    [House Prints, 115th Congress]
    [From the U.S. Government Publishing Office]

    115th Congress}                                            { Print

      2d Session  }              HOUSE OF REPRESENTATIVES	   { 115-15

    ======================================================================

                                COMMITTEE PRINT

                                   ----------

                            COMMITTEE ON THE BUDGET
                            HOUSE OF REPRESENTATIVES

              LEGISLATIVE HISTORY OF THE JOINT SELECT COMMITTEE ON
                    BUDGET AND APPROPRIATIONS PROCESS REFORM

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

     December 19, 2018.--Committed to the Committee of the Whole House on
                the State of the Union and ordered to be printed

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               LEGISLATIVE HISTORY OF THE JOINT SELECT COMMITTEE

    115th Congress}                                            { Print

      2d Session  }              HOUSE OF REPRESENTATIVES	   { 115-15

    ======================================================================

                                COMMITTEE PRINT

                                   ----------

                            COMMITTEE ON THE BUDGET
                            HOUSE OF REPRESENTATIVES

              LEGISLATIVE HISTORY OF THE JOINT SELECT COMMITTEE ON
                    BUDGET AND APPROPRIATIONS PROCESS REFORM

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

     December 19, 2018.--Committed to the Committee of the Whole House on
                the State of the Union and ordered to be printed

                                  __________

                        U.S. GOVERNMENT PUBLISHING OFFICE
    *33-612                       WASHINGTON : 2019

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                                C O N T E N T S

                                                                       Page
    Introduction.....................................................     3

    Report of the Joint Select Committee on Budget and Appropriations
      Process Reform.................................................     5

    The Joint Select Committee on Budget and Appropriations Process
      Reform Bill Text...............................................    15

    Votes of the Joint Select Committee on Budget and Appropriations
      Process Reform.................................................    39

    Appendix.........................................................    53

      Hearings of the Joint Select Committee.........................    55
          Introduction...............................................    61
          April 17, 2018--Organizational Meeting Followed By Hearing
            on Opportunities to Significantly Improve the Federal
            Budget Process...........................................    65
          May 9, 2018--Bipartisanship in Budgeting...................   139
          May 24, 2018--The Budget Resolution-Content, Timeliness,
            and Enforcement..........................................   207
          June 27, 2018--Members' Day: How to Significantly Reform
            the Budget and Appropriations Process....................   301
          July 12, 2018--Opportunities to Improve the Appropriations
            Process..................................................   479

      Congressional Budget Office Briefing Materials Prepared for the
        Joint Select Committee.......................................   539

      Congressional Research Service Briefing Materials Prepared for
        the Joint Select Committee...................................   547

      H.R. 7191......................................................   569

      Press Release Accompanying the Introduction of H.R. 7191.......   591

    115th Congress}                                            { Print

      2d Session  }              HOUSE OF REPRESENTATIVES	   { 115-15

    ======================================================================

                                COMMITTEE PRINT

                                    _______

        LEGISLATIVE HISTORY OF THE JOINT SELECT COMMITTEE ON BUDGET AND
                         APPROPRIATIONS PROCESS REFORM

                                    _______

     December 19, 2018.--Committed to the Committee of the Whole House on
                the State of the Union and ordered to be printed

                                    _______

                                  INTRODUCTION

                                  ----------

    Dear Colleague:

        In the Second Session of the 115th Congress, I was honored
    to Co-Chair the Joint Select Committee on Budget and
    Appropriations Process Reform. As members of the U.S. House of
    Representatives, Article I entrusts in each of us the power of
    the purse. This is an awesome responsibility that I, and I know
    each of you, take very seriously. We owe it to the American
    people to have a process that works, and that was the goal of
    the Joint Select Committee--to produce recommendations to
    reform the federal budget and appropriations process.
        As you know, our Joint Select Committee produced a
    bipartisan, bicameral consensus package of reforms in advance
    of our statutory deadline of November 30, 2018. During our
    markup, amendments were subjected to a supermajority threshold
    to ensure those that passed reflected a true consensus of the
    panel. Some amendments passed unanimously. During the final
    debate on the bill, many members indicated that they had no
    objection to the package's underlying reforms. However, the
    bill and report developed over many months of hard work failed
    to secure the necessary supermajority of votes to pass under
    our Joint Select Committee's rules.
        Despite the unfortunate outcome of the Joint Select
    Committee's work, there is no refuting that the federal budget
    process is broken. It is vital that Congress continues these
    efforts to reform the budget and appropriations process this
    year, next year, and in the years beyond. I have assembled in
    this Budget Committee print all the relevant materials to this
    year's work. I urge all members to review this information. In
    this Committee print, you will find:

       The report of the Joint Select Committee on Budget
    and Appropriations Process Reform;
       The Co-chair's mark, as amended, and voted on, by
    the Joint Select Committee;
       The votes of the Joint Select Committee;
       Hearing transcripts of the Joint Select Committee's
    five public hearings;
       Congressional Budget Office briefing materials
    prepared for the Joint Select Committee;
       Congressional Research Service briefing materials
    prepared for the Joint Select Committee;
       H.R. 7191--a bill introduced in the House by myself
    and Representative Yarmuth, a Joint Select Committee Member and
    Ranking Member of the House Budget Committee; and
       The press release to accompany the introduction of
    H.R. 7191.

        It is my sincere hope that this important work will
    continue in the 116th Congress on a bipartisan and bicameral
    basis. I believe Members of Congress, Executive Branch
    officials, outside budget experts and academics, as well as
    engaged citizens, will find this material useful for future
    reform efforts.
        I would like to thank the Members of the Joint Select
    Committee on Budget and Appropriations Process Reform, our
    hardworking staffs, particularly Dan Keniry, David Reich, and
    Mary Popadiuk, as well as the House Rules Committee staff, Bob
    Weinhagen and Tom Cassidy in the Office of Legislative Counsel,
    budget experts at the Congressional Research Service and the
    Congressional Budget Office--particularly Mark Hadley and Teri
    Gullo--and House Parliamentarian Tom Wickham and his office,
    for the year of dedication.
        If you have any questions or would like additional
    information, please contact Dan Keniry, Staff Director of the
    House Budget Committee or Mary Popadiuk, General Counsel of the
    House Budget Committee at (202) 226-7270.
                                               Steve Womack
                                               Chairman
                                               Committee on the Budget

                           REPORT OF THE JOINT SELECT

                            COMMITTEE ON BUDGET AND

                         APPROPRIATIONS PROCESS REFORM

                                  ----------

                                    SUMMARY

        The Joint Select Committee on Budget and Appropriations
    Process Reform (JSCBAPR) was established by the Bipartisan
    Budget Act of 2018 (BBA 2018), Public Law 115-123, which was
    signed into law on February 9, 2018.\1\ The JSCBAPR was a
    bipartisan, bicameral panel tasked with considering and
    recommending legislative language to ``significantly reform the
    budget and appropriations process.''\2\ The JSCBAPR consisted
    of 16 members, equally divided between the House and Senate.
    The Speaker of the House, the Senate Majority Leader, the House
    Minority Leader, and the Senate Minority Leader each appointed
    four members to the committee.\3\ House Budget Committee
    Chairman Steve Womack (AR-3) and House Appropriations Committee
    Ranking Member Nita Lowey (NY-17) served as co-chairs of this
    panel.
    ---------------------------------------------------------------------------
        \1\ Bipartisan Budget Act of 2018, P.L. 115-123 (2018).
        \2\ Id.
        \3\ Id.
    ---------------------------------------------------------------------------
    History
        The Congressional Budget and Impoundment Control Act of
    1974 (Budget Act) was enacted to establish an overall framework
    for the fairly decentralized process of making budget decisions
    in Congress--a process which involves numerous appropriations,
    authorizations, and revenue measures under the jurisdiction of
    various congressional committees and enacted on differing
    schedules. The Budget Act came five decades after
    centralization of Executive Branch budget decision making in
    what is now called the Office of Management and Budget (OMB).
        In part, the Budget Act was a response to Executive Branch
    challenges to the primacy in budgetary matters that the
    Constitution grants to Congress, including President Nixon's
    assertion of power to withhold spending of funds appropriated
    by Congress. Other factors include recognition of the growing
    complexity of the federal budget and concern over persistent
    budget deficits. The 92nd Congress created the Joint Study
    Committee on Budget Control, which called for procedural
    reforms to strengthen congressional budgeting. Following the
    actual impoundment of appropriated funds, Congress acted on the
    recommendations of the Joint Study Committee and passed the
    Budget Act in 1974.
        The Budget Act provides for annual enactment of
    congressional budget resolutions to help Congress make an
    overall budget plan and sets targets and limits for budget
    legislation to be considered during the year. It also
    established the Congressional Budget Office (CBO) to give
    Congress budget analysis capacity independent of the Executive
    Branch and created standing Committees on the Budget in the
    House and Senate to develop the annual budget resolutions and
    oversee the process.
        Since that time, Congress has reviewed the budget process
    periodically and amended the Budget Act on several occasions,
    including in 1985 and 1990. More recently, concerns about
    delays and procedural breakdowns in the budget process
    triggered the creation of the JSCBAPR to assess the current
    congressional budget and appropriations process and recommend
    reforms.
    Procedures of the JSCBAPR
        The deadline for the JSCBAPR to vote on recommendations,
    legislative language, and an accompanying report was November
    30, 2018.\4\ Approval of the JSCBAPR proposed legislative and
    report language required the votes of a majority of the
    committee members appointed by the Speaker of the House and the
    Senate Majority Leader and a majority of the committee members
    appointed by the House Minority Leader and the Senate Minority
    Leader.\5\ This voting threshold was intended to ensure that
    the committee's recommendations and report comprised bipartisan
    reforms.
    ---------------------------------------------------------------------------
        \4\ Id.
        \5\ Id.
    ---------------------------------------------------------------------------
        Had the JSCBAPR approved the recommendations, the
    legislation and report would have been transmitted to the
    President, Vice President, the Speaker of the House of
    Representatives, and the Majority and Minority Leaders of each
    Chamber of Congress.\6\ The following would then have taken
    place:
    ---------------------------------------------------------------------------
        \6\ Id.
    ---------------------------------------------------------------------------
        In the House of Representatives, the legislation would have
    been introduced and considered under regular order.
        In the Senate, the legislation would have been introduced
    on the next session day by the Majority Leader of the Senate or
    his designee.\7\ The bill would then have been referred to the
    Committee on the Budget, which would have been required to
    report the bill without any revision and with a favorable
    recommendation, with an unfavorable recommendation, or without
    recommendation no later than seven session days after the
    bill's introduction. If the Committee on the Budget failed to
    report the bill within that period, the bill would have been
    automatically discharged from the committee and placed on the
    appropriate calendar.\8\ The BBA 2018 also made in order for
    any Senator to move to proceed to consideration of the bill two
    days after it was reported or discharged from the Committee on
    the Budget. Debate on the motion was limited to ten hours, and
    the support of three-fifths of the Senate was necessary to
    consider and approve the motion.\9\
    ---------------------------------------------------------------------------
        \7\ Id.
        \8\ Id.
        \9\ Id.
    ---------------------------------------------------------------------------

                                    PURPOSE

        There have been numerous breakdowns in the budget process
    in recent decades. Fiscal year 1995 was the last time Congress
    passed a conference report on the budget resolution followed by
    passage of thirteen separate appropriations bills before the
    beginning of the new fiscal year.\10\
    ---------------------------------------------------------------------------
        \10\ Bill Heniff Jr., Congressional Budget Resolutions: Historical
    Information, Congressional Research Service, November 16, 2015.
    ---------------------------------------------------------------------------
        Continuing resolutions (CRs) have become the status quo for
    funding the Federal Government, demonstrating Congress's
    failure to complete its work on time. CRs create uncertainty
    for agencies and the American people. In many years, there has
    been concern that parts of the government would have to shut
    down due to the failure to enact even stopgap appropriations,
    and shutdowns of various durations have actually occurred. In
    the 115th Congress alone, there have been two government
    shutdowns. Whether it is federal employees being furloughed,
    national parks shutting down, adverse effects on defense and
    law enforcement, shutdowns inflict severe damage and
    uncertainty on the nation's fiscal state. Additionally,
    multiple JSCBAPR members expressed frustration regarding the
    lack of legislative tools available for Congress to address
    national needs or the national debt in a bipartisan manner.

                                COMMITTEE ACTION

        The JSCBAPR held five public hearings, fulfilling the
    requirement set forth in the BBA 2018. In addition to these
    formal, open hearings, the JSCBAPR also held two closed
    briefings and multiple formal and informal meetings.
    Hearings
    April 17, 2018--Opportunities to Significantly Improve the
    Federal Budget Process

        During this hearing, members considered the current
    challenges facing the budget and appropriations process in
    Congress and discussed possibilities for improvement. Witnesses
    included:

       Douglas Holtz-Eakin, Ph.D., President, American
    Action Forum
       Martha Coven, J.D., Lecturer and John L. Weinberg/
    Goldman Sachs & Co. Visiting Professor, Woodrow Wilson School
    of Public and International Affairs, Princeton University

    May 9, 2018--Bipartisanship in Budgeting

        During this hearing, members discussed ways to ensure that
    the budget and appropriations process work effectively and in a
    bipartisan manner regardless of political dynamics. Witnesses
    included:

       G. William Hoagland, Senior Vice President,
    Bipartisan Policy Center
       Donald R. Wolfensberger, Fellow, Bipartisan Policy
    Center; Fellow, Woodrow Wilson International Center for
    Scholars
       Emily Holubowich, Participant, Convergence Building
    a Better Budget Process Project; Executive Director, Coalition
    for Health Funding
       Matthew Owens, Participant, Convergence Building a
    Better Budget Process Project; Vice President for Federal
    Relations and Administration, Association of American
    Universities

    May 24, 2018--The Budget Resolution--Content, Timeliness, and
    Enforcement

        During this hearing, members examined the current purpose
    and role of the budget resolution and considered possible
    options, presented by expert witnesses, to bolster the budget
    resolution's impact and influence in the federal budget and
    appropriations process. Witnesses included:

       Maya MacGuineas, President, Committee for a
    Responsible Federal Budget
       James C. Capretta, Resident Fellow and Milton
    Friedman Chair, American Enterprise Institute
       Bill Dauster, Former Democratic Staff Director and
    Chief Counsel, Senate Budget Committee
       Joseph White, Professor, Department of Political
    Science and Center for Policy Studies, Case Western Reserve
    University

    June 27, 2018--Members' Day

        During this hearing, members of both chambers of Congress
    testified before the JSCBAPR on their ideas for improving the
    budget and appropriations process. Members who testified before
    the JSCBAPR included:

       The Honorable Paul D. Ryan, Speaker, House of
    Representatives
       The Honorable Nancy D. Pelosi, Democratic Minority
    Leader, House of Representatives
       The Honorable Steny H. Hoyer, Democratic Minority
    Whip, House of Representatives
       Representative Hal Rogers (KY-05)
       Representative Pete Visclosky (IN-01)
       Representative Robert Aderholt (AL-04)
       Representative David Price (NC-04)
       Representative Rob Bishop (UT-01)
       Representative John Carter (TX-31)
       Representative Devin Nunes (CA-22)
       Senator Bob Corker (TN)
       Representative Jim Himes (CT-04)
       Representative Tom McClintock (CA-04)
       Representative Jim Renacci (OH-16)
       Representative Daniel Webster (FL-11)
       Representative Elizabeth Esty (CT-05)
       Representative Bill Foster (IL-11)
       Representative Keith Rothfus (PA-12)
       Senator Steve Daines (MT)
       Representative French Hill (AR-02)
       Representative Bruce Westerman (AR-04)
       Representative Warren Davidson (OH-08)
       Representative Pramila Jayapal (WA-07)
       Representative Roger Marshall (KS-01)
       Representative Lloyd Smucker (PA-16)
       Representative John Curtis (UT-03)
       Representative Ralph Norman (SC-05)

    Additional statements were submitted for the record by:
       Representative Virginia Foxx (NC-05)
       Representative Mario Diaz-Balart (FL-25)
       Senator Dean Heller (NV)
       Representative Bradley Byrne (AL-01)
       Representative Paul Mitchell (MI-10)

    July 12, 2018--Opportunities to Improve the Appropriations
    Process

        During this hearing, members considered the current
    challenges facing the appropriations process in Congress and
    discussed possibilities for improvement. Witnesses included:

       The Honorable Leon Panetta, Former Secretary of
    Defense, 2011-2013; Chairman, The Panetta Institute for Public
    Policy
       The Honorable David Obey, Former Chairman of House
    Appropriations Committee, 2007-2011
    Briefings
    April 11, 2018--Briefing with the Congressional Research
    Service

        Members of the JSCBAPR heard from experts from the
    Congressional Research Service (CRS) regarding the issues
    facing the budget and appropriations process, past reform
    efforts, and potential options for the JSCBAPR to explore.

