that would happen here at the Federal
Government as well. And, you know, just like at the Federal
Government, that State budget is broken into two separate
annual budgets, but we passed the biennial budget and it works.
I think it has created sound fiscal policy in Ohio, and it has
worked for decades.
It does decrease the opportunity for politics to override
policy decisions, in my opinion. And I think H.R. 114 and 3577
lay out that fiscally sound path. I don't think it would shift
power between the administration and the Congress.
I would love to address Congressman Polis' question, if he
gets a chance to ask it again. And I think if we look at the
record of Congress as an institution since the Budget Act of
1974, Congress has only met its responsibility under the Budget
Act 17 percent of the time. And so I don't think that we could
make it much worse than it is today.
You know, I did think it was interesting, Chairman Dreier
talked about maybe a hybrid system for a little while to put
them next to each other. I think that would be an interesting
thing. And I think there is nothing wrong with trying some new
things. When you are succeeding 17 percent of the time, in any
other business that would not be good. In the business of
government, unfortunately, we put up with it far too long. But
I am glad to hear that there are a lot of people really looking
at it.
I do think that biennial budgeting does lead to business
savvy, just as Representative Ribble talked about, because you
can lock in longer term contracts. I know that that was
discussed on the previous panel, too. And I think that gets
better deals for taxpayers in the long run. It does require
looking ahead a little further. I know the biennial budget
group talked about they were concerned that you would have to
look ahead 30 months. Well, I would be concerned about any
entity that can't look forward 30 months.
And will it be perfect? No. In the budget projections that
we have in Ohio in our experience are not perfect, but they
work, and at the end of the biennium we balance the budget. So
it does require some work in the second year, but, you know, I
don't think the appropriators would have a problem with working
in the second year. They are doing it now, and I think we can
make that work.
You know, the other thing that some people bring up is, you
know, there might be a loss of ability to respond to natural
disasters, national security, or other events. There is nothing
in a biennial budget that prevents supplemental or budget
correction bills, just like we do today. I don't think they are
any more prevalent than they would be in an annual
appropriations process.
And of course let's again bring out that the annual
appropriations process is broken. We end up with continuing
resolutions more often than not, where we don't actually set
the budget priorities, but we just continue on the spending
decisions of previous Congresses. And I don't think that is
good for the people or our Republic. So while I don't think
biennial budgeting is a panacea, I do think it is a step in the
right direction, and I think it can give us another tool in the
toolbox that will work. It has worked in the States, including
my home State of Ohio, where I have experience. And I hope we
will continue to look at it in some form or another.
And I don't claim to come here with all the answers to all
the questions, but if we can work together I think we can find
a process that will actually be good for our Republic, good for
our taxpayers. And I don't think it is about not parading our
failures in front of folks, I think it is about moving toward
success. And that is what we should be about. And when our
success rate is 17 percent on budgeting, successfully
completing the required tasks in the 1974 Budget Act, that is
nothing to brag about. And I think there are things we can do
to fix it, and I think this is one.
Again, I want to thank the chairman and the ranking member
for allowing me to testify. I look forward to answering any of
the questions that any members may have.
[The statement of Mr. Stivers follows:]
Prepared Statement of Congressman Steve Stivers (OH-13)
I would like to thank Chairman Pete Sessions (R-TX) and Ranking
Member Jared Polis (D-CO) for holding this hearing on biennial
budgeting today, and appreciate this discussion on ways we can make the
Federal government fiscally sound. Additionally, I would like to thank
Chairman David Dreier (R-CA) and Representative Ed Whitfield (R-KY) for
their leadership on H.R. 114, the Biennial Budgeting and Appropriations
Act of 2011.
Since coming to Congress last year, I have been working with
Chairman Dreier and Representative Whitfield to reform our budget
process and explain the merits of biennial budgeting and how this
reform would improve the current Congressional budget process.
The current budget process is completely broken. As you may know,
today marks 1,000 days since the Senate has passed a budget. This
failure and Congress' inability to pass appropriations legislation in
regular order shows that the Congressional budget process needs reform.
Fiscal Year 1997 was the last year Congress passed appropriations in
regular order.
Before coming to Congress, I advocated for a biennial budget. As an
Ohio State Senator and Vice Chair of the Finance Committee, I had time
to extensively review the state budget given the two-year budget cycle.
Ohio is one of 19 states that operate on a biennial budget, and Texas
and Ohio are two examples of large states with complex budgets that use
biennial budgeting.
In Ohio, the biennium begins on July 1 of odd-numbered years and
ends 24 months later on June 30. Within a biennium are two separate
fiscal years, each beginning on July 1 and ending on June 30. This two-
year budget process in Ohio has allowed for long-term planning of state
programs and has decreased opportunities for politics to override sound
fiscal policy decisions.
In the current budget process, Congress has only met its
responsibility to pass appropriations in a regular order 17 percent of
the time--17 percent is simply not good enough. Under H.R. 114,
Congress would be spending the second session of Congress reviewing
expired laws, and conducting aggressive oversight of federal programs
to ensure taxpayer dollars are spent efficiently and effectively.
Biennial budgeting is also business savvy, as it allows the federal
government to procure contracts with private companies and venders in
two-year increments potentially increasing the federal government's
ability to lock in the best deal for the taxpayer.
I also want to point out that when Congress needs to act in
response to a natural disaster, national security threat or war, H.R.
114 also includes provisions that will allow Congress to act swiftly.
Mr. Chairman, I believe the Ohio experience with the two-year
budget has been successful, and a biennial budget at the federal level
would be a useful tool in our continued efforts to cut wasteful
government spending. Biennial budgeting is not a panacea, but it is a
step in the right direction. Again, I thank the Chairman for this
dialogue as we work to improve the federal budget process.
The Chairman. Your voices, strong as they are today, it is
my hope that you will not have to look back 10 or 12 or 15
years, as our previous panel did, and say I gave testimony 15
or 17 years ago about this idea. I think your ideas are very
appropriate for today. And so keep your words today, and let's
see if we can move this idea along.
Mr. Dreier.
Mr. Dreier. Thank you very much, Mr. Chairman. And let me
just express my appreciation to Messrs. Ribble and Stivers,
both of whom as new Members bring a very important perspective.
The perspective of the private sector that you bring, Mr.
Ribble, is an important one. And as a senator in that
laboratory of ideas, as I mentioned earlier, as the Framers put
it, of a State that has taken this issue on and done so with a
great deal of success is something that I hope we can learn
from here. I would like to think that the legislation that we
put together does allow us to do that, and I appreciate your
support for the idea of our doing what opponents to biennial
budgeting have said we ought to explore, and that is the notion
of taking some incremental steps on the road towards laying the
groundwork to see if in fact it is successful. And some of the
questions that are out there that I recognize are more than
valid can be addressed in some ways.
So I just again thank you both for being enthusiastic,
hardworking, diligent champions of the goal that we all in a
bipartisan way share, and that is to make this institution more
responsive and representative to the will of the people to get
our fiscal House in order, and to do the right thing on behalf
of the people whom we represent. So thank you very much.
Mr. Stivers. And Mr. Price did mention earlier that we do
that in some cases now on multiyear budgeting. We need to do a
better job of doing that I think. And I believe it would work
everywhere. But if we want to look a few places to start and
then compare to see the 2-year process versus the 1-year
process, I think that is a great first step.
Mr. Dreier. Great. Great. Thanks. Thank you, Mr. Chairman.
The Chairman. Good point. Thank you, Mr. Chairman.
Mr. Polis.
Mr. Polis. Yes, just a brief statement. I know that Mr.
Ribble mentioned that his roofing company had 3-year budgets.