    July 17, 2018--Briefing with the Congressional Budget Office
    and the Congressional Research Service

        Members of the JSCBAPR heard from experts from CBO and CRS
    on implementation and potential impacts of reforms considered
    by the JSCBAPR.
    Committee Meetings
        The JSCBAPR held multiple meetings, both formal and
    informal, since its establishment. These meetings provided a
    collegial opportunity for JSCBAPR members to discuss reforms to
    the budget and appropriations process. These meetings also
    provided the basis for the recommendations made in this report.
    A listing of the JSCBAPR's informal working sessions follows:

    March 7, 2018--Initial JSCBAPR organizing meeting

    August 22, 2018--JSCBAPR working group meeting

    September 13, 2018--JSCBAPR working group meeting

    September 26, 2018--JSCBAPR working group meeting

                                RECOMMENDATIONS

    Biennial Budgeting
        Over the past few Congresses, there has been increasing
    support for a biennial budget. Since the first public meeting
    of the JSCBAPR, biennial budgeting has been viewed as a
    practical and necessary solution to the continued delays in the
    current budget and appropriations process. Additionally, the
    JSCBAPR heard repeatedly from witnesses, as well as from
    multiple outside organizations across the political spectrum,
    that biennial budgeting is an excellent starting point for any
    budget and appropriations reform effort.
        One of the principal arguments in favor of biennial
    budgeting is that it will allow for more time in the budget
    process. Providing a 302(a) allocation for two years to the
    Appropriations Committees at the beginning of a Congress will
    allow for a smoother appropriations process. It will also allow
    the Appropriators additional time to engage in dialogue with
    the Executive Branch on the Administration's priorities.
        Another key argument in favor of biennial budgeting is that
    it will allow for greater certainty in the budget process,
    particularly for Executive Branch entities. One of the chief
    complaints heard consistently by members of Congress and the
    JSCBAPR is that nearly every executive agency and department
    suffers under a protracted budget negotiation, delayed spending
    bills, and continuing resolutions.
        A biennial budget would also provide Congress additional
    time to conduct oversight on federal agencies and departments.
    When Appropriators and authorizers have more certainty, they
    can turn their attention to those entities that they fund and
    oversee, respectively. This also serves to buttress Congress's
    constitutional authority and ensures that appropriated funds
    are being used responsibly and authorized programs are
    implemented consistently with Congressional intent.
        Finally, biennial budgeting would free up time in the
    legislative calendar to enable Congress to not be mired down in
    annual budget resolution squabbles.
    Second Session Revision of the Budget Resolution for Scoring Purposes
        A requirement of a biennial budget resolution would be
    authority in the second year of a biennium to adjust the budget
    resolution's spending and revenue levels, committee
    allocations, and other amounts to reflect an updated baseline
    used for scoring purposes.
    Realistic Deadline for Congress to Complete Action on a Biennial Budget
        One of the challenges identified by the JSCBAPR was that
    Congress has continually failed to adopt a budget resolution by
    the statutorily required April 15th deadline. In those years in
    which Congress has adopted a budget resolution, it has adopted
    the budget resolution an average of 36 days after the target
    date.\11\ This deadline does not reflect a realistic timeline.
    To this end, the JSCBAPR believed that setting a realistic and
    achievable deadline of May 1st for the first year of the
    biennium would provide Congress an opportunity to complete its
    work on time.
    ---------------------------------------------------------------------------
        \11\ This does not include fiscal year 1999, fiscal year 2003,
    fiscal year 2005, fiscal year 2007, and fiscal years 2011 through 2015.
    See Bill Heniff Jr., Congressional Budget Resolutions: Historical
    Information, Congressional Research Service, November 16, 2015.
    ---------------------------------------------------------------------------
    Annual Supplemental Budget Submission by the President
        While JSCBAPR members recognized that Article I entrusts in
    the Congress the power of the purse, members also had an
    appreciation that there is critical data that Congress requires
    from the Executive Branch to begin the budget building process.
    Specifically, CBO cannot begin constructing its baseline for
    the upcoming fiscal year without receipt of data, particularly
    prior-year and current-year spending, that is normally
    transmitted with the President's budget request. Without
    receipt of CBO's baseline, Congress generally cannot begin
    writing its budget resolution. To create additional time for
    developing the baseline, and therefore, the budget resolution
    and various appropriations bills, the JSCBAPR believed that the
    Executive Branch should be required to provide a supplemental
    budget submission that is separate from the President's policy
    proposals no later than December 1st of each calendar year.
        This supplemental budget submission would include:

       Prior year fiscal data
       Current year fiscal data
       Credit re-estimates for the current year

        This data would allow CBO to begin constructing the
    baseline, as well as enable the Budget and Appropriations
    Committees to begin their respective work in writing the budget
    resolution and appropriations bills earlier in the process. The
    President would then submit policy proposals later in the
    process, which would be considered as Congress continues its
    work on the budget resolution and annual appropriations bills.
    Encourage the Use of Best Practices in the Appropriations Process
        The JSCBAPR noted that Congress was more successful this
    year than in other recent years moving appropriations bills
    through the process on a timelier basis, with five fiscal year
    2019 appropriations measures, including the three largest,
    signed into law before the start of the fiscal year. One factor
    in this success appears to have been the strategic combination
    of individual bills into multi-bill packages for initial
    consideration by the House and Senate, as well as for the final
    conference stage.
        JSCBAPR members recommended that the Appropriations
    Committees review the record of recent practices for
    consideration of appropriations bills, identify practices which
    have been helpful in expediting action and increasing
    opportunities for member involvement at various stages of
    consideration, and build those successful practices into their
    work for future years. JSCBAPR members also recommended that
    the Appropriations Committees and other committees with
    responsibilities in this area study the best ways of using the
    new biennial budget resolution schedule to expedite
    congressional work on appropriations and other budgetary
    legislation.
    Reconstitute Senate Budget Committee
        JSCBAPR members noted that the Senate Budget Committee
    should be reconstituted to include the Appropriations and
    Finance Chairs and Ranking Members and make it comprised of
    eight members from the majority and seven members from the
    minority. This would elevate the Senate Budget Committee to be
    more prominent and foster greater seriousness and
    bipartisanship to its important work.
    Add Bipartisan Budget Resolution in the Senate
        JSCBAPR members noted that the budget process has become
    exceedingly partisan in recent years. Partisan posturing has
    contributed to numerous budget and appropriations delays and
    threats of government shutdowns. Political disagreement on the
    debt limit has imposed unnecessary costs on our nation's
    economy. This budget option would have fostered bipartisan work
    on the Senate Budget Committee. In addition to the other
    requirements of Section 301 of the Congressional Budget Act, a
    bipartisan budget resolution would have required to include a
    target for the ratio of the public debt to the gross domestic
    product and a multi-year glideslope for achieving it. The
    glideslope would have included the four primary drivers of
    deficits: health care spending, tax expenditures, discretionary
    appropriations, and revenue levels. The glideslope could have
    also included other economic and policy targets such as
    employment, income equality, and economic growth.
        Committee approval of a bipartisan budget resolution
    required a majority of Democratic members and a majority of
    Republican members. The Senate Majority and Minority Leaders
    would then have been empowered to agree on expedited floor
    consideration including limited debate and amendment votes. To
    be considered a bipartisan budget, a conferenced budget
    resolution or House budget resolution must have included the
    content requirements described above.
        Upon passage in both chambers, a bipartisan budget
    resolution would trigger biannual reporting by the
    Congressional Budget Office. This reporting requirement
    remained unless displaced by passage of a subsequent bipartisan
    budget resolution. Senate passage of a reconciliation bill
    pursuant to a bipartisan budget resolution would have required
    15 votes from the minority party.
    Annual Reconciliation
        Under a biennial budgeting model, it was the JSCBAPR's view
    that the annual reconciliation process should be preserved.
    JSCBAPR's legislative intent was for reconciliation to remain
    an annual exercise. Reconciliation instructions would have been
    based on a single fiscal year, consistent with annual
    appropriations. JSCBAPR's legislative recommendations amended
    current law to clarify that reconciliation may be used each
    fiscal year of a biennium. As a result, a budget resolution
    could provide directives to one or more committees for each
    fiscal year of a biennium and over a specified period of the
    budget window; (e.g. five or ten years). Congress should have
    the ability to consider reconciliation legislation at any point
    during a biennium and have the use of reconciliation's
    expedited procedures each fiscal year to legislatively address
    mandatory spending, revenue, the debt limit, or any combination
    thereof.

        A review of the historical use of reconciliation
    demonstrates its success in significantly reducing the deficit,
    particularly in the 1980s. The JSCBAPR believed that this
    practice - the use of annual reconciliation to reduce the
    deficit - should be encouraged in future Congresses.
    Require a Joint Budget Committee Hearing on the Fiscal State of the
            Nation
        Members of the JSCBAPR believed that members of Congress
    must have access to nonpartisan information about the many
    factors contributing to the nation's debt and deficit in order
    to develop sound fiscal policies and meet our long-debt and
    deficit reduction goals. To accomplish this, JSCBAPR members
    recommended the House and Senate Budget Committees should be
    required to hold a biennial, joint hearing with testimony from
    the Comptroller General of the United States regarding the
    audited financial statement of the Executive Branch. This
    `Fiscal State of the Nation' hearing would have needed to occur
    at least once during the second session of a Congress after a
    biennial budget resolution is adopted and would have enabled
    members to assess the nation's long-term fiscal sustainability.
    As a joint hearing, the chairs of the Budget Committees should
    have alternated presiding and hosting the hearing each
    Congress. The JSCBAPR encouraged the chairs of the Budget
    Committees to follow House and Senate rules when convening the
    Fiscal State of the Nation hearing. Therefore, the chairs of
    the Budget Committees would have been encouraged to make a
    public announcement of the date, place, and subject matter of
    the hearing at least seven calendar days before the hearing.
    All members of Congress would be invited to attend the hearing,
    and the JSCBAPR strongly encouraged the chairs of the Budget
    Committees to agree to allow all members to waive onto their
    respective Budget Committee for the hearing by unanimous
    consent. A video recording of the Fiscal State of the Nation
    hearing would have been made publicly available on the Budget
    Committees' websites.
        Members of the JSCBAPR also recommended establishing
    additional forums for all members of Congress to access the
    information presented in the Fiscal State of the Nation
    hearing. To accomplish this goal, members of the JSCBAPR
    encouraged the House and Senate to implement the following
    recommendations:
        First, all four party caucuses in the House and Senate
    would have been encouraged to hold a biennial meeting with the
    same content presented by the witnesses from the required joint
    Fiscal State of the Nation hearing held by the Budget
    Committees. The JSCBAPR also encouraged the caucuses to include
    in those meetings a briefing from the Congressional Budget
    Office (CBO) to educate members on the function and role of CBO
    in the budget process.
        Second, the House and Senate should have incorporated
    content from the Fiscal State of the Nation hearing, and an
    introductory briefing from CBO, into the official orientation
    process for all newly-elected members of Congress conducted by
    the Committee on House Administration and the Secretary of the
    Senate, respectively. These new member orientations typically
    take place prior to the new members being sworn in and include
    briefings on the legislative process, congressional rules, and
    ethics policies. The JSCBAPR believed this is the ideal forum
    to present the findings from the most recent Fiscal State of
    the Nation hearing to new members of the House and Senate and
    educate them on the critical role of CBO in the budget process.
    Accordingly, the JSCBAPR urged the Committee on House
    Administration and the Secretary of the Senate to ensure that
    these two training opportunities would be provided for all new
    members.
    Include Total Combined Outlays and Revenues for Tax Expenditures as an
            Optional Item in the Budget Resolution
        JSCBAPR members expressed interest in providing greater
    transparency regarding tax expenditures because they are a
    major component of the federal budget. Therefore, JSCBAPR
    members believed that total combined outlays and revenues for
    tax expenditures should have been an optional item in the
    budget resolution's text.

                           THE JOINT SELECT COMMITTEE

                          ON BUDGET AND APPROPRIATIONS

                            PROCESS REFORM BILL TEXT

                                  ----------

        The following text is the Co-Chair's Mark, as amended, and
    voted on by The Joint Select Committee on Budget and
    Appropriations Process Reform on November 29, 2018.

                                          (Original Signature of Member)
    115th CONGRESS
      2d Session
                                     H. R. __

       To implement the recommendations of the Joint Select Committee on
                   Budget and Appropriations Process Reform.

    _______________________________________________________________________

                        IN THE HOUSE OF REPRESENTATIVES

    Mr. Womack (for himself and Mrs. Lowey) introduced the following bill;
             which was referred to the Committee on _______________

    _______________________________________________________________________

                                     A BILL

       To implement the recommendations of the Joint Select Committee on
                   Budget and Appropriations Process Reform.

        Be it enacted by the Senate and House of Representatives of the
    United States of America in Congress assembled,

    SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

        (a) Short Title.--This Act may be cited as the ``Bipartisan Budget
    and Appropriations Reform Act of 2018''.
        (b) Table of Contents.--The table of contents for this Act is as
    follows:

    Sec. 1. Short title; table of contents.
                      TITLE I--BIENNIAL BUDGET RESOLUTIONS

    Sec. 101. Purposes.
    Sec. 102. Definitions.
    Sec. 103. Revision of timetable.
    Sec. 104. Biennial concurrent resolutions on the budget.
    Sec. 105. Committee allocations.
    Sec. 106. Revision of biennial budget.
    Sec. 107. Additional amendments to the Congressional Budget Act of 1974
                                to effectuate biennial budgeting.
    Sec. 108. Reconciliation process.
    Sec. 109. Bipartisan budget resolution.
    Sec. 110. Effective date.
                            TITLE II--OTHER MATTERS

    Sec. 201. Views and estimates of committees.
    Sec. 202. Annual supplemental budget submission by the President.
    Sec. 203. Hearing on the fiscal state of the Nation.
    Sec. 204. Reform of Senate Budget Committee.

                      TITLE I--BIENNIAL BUDGET RESOLUTIONS

    SEC. 101. PURPOSES.

        Paragraph (2) of section 2 of the Congressional Budget and
    Impoundment Control Act of 1974 is amended to read as follows:
                ``(2) to facilitate the determination biennially of the
            appropriate level of Federal revenues and expenditures by the
            Congress;''.

    SEC. 102. DEFINITIONS.

        Section 3 of the Congressional Budget and Impoundment Control Act
    of 1974 (2 U.S.C. 622) is amended--
                (1) in paragraph (4), by striking ``for a fiscal year''
            each place it appears and inserting ``for a biennium''; and
                (2) by adding at the end the following new paragraphs:
                ``(12) The term `direct spending' has the meaning given to
            such term in section 250(c)(8) of the Balanced Budget and
            Emergency Deficit Control Act of 1985.
                ``(13) The term `biennium' means any period of 2
            consecutive fiscal years beginning with an even-numbered fiscal
            year.
                ``(14) The term `budget year' has the meaning given that
            term in section 250(c)(12) of the Balanced Budget and Emergency
            Control Act of 1985.''.

    SEC. 103. REVISION OF TIMETABLE.

        Section 300 of the Congressional Budget Act of 1974 (2 U.S.C. 631)
    is amended to read as follows:

                                  ``timetable

        ``Sec. 300. The timetable with respect to the congressional budget
    process for any Congress is as follows:

                                                     ``First Session
    On or before:                             Action to be completed:
    First Monday in February................  President submits budget.
    February 15.............................  Congressional Budget Office submits report to Budget Committees.
     March 1................................  Committees submit views and estimates to Budget Committees.
    April 1.................................  Senate Budget Committee reports biennial budget.
    May 1...................................  Congress completes action on the biennial budget.
    May 15..................................  Appropriation bills may be considered in the House of Representatives.
    June 10.................................  House Appropriations Committee reports last annual appropriation bill.
    October 1...............................  First fiscal year of the biennium begins.

                                                    ``Second Session
    On or before:                             Action to be completed:
    First Monday in February................  President submits budget.
    February 15.............................  Congressional Budget Office submits report to Budget Committees.
    June 10.................................  House Appropriations Committee reports last annual appropriation bill.
    October 1...............................  Second fiscal year of the biennium begins.''.

    SEC. 104. BIENNIAL CONCURRENT RESOLUTIONS ON THE BUDGET.

        (a) Contents of Resolution.--
                (1) In general.--Section 301(a) of the Congressional Budget
            Act of 1974 (2 U.S.C. 632(a)) is amended--
                        (A) by striking the matter preceding paragraph (1)
                    beginning with ``On or before April 15'' and inserting
                    the following: ``On or before May 1 of each odd-
                    numbered calendar year, the Congress shall complete
                    action on a concurrent resolution on the budget for the
                    biennium beginning on October 1 of that calendar year.
                    The concurrent resolution shall set forth appropriate
                    levels for each fiscal year in the biennium and for at
                    least each fiscal year in the next 2 bienniums for the
                    following--'';
                        (B) in paragraph (6)--
                                (i) by striking ``for the fiscal year'' and
                            inserting ``for each fiscal year in the
                            biennium''; and
                                (ii) by striking ``and'' at the end;
                        (C) in paragraph (7)--
                                (i) by striking ``for the fiscal year'' and
                            inserting ``for each fiscal year in the
                            biennium''; and
                                (ii) by striking the period at the end and
                            inserting ``; and'';
                        (D) by adding after paragraph (7) the following:
                ``(8) subtotals of new budget authority and outlays for
            nondefense discretionary spending; defense discretionary
            spending; direct spending; and net interest.''; and
                        (E) by adding at the end of the matter following
                    paragraph (8) (as added by subparagraph (D)) the
                    following: ``The concurrent resolution on the budget
                    for a biennium shall include procedures for adjusting
                    spending and revenue levels, committee allocations, and
                    other amounts in the resolution during the second
                    session of a Congress to reflect an updated baseline
                    that will be used for scoring purposes.''.
        (b) Additional Matters in Concurrent Resolution.--Section 301(b) of
    the Congressional Budget Act of 1974 (2 U.S.C. 632(b)) is amended--
                (1) in paragraph (3), by striking ``for such fiscal year''
            and inserting ``for either fiscal year in such biennium'';
                (2) in paragraph (8), by striking ``and'' at the end;
                (3) in paragraph (9), by striking the period at the end and
            inserting ``; and''; and
                (4) by adding at the end the following:
                ``(10) include total combined outlays and revenues for tax
            expenditures.''.
        (c) Hearings and Report.--Section 301(e)(1) of the Congressional
    Budget Act of 1974 (2 U.S.C. 632(e)) is amended by striking ``fiscal
    year'' and inserting ``biennium''.
        (d) Goals for Reducing Unemployment.--Section 301(f) of the
    Congressional Budget Act of 1974 (2 U.S.C. 632(f)) is amended by
    striking ``fiscal year'' each place it appears and inserting
    ``biennium''.
        (e) Economic Assumptions.--Section 301(g) of the Congressional
    Budget Act of 1974 (2 U.S.C. 632(g)) is amended by striking ``for a
    fiscal year'' and inserting ``for a biennium''.
        (f) Section Heading.--The section heading of section 301 of the
    Congressional Budget Act of 1974 (2 U.S.C. 632) is amended by striking
    ``annual adoption of'' and inserting ``adoption of biennial''.

    SEC. 105. COMMITTEE ALLOCATIONS.

        Section 302 of the Congressional Budget Act of 1974 (2 U.S.C. 633)
    is amended--
                (1) in subsection (a)(1)--
                        (A) by striking ``for that period of fiscal years''
                    and inserting ``for all fiscal years covered by the
                    resolution''; and
                        (B) by striking ``only for the fiscal year of that
                    resolution'' and inserting ``only for each fiscal year
                    of the biennium'';
                (2) in subsection (c)--
                        (A) by striking ``subsection (a)'' and inserting
                    ``subsection (a)(1)'';
                        (B) by striking ``for a fiscal year'' and inserting
                    ``for a budget year''; and
                        (C) by striking ``for that fiscal year'' and
                    inserting ``for that budget year'';
                (3) in subsection (f)(1)--
                        (A) by striking ``for a fiscal year''; and
                        (B) by striking ``the first fiscal year'' and
                    inserting ``either fiscal year of the biennium of that
                    resolution''; and
                (4) in subsection (f)(2)(A), by--
                        (A) striking ``first fiscal year'' and inserting
                    ``either fiscal year of the biennium of that
                    resolution''; and
                        (B) striking ``the total of fiscal years'' and
                    inserting ``the total of all fiscal years covered by
                    the resolution''.

    SEC. 106. REVISION OF BIENNIAL BUDGET.

        Section 304 of the Congressional Budget Act of 1974 (2 U.S.C. 635)
    is amended to read as follows:

        ``permissible revisions of concurrent resolutions on the budget

        ``Sec. 304. At any time after the concurrent resolution on the
    budget has been agreed to pursuant to section 301 and before the end of
    the biennium, the two Houses may adopt a concurrent resolution that
    revises or reaffirms the most recently agreed to concurrent resolution
    on the budget. Any concurrent resolution that revises or reaffirms the
    most recently agreed to concurrent resolution on the budget shall be
    considered under the procedures set forth in section 305.''.

    SEC. 107. ADDITIONAL AMENDMENTS TO THE CONGRESSIONAL BUDGET ACT OF 1974
                  TO EFFECTUATE BIENNIAL BUDGETING.

        (a) Enforcement of Section 303.--Section 303 of the Congressional
    Budget Act of 1974 (2 U.S.C. 634) is amended--
                (1) in subsection (a)--
                        (A) by striking ``for a fiscal year'' and inserting
                    ``for a biennium''; and
                        (B) by striking ``the first fiscal year covered by
                    that resolution'' and inserting ``either fiscal year of
                    that biennium'';
                (2) in subsection (b)(1)(B), by striking ``the fiscal
            year'' and inserting ``the biennium''; and
                (3) in subsection (c)--
                        (A) in paragraph (1)--
                                (i) by striking ``for a fiscal year'' and
                            inserting ``for a biennium''; and
                                (ii) by striking ``for that year'' in each
                            instance and inserting ``for each year of that
                            biennium''; and
                        (B) in paragraph (2), by striking ``after the year
                    the allocation referred to in that paragraph is made''
                    and inserting ``after the years the allocations
                    referred to in that paragraph are made''.
        (b) Section 305.--Subsections (a)(3) and (b)(3) of section 305 of
    the Congressional Budget Act of 1974 (2 U.S.C. 636) are amended by
    striking ``for a fiscal year''.
        (c) Section 311 Point of Order.--
                (1) In the house of representatives.--Section 311(a)(1) of
            the Congressional Budget Act of 1974 (2 U.S.C. 642(a)) is
            amended--
                        (A) by striking ``for a fiscal year'';
                        (B) by striking ``the first fiscal year'' each
                    place it appears and inserting ``either of the first
                    two fiscal years covered by such resolution''; and
                        (C) by striking ``that first fiscal year'' and
                    inserting ``either of the first two fiscal years''.
                (2) In the senate.--Section 311(a)(2) of the Congressional
            Budget Act of 1974 (2 U.S.C. 642(a)(2)) is amended--
                        (A) in subparagraph (A), by striking ``for the
                    first fiscal year'' and inserting ``for either of the
                    first two fiscal years''; and
                        (B) in subparagraph (B)--
                                (i) by striking ``that first fiscal year''
                            the first place it appears and inserting
                            ``either of the first two fiscal years''; and
                                (ii) by striking ``that first fiscal year
                            and the ensuing fiscal years'' and inserting
                            ``all fiscal years''.
                (3) Social security levels.--Section 311(a)(3) of the
            Congressional Budget Act of 1974 (2 U.S.C. 642(a)(2)) is
            amended by--
                        (A) striking ``for the first fiscal year'' and
                    inserting ``for either of the first two fiscal years'';
                    and
                        (B) striking ``that fiscal year and the ensuing
                    fiscal years'' and inserting ``all fiscal years''.

    SEC. 108. RECONCILIATION PROCESS.

        Section 310(a) of the Congressional Budget Act of 1974 (2 U.S.C.
    641(a)) is amended--
                (1) in the matter before paragraph (1), by striking ``A
            concurrent'' and all that follows through ``shall'' and
            inserting ``A concurrent resolution on the budget for a
            biennium shall, for each fiscal year of the biennium'';
                (2) in paragraph (1)(A), by striking ``for such fiscal
            year'' and inserting ``for each fiscal year of the biennium'';
                (3) in paragraph (1)(C), by striking ``such fiscal year''
            and inserting ``each fiscal year of the biennium''; and
                (4) in paragraph (1)(D), by striking ``such fiscal year''
            and inserting ``each fiscal year of the biennium''.

    SEC. 109. BIPARTISAN BUDGET RESOLUTION.

        (a) Definition.--Section 3 of the Congressional Budget and
    Impoundment Control Act of 1974 (2 U.S.C. 622), as amended by section
    102, is further amended by adding at the end the following:
                ``(15) The term `bipartisan budget resolution' means a
            concurrent resolution on the budget for a biennium--
                        ``(A) ordered reported to the Senate by the
                    Committee on the Budget of the Senate by an affirmative
                    vote of not less than half of the Senators that are
                    members of the majority party in the Senate and not
                    less than half of the Senators that are members of the
                    minority party in the Senate;
                        ``(B) that establishes--
                                ``(i) a target for the ratio of the public
                            debt to the gross domestic product as of the
                            end of the period covered by the concurrent
                            resolution or a later date; and
                                ``(ii) for each fiscal year covered by the
                            concurrent resolution, targets for--
                                        ``(I) the ratio of the public debt
                                    to the gross domestic product;
                                        ``(II) the amount of health care
                                    spending by the Government;
                                        ``(III) the amount of tax
                                    expenditures;
                                        ``(IV) the amount of discretionary
                                    appropriations (as defined in section
                                    250 of the Balanced Budget and
                                    Emergency Deficit Control Act of 1985
                                    (2 U.S.C. 900)); and
                                        ``(V) the amount of revenues; and
                        ``(C) which may include other economic or policy
                    targets.''.
        (b) Consideration of Bipartisan Budget Resolutions.--Section 305 of
    the Congressional Budget and Impoundment Control Act of 1974 (2 U.S.C.
    636) is amended by adding at the end the following:
        ``(e) Procedures in the Senate for Bipartisan Budget Resolutions.--
                ``(1) Other expedited process.--In the Senate, upon the
            agreement of the majority leader and the minority leader,
            additional procedures to expedite consideration of a bipartisan
            budget resolution (which may include limiting the number of
            amendments upon which the Senate shall vote) shall apply to
            consideration of the bipartisan budget resolution. The majority
            leader shall submit a written statement for the Congressional
            Record reflecting any agreement described in this paragraph.
                ``(2) Passage.--In the Senate, a bipartisan budget
            resolution shall be agreed to only upon the affirmative vote of
            not less than--
                        ``(A) three-fifths of the Members, duly chosen and
                    sworn; and
                        ``(B) 15 Members that are members of the minority
                    party in the Senate.
                ``(3) Amendments between the houses and conference
            reports.--To be considered a bipartisan budget resolution, a
            conference report or an amendment between the Houses on a
            concurrent resolution on the budget shall--
                        ``(A) comply with section 3(15)(B); and
                        ``(B) be agreed to in the Senate by an affirmative
                    vote of not less than--
                                ``(i) three-fifths of the Members, duly
                            chosen and sworn; and
                                ``(ii) 15 Members that are members of the
                            minority party in the Senate.''.
        (c) Reconciliation Under Bipartisan Budget Resolutions.--Section
    310(e)(2) of the Congressional Budget and Impoundment Control Act of
    1974 (2 U.S.C. 641(e)(2)) is amended--
                (1) by inserting ``(A)'' before ``Debate''; and
                (2) by adding at the end the following:
                ``(B) In the Senate, a reconciliation bill reported under
            subsection (b) pursuant to reconciliation instructions in a
            bipartisan budget resolution, a House amendment thereto, and a
            conference report thereon shall be agreed to only upon the
            affirmative vote of not less than--
                        ``(i) a majority of the Members voting, a quorum
                    being present; and
                        ``(ii) 15 Members that are members of the minority
                    party in the Senate.''.
        (d) Reporting.--Section 202 of the Congressional Budget and
    Impoundment Control Act of 1974 (2 U.S.C. 603) is amended by adding at
    the end the following:
        ``(h) Report on Ratio of the Public Debt to the Gross Domestic
    Product.--On and after the date on which the first bipartisan budget
    resolution is agreed to, the Director of the Congressional Budget
    Office shall submit to Congress semiannual reports on the ratio of the
    public debt to the gross domestic product, which shall evaluate whether
    the targets in the most recently agreed to bipartisan budget resolution
    have been met.''.

    SEC. 110. EFFECTIVE DATE.

        This title and the amendments made by this title shall take effect
    immediately before noon January 3, 2019.

                            TITLE II--OTHER MATTERS

    SEC. 201. VIEWS AND ESTIMATES OF COMMITTEES.

        Section 301(d) of the Congressional Budget and Impoundment Control
    Act of 1974 (2 U.S.C. 632(d)) is amended to read as follows:
        ``(d) Views and Estimates of Other Committees.--
                ``(1) In general.--Not later than March 1 of the first
            session of a Congress, or upon the request of the Committee on
            the Budget of the House of Representatives or the Senate, each
            committee of the House of Representatives and the Senate having
            legislative jurisdiction shall submit to its respective
            Committee on the Budget its views and estimates (as determined
            by the committee making such submission) with respect to the
            following:
                        ``(A) Any legislation to be considered during that
                    Congress that is a priority for the committee.
                        ``(B) Any legislation within the jurisdiction of
                    the committee that would establish, amend, or
                    reauthorize any Federal program and likely have a
                    significant budgetary impact.
                ``(2) Additional matters.--Any committee of the House of
            Representatives or the Senate and any joint committee of the
            Congress may submit to the appropriate Committees on the Budget
            its views and estimates with respect to all matters set forth
            in subsections (a) and (b) which relate to matters within its
            jurisdiction.
                ``(3) Joint economic committee.--The Joint Economic
            Committee shall submit to the Committees on the Budget of both
            Houses its recommendations as to the fiscal policy appropriate
            to the goals of the Employment Act of 1946.''.

    SEC. 202. ANNUAL SUPPLEMENTAL BUDGET SUBMISSION BY THE PRESIDENT.

        Section 1106 of title 31, United States Code, is amended by adding
    at the end the following:
        ``(d) On or before December 1 of each calendar year, the President
    shall submit to Congress an administrative budget for the fiscal year
    beginning in the ensuing calendar year, which shall include up-to-date
    estimates for current year and prior year data and credit reestimates
    for the current year (as included in the Federal credit supplement of
    such budget).''.

    SEC. 203. HEARING ON THE FISCAL STATE OF THE NATION.

        (a) In General.--Not later than 45 days (excluding Saturdays,
    Sundays, and holidays) after the date on which the Secretary of the
    Treasury submits to Congress the audited financial statement required
    under paragraph (1) of section 331(e) of title 31, United States Code,
    on a date agreed upon by the chairs of the Committees on the Budget of
    the House of Representatives and the Senate and the Comptroller General
    of the United States, the chairs shall conduct a hearing to receive a
    presentation from the Comptroller General reviewing the findings of the
    audit required under paragraph (2) of such section and providing, with
    respect to the information included by the Secretary in the report
    accompanying such audited financial statement, an analysis of the
    financial position and condition of the Federal Government, including
    financial measures (such as the net operating cost, income, budget
    deficits, or budget surpluses) and sustainability measures (such as the
    long-term fiscal projection or social insurance projection) described
    in such report.
        (b) Effective Date.--The requirement under subsection (a) shall
    apply with respect to any audited financial statement submitted on or
    after the date of the enactment of this Act.

    SEC. 204. REFORM OF SENATE BUDGET COMMITTEE.

        In the Senate, the Committee on the Budget shall be composed of 15
    members as follows:
                (1) Six members who are a member of or caucus with the
            political party in the majority in the Senate, of which 1 of
            whom shall be designated as the Chairman by the members of the
            committee.
                (2) Five members who are a member of or caucus with the
            political party in the minority in the Senate, of which 1 of
            whom shall be designated as the Ranking Member by the members
            of the committee.
                (3) The Chairman and Ranking Member of the Committee on
            Appropriations.
                (4) The Chairman and Ranking Member of the Committee on
            Finance.

                           VOTES OF THE JOINT SELECT

                            COMMITTEE ON BUDGET AND

                         APPROPRIATIONS PROCESS REFORM

                                  ----------

        By unanimous consent, the Joint Select Committee on Budget
    and Appropriations Process Reform applied a voting rule for the
    adoption of amendments consistent with the rule required by law
    for final adoption of the Joint Select Committee's
    recommendations. Under that rule, passage or adoption required
    separate majorities of the appointees from each party.

     1. An amendment offered by Senator Bennett and Senator
            Lankford to reform the membership of the Senate Budget
            Committee. The amendment would reconstitute the
            membership of the Senate Budget Committee to include 8
            members from the majority and 7 members from the
            minority in addition to the Chairs and Ranking Members
            of both the Senate Appropriations and Finance
            Committees.

            The amendment was agreed to by a roll call vote of 7
            ayes and 0 noes of the Members appointed by the Speaker
            of the House and the Senate Majority Leader and of 6
            ayes and 1 no of the Members appointed by the House
            Minority Leader and the Senate Minority Leader.

                                                  ROLL CALL VOTE NO. 1
    ----------------------------------------------------------------------------------------------------------------
                  Republicans                 Aye     No   Present          Democrats           Aye     No   Present
    ----------------------------------------------------------------------------------------------------------------
    Co-Chair Womack........................     X   .....  .......  Co-Chair Lowey...........     X   .....  .......
    Senator Blunt..........................     X   .....  .......  Senator Whitehouse.......     X   .....  .......
    Rep. Sessions..........................  .....  .....  .......  Rep. Yarmuth.............     X   .....  .......
    Senator Perdue.........................     X   .....  .......  Senator Bennet...........     X   .....  .......
    Rep. Woodall...........................     X   .....  .......  Rep. Roybal-Allard.......     X   .....  .......
    Senator Lankford.......................     X   .....  .......  Senator Schatz...........  .....     X   .......
    Rep. Arrington.........................     X   .....  .......  Rep. Kilmer..............     X   .....  .......
    Senator Ernst..........................     X   .....  .......  Senator Hirono...........  .....  .....  .......
    ----------------------------------------------------------------------------------------------------------------

     2. An amendment offered by Representative Woodall to eliminate
            functional categories in the budget resolution in lieu
            of budget authority and outlays for the following
            categories: nondefense discretionary spending, defense
            discretionary spending, direct spending, and net
            interest. The amendment would also require the
            inclusion of a debt-to-GDP ratio.

            The amendment was not agreed to by a roll call vote of
            7 ayes and 0 noes of the Members appointed by the
            Speaker of the House and the Senate Majority Leader and
            of 0 ayes and 7 noes of the Members appointed by the
            House Minority Leader and the Senate Minority Leader.

                                                  ROLL CALL VOTE NO. 2
    ----------------------------------------------------------------------------------------------------------------
                  Republicans                 Aye     No   Present          Democrats           Aye     No   Present
    ----------------------------------------------------------------------------------------------------------------
    Co-Chair Womack........................     X   .....  .......  Co-Chair Lowey...........  .....     X   .......
    Senator Blunt..........................     X   .....  .......  Senator Whitehouse.......  .....     X   .......
    Rep. Sessions..........................  .....  .....  .......  Rep. Yarmuth.............  .....     X   .......
    Senator Perdue.........................     X   .....  .......  Senator Bennet...........  .....     X   .......
    Rep. Woodall...........................     X   .....  .......  Rep. Roybal-Allard.......  .....     X   .......
    Senator Lankford.......................     X   .....  .......  Senator Schatz...........  .....     X   .......
    Rep. Arrington.........................     X   .....  .......  Rep. Kilmer..............  .....     X   .......
    Senator Ernst..........................     X   .....  .......  Senator Hirono...........  .....  .....  .......
    ----------------------------------------------------------------------------------------------------------------

     3. An amendment offered by Senator Whitehouse, Senator Blunt,
            and Senator Perdue to establish an optional bipartisan
            path for the budget resolution in the Senate.

            The amendment was agreed to by a roll call vote of 7
            ayes and 0 noes of the Members appointed by the Speaker
            of the House and the Senate Majority Leader and of 7
            ayes and 0 noes of the Members appointed by the House
            Minority Leader and the Senate Minority Leader.

                                                  ROLL CALL VOTE NO. 3
    ----------------------------------------------------------------------------------------------------------------
                  Republicans                 Aye     No   Present          Democrats           Aye     No   Present
    ----------------------------------------------------------------------------------------------------------------
    Co-Chair Womack........................     X   .....  .......  Co-Chair Lowey...........     X   .....  .......
    Senator Blunt..........................     X   .....  .......  Senator Whitehouse.......     X   .....  .......
    Rep. Sessions..........................  .....  .....  .......  Rep. Yarmuth.............     X   .....  .......
    Senator Perdue.........................     X   .....  .......  Senator Bennet...........     X   .....  .......
    Rep. Woodall...........................     X   .....  .......  Rep. Roybal-Allard.......     X   .....  .......
    Senator Lankford.......................     X   .....  .......  Senator Schatz...........     X   .....  .......
    Rep. Arrington.........................     X   .....  .......  Rep. Kilmer..............     X   .....  .......
    Senator Ernst..........................     X   .....  .......  Senator Hirono...........  .....  .....  .......
    ----------------------------------------------------------------------------------------------------------------

     4. An amendment offered by Senator Schatz to include tax
            expenditures in the list of subtotals reported in the
            biennial budget.

            The amendment was not agreed to by a roll call vote of
            3 ayes and 5 noes of the Members appointed by the
            Speaker of the House and the Senate Majority Leader and
            of 7 ayes and 0 noes of the Members appointed by the
            House Minority Leader and the Senate Minority Leader.

                                                  ROLL CALL VOTE NO. 4
    ----------------------------------------------------------------------------------------------------------------
                  Republicans                 Aye     No   Present          Democrats           Aye     No   Present
    ----------------------------------------------------------------------------------------------------------------
    Co-Chair Womack........................  .....     X   .......  Co-Chair Lowey...........     X   .....  .......
    Senator Blunt..........................  .....     X   .......  Senator Whitehouse.......  .....  .....  .......
    Rep. Sessions..........................  .....     X   .......  Rep. Yarmuth.............     X   .....  .......
    Senator Perdue.........................  .....     X   .......  Senator Bennet...........     X   .....  .......
    Rep. Woodall...........................     X   .....  .......  Rep. Roybal-Allard.......     X   .....  .......
    Senator Lankford.......................     X   .....  .......  Senator Schatz...........     X   .....  .......
    Rep. Arrington.........................  .....     X   .......  Rep. Kilmer..............     X   .....  .......
    Senator Ernst..........................     X   .....  .......  Senator Hirono...........     X   .....  .......
    ----------------------------------------------------------------------------------------------------------------

     5. An amendment offered by Senator Perdue to increase the
            threshold for passing the budget resolution in the
            Senate from a simple majority (51 votes) to a super
            majority (60 votes).

            The amendment was not agreed to by a roll call vote of
            3 ayes and 4 noes of the Members appointed by the
            Speaker of the House and the Senate Majority Leader and
            of 0 ayes and 8 noes of the Members appointed by the
            House Minority Leader and the Senate Minority Leader.