And in my private sector experience in the technology sector
and startups, 1-year budgeting is more the norm. Those are
early stage growth start-up companies. Obviously, when you have
larger enterprises that are more predictable, you can move to
multiyear budgeting.
But there is no--just as we have in the public sector
between the States, some States that have 1-year and some that
have 2-year, I think in the private sector as well, you find a
wide array of different kinds of companies. And it usually
makes sense to come up with what best suits that company.
So it is really a discussion for what best suits the
Federal Government. And certainly we all agree it is better to
succeed in the process, whether you do it annually or
biennially. But it has been very informative to hear some of
the merits of doing it biennally. I yield back.
The Chairman. Thank you very much. I want to thank both of
you for not only sharing your ideas, but taking your time in a
very busy day that I know today represents, with the President
of the United States will be before the United States Congress,
a joint session of Congress and the American people to talk
about his priorities for the new year. And perhaps none are
more important than the budget which the President and this
Congress do present to the American people, which lay out the
responsibilities of government to produce things for the
American people.
I want to thank both of you for being here today. I think
you have been value added, and I appreciate you taking time do
this. This panel is now excused.
Mr. Stivers. Mr. Chairman, is there any chance I could
respond to something that Mr. Price said earlier about Homeland
Security in the context that Mr. Polis talked about?
The Chairman. I would welcome the gentleman's comment.
Mr. Stivers. He did talk about when they stood up the
Homeland Security Department, how important it was for some of
that give and take early on.
Mr. Polis just referred to when he started up--was it Green
Mountain Greetings or whatever, I apologize.
Mr. Polis. Blue Mountain.
Mr. Stivers. Blue Mountain Greetings, I am sorry, wrong
color. But startups obviously do require a little more
attention. And annual appropriations on things like Homeland
Security that we are just starting up, I don't have a problem
with. But the Federal Government is a very complex, large
organization that has multiyear budget processes in place for
most of these departments already. So I think moving to a
biennial budget for most of the Federal Government, you know--
the Federal Government is not really a start-up. It is hard for
us to say that after 230 years. But I do think that most of the
Federal Government would be fairly simple to move to a biennial
process, although I certainly understand that there are
opponents who think the benefits aren't there.
But I would love to at least try to move some agencies,
including the Defense Department, which has a lot of issues
with appropriations for technology, and for contracts for
building systems, moving some of those large, more complex
departments to a multiyear, much more stable appropriations
process, I think there would be some real value to starting
there.
Mr. Polis. Could I have more time for a follow-up question?
The Chairman. Sure.
Mr. Polis. Along those lines, aren't there times in fact
when there are savings that can be recognized from the
predictability? I mean when you have contracts that may or may
not go on, and they are kind of artificially across the year,
sometimes there are additional premiums built into work that
others are doing for the Federal Government as a result of 1-
year budgeting? Is that an issue that you see?
Mr. Stivers. Yes, sir. And we have seen that in the Defense
Department a lot, and in a lot of the acquisitions processes.
If it goes across a Federal appropriations year, then usually
there are added costs built in because of the uncertainty. And
in fact, it is public information, you can see that, where the
contractors build in costs because of the uncertainty of the
appropriations years crossing over. So I think the multiyear
process could save some money. And that is not, again, going to
happen in every case, but it could really save some money. So I
appreciate the question.
The Chairman. Perhaps for sure it would stop what the
testimony earlier--the starting and stopping, starting and
stopping, as Congress does its job, and with more
predictability to the success. Good. Thank you very much. I
want to thank both of you, and dismiss this panel at this time.
Our third panel that we have today is from a distinguished
group that we have tried to gather together here for this
hearing. And I want to welcome Maya MacGuineas and Scott Lilly.
Maya MacGuineas is president of the Committee for a
Responsible Federal Budget, and director of the Fiscal Policy
Program at the New America Foundation. Her areas of expertise
include the budget, entitlements, and tax policy. Before coming
to the New America Foundation, Maya worked as a Social Security
adviser to the McCain Presidential campaign. Prior to that, she
worked at the Brookings Institute, Concord Coalition, and on
Wall Street.
And Scott Lilly--who I welcomed earlier when he walked in
today, Scott, welcome. Chairman Dreier and I and Mr. Polis are
delighted that you are here also--is a senior fellow at the
Center for American Progress who writes and researches on a
wide range of areas, including government, Federal budgeting,
national security, and the economy. He joined the Center in
March of 2004, after 31 years of service to this body, the
United States Congress. He served as a clerk and staff director
for the House Appropriations Committee, minority staff director
of that committee, executive director of the House Democrat
Study Group, executive director of the Joint Economic
Committee, and chief of staff to the gentleman who has just
retired, the gentleman David Obey, who was a regular visitor
here. And I know the Rules Committee is something that you have
seen and enjoyed your experiences with us each time you would
come before this committee. So I want to welcome both of you.
The gentlewoman, Ms. MacGuineas, is recognized at this
time.
STATEMENT OF MAYA C. MacGUINEAS, PRESIDENT, COMMITTEE FOR A
RESPONSIBLE FEDERAL BUDGET AND DIRECTOR, FISCAL POLICY PROGRAM,
NEW AMERICA FOUNDATION
Ms. MacGuineas. Thank you. Thank you for having me here
today. I am happy to testify on biennial budgeting and
improving the budget process overall. I am the president of the
Committee for a Responsible Federal Budget, which is a
bipartisan organization. And our co-chairs are former Members
Frenzel, Stenholm, Penny, and Nussle. And we have a board of
people who have run OMB, and CBO, and the Fed and Treasury.
We also work on something called the Peterson-Pew
Commission on Budget Reform, which came up with a number of
recommendations. In the past we supported biennial budgeting,
along with a lot of other budget reforms. Recently we have been
focusing on how to come up with fiscal targets, filling that in
with policy plans and triggers in order to keep the budget
reforms in place.
So I share the belief, as I assume many of you do, that our
budget process certainly needs major reform, that an improved
process can both help force and enforce improved actions, and
that process reforms are not a silver bullet with regard to
fixing our looming fiscal crisis. So the only way we are going
to fix that is if we put in place a large and comprehensive
fiscal plan which addresses our major fiscal challenges. And
the sooner we enact such a plan, the better it would be for the
fiscal and economic well-being of the U.S.
But not only are our policies off track, our process is
certainly broken and a mess. Deadlines exist in name only in
many instances. Appropriations continuously fall behind
schedule, leading to unwanted mini- and omnibuses. Gimmicks are
regularly employed. And these problems only exist for the small
portion of the budget that lawmakers annually mark up. The vast
majority of our spending and tax policies are really on
autopilot, leading to a system where our national priorities
are neither fully thought out nor fully funded.
So today's hearing is specifically on biennial budgeting,
which we support. Biennial budgeting would give Congress
additional time for evaluation and oversight. Fixing our fiscal
problems will require going through our spending and tax
policies with a fine-tooth comb and determining what works,
what could work better, and what does not work.
In addition to giving additional time, Congress would have
more of an ability to conduct the type of needed oversights and
work them into the budget process. Right now we collect an
awful lot of information through evaluation and oversight, but
it isn't really incorporated into the entire budget process. So
in a time of limited resources, this will all become essential.
And we just cannot afford wasteful spending when we are being
forced to cut back on priority spending and increase revenues.
A longer process would also provide more of the stability that
we certainly need in our budgetary environments.
We should also consider--and this is something we have
recommended in our recent reports--multiyear budgeting, in that
right now the country really does need a fiscal plan that will
get us to sustainable debt levels. That is going to take
certainly a decade, if not more, to bring us back to, say, the
neighborhood of the mid-sixties debt to GDP, and then over time
back to our traditional levels of below 40 percent of GDP.
Given that so much of the purpose of putting in place a
multiyear plan is to reassure markets, and provide economic
stability, you need to know that any budget reforms that we put
in place will actually stay on track. And so we want to find as
many ways to make these reforms credible and enforceable, and
provide the needed stability and security to the markets, to
businesses, to households, and to policymakers.
We also know that we are going to want to put a multiyear
fiscal plan in place immediately, and allow many of the changes
to phase in more gradually. So you put them in place now, you
budget for them, but you give them time to make changes.
So we basically, bottom line, have always supported
biennial budgeting. We think that in many ways 2 years would
help recognize the shortcomings.
I am very encouraged to hear in the discussion today the
openness of sort of trying this out in incremental or different
ways and seeing if it works. Because I don't think anybody
thinks this is going to be the cure-all to any of the budgetary
problems, but it certainly has the ability to make
improvements, particularly in the oversight area. And giving
that a try in some areas makes an awful lot of sense to me.
I also find something very appealing about an idea that
does have widespread bipartisan support. And I have had the
chance to testify in the Senate as well, and seeing how many
Members have come on board to this idea. And I think there is
something to be said for moving forward with things that do
have bipartisan support in this very tough area of budget and
fiscal reforms.
So I would conclude by reiterating how much of our current
budget process is really failing the American people. We have
nearly a dozen short-term continuing resolutions, we have had
them over the past 2 years. This is no way to inspire
confidence in Washington's ability to effectively govern at a
time where we so desperately do need to have confidence that we
can. The instability doesn't even stop there. There is still no
consensus on other budgetary matters such as expiring and
expired tax extenders, the doc fix, the AMT, the payroll tax
holiday, the sequester, the tax cuts. We need to find a way to
put more stability into this process, along with the necessary
budget improvements for the fiscal situation.
So there is no question that when it comes to the budget
there is an awful lot of work to be done. And I applaud the
committee and the sponsors of this legislation for looking into
biennial budgeting as one of those possible improvements. Thank
you for inviting me today.
The Chairman. Maya, thank you very much.
[The statement of Ms. MacGuineas follows:]
Prepared Statement of Ms. Maya C. MacGuineas
Good morning, Mr. Chairman and members of the Committee. Thank you
for the opportunity to testify today on the important topic of fixing
the budget process. It is a privilege to appear before the committee.
I am the President of the Committee for a Responsible Federal
Budget. Our Co-Chairs are Bill Frenzel, Jim Nussle, Tim Penny and
Charlie Stenholm, and our Board is comprised of many of the past
Directors of the Office of Management and Budget, the Congressional
Budget Office and the Chairs of the Federal Reserve Board and the House
and Senate Budget Committees. I was also a member of the Peterson-Pew
Commission on Budget Reform, which spent three years developing a
collection of recommendations to reform the budget process, which can
be a helpful component in overcoming our fiscal challenges. The
Commission released a plethora of papers and two reports--Red Ink
Rising and Getting Back in the Black that focused on the need to adopt
multi-year budgetary targets, automatic triggers as well as many other
budgetary reforms.
I share a belief with many of you and other members of Congress
that (1) our budget process needs major improvements; (2) an improved
process can both help force and enforce better policies; and (3)
process reform is not a silver bullet with regard to fixing our looming
fiscal crisis, but it can help. The only way to fix that is to put in
place a large, comprehensive fiscal plan addressing our major fiscal
challenges, and the sooner we enact such a plan, the better it will be
for the fiscal and economic wellbeing of the United States.
Our budget process is just not working. Deadlines exist in name
only; appropriations continuously fall behind schedule leading to
unwanted mini and omnibus legislation, and gimmicks are regularly
employed. And these problems only exist for the small portion of the
budget that lawmakers annually mark up and decide. The vast majority of
our spending and tax policies are on autopilot, leading to a system
where our national priorities are neither fully thought out nor fully
funded.
The Committee for a Responsible Federal Budget and the Peterson-Pew
Commission have crafted a number of budget reform recommendations,
which we call the 3-Ts of Targets, Triggers and Transparency, which we
believe would enhance the current budget process. Among these are:
Setting a medium-term debt target and a glide path of
annual debt and savings targets to achieve it.
Using broad-based budget triggers with no programmatic
exemptions to ensure that targets are met.
Following the enactment of a deficit reduction plan to
stabilize the debt, using additional triggers and spending and tax
expenditure caps to keep any plan on track.
Requiring the President to issue annual progress reports
on the effects of all newly issued legislation and progress towards
longer-term fiscal goals.
Presenting new budget allocations compared to the
previous year's levels as well as other baselines Reforming the way for
which emergencies are budgeted.
Presenting tax expenditures by area alongside other
spending in the same categories.
Increasing the level of scrutiny and oversight on tax
expenditures.
Today's hearing is more specifically about the budget reform known
as biennial budgeting, a reform that the Committee for a Responsible
Federal Budget supports. I will also spend some time speaking about an
extension of this policy, multi-year budgeting, something the Committee
finds particularly important right now.
H.R. 114, the specific bill we are discussing today, would move the
discretionary budget from an annual appropriations cycle to a two-year
budget cycle. The most popular argument in support of such a regime
would be the additional time Congress would now have freed up to
conduct other business--from additional program review and evaluation
to a more careful look at our budget and budget programs currently on
auto-pilot. Fixing our fiscal problems will require going through our
spending and tax policies with a fine-toothed comb and determining what
works, what could worked better, and what does not work. If given
additional time, Congress would have more ability to conduct this type
of needed oversight. In a time of limited resources, this becomes
essential--we cannot afford wasteful spending when we are being forced
to cut back on priority spending and/or raising taxes.
Over the years, Congress has mandated that agencies collect a
significant amount of data to develop and track performance metrics.
However, because of the compressed schedule and political realities,
the budget is more and more rushed and legislators have less and less
time to adequately use the wealth of data they receive to better align
the nation's priorities with what programs we choose to fund and to
remove waste and create efficiencies. Moving to a biennial system would
give members an entire year to better conduct program evaluation and
better set spending and tax levels. Members would then have more time
to find under-performing or duplicative programs and eliminate or
reform them, or even find over-performing programs and allocate
additional funds.
At the same time, a two-year cycle would give the executive branch
and its agencies more time to craft their budgets. Adding an additional
year would allow these agencies to operate on a more stable funding
ground, preventing un-needed payments for fear of reductions in the
following year's budget, and by allowing better longer-term planning.
Much like how families and businesses would appreciate the stability
added by having more certain taxing and spending policies (instead of
the current system of short-term extensions, and the fear of looming
tax increases and spending cuts created by the lack of a multi-year
budget), giving additional time would add stability to executive
planning.
Biennial budgeting is not without its flaws, though. There are a
number of fears that go along with this reform, not unlike any specific
reform policy, as this is not a silver bullet. From a legislator's
perspective, moving to a two-year cycle would mean fewer times agency
heads would have to justify their appropriations. Thus, agencies might
be less accountable to Congress.
Additionally, there are real questions as to how biennial budgeting
would work in practice-would the old annual appropriations process
continue to exist because of a surge in supplemental appropriations
bills? This is a real concern and it would require political will to
prevent this from occurring. While supplemental funding bills are
sometimes necessary due to the nature of government and the need to
respond to emergencies or unforeseen events, creating a new budget
cycle to see it exist in name only due to appropriators' desire to stay
on a de-facto one year cycle would in fact only create more havoc and
less stability. This could be avoided through more stringent
definitions of what constitutes emergency spending and what could be
part of a supplemental, or through other budget reforms.
Some of the budgeting work for the next nine years has already been
done through the passage of the discretionary caps seen in the Budget
Control Act. There is, in fact, no need for a top line discretionary
funding level to be agreed to legally if the caps are followed--which
is not to say that this Congress, or future Congresses, cannot change
these levels. Nevertheless, adoption of these levels has removed a
large part of the annual budget work and has added another impetus to
move away from the annual system.