                                                  ROLL CALL VOTE NO. 5
    ----------------------------------------------------------------------------------------------------------------
                  Republicans                 Aye     No   Present          Democrats           Aye     No   Present
    ----------------------------------------------------------------------------------------------------------------
    Co-Chair Womack........................  .....     X   .......  Co-Chair Lowey...........  .....     X   .......
    Senator Blunt..........................  .....     X   .......  Senator Whitehouse.......  .....     X   .......
    Rep. Sessions..........................  .....  .....  .......  Rep. Yarmuth.............  .....     X   .......
    Senator Perdue.........................     X   .....  .......  Senator Bennet...........  .....     X   .......
    Rep. Woodall...........................     X   .....  .......  Rep. Roybal-Allard.......  .....     X   .......
    Senator Lankford.......................  .....     X   .......  Senator Schatz...........  .....     X   .......
    Rep. Arrington.........................  .....     X   .......  Rep. Kilmer..............  .....     X   .......
    Senator Ernst..........................     X   .....  .......  Senator Hirono...........  .....     X   .......
    ----------------------------------------------------------------------------------------------------------------

     6. An amendment offered by Senator Perdue to turn 50 hours of
            debate on the budget resolution in the Senate into 50
            hours of consideration.

            The amendment was not agreed to by a roll call vote of
            7 ayes and 0 noes of the Members appointed by the
            Speaker of the House and the Senate Majority Leader and
            of 0 ayes and 8 noes of the Members appointed by the
            House Minority Leader and the Senate Minority Leader.

                                                  ROLL CALL VOTE NO. 6
    ----------------------------------------------------------------------------------------------------------------
                  Republicans                 Aye     No   Present          Democrats           Aye     No   Present
    ----------------------------------------------------------------------------------------------------------------
    Co-Chair Womack........................     X   .....  .......  Co-Chair Lowey...........  .....     X   .......
    Senator Blunt..........................  .....  .....  .......  Senator Whitehouse.......  .....     X   .......
    Rep. Sessions..........................     X   .....  .......  Rep. Yarmuth.............  .....     X   .......
    Senator Perdue.........................     X   .....  .......  Senator Bennet...........  .....     X   .......
    Rep. Woodall...........................     X   .....  .......  Rep. Roybal-Allard.......  .....     X   .......
    Senator Lankford.......................     X   .....  .......  Senator Schatz...........  .....     X   .......
    Rep. Arrington.........................     X   .....  .......  Rep. Kilmer..............  .....     X   .......
    Senator Ernst..........................     X   .....  .......  Senator Hirono...........  .....     X   .......
    ----------------------------------------------------------------------------------------------------------------

     7. An amendment offered by Representative Kilmer to prohibit
            any reconciliation bill that would cause or increase a
            deficit or reduce a surplus over the period of years
            covered by the reconciliation instructions in the
            budget resolution.

            The amendment was not agreed to by a roll call vote of
            0 ayes and 8 noes of the Members appointed by the
            Speaker of the House and the Senate Majority Leader and
            of 8 ayes and 0 noes of the Members appointed by the
            House Minority Leader and the Senate Minority Leader.

                                                  ROLL CALL VOTE NO. 7
    ----------------------------------------------------------------------------------------------------------------
                  Republicans                 Aye     No   Present          Democrats           Aye     No   Present
    ----------------------------------------------------------------------------------------------------------------
    Co-Chair Womack........................  .....     X   .......  Co-Chair Lowey...........     X   .....  .......
    Senator Blunt..........................  .....     X   .......  Senator Whitehouse.......     X   .....  .......
    Rep. Sessions..........................  .....     X   .......  Rep. Yarmuth.............     X   .....  .......
    Senator Perdue.........................  .....     X   .......  Senator Bennet...........     X   .....  .......
    Rep. Woodall...........................  .....     X   .......  Rep. Roybal-Allard.......     X   .....  .......
    Senator Lankford.......................  .....     X   .......  Senator Schatz...........     X   .....  .......
    Rep. Arrington.........................  .....     X   .......  Rep. Kilmer..............     X   .....  .......
    Senator Ernst..........................  .....     X   .......  Senator Hirono...........     X   .....  .......
    ----------------------------------------------------------------------------------------------------------------

     8. An amendment offered by Senator Lankford to include
            reconciliation directives as a required element in the
            contents of the budget resolution.

            The amendment was not agreed to by a roll call vote of
            8 ayes and 0 noes of the Members appointed by the
            Speaker of the House and the Senate Majority Leader and
            of 0 ayes and 7 noes of the Members appointed by the
            House Minority Leader and the Senate Minority Leader.

                                                  ROLL CALL VOTE NO. 8
    ----------------------------------------------------------------------------------------------------------------
                  Republicans                 Aye     No   Present          Democrats           Aye     No   Present
    ----------------------------------------------------------------------------------------------------------------
    Co-Chair Womack........................     X   .....  .......  Co-Chair Lowey...........  .....     X   .......
    Senator Blunt..........................     X   .....  .......  Senator Whitehouse.......  .....  .....  .......
    Rep. Sessions..........................     X   .....  .......  Rep. Yarmuth.............  .....     X   .......
    Senator Perdue.........................     X   .....  .......  Senator Bennet...........  .....     X   .......
    Rep. Woodall...........................     X   .....  .......  Rep. Roybal-Allard.......  .....     X   .......
    Senator Lankford.......................     X   .....  .......  Senator Schatz...........  .....     X   .......
    Rep. Arrington.........................     X   .....  .......  Rep. Kilmer..............  .....     X   .......
    Senator Ernst..........................     X   .....  .......  Senator Hirono...........  .....     X   .......
    ----------------------------------------------------------------------------------------------------------------

     9. An amendment offered by Senator Lankford to make
            reconciliation a mandatory element of the budget
            resolution. The amendment would also establish a new 20
            percent limitation on provisions in a reconciliation
            bill that either increase direct spending or reduce
            revenues beyond 20 percent of the gross savings in the
            budget resolution's reconciliation directives.

            The amendment was not agreed to by a roll call vote of
            6 ayes and 2 noes of the Members appointed by the
            Speaker of the House and the Senate Majority Leader and
            of 0 ayes and 7 noes of the Members appointed by the
            House Minority Leader and the Senate Minority Leader.

                                                  ROLL CALL VOTE NO. 9
    ----------------------------------------------------------------------------------------------------------------
                  Republicans                 Aye     No   Present          Democrats           Aye     No   Present
    ----------------------------------------------------------------------------------------------------------------
    Co-Chair Womack........................  .....     X   .......  Co-Chair Lowey...........  .....     X   .......
    Senator Blunt..........................     X   .....  .......  Senator Whitehouse.......  .....  .....  .......
    Rep. Sessions..........................     X   .....  .......  Rep. Yarmuth.............  .....     X   .......
    Senator Perdue.........................     X   .....  .......  Senator Bennet...........  .....     X   .......
    Rep. Woodall...........................     X   .....  .......  Rep. Roybal-Allard.......  .....     X   .......
    Senator Lankford.......................     X   .....  .......  Senator Schatz...........  .....     X   .......
    Rep. Arrington.........................  .....     X   .......  Rep. Kilmer..............  .....     X   .......
    Senator Ernst..........................     X   .....  .......  Senator Hirono...........  .....     X   .......
    ----------------------------------------------------------------------------------------------------------------

    10. An amendment offered by Senator Blunt, Senator Whitehouse,
            and Representative Woodall to maintain annual
            reconciliation.

            The amendment was agreed to by a roll call vote of 8
            ayes and 0 noes of the Members appointed by the Speaker
            of the House and the Senate Majority Leader and of 8
            ayes and 0 noes of the Members appointed by the House
            Minority Leader and the Senate Minority Leader.

                                                  ROLL CALL VOTE NO. 10
    ----------------------------------------------------------------------------------------------------------------
                  Republicans                 Aye     No   Present          Democrats           Aye     No   Present
    ----------------------------------------------------------------------------------------------------------------
    Co-Chair Womack........................     X   .....  .......  Co-Chair Lowey...........     X   .....  .......
    Senator Blunt..........................     X   .....  .......  Senator Whitehouse.......     X   .....  .......
    Rep. Sessions..........................     X   .....  .......  Rep. Yarmuth.............     X   .....  .......
    Senator Perdue.........................     X   .....  .......  Senator Bennet...........     X   .....  .......
    Rep. Woodall...........................     X   .....  .......  Rep. Roybal-Allard.......     X   .....  .......
    Senator Lankford.......................     X   .....  .......  Senator Schatz...........     X   .....  .......
    Rep. Arrington.........................     X   .....  .......  Rep. Kilmer..............     X   .....  .......
    Senator Ernst..........................     X   .....  .......  Senator Hirono...........     X   .....  .......
    ----------------------------------------------------------------------------------------------------------------

    11. An amendment offered by Representative Sessions to
            establish a permanent bipartisan, bicameral debt
            reduction committee.

            The amendment was not agreed to by a roll call vote of
            7 ayes and 1 no of the Members appointed by the Speaker
            of the House and the Senate Majority Leader and of 1
            aye and 7 noes of the Members appointed by the House
            Minority Leader and the Senate Minority Leader.

                                                  ROLL CALL VOTE NO. 11
    ----------------------------------------------------------------------------------------------------------------
                  Republicans                 Aye     No   Present          Democrats           Aye     No   Present
    ----------------------------------------------------------------------------------------------------------------
    Co-Chair Womack........................     X   .....  .......  Co-Chair Lowey...........  .....     X   .......
    Senator Blunt..........................     X   .....  .......  Senator Whitehouse.......  .....     X   .......
    Rep. Sessions..........................     X   .....  .......  Rep. Yarmuth.............  .....     X   .......
    Senator Perdue.........................     X   .....  .......  Senator Bennet...........  .....     X   .......
    Rep. Woodall...........................     X   .....  .......  Rep. Roybal-Allard.......  .....     X   .......
    Senator Lankford.......................  .....     X   .......  Senator Schatz...........  .....     X   .......
    Rep. Arrington.........................     X   .....  .......  Rep. Kilmer..............     X   .....  .......
    Senator Ernst..........................     X   .....  .......  Senator Hirono...........  .....     X   .......
    ----------------------------------------------------------------------------------------------------------------

    12. An amendment offered by Senator Hirono to authorize the
            Treasury Secretary to suspend the debt ceiling.

            The amendment was not agreed to by a roll call vote of
            0 ayes and 7 noes of the Members appointed by the
            Speaker of the House and the Senate Majority Leader and
            of 6 ayes and 0 noes of the Members appointed by the
            House Minority Leader and the Senate Minority Leader.

                                                  ROLL CALL VOTE NO. 12
    ----------------------------------------------------------------------------------------------------------------
                  Republicans                 Aye     No   Present          Democrats           Aye     No   Present
    ----------------------------------------------------------------------------------------------------------------
    Co-Chair Womack........................  .....     X   .......  Co-Chair Lowey...........     X   .....  .......
    Senator Blunt..........................  .....  .....  .......  Senator Whitehouse.......     X   .....  .......
    Rep. Sessions..........................  .....     X   .......  Rep. Yarmuth.............  .....  .....  .......
    Senator Perdue.........................  .....     X   .......  Senator Bennet...........     X   .....  .......
    Rep. Woodall...........................  .....     X   .......  Rep. Roybal-Allard.......  .....  .....  .......
    Senator Lankford.......................  .....     X   .......  Senator Schatz...........     X   .....  .......
    Rep. Arrington.........................  .....     X   .......  Rep. Kilmer..............     X   .....  .......
    Senator Ernst..........................  .....     X   .......  Senator Hirono...........     X   .....  .......
    ----------------------------------------------------------------------------------------------------------------

    13. An amendment offered by Representative Arrington and
            Senator Lankford to limit and ultimately phase out the
            use of changes in mandatory programs (CHIMPs).

            The amendment was not agreed to by a roll call vote of
            8 ayes and 0 noes of the Members appointed by the
            Speaker of the House and the Senate Majority Leader and
            of 0 ayes and 6 noes of the Members appointed by the
            House Minority Leader and the Senate Minority Leader.

                                                  ROLL CALL VOTE NO. 13
    ----------------------------------------------------------------------------------------------------------------
                  Republicans                 Aye     No   Present          Democrats           Aye     No   Present
    ----------------------------------------------------------------------------------------------------------------
    Co-Chair Womack........................     X   .....  .......  Co-Chair Lowey...........  .....     X   .......
    Senator Blunt..........................     X   .....  .......  Senator Whitehouse.......  .....     X   .......
    Rep. Sessions..........................     X   .....  .......  Rep. Yarmuth.............  .....  .....  .......
    Senator Perdue.........................     X   .....  .......  Senator Bennet...........  .....     X   .......
    Rep. Woodall...........................     X   .....  .......  Rep. Roybal-Allard.......  .....  .....  .......
    Senator Lankford.......................     X   .....  .......  Senator Schatz...........  .....     X   .......
    Rep. Arrington.........................     X   .....  .......  Rep. Kilmer..............  .....     X   .......
    Senator Ernst..........................     X   .....  .......  Senator Hirono...........  .....     X   .......
    ----------------------------------------------------------------------------------------------------------------

    14. An amendment offered by Representative Kilmer to require
            the House and Senate Budget Committees to hold a joint
            committee hearing on the Fiscal State of the Nation.

            The amendment was agreed to by a roll call vote of 8
            ayes and 0 noes of the Members appointed by the Speaker
            of the House and the Senate Majority Leader and of 6
            ayes and 0 noes of the Members appointed by the House
            Minority Leader and the Senate Minority Leader.

                                                  ROLL CALL VOTE NO. 14
    ----------------------------------------------------------------------------------------------------------------
                  Republicans                 Aye     No   Present          Democrats           Aye     No   Present
    ----------------------------------------------------------------------------------------------------------------
    Co-Chair Womack........................     X   .....  .......  Co-Chair Lowey...........     X   .....  .......
    Senator Blunt..........................     X   .....  .......  Senator Whitehouse.......     X   .....  .......
    Rep. Sessions..........................     X   .....  .......  Rep. Yarmuth.............  .....  .....  .......
    Senator Perdue.........................     X   .....  .......  Senator Bennet...........     X   .....  .......
    Rep. Woodall...........................     X   .....  .......  Rep. Roybal-Allard.......  .....  .....  .......
    Senator Lankford.......................     X   .....  .......  Senator Schatz...........     X   .....  .......
    Rep. Arrington.........................     X   .....  .......  Rep. Kilmer..............     X   .....  .......
    Senator Ernst..........................     X   .....  .......  Senator Hirono...........     X   .....  .......
    ----------------------------------------------------------------------------------------------------------------

    15. An amendment offered by Senator Schatz to include total
            outlays and revenues for tax expenditures as an
            optional item in the budget resolution.

            The amendment was agreed to by a roll call vote of 8
            ayes and 0 noes of the Members appointed by the Speaker
            of the House and the Senate Majority Leader and of 6
            ayes and 0 noes of the Members appointed by the House
            Minority Leader and the Senate Minority Leader.

                                                  ROLL CALL VOTE NO. 15
    ----------------------------------------------------------------------------------------------------------------
                  Republicans                 Aye     No   Present          Democrats           Aye     No   Present
    ----------------------------------------------------------------------------------------------------------------
    Co-Chair Womack........................     X   .....  .......  Co-Chair Lowey...........     X   .....  .......
    Senator Blunt..........................     X   .....  .......  Senator Whitehouse.......     X   .....  .......
    Rep. Sessions..........................     X   .....  .......  Rep. Yarmuth.............  .....  .....  .......
    Senator Perdue.........................     X   .....  .......  Senator Bennet...........     X   .....  .......
    Rep. Woodall...........................     X   .....  .......  Rep. Roybal-Allard.......  .....  .....  .......
    Senator Lankford.......................     X   .....  .......  Senator Schatz...........     X   .....  .......
    Rep. Arrington.........................     X   .....  .......  Rep. Kilmer..............     X   .....  .......
    Senator Ernst..........................     X   .....  .......  Senator Hirono...........     X   .....  .......
    ----------------------------------------------------------------------------------------------------------------

    16. An amendment offered by Senator Perdue to align the fiscal
            year with the calendar year and incorporate milestones
            into the funding process connected with penalties. The
            milestones are based on a percentage of completion of
            funding bills signed into law (25/50/75/100). The
            penalties connected with these milestones includes no
            recess or use of official funds for member travel if
            these funding milestones are not met.

            The amendment was not agreed to by a roll call vote of
            8 ayes and 0 noes of the Members appointed by the
            Speaker of the House and the Senate Majority Leader and
            of 0 ayes and 7 noes of the Members appointed by the
            House Minority Leader and the Senate Minority Leader.

                                                  ROLL CALL VOTE NO. 16
    ----------------------------------------------------------------------------------------------------------------
                  Republicans                 Aye     No   Present          Democrats           Aye     No   Present
    ----------------------------------------------------------------------------------------------------------------
    Co-Chair Womack........................     X   .....  .......  Co-Chair Lowey...........  .....     X   .......
    Senator Blunt..........................     X   .....  .......  Senator Whitehouse.......  .....     X   .......
    Rep. Sessions..........................     X   .....  .......  Rep. Yarmuth.............  .....  .....  .......
    Senator Perdue.........................     X   .....  .......  Senator Bennet...........  .....     X   .......
    Rep. Woodall...........................     X   .....  .......  Rep. Roybal-Allard.......  .....     X   .......
    Senator Lankford.......................     X   .....  .......  Senator Schatz...........  .....     X   .......
    Rep. Arrington.........................     X   .....  .......  Rep. Kilmer..............  .....     X   .......
    Senator Ernst..........................     X   .....  .......  Senator Hirono...........  .....     X   .......
    ----------------------------------------------------------------------------------------------------------------

    17. An amendment offered by Senator Perdue to incorporate
            milestones into the funding process connected with
            penalties. The milestones are based on a percentage of
            completion of funding bills signed into law (25/50/75/
            100). The penalties connected with these milestones
            includes no recess or use of official funds for member
            travel if these funding milestones are not met.

            The amendment was not agreed to by a roll call vote of
            8 ayes and 0 noes of the Members appointed by the
            Speaker of the House and the Senate Majority Leader and
            of 1 aye and 6 noes of the Members appointed by the
            House Minority Leader and the Senate Minority Leader.

                                                  ROLL CALL VOTE NO. 17
    ----------------------------------------------------------------------------------------------------------------
                  Republicans                 Aye     No   Present          Democrats           Aye     No   Present
    ----------------------------------------------------------------------------------------------------------------
    Co-Chair Womack........................     X   .....  .......  Co-Chair Lowey...........  .....     X   .......
    Senator Blunt..........................     X   .....  .......  Senator Whitehouse.......  .....     X   .......
    Rep. Sessions..........................     X   .....  .......  Rep. Yarmuth.............  .....  .....  .......
    Senator Perdue.........................     X   .....  .......  Senator Bennet...........  .....     X   .......
    Rep. Woodall...........................     X   .....  .......  Rep. Roybal-Allard.......  .....     X   .......
    Senator Lankford.......................     X   .....  .......  Senator Schatz...........  .....     X   .......
    Rep. Arrington.........................     X   .....  .......  Rep. Kilmer..............     X   .....  .......
    Senator Ernst..........................     X   .....  .......  Senator Hirono...........  .....     X   .......
    ----------------------------------------------------------------------------------------------------------------

    18. An amendment offered by Senator Ernst and Senator Lankford
            to establish live quorum calls if the Senate fails to
            adopt a budget resolution by May 1st or fails to pass
            all regular appropriations bills by October 1st.