I would now like to highlight what I believe are some of the things
that can be done with an additional year of budgeting within a two-year
cycle.
As intimated previously, one possible use of Congress' time in
light of a biennial regime would be increased oversight and exploration
of federal programs, the tax code and possible waste and inefficiencies
all related to the budget. But beyond that, one possible thing that we
at the Committee have long supported would be to create a budget
concepts commission. Such a commission would look into a number of
issues, including many of those I mentioned earlier in my remarks, such
as better accounting, particularly for long-term spending programs,
fiscal exposures, insurance programs, and programs that are intended to
be pre-funded; improving the construction and use of budget baselines;
capital budgeting and dynamic scoring issues; tax expenditures;
accounting for private securities; leasing and public-private
partnerships; and trust funds. As the nature of budgeting continues to
evolve, a freestanding budget concepts commission would likely prove
immensely beneficial.
A second possible or additional matter Congress could address with
additional time is a more careful review of national priorities.
Congress could conduct a more detailed analysis of our taxing and
spending policies and rank them versus what our national needs. This
budget concept is known in other countries as portfolio budgeting and
would focus on connecting the entire budget and tax programs with their
intended objective. Time would be devoted towards ranking the programs,
and the corresponding national priorities, to reflect what should be
taxed and how much as each objective spending program receives. This
would allow lawmakers more ability to have a transparent budget process
over what the priorities are and how best to achieve them.
Related to this would be using the off years to engage in broader
strategic planning for the nation. As of now, we do not have a national
fiscal roadmap and no broader strategic path. We could use this time to
identify long, medium and short-term strategic goals, take note of
threats and new opportunities, political and economic changes etc. This
would help guide policymakers as they hopefully engage in a more
thoughtful budget process and allow them to take a step back on a
regular basis from the nuts and bolts aspects of crafting a national
budget. Not only do we not have a strategic plan, but we seem to be
operating in the opposite with constant short-term measures, extenders
and a never-ending political fight.
And finally, we could produce topical reports about the fiscal
health of the country. Australia issues its Intergenerational Report
every five years, which assess the implications of current policies
over a longer time horizon and looks at the effects of demographic
change on economic growth. Past efforts in the United States to
integrate generational accounting have been, while technically
challenging, extremely illuminating. A deeper dive into topics such as
the interconnectedness between federal, state, and local budgets or
fiscal exposures due to contingent liabilities and implicit budget
commitments would be immensely useful in identifying, and hopefully
avoiding, future budgetary challenges. Rising Medicaid costs, increased
state pension liabilities and local government bankruptcies have the
potential to impact the federal fiscal outlook-preparing for these
events would lessen the negative consequences and all the federal
government to better respond. Overall, there are numerous beneficial
uses the additional time allowed would provide if the federal
government moved to a two year cycle.
Related to biennial budgeting, but with significantly more upside,
would be to develop a multi-year budget--something I'd like to take
some time to discuss. Right now the country needs a fiscal plan to get
us to a sustainable debt level with the debt on a declining path
relative to the economy. Such a plan will probably need to span a full
decade, which is a reasonable amount of time to make progress on
reducing the debt to around 65 percent of GDP--though beyond that, we
need to continue to make changes to bring it back closer to its
historical level of below 40 percent. Ideally, we would put such a plan
in place immediately and allow many of the changes to phase-in more
gradually both to allow people to adjust as needed and to allow the
economy to continue to recover. But in order to be credible, there has
to be a real commitment to sticking to the plan in subsequent years. So
if such a multi-year plan is adopted as so many fiscal experts have
recommended, the policy then should be to assume that ten-year plan
remains in place for the decade, though with enough flexibility to make
necessary changes along the way to account for external changes that
arise without derailing the overall glide path to an improved fiscal
situation. One of the purposes of putting a plan in place is to
reassure credit markets and rating agencies, and provide families and
businesses with the stability they need to plan, invest, and help grow
the economy. If this plan is seen as something that can be changed
dramatically year-to-year, it will not provide that security or
stability.
Therefore, the Committee for a Responsible Federal Budget has been
focused on how to put a multi-year budget plan in place, as well as
incorporate the necessary enforcement mechanism to keep such a plan in
place. Besides adding the desperately needed stability, multi-year
plans have the advantage of becoming the de-facto budget--they stay in
place until an entirely new multi-year budget is agreed upon. As a
result, our current practice of constantly missing deadlines, endless
extensions, consistent fears of a government shut-down and the specter
of a fiscal crisis, would end.
Nevertheless, I must emphasize that while I am fully in favor of
budget process reforms that move the process in a more positive
direction, they are in no way a replacement for the tough budget policy
choices that have to be made. The Joint Select Committee on Deficit
Reduction failed in making these tough choices, and we now have a $1.2
trillion spending trigger that is set to go off January 1st of next
year--something some are discussing ways to turn off with no
corresponding savings. Turning off the trigger completely would send a
signal to markets and the American people that Washington is unwilling
to make any tough choices--it might even risk another downgrade. Even
with savings equal to the trigger, though, that will be insufficient to
prevent debt from continuing to rise as share of the economy this
decade, and particularly insufficient to stabilize long-term debt based
on our current trajectory. We need to focus on the largest problems in
the budget, particularly entitlement spending on health care and
retirement and an outdated and inefficient tax code, and come up with
larger savings in order to bring the debt down to sustainable levels.
While fixing our broken budget process would certainly help achieve
these goals and are critical to making them stick, the actual decisions
made on policy choices regarding what and how much spending to cut and
what and how much revenue to raise are the only ways to actually fix
the real problems with our budget.
I would like to conclude by once again reiterating how much our
current budget process is failing the American people. We have had
nearly a dozen sort-term continuing resolutions over the past two
years--this is no way to inspire confidence in Washington's ability to
effectively govern or in the fiscal policies that will be in place
going forward. This adds significant instability to the economy at a
time when the recovery is still fragile. But the instability doesn't
stop there. There is still no consensus on other budgetary matters,
such as expiring and expired tax extenders, the `doc fix', the
alternative minimum tax, the payroll tax holiday, the sequester and the
looming 2001/2003/2010 tax cut expiration. If moving to a biennial
system gives the added time needed to focus on important fiscal
policies decisions, then we should move to it. Because we need a better
process so we all can better serve the American people and also help
our economy, we need a multi-year fiscal plan to address our fiscal
issues.
Relying on a more rational timeframe for budgeting is one of the
process changes we believe will have positive results. Accordingly,
while I would urge Congress not to focus on process as a replacement
for policy, biennial budgeting or multi-year budgeting would be a
useful tool in helping to deal with America's significant budgetary and
fiscal challenges.
Thank you again for the to testify today and to the many members of
this Committee for your leadership on these critical issues. I look
forward to your questions.
The Chairman. The gentleman, Mr. Lilly, is recognized.
STATEMENT OF SCOTT LILLY, SENIOR FELLOW,
CENTER FOR AMERICAN PROGRESS
Mr. Lilly. Thank you, Mr. Chairman, Mr. Chairman, Ranking
Member. I guess I am going to try to build on what Dave Price
said earlier. I find some aspects of a biennial budget
attractive, but I find the downsides much more unattractive.
I have got three basic points I want to make. The first is
that biennial budgeting will not help ease gridlock. There are
two basic things that are driving the gridlock that we have in
this institution. I would say that there have been several
references to the last time we passed all the appropriations
bills on time. In 1996, Bill Livingstone was able to get an
omnibus approps bill in at the end of September, which
President Clinton signed in October, a couple weeks into the
fiscal year. The only time in the last 60 years that we have
passed all 13 bills independently and had them signed into law
at the beginning of the fiscal year was in 1994. And I was
clerk of the Appropriations Committee when that happened. So I
know what kind of a struggle it is. And I also have a real
appreciation of how important it is to give agencies the time
to effectively obligate funds.