            The amendment was not agreed to by a roll call vote of
            8 ayes and 0 noes of the Members appointed by the
            Speaker of the House and the Senate Majority Leader and
            of 1 aye and 6 noes of the Members appointed by the
            House Minority Leader and the Senate Minority Leader.

                                                  ROLL CALL VOTE NO. 18
    ----------------------------------------------------------------------------------------------------------------
                  Republicans                 Aye     No   Present          Democrats           Aye     No   Present
    ----------------------------------------------------------------------------------------------------------------
    Co-Chair Womack........................     X   .....  .......  Co-Chair Lowey...........  .....     X   .......
    Senator Blunt..........................     X   .....  .......  Senator Whitehouse.......  .....     X   .......
    Rep. Sessions..........................     X   .....  .......  Rep. Yarmuth.............  .....  .....  .......
    Senator Perdue.........................     X   .....  .......  Senator Bennet...........  .....     X   .......
    Rep. Woodall...........................     X   .....  .......  Rep. Roybal-Allard.......  .....     X   .......
    Senator Lankford.......................     X   .....  .......  Senator Schatz...........  .....     X   .......
    Rep. Arrington.........................     X   .....  .......  Rep. Kilmer..............     X   .....  .......
    Senator Ernst..........................     X   .....  .......  Senator Hirono...........  .....     X   .......
    ----------------------------------------------------------------------------------------------------------------

    19. An amendment offered by Senator Ernst to prohibit the
            Senate from recessing or adjourning if it fails to pass
            all regular appropriations bills by October 1st of each
            year.

            The amendment was not agreed to by a roll call vote of
            8 ayes and 0 noes of the Members appointed by the
            Speaker of the House and the Senate Majority Leader and
            of 1 aye and 6 noes of the Members appointed by the
            House Minority Leader and the Senate Minority Leader.

                                                  ROLL CALL VOTE NO. 19
    ----------------------------------------------------------------------------------------------------------------
                  Republicans                 Aye     No   Present          Democrats           Aye     No   Present
    ----------------------------------------------------------------------------------------------------------------
    Co-Chair Womack........................     X   .....  .......  Co-Chair Lowey...........  .....     X   .......
    Senator Blunt..........................     X   .....  .......  Senator Whitehouse.......  .....     X   .......
    Rep. Sessions..........................     X   .....  .......  Rep. Yarmuth.............  .....  .....  .......
    Senator Perdue.........................     X   .....  .......  Senator Bennet...........  .....     X   .......
    Rep. Woodall...........................     X   .....  .......  Rep. Roybal-Allard.......  .....     X   .......
    Senator Lankford.......................     X   .....  .......  Senator Schatz...........  .....     X   .......
    Rep. Arrington.........................     X   .....  .......  Rep. Kilmer..............     X   .....  .......
    Senator Ernst..........................     X   .....  .......  Senator Hirono...........  .....     X   .......
    ----------------------------------------------------------------------------------------------------------------

    20. An amendment offered by Senator Ernst to prohibit the
            Senate from recessing or adjourning if it fails to pass
            a budget resolution by May 1st of an odd-numbered
            calendar year.

            The amendment was not agreed to by a roll call vote of
            8 ayes and 0 noes of the Members appointed by the
            Speaker of the House and the Senate Majority Leader and
            of 1 aye and 6 noes of the Members appointed by the
            House Minority Leader and the Senate Minority Leader.

                                                  ROLL CALL VOTE NO. 20
    ----------------------------------------------------------------------------------------------------------------
                  Republicans                 Aye     No   Present          Democrats           Aye     No   Present
    ----------------------------------------------------------------------------------------------------------------
    Co-Chair Womack........................     X   .....  .......  Co-Chair Lowey...........  .....     X   .......
    Senator Blunt..........................     X   .....  .......  Senator Whitehouse.......  .....     X   .......
    Rep. Sessions..........................     X   .....  .......  Rep. Yarmuth.............  .....  .....  .......
    Senator Perdue.........................     X   .....  .......  Senator Bennet...........  .....     X   .......
    Rep. Woodall...........................     X   .....  .......  Rep. Roybal-Allard.......  .....     X   .......
    Senator Lankford.......................     X   .....  .......  Senator Schatz...........  .....     X   .......
    Rep. Arrington.........................     X   .....  .......  Rep. Kilmer..............     X   .....  .......
    Senator Ernst..........................     X   .....  .......  Senator Hirono...........  .....     X   .......
    ----------------------------------------------------------------------------------------------------------------

    21. An amendment offered by Senator Ernst to prohibit the
            obligation or expenditure of funds for official travel
            by a Senator if the Senate fails to adopt a budget
            resolution by May 1st of each odd-numbered year or all
            appropriation bills individually or collectively, by
            October 1st of each year.

            The amendment was not agreed to by a roll call vote of
            8 ayes and 0 noes of the Members appointed by the
            Speaker of the House and the Senate Majority Leader and
            of 1 aye and 6 noes of the Members appointed by the
            House Minority Leader and the Senate Minority Leader.

                                                  ROLL CALL VOTE NO. 21
    ----------------------------------------------------------------------------------------------------------------
                  Republicans                 Aye     No   Present          Democrats           Aye     No   Present
    ----------------------------------------------------------------------------------------------------------------
    Co-Chair Womack........................     X   .....  .......  Co-Chair Lowey...........  .....     X   .......
    Senator Blunt..........................     X   .....  .......  Senator Whitehouse.......  .....     X   .......
    Rep. Sessions..........................     X   .....  .......  Rep. Yarmuth.............  .....  .....  .......
    Senator Perdue.........................     X   .....  .......  Senator Bennet...........  .....     X   .......
    Rep. Woodall...........................     X   .....  .......  Rep. Roybal-Allard.......  .....     X   .......
    Senator Lankford.......................     X   .....  .......  Senator Schatz...........  .....     X   .......
    Rep. Arrington.........................     X   .....  .......  Rep. Kilmer..............     X   .....  .......
    Senator Ernst..........................     X   .....  .......  Senator Hirono...........  .....     X   .......
    ----------------------------------------------------------------------------------------------------------------

    22. An amendment offered by Representative Arrington,
            Representative Kilmer, and Senator Ernst to expand the
            prohibition against adjournment resolutions in the
            House to include the August recess.

            The amendment was not agreed to by a roll call vote of
            8 ayes and 0 noes of the Members appointed by the
            Speaker of the House and the Senate Majority Leader and
            of 2 ayes and 5 noes of the Members appointed by the
            House Minority Leader and the Senate Minority Leader.

                                                  ROLL CALL VOTE NO. 22
    ----------------------------------------------------------------------------------------------------------------
                  Republicans                 Aye     No   Present          Democrats           Aye     No   Present
    ----------------------------------------------------------------------------------------------------------------
    Co-Chair Womack........................     X   .....  .......  Co-Chair Lowey...........  .....     X   .......
    Senator Blunt..........................     X   .....  .......  Senator Whitehouse.......  .....     X   .......
    Rep. Sessions..........................     X   .....  .......  Rep. Yarmuth.............  .....  .....  .......
    Senator Perdue.........................     X   .....  .......  Senator Bennet...........     X   .....  .......
    Rep. Woodall...........................     X   .....  .......  Rep. Roybal-Allard.......  .....     X   .......
    Senator Lankford.......................     X   .....  .......  Senator Schatz...........  .....     X   .......
    Rep. Arrington.........................     X   .....  .......  Rep. Kilmer..............     X   .....  .......
    Senator Ernst..........................     X   .....  .......  Senator Hirono...........  .....     X   .......
    ----------------------------------------------------------------------------------------------------------------

    23. An amendment offered by Senator Perdue to align the fiscal
            year with the calendar year.

            The amendment was not agreed to by a roll call vote of
            8 ayes and 0 noes of the Members appointed by the
            Speaker of the House and the Senate Majority Leader and
            of 2 ayes and 5 noes of the Members appointed by the
            House Minority Leader and the Senate Minority Leader.

                                                  ROLL CALL VOTE NO. 23
    ----------------------------------------------------------------------------------------------------------------
                  Republicans                 Aye     No   Present          Democrats           Aye     No   Present
    ----------------------------------------------------------------------------------------------------------------
    Co-Chair Womack........................     X   .....  .......  Co-Chair Lowey...........  .....     X   .......
    Senator Blunt..........................     X   .....  .......  Senator Whitehouse.......  .....     X   .......
    Rep. Sessions..........................     X   .....  .......  Rep. Yarmuth.............  .....  .....  .......
    Senator Perdue.........................     X   .....  .......  Senator Bennet...........     X   .....  .......
    Rep. Woodall...........................     X   .....  .......  Rep. Roybal-Allard.......  .....     X   .......
    Senator Lankford.......................     X   .....  .......  Senator Schatz...........  .....     X   .......
    Rep. Arrington.........................     X   .....  .......  Rep. Kilmer..............  .....     X   .......
    Senator Ernst..........................     X   .....  .......  Senator Hirono...........     X   .....  .......
    ----------------------------------------------------------------------------------------------------------------

    24. An amendment offered by Representative Roybal-Allard on
            behalf of Representative Yarmuth to repeal the
            statutory discretionary spending limits.

            The amendment was not agreed to by a roll call vote of
            1 aye and 7 noes of the Members appointed by the
            Speaker of the House and the Senate Majority Leader and
            of 7 ayes and 0 noes of the Members appointed by the
            House Minority Leader and the Senate Minority Leader.

                                                  ROLL CALL VOTE NO. 24
    ----------------------------------------------------------------------------------------------------------------
                  Republicans                 Aye     No   Present          Democrats           Aye     No   Present
    ----------------------------------------------------------------------------------------------------------------
    Co-Chair Womack........................  .....     X   .......  Co-Chair Lowey...........     X   .....  .......
    Senator Blunt..........................     X   .....  .......  Senator Whitehouse.......     X   .....  .......
    Rep. Sessions..........................  .....     X   .......  Rep. Yarmuth.............  .....  .....  .......
    Senator Perdue.........................  .....     X   .......  Senator Bennet...........     X   .....  .......
    Rep. Woodall...........................  .....     X   .......  Rep. Roybal-Allard.......     X   .....  .......
    Senator Lankford.......................  .....     X   .......  Senator Schatz...........     X   .....  .......
    Rep. Arrington.........................  .....     X   .......  Rep. Kilmer..............     X   .....  .......
    Senator Ernst..........................  .....     X   .......  Senator Hirono...........     X   .....  .......
    ----------------------------------------------------------------------------------------------------------------

    25. Vote on the bill as amended and the report as amended.

            The bill and report as amended was not agreed to by a
            roll call vote of 1 aye and 7 noes of the Members
            appointed by the Speaker of the House and the Senate
            Majority Leader and of 7 ayes and 0 noes of the Members
            appointed by the House Minority Leader and the Senate
            Minority Leader.

                                                  ROLL CALL VOTE NO. 25
    ----------------------------------------------------------------------------------------------------------------
                  Republicans                 Aye     No   Present          Democrats           Aye     No   Present
    ----------------------------------------------------------------------------------------------------------------
    Co-Chair Womack........................     X   .....  .......  Co-Chair Lowey...........  .....  .....       X
    Senator Blunt..........................     X   .....  .......  Senator Whitehouse.......  .....  .....       X
    Rep. Sessions..........................     X   .....  .......  Rep. Yarmuth.............     X   .....  .......
    Senator Perdue.........................  .....     X   .......  Senator Bennet...........  .....     X   .......
    Rep. Woodall...........................     X   .....  .......  Rep. Roybal-Allard.......  .....  .....       X
    Senator Lankford.......................  .....     X   .......  Senator Schatz...........  .....     X   .......
    Rep. Arrington.........................     X   .....  .......  Rep. Kilmer..............     X   .....  .......
    Senator Ernst..........................  .....     X   .......  Senator Hirono...........  .....  .....       X
    ----------------------------------------------------------------------------------------------------------------

                                    APPENDIX

                                  ----------

        This appendix includes five items produced by the Joint
    Select Committee on Budget and Appropriations Process Reform
    (JSCBAPR). The first consists of the complete transcripts of
    the five public hearings held by the JSCBAPR. The second and
    third items are briefing materials prepared by the
    Congressional Budget Office and the Congressional Research
    Service for the JSCBAPR. The fourth is H.R. 7191, a bill
    introduced by Representative Steve Womack, Chairman of the
    House Committee on the Budget, and Representative John Yarmuth,
    the Ranking Member of the House Committee on the Budget. This
    bill reflects the work of the JSCBAPR and excludes only those
    recommendations that dealt solely with Senate procedure and the
    Senate Budget Committee. The final item is the press release
    that accompanied the introduction of H.R. 7191.

                              Hearing Transcripts

        Following the creation of the JSCBAPR in February 2018, the
    Committee held five public hearings, fulfilling the requirement
    in the BBA 2018.\12\ The JSCBAPR held the following hearings.
    ---------------------------------------------------------------------------
        \12\ Id.

    April 17, 2018--Opportunities to Significantly Improve the
    ---------------------------------------------------------------------------
    Federal Budget Process

    May 9, 2018--Bipartisanship in Budgeting

    May 24, 2018--The Budget Resolution--Content, Timeliness, and
    Enforcement

    June 27, 2018--Members' Day

    July 12, 2018--Opportunities to Improve the Appropriations
    Process

        A complete compilation of the transcripts of each of these
    Hearings follows:

                     HEARINGS OF THE JOINT SELECT COMMITTEE

    =======================================================================

                           JOINT SELECT COMMITTEE ON
                           BUDGET AND APPROPRIATIONS
                                 PROCESS REFORM

                         ONE HUNDRED FIFTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                  HEARINGS HELD IN WASHINGTON, D.C., APRIL 17,
                   MAY 9, MAY 24, JUNE 27, AND JULY 12, 2018

                                   __________

                                Serial No. 115-1

                                   __________

               Printed for the use of the Joint Select Committee

                           Available on the Internet:
                                www.govinfo.gov
                      JOINT SELECT COMMITTEE ON BUDGET AND
                         APPROPRIATIONS PROCESS REFORM

    Republicans                          Democrats
    REP. STEVE WOMACK, Arkansas          REP. NITA LOWEY, New York
      Co-Chair                             Co-Chair
    SEN. ROY BLUNT, Missouri             SEN. SHELDON WHITEHOUSE,
    REP. PETE SESSIONS, Texas              Rhode Island
    SEN. DAVID PERDUE, Georgia           REP. JOHN YARMUTH, Kentucky
    REP. ROB WOODALL, Georgia            SEN. MICHAEL BENNET, Colorado
    SEN. JAMES LANKFORD, Oklahoma        REP. LUCILLE ROYBAL-ALLARD,
    REP. JODEY ARRINGTON, Texas              California
    SEN. JONI ERNST, Iowa                SEN. BRIAN SCHATZ, Hawaii
                                         REP. DEREK KILMER, Washington
                                         SEN. MAZIE HIRONO, Hawaii

                                C O N T E N T S

                                                                       Page

    INTRODUCTION.....................................................    61

                                   __________

                                 APRIL 17, 2018

    ORGANIZATIONAL MEETING FOLLOWED BY HEARING ON: OPPORTUNITIES TO
      SIGNIFICANTLY IMPROVE THE FEDERAL BUDGET PROCESS...............    65

        Hon. Steve Womack, Co-Chair, Joint Select Committee..........    66
            Prepared statement of....................................    68
        Hon. Nita M. Lowey, Co-Chair, Joint Select Committee.........    70
            Prepared statement of....................................    71
        Martha Coven, J.D., Lecturer and John L. Weinberg/Goldman
          Sachs & Co. Visiting Professor, Woodrow Wilson School of
          Public and International Affairs, Princeton University.....    88
            Prepared statement of....................................    90
        Douglas Holtz-Eakin, Ph.D., President, American Action Forum.    95
            Prepared statement of....................................    97
        Hon. Lucille Roybal-Allard, Joint Select Committee, statement
          submitted for the record...................................   126
        Hon. Steve Womack, Co-Chair, Joint Select Committee,
          questions to Ms. Martha Coven submitted for the record.....   127
            Ms. Martha Coven's answers to questions submitted for the
              record.................................................   128
        Hon. Steve Womack, Co-Chair, Joint Select Committee,
          questions to Dr. Douglas Holtz-Eakin submitted for the
          record.....................................................   131
            Dr. Douglas Holtz-Eakin's answers to questions submitted
              for the record.........................................   132
        Hon. David Perdue, Joint Select Committee, questions to Ms.
          Martha Coven submitted for the record......................   134
            Ms. Martha Coven's answers to questions submitted for the
              record.................................................   135
        Hon. David Perdue, Joint Select Committee, questions to Dr.
          Douglas Holtz-Eakin submitted for the record...............   137
            Dr. Douglas Holtz-Eakin's answers to questions submitted
              for the record.........................................   138

                                   __________

                                  MAY 9, 2018

    BIPARTISANSHIP IN BUDGETING......................................   139

        Hon. Steve Womack, Co-Chair, Joint Select Committee..........   139
            Prepared statement of....................................   140
        Hon. Nita M. Lowey, Co-Chair, Joint Select Committee.........   141
            Prepared statement of....................................   142
        G. William Hoagland, Senior Vice President, Bipartisan Policy
          Center, U.S. Senate Staff 1982-2007........................   143
            Prepared statement of....................................   146
        Donald R. Wolfensberger, Fellow, Bipartisan Policy Center,
          Fellow, Woodrow Wilson International Center for Scholars...   151
            Prepared statement of....................................   154
            Supplemental statement of................................   158
        Emily Holubowich, Participant, Convergence Building a Better
          Budget Process Project; Executive Director, Coalition for
          Health Funding.............................................   162
            Prepared statement of....................................   164
            Addendum to the Testimony of Emily Holubowich............   167
        Matt Owens, Participant, Convergence Building a Better Budget
          Process Project, Vice President for Federal Relations and
          Administration, Association of American Universities (AAU).   170
            Prepared statement of....................................   172
        Hon. Sheldon Whitehouse, Joint Select Committee..............   198
            Letter submitted for the record..........................   198
        Hon. Sheldon Whitehouse, Joint Select Committee, question to
          Emily J. Holubowich and M. Matthew Owens submitted for the
          record.....................................................   204
            Emily J. Holubowich and M. Matthew Owens's answer to a
              question submitted for the record......................   205