But having said that, I think what makes it impossible for
the people who run the Appropriations Committee today to meet
that standard is the very deep ideological divide in this
institution. You have got about half of the House and half of
the Senate that want to significantly reduce government, and
another half that do not. And that is not something that
process can solve. I think biennial budgeting simply ups the
stakes and makes compromise more difficult.
Very often when we have had trouble moving appropriations
bills, we agree to a shorter time frame in order to get a
greater consensus and more time to argue, more time to resolve
differences. There is no question in my mind that that is what
would happen with this. A 2-year appropriation is much higher
stakes than a 1-year appropriation. Furthermore, there is a lot
more time to maneuver. If it is for 2 years and you end up
arguing for the first 12 months of the 2 years, you really
don't hit the brick wall. Repeatedly, there has been an attempt
to move the brick walls that the legislative process faces in
order to resolve timing differences. That almost never works
because it is the brick wall that causes Congress to ultimately
act. And I think that is what you face here.
The second thing that I think, and I am amazed that this
discussion hasn't gotten into this, the real problem with
appropriations through the years has not been in the House at
all. Even when the House had less ideological divisions, it has
been the Senate that has failed to act. Time and time again,
Chairman Young and Chairman Lewis were able to move all of the
appropriations bills through the House in the month of June, or
at least by the middle of July, only to have them languish for
months and months in the Senate.
Now, the perfect example of why that happens is the 2010
energy and water appropriations bill. The bill passed the House
overwhelmingly, went to the Senate with broad support,
attempted to bring it up, there was a hold placed on it. The
majority leader tried repeatedly to get the hold lifted.
Finally, at the end of July, just before the August recess,
filed cloture, was able to wait the amount of time and collect
the number of votes to move that bill, which then passed 85 to
7.
Now, if you have that repeatedly you just simply can't get
the bills through. And that is, with the leadership of both
parties in the Senate, the problem they face. They cannot move
legislation. This has always been possible under the Senate
rules. But until the last decade, it was never practiced. So
unless the Senate changes those rules--and I did a proposal
last year for different Senate rules--no matter what the House
does, you are going to end up languishing appropriations bills
and not acting. And it will only be when you have finally hit
the final end that the Senate will turn around and say, okay,
we didn't bring these bills up, but we will agree to an omnibus
that we put together. And I think you just have to face that
problem.
And I think it is destructive to reaching a solution to
that problem to pretend like there is another problem. There
isn't another problem. It is the failure of the Senate rules to
allow the Senate to act in an expeditious manner.
Now, the second thing I think is important here is we don't
have enough information to reliably make intelligent decisions
about spending levels this far out. Let me give you an example.
We are going to start spring training in about 3 weeks with the
pitchers and catchers reporting. That is about the same time
that the budget officers start going to meet with section
chiefs throughout the Federal Government. They are not going to
be working on the budget that will take place or go into effect
at the time of the World Series. They are going to be working
on the budget that will go into effect a year from then. All
right. Much of that money will actually not be spent until the
end of the fiscal year, because that is the way it works. Most
obligations of contracts or grants tend to take place in the
last 3 months of the year. So we are talking about July, August
and September of 2014. Nobody in this room knows what the
unemployment rate is going to be, which programs are going to
show up with serious management flaws in that time frame. And
that is the time frame we are working on now. And we are
talking about extending that another 12 months.
I don't think that is good management. I don't think that
the board of directors of this organization, which is the
Congress, should give the executive branch that much latitude.
Now, I would say the record of the States is much less
mixed than I have heard described in this room. At the end of
World War II, there were only four States that had annual
budgets. In 2000, when the hearing on this legislation was
held, I helped work on testimony, and it had risen to 29
States. It is now 31 States that have moved from biennial to
annual budgeting. So they recognize that they can't see that
far in the future, that they are giving some agencies too much
money and other agencies not enough money to provide vital
services.
Now, the other thing I would say about that is look at what
has happened to the Congress in the last 10 years. The last
time, 12 years ago, when this hearing was held, Congress was
doing a pretty good job holding to an annual budget. In the 10
years that preceded that hearing, we had $100 billion in
supplemental appropriations over that period. Now, that is
probably too much. Half of that was the Gulf War, which was
money that was paid back into the Treasury. But even if you
count the money that was paid back, we only had about $100
billion, which was about 2 percent of all discretionary
spending.
What happened in the decade since then when we were looking
at biennial budgeting? We went to biannual budgeting. In fact,
you might even say we went to bimonthly budgeting. This
committee reported 29 resolutions waiving points of order under
the Budget Act for supplemental appropriations that amounted to
$1 trillion in the last 10 years, about $100 billion a year, 10
percent of discretionary spending every year.
I don't know why anybody would be worried about when the
budget resolution is passed, given the lack of deference that
is given to that resolution in this body. We have just simply
walked right past the budget resolution. We have no plan. We
simply appropriate what we think we need, and then if we need
more we appropriate more. That is the way we have operated.
Part of that I think was just an abuse of process. We should
have gotten away from that. But part of it is that an awful lot
of these things can't be seen that far in the future.
I worked for a long time when I was here on trying to
improve the computer system at the FBI. On 9/11 they couldn't
send digital photographs to their field offices. Now, we put
millions and millions of dollars into that system, and it took
years to get off. And it is still struggling. Those kinds of
programs need to be looked at all the time. And they need to be
funded on a year-to-year basis, and they need to be cut when
they are not ready.
Mr. Young talked about the need to give multiyear funding
to the Defense Department. The best thing that the
Appropriations Committee did the entire time I served on it was
when Jerry Lewis cut the F-22 significantly. Now, it wasn't
that we lost planes, it was we sent a warning shot to the Air
Force: Straighten this program out or you are going to lose it.
And we have a much better plane today because the Congress did
that.
Now, the third thing I want to talk about is the balance of
powers and the role of the Congress. I think that is a much
bigger issue today than it was 12 years ago. I think the
Congress is really failing to play its role under the
Constitution. And I think the deep concern that the Founding
Fathers had that the executive branch could get away from the
American people, and the reason they created a Congress and
gave them this power, was very well justified and justified by
what the executive has done over the last decade.
And if there is one thing that I would like to leave with
the committee it is the fact that the power of the purse is
relatively meaningless unless the Congress knows exactly what
the money that they are appropriating is being spent for. And
today I do not think that is true. I am amazed at how much the
view that the executive branch is a benevolent partner in this
relationship. That has been my experience, and we have had nine
Presidents since I was first an intern on Capitol Hill, and
none of them was anxious to share information with the
Congress. It was hard-fought all the time, (every time,) and it
was particularly hard-fought on programs that were in trouble,
programs where there was a disagreement between the Congress
and the executive branch. And I think it has gotten worse, not
better.
I think the last administration was outrageous in their
willingness to just absolutely deny information that the
Congress deserved. And I wish that I could say there had been
more improvement under this administration.
I am doing a project with somebody outside for the Center
for American Progress on the information available to budget
makers both in the executive branch and the legislative branch.
And one person, a senior staffer on the House Appropriations
Committee, told us in the interview we did, ``I am struck with
how little useful information the committee now gets in making
funding decisions. We are getting more and more pages, there
has certainly been no decrease in the number of pages, but the
amount of useful information is really very little.'' And in
referring to one agency said, ``It is essentially a $10 billion
black box.''