                                   __________

                                  MAY 24, 2018

    THE BUDGET RESOLUTION--CONTENT, TIMELINESS, AND ENFORCEMENT......   207

        Hon. Steve Womack, Co-Chair, Joint Select Committee..........   207
            Prepared statement of....................................   209
        Hon. Nita M. Lowey, Co-Chair, Joint Select Committee.........   211
            Prepared statement of....................................   212
        Maya MacGuineas, President, Committee for a Responsible
          Federal Budget.............................................   213
            Prepared statement of....................................   216
        James C. Capretta, Resident Fellow, Milton Friedman Chair,
          American Enterprise Institute..............................   224
            Prepared statement of....................................   226
        Bill Dauster, Former Democratic Staff Director and Chief
          Counsel, Senate Budget Committee...........................   236
            Prepared statement of....................................   238
        Joseph White, Professor, Department of Political Science and
          Center for Policy Studies, Case Western Reserve University.   242
            Prepared statement of....................................   244
            Congressional Budget Office letter submitted for the
              record.................................................   275

                                   __________

                                 JUNE 27, 2018

    MEMBERS' DAY: HOW TO SIGNIFICANTLY REFORM THE BUDGET AND
      APPROPRIATIONS PROCESS.........................................   301

        Hon. Steve Womack, Co-Chair, Joint Select Committee..........   301
            Prepared statement of....................................   303
        Hon. Nita M. Lowey, Co-Chair, Joint Select Committee.........   304
            Prepared statement of....................................   305
        Hon. Paul D. Ryan, Speaker of the House of Representatives
          from the State of Wisconsin................................   306
            Prepared statement of....................................   310
        Hon. Nancy Pelosi, Democratic Minority Leader of the House of
          Representatives from the State of California...............   316
            Prepared statement of....................................   320
        Hon. Steny H. Hoyer, Democratic Whip of the House of
          Representatives from the State of Maryland.................   324
            Prepared statement of....................................   327
        Hon. Bob Corker, United States Senator from the State of
          Tennessee..................................................   329
            Prepared statement of....................................   331
        Hon. Peter J. Visclosky, U.S. House of Representatives from
          the State of Indiana.......................................   334
            Prepared statement of....................................   336
        Hon. Devin Nunes, U.S. House of Representatives from the
          State of California........................................   340
            Prepared statement of....................................   342
        Hon. Keith J. Rothfus, U.S. House of Representatives from the
          State of Pennsylvania......................................   344
            Prepared statement of....................................   346
        Hon. Lloyd Smucker, U.S. House of Representatives from the
          State of Pennsylvania......................................   348
            Prepared statement of....................................   350
        Hon. Warren Davidson, U.S. House of Representatives from the
          State of Ohio..............................................   353
            Prepared statement of....................................   355
        Hon. J. French Hill, U.S. House of Representatives from the
          State of Arkansas..........................................   357
            Prepared statement of....................................   359
        Hon. James B. Renacci, U.S. House of Representatives from the
          State of Ohio..............................................   363
            Prepared statement of....................................   365
        Hon. Pramila Jayapal, U.S. House of Representatives from the
          State of Washington........................................   368
            Prepared statement of....................................   371
        Hon. David E. Price, U.S. House of Representatives from the
          State of North Carolina....................................   373
            Prepared statement of....................................   376
        Hon. Steve Daines, United States Senator from the State of
          Montana....................................................   382
            Prepared statement of....................................   385
        Hon. Robert B. Aderholt, U.S. House of Representatives from
          the State of Alabama.......................................   390
            Prepared statement of....................................   392
        Hon. Elizabeth H. Esty, U.S. House of Representatives from
          the State of Connecticut...................................   399
            Prepared statement of....................................   401
        Hon. Tom McClintock, U.S. House of Representatives from the
          State of California........................................   405
            Prepared statement of....................................   407
        Hon. Bill Foster, U.S. House of Representatives from the
          State of Illinois..........................................   410
            Prepared statement of....................................   412
        Hon. Bruce Westerman, U.S. House of Representatives from the
          State of Arkansas..........................................   414
            Prepared statement of....................................   416
        Hon. John Curtis, U.S. House of Representatives from the
          State of Utah..............................................   421
            Prepared statement of....................................   423
        Hon. Jim Himes, U.S. House of Representatives from the State
          of Connecticut.............................................   426
            Prepared statement of....................................   428
        Hon. Roger Marshall, U.S. House of Representatives from the
          State of Kansas............................................   430
            Prepared statement of....................................   432
        Hon. Hal Rogers, U.S. House of Representatives from the State
          of Kentucky................................................   434
            Prepared statement of....................................   436
        Hon. Daniel Webster, U.S. House of Representatives from the
          State of Florida...........................................   442
            Prepared statement of....................................   444
        Hon. Ralph Norman, U.S. House of Representatives from the
          State of South Carolina....................................   446
            Prepared statement of....................................   448
        Additional statements submitted for the record:
                  ...................................................
            Hon. Rob Bishop, U.S. House of Representatives from the
              State of Utah..........................................   450
            Hon. John Carter, U.S. House of Representatives from the
              State of Texas.........................................   459
            Hon. Bradley Byrne, U.S. House of Representatives from
              the State of Alabama and Hon. Paul Mitchell, U.S. House
              of Representatives from the State of Michigan..........   462
            Hon. Mario Diaz-Balart, U.S. House of Representatives
              from the State of Florida..............................   470
            Hon. Virginia Foxx, U.S. House of Representatives from
              the State of North Carolina............................   473
            Hon. Dean Heller, United States Senator from the State of
              Nevada, submitted a letter for the record..............   477

                                   __________

                                 JULY 12, 2018

    OPPORTUNITIES TO IMPROVE THE APPROPRIATIONS PROCESS..............   479

        Hon. Steve Womack, Co-Chair, Joint Select Committee..........   479
            Prepared statement of....................................   481
        Hon. Nita M. Lowey, Co-Chair, Joint Select Committee.........   483
            Prepared statement of....................................   484
        Hon. Leon E. Panetta, Former Secretary of Defense, 2011-2013;
          Chairman, The Panetta Institute for Public Policy and
          Former Secretary of Defense................................   485
            Prepared statement of....................................   489
        Hon. David R. Obey, Former Chairman of House Appropriations
          Committee, 2007-2011.......................................   498
            Prepared statement of....................................   501

                                  INTRODUCTION

                                  ----------

                      The Joint Select Committee on Budget

                       and Appropriations Process Reform

    The Joint Select Committee on Budget and Appropriations Process
    Reform (JSCBAPR) was established by the Bipartisan Budget Act
    of 2018 (BBA 2018), which was signed into law on February 9,
    2018.\1\ The JSCBAPR is a bipartisan and bicameral panel tasked
    with considering and recommending legislative language that
    will ``significantly reform the budget and appropriation
    process.'' The JSCBAPR is comprised of 16 members, equally
    divided between the House and Senate. Four members each were
    appointed by the Speaker of the House, the Senate Majority
    Leader, the House Minority Leader, and the Senate Minority
    Leader. House Budget Committee Chairman Steve Womack (R-AR) and
    House Appropriations Ranking Member Nita Lowey (D-NY) serve as
    co-chairs of this panel.
    ---------------------------------------------------------------------------
        \1\ Bipartisan Budget Act of 2018, P.L. 115-123 (2018).

    Members Appointed by the Speaker:
    Representative Steve Womack (AR-3)
    Representative Pete Sessions (TX-32)
    Representative Rob Woodall (GA-7)
    Representative Jodey Arrington (TX-19)

    Members Appointed by the House Minority Leader:
    Representative Nita Lowey (NY-17)
    Representative John Yarmuth (KY-3)
    Representative Lucille Roybal-Allard (CA-40)
    Representative Derek Kilmer (WA-6)

    Members Appointed by the Senate Majority Leader:
    Senator Roy Blunt (MO)
    Senator David Perdue (GA)
    Senator James Lankford (OK)
    Senator Joni Ernst (IA)

    Members Appointed by the Senate Minority Leader:
    Senator Sheldon Whitehouse (RI)
    Senator Michael Bennet (CO)
    Senate Brian Schatz (HI)
    Senator Mazie Hirono (HI)

    The deadline for the JSCBAPR to vote on recommendations,
    legislative language, and an accompanying report was November
    30, 2018.\2\ For the JSCBAPR to report recommendations,
    including legislative language and an accompanying report, it
    required votes of a majority of the committee members appointed
    by the Speaker of the House of Representatives and the Majority
    Leader of the Senate; and a majority of the committee members
    appointed by the Minority Leader of the House of
    Representatives and the Minority Leader of the Senate.\3\ This
    voting threshold was intended to ensure that these
    recommendations and this report are comprised of bipartisan
    solutions.
    ---------------------------------------------------------------------------
        \2\ Id.
        \3\ Id.
    ---------------------------------------------------------------------------

                                    Purpose

    JSCBAPR was created in part because Congress has not followed
    regular order for the congressional budget and appropriations
    processes for more than two decades. Fiscal year 1995 was the
    last time Congress passed a conference report on the budget
    resolution and thirteen separate appropriations bills before
    the beginning of the fiscal year.\4\ Congress has continually
    failed to complete its work before the start of the fiscal year
    and as a result, continuing resolutions (CRs) have become the
    norm for funding the federal government.
    ---------------------------------------------------------------------------
        \4\ Grant A. Driessen, The Federal Budget: Overview and Issues for
    FY2019 and Beyond, Congressional Research Service, May 21, 2018.

    Members have also expressed concerns regarding the lack of
    legislative tools available for Congress to address the
    national debt in a bipartisan manner. In 2018, the national
    debt eclipsed $21 trillion and is projected to rise to $34
    trillion by 2028 unless Congress acts. The JSCBAPR viewed its
    purpose through the lens of these challenges: a broken budget
    process and an unsustainable fiscal trajectory.

                                    Hearings

    Following the creation of the JSCBAPR in February 2018, the
    Committee held five public hearings, fulfilling the requirement
    in the BBA 2018.\5\ In addition to these public hearings, the
    JSCBAPR has also held two closed briefings and multiple formal
    and informal meetings. The JSCBAPR held the following hearings.
    ---------------------------------------------------------------------------
        \5\ Id.

    April 17, 2018--Opportunities to Significantly Improve the
    ---------------------------------------------------------------------------
    Federal Budget Process

    During this hearing, members considered the current challenges
    facing the budget and appropriations processes in Congress and
    discussed possibilities for improvement. Witnesses included:

       Douglas Holtz-Eakin, Ph.D., President, American
    Action Forum
       Martha Coven, J.D., Lecturer and John L. Weinberg/
    Goldman Sachs & Co. Visiting Professor, Woodrow Wilson School
    of Public and International Affairs, Princeton University

    May 9, 2018--Bipartisanship in Budgeting

    During this hearing, members discussed ways to ensure that the
    budget and appropriations processes work in a bipartisan manner
    and are effective regardless of political dynamics. Witnesses
    included:

       G. William Hoagland, Senior Vice President,
    Bipartisan Policy Center
       Donald R. Wolfensberger, Fellow, Bipartisan Policy
    Center; Fellow, Woodrow Wilson International Center for
    Scholars
       Emily Holubowich, Participant, Convergence Building
    a Better Budget Process Project; Executive Director, Coalition
    for Health Funding
       Matt Owens, Participant, Convergence Building a
    Better Budget Process Project; Vice President for Federal
    Relations and Administration, Association of American
    Universities (AAU)

    May 24, 2018--The Budget Resolution--Content, Timeliness, and
    Enforcement

    During this hearing, members examined the current purpose and
    role of the budget resolution and considered possible options,
    presented by expert witnesses, to bolster the budget
    resolution's impact and influence in the federal budget and
    appropriations processes. Witnesses included:

       Maya MacGuineas, President, Committee for a
    Responsible Federal Budget
       James C. Capretta, Resident Fellow and Milton
    Friedman Chair, American Enterprise Institute
       Bill Dauster, Former Democratic Staff Director and
    Chief Counsel, Senate Budget Committee
       Joseph White, Professor, Department of Political
    Science and Center for Policy Studies, Case Western Reserve
    University

    June 27, 2018--Members' Day

    During this hearing, members of both chambers of Congress
    testified before the JSCBAPR on their ideas for improving the
    budget and appropriations processes. Members who testified
    before the JSCBAPR included:

       The Honorable Paul D. Ryan, Speaker of the House of
    Representatives
       The Honorable Nancy P. Pelosi, Democratic Minority
    Leader of the House of Representatives
       The Honorable Steny H. Hoyer, Democratic Whip of the
    House of Representatives
       Representative Hal Rogers (KY-05)
       Representative Pete Visclosky (IN-01)
       Representative Robert Aderholt (AL-04)
       Representative David Price (NC-04)
       Representative Rob Bishop (UT-01)
       Representative John Carter (TX-31)
       Representative Devin Nunes (CA-22)
       Senator Bob Corker (TN)
       Representative Jim Himes (CT-04)
       Representative Tom McClintock (CA-04)
       Representative Jim Renacci (OH-16)
       Representative Daniel Webster (FL-11)
       Representative Elizabeth Esty (CT-05)
       Representative Bill Foster (IL-11)
       Representative Keith Rothfus (PA-12)
       Senator Steve Daines (MT)
       Representative French Hill (AR-02)
       Representative Bruce Westerman (AR-04)
       Representative Warren Davidson (OH-08)
       Representative Pramila Jayapal (WA-07)
       Representative Roger Marshall (KS-01)
       Representative Lloyd Smucker (PA-16)
       Representative John Curtis (UT-03)
       Representative Ralph Norman (SC-05)

    Additional statements submitted for the record:

       Representative Virginia Foxx (NC-05)
       Representative Mario Diaz-Balart (FL-25)
       Senator Dean Heller (NV)
       Representative Bradley Byrne (AL-01)
       Representative Paul Mitchell (MI-10)

    July 12, 2018--Opportunities to Improve the Appropriations
    Process

    During this hearing, members considered the current challenges
    facing the appropriations process in Congress and discussed
    possibilities for improvement. Witnesses included:

       The Honorable Leon Panetta, Former Secretary of
    Defense, 2011-2013; Chairman, The Panetta Institute for Public
    Policy and Former Secretary of Defense
       The Honorable David Obey, Former Chairman of House
    Appropriations Committee, 2007-2011

        ORGANIZATIONAL MEETING FOLLOWED BY HEARING ON: OPPORTUNITIES TO
                SIGNIFICANTLY IMPROVE THE FEDERAL BUDGET PROCESS

                                  ----------

                            TUESDAY, APRIL 17, 2018

                              House of Representatives,
                          Joint Select Committee on Budget and
                                 Appropriations Process Reform,
                                                       Washington, D.C.
        The committee met, pursuant to call, at 10:32 a.m. in Room
    HVC-210, Capitol Visitor Center, Hon. Steve Womack and Hon.
    Nita M. Lowey [co-chairs of the committee] presiding.
        Present: Representatives Womack, Sessions, Woodall,
    Arrington, Lowey, Yarmuth, Roybal-Allard, and Kilmer.
        Senators Blunt, Perdue, Lankford, Ernst, Whitehouse,
    Bennet, Schatz, and Hirono.
        Co-Chair Womack. Good morning. The committee will come to
    order.
        I want to welcome everyone, and welcome to the first public
    hearing of the Joint Select Committee on Budget and
    Appropriations Process Reform. Before we begin our hearing, we
    will first conduct the organizational meeting.
        After our administrative business, the co-chair and I
    intend to recognize members for opening statements. I encourage
    opening statements at the hearing. In future hearings we hope
    to minimize them.
        Finally, we will hear from our distinguished witnesses who
    have joined us.
        Before we consider the committee's rules, we would like to
    designate the committee's staff director. Pursuant to the co-
    chair's authority under the Bipartisan Budget Act of 2018, Dan
    Keniry, who currently serves as the staff director for the
    House Budget Committee, will serve as the Joint Select
    Committee staff director, with the understanding that he will
    consult with David Reich, counsel to Co-Chair Lowey.
        We will now consider the committee's rules of procedure.
    The proposed rules have been shared with all members of the
    committee. These rules set out the committee's procedures and
    are consistent with both House rules and the Bipartisan Budget
    Act of 2018. If there are any questions, staff are available to
    answer those queries.
        The committee will now proceed to the consideration of the
    committee rules package. My understanding is that we will have
    no amendments. So I would like to move from the chair to the
    adoption of the rule.
        Senator Lankford. Mr. Chairman, can I ask one question, a
    parliamentary inquiry?
        Co-Chair Womack. The gentleman will state his inquiry.
        Senator Lankford. My question was I had raised before just
    a clarification on what a majority is. The way the actual bill
    was written is it is unclear whether a majority--it is a
    majority from each party or a majority total. So that could be
    10 people to pass the final product or 12 people. Has that been
    clarified yet?
        Co-Chair Womack. Based on guidance that the co-chairs have
    received, 10 votes total, including a minimum of 5 Republicans
    and 5 Democrats, are required to report the committee's
    legislative recommendations and report.
        Senator Lankford. Thank you. Thanks for putting that on the
    record.
        Co-Chair Womack. Thank you.
        Today's formal hearing record will provide this guidance.
        Co-Chair Lowey. Mr. Chairman, our staffs have consulted
    regarding these rules. We are both in agreement. This is a
    pretty simple, plain vanilla package. The committee will be
    fundamentally guided by the legislation that set it up, but
    these rules provide a useful supplement. So I move that the
    proposed rules be adopted and that the co-chairs be authorized
    to submit them for printing in the Congressional Record.
        Co-Chair Womack. Within a timeframe specific? Thirty days?
        Co-Chair Lowey. Correct.
        Co-Chair Womack. Okay.
        Is there any debate on the motion by the co-chair?
        If not, the question is on the motion offered by the
    gentlelady from New York.
        All those in favor, say aye.
        Those opposed, no.
        The ayes have it. The rules package is adopted.
        That concludes the business portion of the meeting.
        Now we will begin the hearing portion of the meeting, and I
    yield myself 5 minutes.
        Established by the Bipartisan Budget Act of 2018, our panel
    of 16 members is charged with the task of significantly
    reforming the budget and appropriations process. Prior to this
    hearing, our panel has met twice to start the conversation and
    identify the problems. While this Select Committee is comprised
    of a diversity of political thought, we have clearly shared a
    common goal from the start. We believe that the current process
    isn't working, and reform is long overdue.
        Perhaps the most visible sign of dysfunction is that
    Congress has not followed regular order for the budget process
    for more than 20 years. Fiscal 1995 was the last time Congress
    passed a budget conference agreement followed by all of the
    separate appropriation bills before the beginning of the fiscal
    year.
        Since then it has become commonplace for Congress to rely
    on short-term funding measures and continuing resolutions in
    order to avoid government shutdowns, and even those efforts
    have not always been successful.
        It is our job to keep the government's lights on. We have
    failed to do it five times. The most important role given to
    Congress under the Constitution is the power of the purse. This
    panel is charged with ensuring we can fulfill this essential
    duty.
        It is no mistake that our Constitution begins in Article I
    by describing the powers and role of the legislative branch,
    and I believe that any proposals of this panel should affirm
    the distinct role intended by our Founding Fathers. Congress
    should always be at the center of deciding budget and spending
    issues for our nation.
        While respecting the role of the other two branches of
    government, any recommendations from this committee should
    reflect improvements to the congressional process rather than
    offer prescriptions for specific budgetary outcomes that
    benefit Republicans or Democrats. Our goal is to ensure a
    framework that works regardless of what party holds the
    majority in either Chamber of Congress.
        And it is my hope that we can come to agreement on
    recommendations and ultimately develop legislation that
    significantly reforms the budget and appropriations process. If
    we can design a better budget process to allow Congress to more
    effectively put forward its proposals, the budgetary outcomes
    will ultimately be returned to the American people through the
    elections.
        While the Bipartisan Budget Act requires that our panel
    come up with solutions by November 30, I believe we can and
    should get agreement on solutions sooner. So in the coming days
    and weeks, it is important that we quickly and thoughtfully
    move through our work. As we identify possible solutions, I
    urge my colleagues to bring up proposals that encourage and
    incentivize the completion of budget and appropriations work on
    time.
        In recent years, there have been four 2-year budget
    agreements. Our work should build on this trend, developing an
    overarching framework for Congress and ensuring certainty for
    funding decisions earlier.
        I look forward to today's discussion with experts on the
    advantages and disadvantages of various fixes. Today we will
    have two esteemed witnesses to help talk us through ideas for
    solutions.
        I am pleased to welcome Dr. Douglas Holtz-Eakin, who was
    appointed as Director of Congressional Budget Office in 2003
    and led the agency for nearly 3 years. He served on President
    George W. Bush's Council of Economic Advisers, and he is
    currently president of the American Action Forum.
        Also joining us is Martha Coven, who previously served at
    the Office of Management and Budget and at the Domestic Policy
    Council during the Obama administration. Prior to her work in
    the executive branch, she spent several years at the Center on
    Budget and Policy Priorities. Currently a lecturer and visiting
    professor at Princeton University.
        Thank you.
        And with that, I yield to the distinguished co-chair, the
    gentlelady from New York, Mrs. Lowey.
        [The prepared statement of Co-Chair Womack follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Lowey. And I would like to say thank you and
    welcome to Co-Chairman Womack, all of our members and
    witnesses, to the first public meeting of the Joint Select
    Committee.
        We all have our discontents with the budget process. Having
    recently emerged from the marathon negotiations over the 2018
    omnibus appropriations package, I would put at the top of my
    list not enacting spending bills until the fiscal year is half
    over, our reliance on numerous short-term continuing
    resolutions, and appropriations getting bogged down by
    extraneous issues.
        But the process itself, which has served Congress well in
    the past, is not the fundamental cause of all these problems.
    The root cause of our current situation has much more to do
    with deep policy disagreements, often over issues that
    shouldn't be part of appropriation bills and a lack of
    political will.
        Procedural reforms alone are insufficient. But perhaps an
    improved process could facilitate reaching and implementing
    agreements when there is the will to do so. And perhaps changes
    to the process could help change some norms and expectations
    about how we function. It is well worth consideration.
        What kinds of problems should we be tackling? I would like
    to find a way to reach much earlier agreement on topline totals
    we need in order to make serious progress on appropriations
    bills. Among other things, that would make consideration of
    appropriation bills in the House and Senate much more
    meaningful as we would be working with common totals and bills
    more likely to be enacted, rather than leaving all that to the
    last minute.
        I would also like to find a better way of handling the debt
    ceiling, a process that currently serves no useful purpose but
    invites brinksmanship that menaces our economy. And I would
    like to find ways to once again make budget resolutions more
    meaningful and more useful.
        I look forward to working with my colleagues on this panel
    and to making progress on the task we have been given.
        Thank you.
        [The prepared statement of Co-Chair Lowey follows:]
        [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. I thank the Co-Chair.
        We are in the opening statements' portion of this hearing,
    and we will alternate House and Senate and Republican and
    Democrat.
        And with that, I will yield 5 minutes to the gentleman from
    Georgia, Senator Perdue.
        Senator Perdue. Thank you, Mr. Chairman.
        I really am honored to be a part of this Select Committee.
    I don't think there is anything this year that we are going to
    do that will have a longer-term potential impact on the fiscal
    nature of our country and our ability to do what we all want to
    do. We are losing the right to do the right things financially.
        First of all, my learned opinion after the last 3 years of
    looking at this very, very closely is that our budget, and I am
    going to include our funding process in the United States
    Senate, is totally broken. While our appropriations process in
    the House indeed does work, I agree with the Co-Chair, Mrs.
    Lowey, that the lack of will keeps us from doing many things in
    the Senate.
        But I will argue this, that the budget process itself is
    totally broken. April 15 was this past Sunday, 2 days ago. It
    is a date that, in the Senate, we are supposed to have, by
    statute, we are supposed to have the budget complete. We
    haven't even talked about the budget yet this year, and I
    indeed believe we will not do a budget this year, just like we
    didn't do a budget last year and we didn't do a budget the year
    before.
        In 2015 we did a budget in the Senate. It took $7.5
    trillion out of the future expenditures of the federal
    government. But it was fake, it was partisan, and it only lived
    for 4 months. It was waived in order to do the grand bargain so
    that we could fund the government that fall.
        The next year we deemed a budget so the Republicans could
    get to reconciliation and do what they wanted to do at 51 votes
    under the reconciliation law. Then last year we did the same
    thing. So we attempted healthcare, we attempted taxes all under
    reconciliation, which is part of the budget process. In my
    opinion, reading the Budget Act of 1974, that is a bad way to
    use, that is it is an improper use of the reconciliation rule.
        But the reality is that results speak for themselves, Mr.
    Chairman. Our budget process has only funded the government
    four times by the end of the fiscal year in the last 44 years
    since the 1974 Budget Act was put in place. Four times.
    Actually, the federal government has been closed down 20 times
    in the last 44 years because Congress did not fund the
    government by the end of a due date, either the fiscal year or
    the end of a continuing resolution.
        We are supposed to in the Senate, since 2000, we are
    supposed to appropriate 12 appropriation bills a year. The
    truth is we have only averaged 2\1/2\ appropriation bills being
    put on the floor of the Senate and passed in the Senate over
    those 44 years, an average of 2\1/2\ out of 12.
        Mr. Chairman, I would argue that there is no way anybody
    can argue that this process does not need dramatic
    revitalization. As a matter of fact, I think it takes a zero-
    based budget approach to the budget process itself, and that is
    a clean-page approach.
        We are indeed in a crisis financially. We just passed $21
    trillion. I would argue that we will not solve the debt crisis
    unless and until we solve this budget process and funding
    crisis that we have today.
        In my opinion, other countries have to fund their
    government on time. And many countries, their constitution says
    that if you don't fund the government by the end of the current
    fiscal year, they dissolve that particular government and they
    form another one.
        I just believe that we have release valves in our system
    here that allow us in the Congress to not do our duty. The
    number one responsibility of the U.S. Congress is to fund the
    government. Article II very clearly lays out the
    responsibilities of the executive branch. Nowhere in there, in
    those itemized responsibilities, is to be involved in the
    funding of the government or, indeed, providing budgetary
    advice. The OMB Act of 1921 in many ways, in my view, violates
    that Article II piece of the Constitution.
        And so when I look at where we are today, we don't even
    start this process until we get an executive branch budget. I
    think that is wrong. I personally believe there is no higher
    calling right now for the United States Congress than to
    finally face up to the failure of this Budget Act of 1974, take
    a clean page approach, and finally, once and for all, develop a
    politically neutral platform that allows us to fund the
    government on time without all this drama and without creating
    crisis for the rest of the world regarding what are we going to
    do in terms of funding the federal government the next year.
        Thank you, Mr. Chairman.
        Co-Chair Womack. I thank the gentleman.
        The Senator from Rhode Island, Mr. Whitehouse.
        Senator Whitehouse. Thank you, Chairman. Thank you to you
    and your Co-Chair, Representative Lowey, for your leadership of
    this group. I hope that we are able to be effective and to
    discharge our duties here.
        I note that we are both Senators and House members, and the
    Senate and the House have different perspectives and different
    procedures. And the problem areas are budget and
    appropriations, and budgeters and appropriators have different
    procedures and perspectives.
        I do believe there are some commonalities. I think we can
    probably agree together that a 2-year budget cycle makes more
    sense. We could perhaps even agree that a 2-year appropriations
    cycle, perhaps staggered year to year, might make some sense.
        We can perhaps agree that the executive branch doesn't need
    to have a formal role in the budget timeframe and process, that
    there is plenty of political interaction to take place so that
    we don't need to boil that into our scheduling.
        But I would just like to say a few words from my
    perspective as a Senator who sits on the Senate Budget
    Committee.
        I would concur with Senator Perdue that the Senate Budget
    Committee process is completely broken. It became ineffectual
    when the Senate went to a 60-vote baseline for virtually
    everything, and the penalty for violating the Senate budget is
    60 votes. A fence that is at the level of the ground is no
    fence at all.
        Moreover, the Senate Budget Committee is the mechanism for
    the delivery of reconciliation, which has been morphed over the
    years away from its original purpose to become a general
    partisan delivery system. Both sides, I think, need to stand
    down on that and redirect the Senate Budget Committee to a
    budget process.
        Now, in order to do that, I think there are some baselines
    that we have to achieve. The first is that we have to create
    within the Senate Budget Committee at least the possibility of
    a bipartisan process. Everything about the Senate process right
    now pushes towards partisanship. We need to create a rule that
    provides the option of traveling a bipartisan road.
        If we can get over the hurdle of bipartisanship, then there
    are some other things we need to consider. If we are going to
    look at debt and deficit, we have to comply with the
    mathematics of debt and deficit, which means you have to look
    at appropriated spending, you have to look at healthcare
    spending, you have to look at tax spending, and you have to
    look at revenues.
        If you are not looking at all of them, you are necessarily
    mathematically incomplete, and it is virtually impossible to
    get anything meaningful done.
        I think everybody who has ever been before the Senate
    Budget Committee has agreed that debt to GDP is the measure of
    safety with respect to long-term debt and with respect to
    regular deficits. So we need to do the basic task of deciding,
    and I think we can do this, bipartisan fashion, what is a fair
    and sustainable debt-to-GDP ratio.
        And then how long is it going to take us to get there? You
    don't land a plane by driving it straight down to the ground.
    You have a glide slope. And we need to have a glide slope. And
    what should that glide slope be? That is something I think we
    can also agree to.
        And then what are the warnings that let you know you are
    off your landing path, that you are not on the glide slope? I
    think we can install those as well.
        If we have a bipartisan path that considers all those
    elements, tracks us towards a sustainable debt-to-GDP ratio,
    and warns the public when we are off course, I think we will
    have accomplished a very significant task, and the Senate
    Budget Committee will once again be somewhat useful.
        I would close by echoing what Representative Lowey said
    about the debt ceiling. I see the debt ceiling as like somebody
    who put a bear trap in their bedroom. And they know they are
    going to get up in the night, and if they are lucky, their
    best-case scenario is that they avoid the bear trap.
        There is no good that comes out of having that bear trap in
    the bedroom. There is the chance that you step in it. And if
    you step in it, it is a catastrophe.
        If we can build through this process some sense of public
    confidence that we have a track towards a sustainable debt-to-
    GDP ratio, then perhaps we can undo this completely unhelpful,
    completely manipulable, and dangerous debt ceiling process that
    we go through, which appeals to the nature of our very worst
    angels.
        So with that, I look forward to working productively with
    everyone. I do think it is important that we understand that
    the Senate operates a little differently from the House, and
    budget folks have different perspectives from appropriators.
    And we all need to pull together to try to come up with
    something that can solve this problem.
        I think it is very doable, and I look forward to joining
    all my terrific colleagues in doing it. And I thank you both
    for your leadership.
        Co-Chair Womack. Thank you, Senator.
        Based on order of arrival, the next opening statement will
    be given by the gentleman from Texas, Representative Arrington.
        Representative Arrington. Thank you, Mr. Chairman and
    Chairman Lowey, for your leadership to take on this daunting
    task. I am grateful to join my distinguished colleagues in
    solving what I believe is not a fundamental, but the
    fundamental problem for Congress, the budget and appropriations
    process.
        We all start with one thing in common. We believe that the
    process is broken, and I believe we are all truly committed to
    fixing it and doing it in a bipartisan and bicameral fashion,
    not just for our institutions, respectively, but for the
    American people, more importantly. Because if there is one area
    that I think highlights that Congress plays by a different set
    of rules than the American people, it is certainly the budget
    process.
        All someone has to do is review the tape of the past reform
    efforts, we went over that in painful detail last meeting, and
    look at the budget outcomes to appreciate the abysmal failure
    of past reform efforts and the Herculean challenge we have to
    implement any meaningful reforms in this one.
        If we don't do something to improve our situation, we will
    not only fail our frustrated colleagues and ourselves, we will
    fail our children. As a new member and a new generation
    policymaker, I am convinced that getting to the right budgetary
    outcome and the right budgetary process is the challenge of the
    21st century. And if we stay on the current trajectory, I
    believe that it is the biggest threat to our nation's future. I
    don't think I could overstate that.
        Whether your priorities include infrastructure and the
    benefits to our economy in that regard, or the food supply and
    the Farm Bill safety net that we are working on, I believe that
    is important to food security, and R&D, as a former Vice
    Chancellor for research, I know that helps our global
    competitiveness, the list goes on and on. We all have our list
    of what we believe are national priorities. I think we would
    all agree on national defense.
        But it is all going to be in jeopardy if we, God help us,
    enter a sovereign debt crisis, not to mention the terrible
    economic conditions we will thrust on the next generation of
    Americans if we don't do something.
        I don't think that an external threat is going to take this
    country down. And when I say down, I mean lose our
    exceptionalism. I think it is going to be like most great
    civilizations, I think our most formidable foe is ourselves. I
    think it is our inability to govern ourselves, in many ways,
    but I think this being the greatest example. This inaptitude
    for self-governance, self-restraint, self-discipline is
    highlighted, again, I think most prominently in this process.
        So it seems to me that we are either going to make the
    sacrifices that other generations have made and muster the
    courage to put our country's interest ahead of our own
    political interest, or we are not going to have a choice. The
    harsh and indiscriminate realities of a sovereign debt crisis
    will force us to make the changes that we must make.
        And that is a sad state of affairs, that we know the train
    is heading for a collision. We know probably, I think
    collectively, we know what needs to be done. Will we have the
    courage to do it? Even in this group, even among this
    committee, will we have the collective courage to do it?
        Because if we do wait, we will have lost that privilege,
    that unwritten pledge that we made when we took this office to
    hand this country better than we found it to our children and
    grandchildren.
        What is our mission? I think, Mr. Chairman, we should start
    with what is our task at hand? And it should be something that
    we should be able to attain, but something that is aspirational
    at the same time, and we will have to figure out the balance of
    the two.
        But it is simply to ensure a process that results in timely
    and continuous funding for our government instead of this
    stopgap shutdown show that we have seen that you guys have
    described and my friend, Senator Perdue, described in his
    opening statement.
        I think the other component, I hope we can get there, I
    believe we can, is to not just focus on the process, but to
    ensure that we have the process, mechanisms, and incentives in
    place for responsible and cost-effective budget outcomes. I
    hope we can do that.
        We have to learn from history. We have to learn from our
    own experiences. But I believe fundamentally, and I hate to say
    this, but actually I am going to lump myself in this, but
    Congress as a whole and by nature I don't think has the
    collective will to do this. We have to find ways to align
    incentives. And if we do that, I think we will be successful.
        I will yield back.
        Co-Chair Womack. I thank the gentleman.
        Next to the Commonwealth of Kentucky and the Ranking Member
    on the House Budget Committee, the gentleman, Mr. Yarmuth.
        Representative Yarmuth. Thank you very much, Mr. Chairman.
    And I want to thank you and Co-Chair Lowey for getting this
    process off to a very good start.
        As I said in one of our initial meetings, I think it is key
    that we focus on defining the problems we are seeking to fix.
    And from the tenor and the substance of the opening remarks
    that I have heard from our members so far, I can see where this
    is going. This is going to be a situation in which everything
    will have been said but not everybody has said it.
        And I think that is actually very encouraging, because I
    think it shows that this committee is committed to a very
    serious nonpartisan approach to solving what is a very
    difficult problem. And I find that very encouraging.
        I think it has been said several times already that
    whatever we propose should not be aimed at some kind of a
    philosophical result or any kind of outcome. And I think that