Now, if we have that problem with year-to-year annual
appropriations, I think that problem is going to get a lot
worse. Think about the schedule that you are going to have. A
Member gets elected in November. He comes here in January to be
sworn in. In February he gets the President's budget. In March
and April he has got an opportunity to comment to the
Appropriations Committee. In June he votes on the budget and he
is done. Why does anybody in the executive branch need to call
him after that?
A lot of these people, these agency heads that you are
talking about, they are going to be gone by the time you get
reelected. And you know, my experience is they are not very
cooperative at all, even when they know that you have a chance
to go after them. The fact that we haven't been going after
them often enough means--is the reason that it has gotten
worse, in my judgment.
So I think that there are many areas of reform that we need
to look at. The system clearly is not working the way any of us
would want to, but I don't think the biennial budget is the
road to go down. Thank you.
The Chairman. Thank you very much.
[The statement of Mr. Lilly follows:]
Prepared Statement of Mr. Scott Lilly
There are some of us on both sides of the biennial budgeting issue
who feel that this is exactly what Yogi Berra meant when he said,
``Deja vu all over again.'' It seems that this committee has been
having hearings on this issue since I was a young Hill staffer and
Abraham Lincoln was president. Twelve years ago I worked on testimony
for my former boss, David Obey, for a hearing on a very similar bill
introduced by the gentleman from California who chaired this committee
then as he does today.
Obey argued that state governments were turning away from biennial
budgets because the long time horizon required in a biennial budget led
to faulty decisions about funding levels leading to excessive
appropriations in some instances and loss of needed services in others.
He pointed out that only four states used annual budgets at the end of
World War II but that number had grown to 29 by 2000. Today it has
grown to 31.
The move to biannual budgeting
The biggest change that has taken place in the time frame for
budgeting has been at the federal level. In the decade prior to the
2000 hearing, Congress had been fairly successful in sticking with
annual budgets. During that entire decade less than $100 billion was
provided in spending outside the regular appropriation bills. More than
half of that was funding for the First Gulf War, and that money was
repaid to the Treasury through contributions from other countries. But
even counting the money that was repaid as supplemental spending,
average annual discretionary spending outside of regular appropriation
measures was less than $10 billion per year, or about 2 percent of
total discretionary.
Since the 2000 hearings on biennial budgeting, we have shifted
dramatically away from annual budgets--but toward biannual or one might
even argue bimonthly budgeting. In the decade following those hearings,
this committee reported 29 resolutions waiving budget act points of
order on supplemental appropriations totaling more than $1 trillion. On
average, supplementals have accounted for about $100 billion a year in
spending above the amount permitted by budget resolutions of that
period or a little more than 10 percent of discretionary.
That has had a profound effect on our government. We in effect have
not had a budget process. We agree to not spend above a certain level
until we decide to spend more.
Anticipating resource needs too far into the future
The experience of the past decade also makes it clear that it is
difficult to anticipate needs even within the current annual time
horizon for budgeting.
In about three weeks pitchers and catchers will start reporting for
spring training to get ready for the 2012 Major League Baseball season.
At about the same time, federal budget officers across the government
will start putting together the president's annual budget request--not
for the fiscal year that begins at the end of this baseball season but
a full year after that. Since much of the grant and contract money will
be obligated at the end of that fiscal year--which will be August and
September of 2014--there will be a 33-month time lag between the
beginning of the current budget process and the much of the spending
that it will facilitate. Biennial budgeting will add 12 months to that
timeframe and simply speaking, nobody's crystal ball is that good.
Nobody in this room really knows what employment in this country
will be like in the summer of 2015 or what types of security threats we
will face, or how much the management of troubled programs will be
improved or diminished, or how much revenue the Treasury is likely to
collect.
It denies the Congress, and indeed the American people, the
opportunity to move resources to emerging priorities, and, equally
important, it denies the opportunity to cut funding in a timely way for
programs that are underperforming or are no longer relevant to the
problems we face as a nation.
Protecting checks and balances
Another point that was made in the 2000 Obey testimony was
important then but it is much more important today: the impact that
biennial budgeting has on the ability of Congress to play its role as a
coequal branch of government.
The founding fathers would be incredulous at what now stands on the
banks of the Potomac, the seat of a government of more than 300 million
people--nearly 80 times the population represented by the delegates of
the Constitutional Convention. The real per-capita GDP of those 300
million is about 40 times that of the 4 million Americans who lived in
the colonies at the signing of the Constitution. The government of this
country now both facilitates and regulates commercial activity that is
more than 3,000 times greater than it was in the beginning.
Those who gathered in Philadelphia had two central concerns. First,
that we create an executive vested with the power that would make it
capable of governing a country as large as the 13 colonies and, of
equal importance, that such a government would not become so powerful
that the American people would lose control over it. That is why you
people (members of Congress) occupy this building. You were created to
be a check on the misuse and abuse of power by the executive. And to
the extent that was an issue in 1789, it is an issue that is about
3,000 times bigger today.
The founding fathers gave Congress certain tools that they hoped
would counterbalance the authorities granted to the executive or, if
you will, would make Congress an even match for the president. The most
fundamental of those tools was the power of the purse.
What we are discussing today is a very fundamental change in the
way Congress is able to use that power. It deserves thorough and
serious deliberation.
If I could leave you with only one point to consider today, it
would be that the power of the purse is meaningless if Congress does
not understand how the money the executive branch is requesting is
likely to be spent, and getting that information is never easy. Today
it is harder than ever. We have had nine presidents since I first
worked as an intern in the House of Representatives, and not one of
them was anxious to share his plans or explain his programs. But based
on research I have been doing over the past two years, I am convinced
the quality of information Congress gets has deteriorated
significantly. Some presidents have gone to extraordinary links to keep
Congress in the dark, and I would single out the previous
administration in that regard. At the same time it is often more
difficult to get good information because the agencies themselves don't
have the facts necessary for good management or decisions about
resource allocation.
Among the dozens of budget professionals in both the legislative
and executive branch that my colleague and I spoke with on this matter
in recent years, a House Appropriations staffer made the point
succinctly:
I am struck by how little useful information the committee
now gets in making funding decisions. We are getting more and
more pages. There has certainly been no decrease in the number
of pages. But the amount of useful information is really very
little.
Referring to one agency he had responsibility over he said, ``It is
essentially a $10 billion black box.''
Among those we interviewed we found a clear consensus that the
quality of information now being used in decisions about resource
allocation has deteriorated, and in certain agencies even that is not
available to Congress.
But the founding fathers expected presidents to overreach. That is
why they gave Congress the extraordinary powers that are guaranteed in
the Constitution. But only Congress can assert those powers. It is the
fault of Congress that so much of the federal budget flows into
accounts that are poorly understood and go to programs that lack clear
goals and clear records of performance. It is the fault of Congress
that far less relevant information is contained in the annual budget
justifications submitted by executive agencies today than was true in
the past.
If Congress has allowed its authority to demand the truth to slip
away under a system of annual budgeting, I ask you to speculate on what
would happen if agency heads walked away in October of odd-numbered
years with all the money they need for the next 24 months, as is
proposed by the legislation before this committee? Let's think about
that schedule for a minute. A member is elected to represent his
district in November; sworn in as a member of the House in January;
gets the president's budget requests in February; has a chance to
testify or make recommendations to the appropriations committee in
March and April; and in June votes on all 12 appropriation bills. That
is it. He or she is done for the Congress. Why would an agency head
return a phone call? There will be 20 months before the next budget is
submitted, and a member of Congress will have to get re-elected before
the White House or any agency will likely need anything a member of
Congress--or a committee of Congress, for that matter--can offer.
While Congress may be free to hold hearings during that period,
what is the stick going to be for agencies that don't cooperate? As
former Congressional Budget Office Director June O'Neill testified
before this committee some years ago, ``Congressional oversight that is
divorced from the purse strings may be less effective than oversight
conducted through annual appropriations hearings linked to agency
funding requests.'' I would go further. The most troublesome agencies
in the federal government--those proceeding with policies and
approaches that the Congress disagrees with--will be far less likely to
cooperate once their biennial budget is in place with any hearing or
oversight activity.
Theoretically Congress could extract all of the commitments they
need from agencies before the June deadline for voting on appropriation
matters has past. But that time period passes in a flash. It takes the
better part of a year to put a good oversight investigation in place
and by that time the opportunity to insure cooperation and extract the
penalty for noncooperation will have expired.
Need for reform
I do not criticize this proposal because I am an old-time
appropriator who is happy with the way things are or the way things
used to be. There is plenty wrong with the way the system works and
serious changes that need to be made. Appropriators need to be critics
of the programs they oversee and not cheerleaders for those programs.
The congressional schedule should accommodate the opportunity to have
thorough hearings on each agency's budget request. The committee should
have sufficient staff to fully monitor the justifications of each
agency under its jurisdiction, and staff resources should not be
squandered on earmark management. Oversight committees should discover
the world of oversight--they might like it. The Senate must take steps
necessary to ensure that expired authorizations can be brought to the
Senate floor. CBO has just reported that of the $640 billion in
nondefense discretionary spending in the 2012 appropriations just
enacted, $241 billion, or 40 percent, is not authorized. My belief is
that committees no longer charged with enacting legislation for
programs within their jurisdiction are also no longer engaged in any
real oversight.
There is a lot of work to do but unfortunately, biennial budgeting
will add to our problems, not reduce them.
Biennial budgeting will exacerbate, not relieve, gridlock
I also want to address an argument that seems to be gaining more
currency, an argument that I find somewhat remarkable: that two-year
budgets will help Congress perform its work in a more expeditious and
timely manner. Congress has two serious problems with respect to the
timeliness of its actions on budget and appropriation measures. First,
close to half the members of both houses of Congress favor dramatically
smaller government and about half do not. There are not many people in
between and in the Senate a 60 percent majority is required to break
the deadlock. That issue will not get easier if Congress is voting on a
two-year budget rather than a one-year budget--in fact it is likely to
get harder and the timeframe allowed for its resolution is likely to
grow.
The second problem involves Senate Rules. Even when there is broad
consensus in the Senate, it is often impossible to move appropriation
bills. A good example was the FY 2010 Energy and Water Appropriation on
which a ``hold'' was exercised for much of the summer of 2009. After
the majority leader finally introduced a cloture motion, waiting the
requisite number of days and collecting the requisite number of votes,
the bill passed 85 to 9.
This kind of obstruction has always been possible in the Senate but
for most of our history it never happened. In 1994 the Senate passed a
few appropriation bills in June and most of the rest in July. By
September 30 we finished every conference report and delivered every
bill as separate legislation to the president. But the old rules do not
work with the current Senate membership. It is no longer possible for
the Senate to consider all 12 appropriation bills--and in particular
consider them before the beginning of the new fiscal year. They are now
immaculately conceived in conference some months after the fiscal year
has begun and without ever having been debated by the full Senate.
Lengthen the fiscal year and you simply give the Senate more time to
cogitate about when they will abandon their broken system. It would be
far better to address the real problem.
In 1974 the Senate agreed to an important exception to the rule of
unlimited debate--an exception that we now refer to as reconciliation.
It is time for the Senate to adopt a second exception to ensure the
deliberate and timely consideration of all appropriation measures. All
debate on each measure could be limited to no more than 16 hours--
except that each senator who chose to offer an amendment could do so
even if the 16-hour time limit had been exceeded. Debate on a single
amendment could be limited to one hour.
If this kind of reform were enacted, then most senators would have
more say in appropriation matters than they do presently. The Senate
would be able to pass funding bills and get their bills to conference
committee with the House in time to send final legislation to the
president before the beginning of the fiscal year. And a more orderly
and structured approach to appropriations would free the Senate to
spend more time on other important legislation.
Conclusion
We must be realistic about what we are capable of doing. We cannot
see far enough over the horizon to effectively allocate resources three
years in advance. We can and must restore a system of annual budgeting
that will pose much less risk to the country than experimenting with a
system that will almost certainly weaken a branch of this government
that is too weak already.
The Chairman. You know, you made an analogy to baseball.
Lots of championship playoffs are no longer with stalemate.
They have rules now to where there are no ties, so you can't
tie the game. There are provisions for what you do when you get
into trouble or are unable to make a decision. And I think this
would be one of those where we would give the power back to the
people that need it. And if the process would work well, we
would understand what it is and do it every other year, once
again for the success. Thank you very much, both of you, for
your testimony.
Mr. Dreier.
Mr. Dreier. Thank you very much, Mr. Chairman. Thanks to
both of you for being here. And thanks, Ms. MacGuineas, for
your support of our effort here.
And I would like to just engage Mr. Lilly, if I might, for
a moment. First, I mean I disagree with a number of the
arguments you made. First of all, no one on this panel,
Democrat or Republican, has claimed that the States have been
the perfect example. I don't know how you came to the
conclusion that something is coming from this panel. I went
through the fact there has been an exchange, a give-and-take on
that. And some States have moved from annual to biennial, back
to annual. Some have moved from biennial to annual, back to
biennial.
Mr. Lilly. My only point was that a lot more have moved
from biennial to annual.
Mr. Dreier. I understand that. I understand that. But the
fact is, there has been this fluidity. And we did have an
example of--if you look at large States like Texas and Ohio, I
mean there are a number of large States, and I know there is
this notion that it is only small States that have been
involved in this, and that is not accurate.
The other thing that I would say is I think that you are
wrong in claiming that half of the House and Senate would like
to reduce the size of government and half wouldn't. I find many
Democrats join in the effort to try and bring about--Mr. Polis
being an example--the size and scope and reach of government,
and they want a greater degree of fiscal responsibility.
While I acknowledge we have gridlock here, I mean I think
that there are a number of things that have been done to
address that. Much more needs to be done. As I look at the
studies that have been done by the National Council of State
Legislatures and then the study from the Center on Budget and
Policy Priorities, and I go to their conclusion, the National
Council of State Legislatures actually points to the fact that
there may be enhanced oversight. And there is not a conclusion
on this. And similarly, the other group here, the Center, talks
about the idea of a pilot program.
What reaction do you have to what I threw out here of maybe
just taking and building on what Mr. Young had talked about?
Because I mean, I think I have made it pretty clear I don't see
this as a panacea. I don't believe that all of the budget
challenges that we have, I don't believe that the problems that
exist out there are all of a sudden going to be solved if we do
move to a biennial process. But I do think, again, back to what
I started with, the Einstein quote, we have been doing this
since 1974. You have to acknowledge that the 1974 Budget
Impoundment Act has not worked. And you know, you can point to
the Senate. Listen, Kent Conrad is one who again was a virulent
opponent, I mean to this notion, and he believes that this
would go a long way towards doing it.
I understand the power of the hold and the changes to the
rules in the Senate that need to be addressed. But I do think
that for us to explore this by taking some incremental steps,
which is what I have thrown out on the table as an alternative
to this, is something that would be worthy. What thoughts do
you have of our trying to look at that?
Mr. Lilly. Well, first of all, I think that the multiyear
funding is actually more prevalent than even Mr. Young--I mean,
I can't think of any time that we have funded an aircraft
carrier that we didn't put the whole amount down. And that
money is spent out over 5 years. If you go to the Public
Buildings Office at the General Services Administration, one of
the problems we have right now is this Congress cut back the
leasing funds, and they have multiyear leases, so they are
going to have to pay cancellations simply because of the
changes. I don't think that is a good thing. I think that the
Appropriations Committee ought to recognize that they are going
to face those problems when they do that. It is not going to
lessen when you have a multiyear or a single year.
But an awful lot of procurement is multiyear, an awful lot
of the contracting the government does is multiyear. It is
pretty sensible most of the time, although I think you can find
areas where it is not. One area that I think that this
addresses that could be very important, is when we extend, when
we fail to pass appropriations bills on time and we let it go
into January, February, as we did then, when the money is
finally apportioned by OMB, agencies have about 6 months to
obligate that money. That is not enough time to go through the
regular contracting process. It results in short-circuiting
that. So no-bid contracts become more prevalent. It doesn't
allow as good a review of grant applications as you should
have. And so I think we should try to address that.
My feeling is that the best way to address that is to put
more pressure on the Congress to finish appropriations in time.
The problem with going multiyear on the things that we don't
already, is you tend to start getting into controversial issues
when you do that.
Mr. Dreier. Would there be particular areas that you think
we might be able to explore it that are better than others?
Mr. Lilly. Let me give you an example of an information
problem we have and a problem with implementation. You take the
Bureau of Prisons. Now, that ought to be something, we kind of
know how many cases are in court, we know that the prison
population is likely to grow. We have repeatedly appropriated
less money than we needed there. Now, the reason is the Justice
Department doesn't allow that information to be transmitted
because they don't want to allocate that much money to the
prisons. They want to keep it for initiatives that the Attorney
General has. So we end up with undercutting.
This has been verified both in GAO studies and the
appropriations staff studies, that in fact Bureau of Prisons
knew exactly what they wanted. Sure, we ought to just put them
on pretty much automatic pilot and say this is something that
we could go through down the years. But there is an awful lot
of manipulation of the numbers there. And I think that
manipulation is likely to continue, whether you have biennial
budgets or annual budgets. We fail to anticipate their needs in
an annual budget.
Mr. Dreier. I just wondered if you might think about for
us, as we look at possibly taking an incremental approach to
this, if you might think about areas where we could address
some of your valid concerns. I share your concern about
economic prognostication and the economic conditions for the
future.
I mean, I do think that though some people say we will have
more continuing resolutions if we proceed with the biennial
process, but you know what, we have continuing resolutions now.
If conditions, economic conditions do change and we need to
have the ability to address it, the fact that we have done this
in a biennial way does not undermine the ability to address
those changing economic conditions in the future. So I think
that, you know, I mean it makes it challenging, I will
acknowledge, but I think that there are also tremendous
benefits.
Anyway, I would love to have, you know, any thoughts or
recommendations that you might have, if you could take some
time, and even, you know, with your think tank if you could
explore steps because, again, it has been the opponents who
have talked about the idea of maybe exploring this with an
incremental approach, and if you could do that, I would very
much appreciate it.
Mr. Chairman, thank you very much for allowing me to ask
these distinguished panelists questions, and thanks again for
holding this hearing. I think it has been very helpful, and
again I agree with your argument that we hope very much that we
don't have to, you know, a dozen years from now be dealing with
the same thing, and be able to take some kind of action on
this. Thanks to Mr. Polis, too, for his very thoughtful
exploration of this issue.
The Chairman. Chairman Dreier, thank you for not only your
leadership in this idea for the years that you have been in
Congress, but also the time to apply the proper way to get it
done now so that we can gain the--so the American people can
have confidence in that which we do. Mr. Polis.
Mr. Polis. I want to thank our panelists for being here.
Just one quick question. We all have our kind of pet causes
with regard to the budget, and one that I have long been
interested in is why we have no capital budget at the Federal
level, and that is a separate issue.
Other than that, I am wondering if moving to biennial
budgeting would, in fact, be a first step towards a capital
budget insofar as it would allow capital projects to be
expensed over 2 years under this proposal, rather than all in
the year that they are made. If either of you know the answer.
If not, we can find it elsewhere.
Ms. MacGuineas. I guess I will respond more broadly to the
capital budget, which has always been something that we have
been drawn to, because obviously, I mean, one of the biggest
challenges we have is how do we repurpose our budget so that we
focus more on investment and away from consumption? And part of
the budget process, if it were to reward those changes, it
would make it much easier to do that, because right now you
don't get credit for investing in things that have returns over
time and promote growth. I think the risk has always been, of
course, the political risk, which is that you start counting
everything as investments, which just happens to be your
favorite program. And we have seen this in so many ways, that
something that is pro-growth in times when the economy is good
suddenly becomes stimulus in times when the economy is bad. So
I think that is the trade-off.
I am not sure that the expensing would be altered in terms
of biennial budgeting because that would have to do with the
tax laws. But do you know? I think that is a tax law issue more
than it is the budgeting window.
Mr. Lilly. Yeah, I agree. I mean, I certainly think there
has been a very destructive bias against investment in the
Federal budget, and as entitlements grow and so forth, the
appropriations process is squeezed down. That is one reason I
think you hear so many complaints about the uncertainty of
Federal budgeting, is that the small part of the budget which
is discretionary spending, particularly domestic discretionary
spending, absorbs all of the desires for cuts, and that really
cuts into investments.
The question with the capital budgeting is, which
investments are you going to call investment? I mean, is
highway construction more of an investment than NIH research?
And, you know, I would like to see something that is fairly
broad and deals with intellectual capital as well as physical
capital. But I also think Maya is right, that it is very hard
to define.
Mr. Polis. I would submit that there are ways that this is
done in the private sector, and no matter where we draw the
lines and how we do it, it is likely to lead to a better
accounting of investment than how we do it now, which
effectively denies the possibility of investment and treats
investments and capital expenses as expenses, and obviously
there is a debate about, as you said, where to draw the line.
But, again, most methods of accounting that the private sector
uses in this regard would--are better than the current version
currently used by the Federal Government.
I will yield back to the gentleman, yield back the balance
of my time.
The Chairman. Thank you very much. I want to thank not only
the gentleman, Mr. Polis, for stepping in very ably today to
represent Mr. Hastings, him bringing to the table his thoughts
and ideas, his time that he has given us today to make sure
that this hearing before the Rules Committee is done in a way
that would bring stature to the idea, the opportunity for us to
push it forward.
Obviously our panel today brought not only the expertise,
but I think, brought some ideas about what we need to do to go
mature the idea, what the intended impact would be. Don't
answer the question, but the question came up in my mind: Does
the Federal Government even follow tax law? If we had to live
by--if the government had to live by the laws that everybody
else did, I don't know the answer; whether the government
follows accounting standards and practices that would be
expected by those that they perhaps have within their--our
owners. I brought up that question. So Maya, perhaps some day
what I will do is I will ask you to come up here and we will
explore that idea also.
Ms. MacGuineas. Sure.
The Chairman. I want to thank this entire panel for being
here. Ms. MacGuineas, Mr. Lilly, your statements, we would like
to take them, without objection, we will include those, not
just your words, but whatever you brought, your statements.
Mr. Lilly. I would ask to revise and extend. I found some
typos that need to be stricken.
The Chairman. I would allow the gentleman to do that. As
has been noted earlier, we are going to hold the record open
for 5 days, allowing other members to have that opportunity.
I would also like to, without objection, bring in a
statement from the Bipartisan Policy Center and also Citizens
Against Government Waste, who have asked that their ideas be
presented as part of the record today.
[The statement of the Bipartisan Policy Center follows:]
[The statement of Citizens Against Government Waste
follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. On behalf of the committee and the
subcommittee, I want to thank each of you for being here today.
This subcommittee hearing is now adjourned.
[Whereupon, at 12:17 p.m., the subcommittee was adjourned.]