    is very positive in the way we ought to approach it.
        I just have a couple of thoughts that have occurred to me,
    and having been on the Budget Committee now for almost 10
    years, one of the things that I think is very important is that
    most people when they look at the federal budget think of it as
    in terms of the context that they see elsewhere, a corporate
    budget, a personal family budget.
        And I think this is a mistake. I think a governmental
    budget is something that is very, very different from a
    business budget and from a personal family budget.
        In the government, we have a responsibility for coming up
    with a budget, but we are not the managers. The managers are
    the voters.
        We are also not the customers. The voters are the
    customers. And we have to figure out what they want us to do.
    Of course, that is part of our campaigns.
        But it is a very different perspective when we are trying
    to figure out what is an appropriate level of spending for
    which categories when we are not the ones who are actually
    finally ratifying our choices.
        And the other thing that concerns me, and Senator
    Whitehouse mentioned this as well, is that in practice revenues
    have been totally detached from the budget process. And if you
    are in a business, as I have been, when you are thinking about
    what you want to accomplish in your business, other than making
    money, you think about, first, what you want to accomplish.
        I was in the newspaper business. I decided on what kind of
    product I wanted to produce, and then I decided what resources
    were necessary. If there weren't enough resources, I hired a
    new sales manager or a new sales representative who would go
    out and try to generate more income.
        And I don't think we can view government quite the same
    way, but we also can't ignore the fact that revenue is a very
    critical part of what we do. And this process, at least as long
    as I have been involved in it, has totally ignored revenue as a
    component of the budget.
        When we put out an alternative budget last year and the
    year before that, the Democratic budget actually called for
    increased revenues, and of course that lead to political
    challenges from the other side. And I don't expect to hear that
    in this process.
        But that, I think, is something that we cannot fail to
    recognize, that as much as expenditures are important, we have
    expectations that our managers place on us. They know what they
    want government to do for them. And we have to figure out not
    only how to allocate money for those responsibilities, those
    functions, but we also have to figure out how to generate the
    revenue as well.
        So once again I am very encouraged by the tenor of the
    discussions so far in our prior meetings and today, and I look
    forward to a very productive process.
        I yield back.
        Co-Chair Womack. Next to the State of Iowa and the
    distinguished Senator, Ms. Ernst.
        Senator Ernst. Thank you, Mr. Co-Chairman. And I truly am
    thrilled to have the opportunity to serve on this committee.
        The most fundamental role of Congress as laid out in
    Article I, section 8 of the Constitution is to raise revenue
    and fund the federal government. And, unfortunately, Congress
    has consistently failed to execute this responsibility in a
    timely or an effective manner.
        As noted before, since 1974 Congress has only passed all of
    its appropriations bills four times. Over the past 20 years we
    have passed a budget resolution only 11 times. And since 1999
    we are averaging five continuing resolutions per year. Five per
    year.
        Unsurprisingly, our dysfunctional process has also yielded
    dysfunctional outcomes, growing deficits and $21 trillion in
    debt. This ineffectiveness is not only bad governance, it is a
    threat to our national security.
        Our reliance on continuing resolutions has a devastating
    effect on our military. As a result of our continued reliance
    on continuing resolutions, only 3 of the Army's 31 brigade
    combat teams are capable of deploying immediately to conflict.
    During continuing resolutions, the Army has $400 million less
    per month in their operating accounts.
        Richard Spencer, the Secretary of the Navy, has said that
    inefficiencies stemming from continuing resolutions have
    consulted in $4 billion in waste for the Navy since 2011.
        Our constituents deserve better than this cycle of
    governing crisis to crisis, and I look forward to working with
    my colleagues in a bipartisan manner to put in place reforms to
    get our budget and appropriations process working again.
        Again, I am thrilled to have the opportunity to spend this
    time with my colleagues working towards, again, a bipartisan
    fix to this very devastating situation.
        So again, thank you, Mr. Co-Chair. And I will yield.
        Co-Chair Womack. The gentleman from Colorado, Senator
    Bennet.
        Senator Bennet. Thank you, Mr. Chairman. And thank you and
    your Co-Chair for such an encouraging start. I appreciate the
    comments of my colleagues.
        When I first came to the Senate, I was a little more
    optimistic than I am today about the ability of Congress to
    deal with our long-term fiscal challenges. By coming together,
    I thought we would figure out ways to pay for investments in
    the future while curbing spending to stay within our means. In
    other words, I thought there was a bipartisan commitment to do
    for our kids and grandkids what our grandparents had done for
    us.
        Unfortunately, as we have heard today in a bipartisan way,
    Congress has excelled over and over again taking the path of
    least resistance. We have had, I think by my count, roughly 39
    continuing resolutions since I became a member of the United
    States Senate.
        And following recent tax and spending decisions by
    Congress, we are now on a path to have the largest deficits
    outside of a recession since World War II. The Congressional
    Budget Office now projects that even as we are approaching full
    employment we will have deficits approaching $1 trillion next
    year and on track to grow every year after that.
        At some point, the growing gap between spending and revenue
    will catch up with us if we don't do anything and will
    certainly catch up with the next generation of Americans.
        In the meantime, we are grinding down the parts of our
    government vital to our future--education, innovation,
    infrastructure, and efforts to reduce child poverty--and we are
    putting at risk the obligations we have made to our seniors,
    our veterans, and most vulnerable, including Medicare,
    Medicare, and Social Security.
        Mr. Chairman, I am under no illusion that reforming our
    budget process is a silver bullet to address the toxic levels
    of partisanship that seem to infect, for no good reason,
    everything we do around here. And no process reform can produce
    the political courage needed to take on the tough fiscal
    challenges that we face. But I do believe this committee can
    make important bipartisan progress and demonstrate leadership.
        I hope that we will work in good faith. We have a rare
    opportunity to do that on this committee. My hope is that all
    of us will keep an open mind and remain constructive in the
    face of hard and inevitable differences.
        Here are a few areas that I think we could think about
    working together.
        We might create more predictability for appropriators by
    putting in place a 2-year cycle for topline discretionary
    spending levels through so-called biennial budgeting.
        We will also need to come up with reasonable enforcement
    mechanisms that are a constructive push for us to act within
    deadlines.
        We should consider creating an appropriations process that
    is more predictable and inclusive, one that encourages
    bipartisan work, not partisan work, and limits the meaningless
    showboats that have become an unfortunate tradition around
    here.
        Lastly, we should de-weaponize the debt limit. Senator
    Schatz and I have a bill to eliminate the debt limit entirely
    since it serves no purpose other than risking default. I am
    open to considering alternative mechanisms to focus our
    attention on our actual fiscal problems while eliminating the
    threat of default once and for all. We should be responsible
    when we decide revenue and spending levels instead of trying to
    walk out on a bill when it comes due.
        I look forward to working with you, Mr. Chairman, and all
    of my colleagues up here to see where we can make progress, to
    see where we can make a difference. And I hope that we can show
    the world that even in these troubled times bipartisan progress
    really is possible.
        Thank you, Mr. Chairman.
        Chairman Womack. The gentleman from Georgia, Mr. Woodall.
        Representative Woodall. Thank you, Mr. Chairman. I thank
    you and our Co-Chairman for our leadership here. I appreciate
    Speaker Ryan entrusting me with a spot on this committee.
        My very first vote of significance, Mr. Chairman, that I
    took in this institution back in 2011, you will remember it,
    you were a freshman as I was, was the vote for the Budget
    Control Act that created the last Joint Select Committee that
    had a chance to make a difference here.
        And I was so excited. We only had two Republicans in
    Georgia who supported that bill. I was so excited. I knew I was
    going to get defeated without question, but I knew I was going
    to have an opportunity to move the needle for our children and
    our grandchildren, which is what everybody has been talking
    about.
        I can't tell you the disappointment I had when that
    committee adjourned having agreed on absolutely nothing. Now,
    we entrusted, the Congress entrusted that committee with
    looking at the entire budget over a decade-upon-decade-long
    window, and they couldn't find a thing to do to make anything
    better for anybody.
        I would tell you the men and women of that committee I am
    sure regret that today and found themselves in a political
    environment that made that difficult.
        Mr. Chairman, everything I have heard from every member on
    this committee in the times we have gathered has led me to
    conclude we are not going to meet that same fate.
        To my friend from Texas' point, we have big, lofty
    aspirational goals that I hope that we will achieve. I believe
    that we can.
        But we also have those areas of fundamental agreement, as
    the Senator from Colorado pointed out, that we absolutely can
    achieve. There are some floors on our success as well. And I
    recognize that this is an opportunity that many of us came to
    Congress to be a part of, doing those things that otherwise
    would be unable to be done.
        And I want to encourage my colleagues. We talk about our
    current situation as if we are experiencing something that no
    generation before us has experienced, as if we are the first
    ones to overpromise and underdeliver, to cut taxes while
    promising new benefits.
        I will remind everyone of the story of Ida May Fuller, the
    very first woman to ever receive a Social Security pension.
    Those were our colleagues in 1935 that made those promises on
    behalf of a nation.
        And Ida May Fuller worked for 3 years under the Social
    Security system, paid in just over $24 in her 3 years. Her very
    first Social Security pension check was for just over $22, and
    she received that benefit over a lifetime that ultimately paid
    her almost $23,000 in Social Security benefits.
        So lest you think that our track record together is not
    that praiseworthy, I will tell you, we have not made $22
    commitments for which we have paid out $22,000 in exchange.
    This has long been a problem. And much of the burden that is on
    us today is to solve problems not that we have created, but
    that previous generations of Members of Congress have created.
    And I am pleased to be a part of that.
        I appreciate the discussion of a glide slope forward, that
    we are not going to be able to get this all done overnight.
        But I think back to the Social Security amendments of 1983,
    another big vote that folks thought they would lose their seats
    over, restored solvency to the Social Security trust fund for
    decades, raised taxes, reduced benefits in many cases, but took
    effect far enough out into the future that folks had a chance
    to plan.
        I have read the testimony of both of our witnesses. Both
    suggest that we have process problems, flawed processes produce
    flawed products, and process problems that lead us to tools
    that were supposed to be productive and we use them in
    gimmickry fashions today.
        I think that much of our job, Mr. Chairman, is to build
    trust. I have often commented on Chairman Lowey and the trust
    that she builds on the Appropriations Committee, and we have a
    chance to do that.
        I would just close with a cautionary tale, though. I have
    never served on the United States Senate. I have spent a decade
    as a chief of staff on the House side, a decade as a member. I
    don't have any idea the challenges that go on in the United
    States Senate. But I hear the mention of the debt ceiling over
    and over again.
        You know, on the House side, that provides a minority voice
    opportunity in ways that otherwise the minority has no voice on
    the House side. Whether you are in the Progressive Caucus or
    whether you are in the Freedom Caucus, a debt ceiling
    conversation allows a stop in the process and requires that
    folks come together. Every single debt ceiling increase, Mr.
    Chairman, since you and I have come to Congress has resulted in
    moving the needle for more responsible spending or more
    responsible governing, every single time.
        I think we have to think through those challenges that
    obviously create lots of headaches. But sometimes those
    headaches are designed to create opportunities.
        And I yield back.
        Co-Chair Womack. The gentleman from Washington, Mr. Kilmer.
        Representative Kilmer. Thanks, Mr. Chairman. And I thank
    both of our Co-Chairs for your leadership on this.
        In the fall of 2012, I came to freshman orientation. I was
    elected for the first time. And they had a presentation from
    the Congressional Research Service to talk about how the budget
    process works.
        And after explaining the rules and the timelines in
    tremendous detail, they then said, ``But it never actually
    works that way. Let us tell you how it actually works.'' And I
    understand you have a similar experience teaching at Princeton.
        I have only served in Congress for 5 years, but I have
    spent a lot of time over the last few weeks trying to think
    through the budget process as I prepared to serve on this
    committee. And I think I have an idea why Congress doesn't
    follow the 1974 Budget Act, and it is because it would require
    Congress to make tough choices. And it is a whole lot easier to
    simply waive the rules.
        They tell me the last time Congress passed all 12 bills
    into law before the expiration of the fiscal year was back in
    the 1990s. And to me what that means is that no one in a
    position of leadership today feels like they are opening
    themselves up to any sort of criticism if they stray from the
    budget rules.
        Here we are 2 days after the Budget Act says Congress was
    supposed to have passed a budget resolution, and there is no
    uproar. There is no downside to having failed the act. It has,
    in fact, become an expectation that Congress won't follow the
    budget rules. And that seems like a problem.
        But I think it also creates an opportunity. If we are able
    to recommend some reforms and if congressional leaders from
    both parties support these new budget rules, then hopefully it
    will create some accountability and some pressure to follow
    those rules next year when the new Congress is sworn in.
        And that is not to say that a new budget process will lead
    to significantly better fiscal outcomes right away. I don't
    think this committee will be able to balance the budget or put
    us on a quick path to eliminating our deficit and paying down
    our debt overnight.
        But I do think there are very real problems that we can
    solve, and those are shutdowns, the threat of shutdowns, the
    persistent use of long-term continuing resolutions to fund the
    government.
        And we are going to hear from one of our witnesses today
    that those are wasteful and inefficient and destabilizing to
    our economy and unfair to our federal workforce and unfair to
    our military. And I think we have got to stop playing that
    record.
        I think there are a few principles that should guide the
    work that we are doing as we work toward those goals. First,
    whatever the budget process we put down on paper, in my view,
    should reflect the reality of how Congress actually works.
        I have only served in the post-BCA world where the budget
    resolution is purely a messaging and political exercise that
    is, frankly, largely a waste of time in a Congress that has
    plenty of opportunities for messaging and political efforts.
        The real budget process that I have seen involves Congress
    coming together on a bipartisan basis and passing a 2-year
    budget law and then working within that framework. And it seems
    like we should decide which of these paths we want to follow
    and have a process on paper that reflects that.
        Second, we should empower the independent, nonpartisan
    budget organizations. Someone needs to call balls and strikes.
    And we should do everything we can to insulate the CBO from the
    excessive partisanship that seems to have affected every other
    part of our legislative system.
        And, third, we should have a budget that is as honest and
    as transparent as possible. Congress may need gimmicks to get
    over the line, but it shouldn't rely on them to make the
    process work.
        So as we consider ideas for reform, I think there are a few
    things that we ought to avoid. First, inducements or incentives
    to actually be positive and not negative. We have already seen
    what happens when Congress puts a gun to its head. It ends up
    pulling the trigger. And I can't think of a single trigger that
    we could design to force action that wouldn't end up being some
    faction's preferred policy outcome.
        On top of that, I think we should create incentives for
    action, not inaction. Given the option, Congress always seems
    to want to kick the can and avoid hard choices.
        And the last thing we need to do is create a process that
    incentivizes delaying difficult decisions.
        And I want to close by saying that I approach serving on
    this committee with genuine hope and excitement that we can
    make a positive difference. I have had a chance to meet with
    and talk to many of you who I am serving with on this, and I
    hope to get to know all of you better as we undertake this work
    together. I think it is really important.
        And I thank you, Mr. Chairman. I yield back.
        Co-Chair Womack. I thank you the gentleman;
        Let's go to Oklahoma now, and the Senator from Oklahoma,
    and my classmate, James Lankford.
        Senator Lankford. Thank you, Mr. Chairman.
        I had folks in Oklahoma that I visited with a couple of
    weeks ago in a townhall meeting. I tried to describe this
    process to them, and they said, ``What are your thoughts on the
    success of this process?''
        I said, ``I am in the early optimistic phase of this,''
    that we are all together, we are all nodding our heads saying
    something needs to be done. Ask me again in July how we are
    doing, because at some point we will move from larger concepts
    of recognizing problems to having to fight through how do we
    actually get to a solution on this.
        The problems are fairly obvious to us. In fact, it has been
    obvious for decades. As one of our witnesses today will
    mention, I am sure, today is April the 17th, 2 days past when
    the budget is required to be done by Congress, yet the Congress
    hasn't even taken up the budget much less actually passed it.
        We have clear issues that we continue to face with the
    deadlines and the structure as it exists. Eighteen of the past
    20 years, we have had an omnibus bill. We are not even trying
    to be able to go through the process.
        What is interesting is to be able to see the history of
    this. This is not something new. But the battle over leaving it
    as is or saying that we need to actually have major changes is
    something that we have not only seen, but it seems to be every
    time the solutions seem to be the same, and we are reoccurring
    those over and over again.
        For instance, Senator Byrd, who was the Chairman of the
    Senate Appropriations Committee in the 1990s, made the comment
    that there is not a need to make a change in the budget process
    because the Senate always gets its 13, at that time, 13 bills
    done expeditiously, was his words, and so there is no need to
    be able to change the budget process.
        At the same time, the Budget Committee was making
    bipartisan recommendations to be able to make major changes to
    the budget process.
        I would expect that would occur again. There will be
    individuals that will stand up in this body and say, ``Things
    are going fine, we are still open, we are still functioning,''
    while this body stands up and says, ``No, there are major
    changes that are needed, this is not working.'' We are going to
    have to be able to work through that.
        Most of these issues are not new to us. As I have gone back
    through the history, as most of the members of this committee
    have already done as well, and as we walk through as a body
    together, we have seen some very basic things. Biennial
    budgeting. Do we need to do this every 2 years? How does the
    appropriations process work into that? Does the leadership
    committee need to be able to take the lead on forming the
    budget, or do we need to have a Budget Committee determine
    that?
        The big fight between authorizing and appropriating that
    only makes sense in Washington, D.C., continues to come up
    decade after decade after decade in the arguments, but yet we
    have still not resolved that. How many bills should come to the
    floor? How should those bills come to the floor? What is the
    process for the Finance Committee? Do they engage with that in
    Ways and Means?
        The oversight committees and the lack of oversight from the
    appropriations process. I can't tell you what it is in the
    House right now, but I believe the Senate did exactly zero
    oversight committees on anything in appropriations last year.
    With over a trillion dollars in spending, you would think we
    could work in at least one oversight hearing through that
    process.
        The CBO was designed to be a neutral balls-and-strikes
    arbitrator. It has become a great way to be able to game the
    system to be able to get done what you want to get done with
    fun rules like ChIMPs and pension smoothing and whatever rules
    that may be devised to create a new way to be able to spend
    money, not to actually be able to get insight and information.
    CRs, government shutdowns, debt ceilings, all of those things
    all fall into the chaos of the system.
        So my hope is that we can take the optimism that we
    currently have and the recognition that something needs to be
    done to look back at what has been discussed for decades and to
    say, how do we break through individuals who will say,
    ``Everything is working fine because I still have power in the
    process,'' and everyone else saying, ``No, this process is
    broken''?
        Just for the House Members that are here, let me describe
    the Senate appropriations process that I have the joy to be
    able serve on the Senate Appropriations Committee.
        The bills come to the Subcommittee--out of the
    Subcommittee--and you get the text of it the night before. You
    can't get it digitally, because if you got it digitally, you
    could search it.
        You get the text if you go into a room, much like you are
    going into a classified setting, to be able to flip through the
    text of that, and then you vote on it with no amendments the
    next day in the Subcommittee.
        And then it comes to the full committee, and you fight off
    all amendments during the full committee process. And then you
    never see it again until it shows up in the omnibus bill.
        By the way, may I mention, when it comes to the full
    committee and you actually vote on it in the full committee,
    each bill, you vote on it first, passing it up or down, and
    then amend it second.
        The process is broken from the subcommittee process, the
    budgeting process, all the way through. And I would hope this
    is something that we can address and should address.
        With that, I yield back.
        Co-Chair Womack. To the great State of Hawaii, Senator
    Schatz.
        Senator Schatz. I thank the Co-Chairs for their great work.
    And I want to agree with almost everything that has been said.
    I have a couple of additional thoughts.
        I think we should do this on an ongoing basis. We may want
    to consider doing this during every Congress as a good
    housekeeping for rules and process issues.
        It took us decades to get where we are. And although I am
    optimistic, I am in the early optimistic phases of this process
    as well, I am not optimistic that we can fix this in a matter
    of months, and I think we have to be committed over the long
    run to iterate this.
        We are in the beginning stages of the NBA playoffs, and the
    NBA has a Competition Committee that continually considers rule
    changes and brings those recommendations to the NBA's Board of
    Governors for their approval. And I think this is a good model
    for us. The Joint Select Committee should be just the beginning
    of a regular effort to develop reforms in our processes.
        In terms of specific proposals, under normal circumstances
    I wouldn't repeat what was said before, but I want to reiterate
    my determination to deal with this debt ceiling problem. I see
    no benefit.
        I understand what Representative Woodall is talking about
    in terms of giving the minority rights, but I think that is a
    broader question about the functioning of the House and Senate.
    And although there are sometimes some salutary effects, for
    both parties and both ideological perspectives, I think it is
    basically a trap for ourselves.
        A couple of final thoughts. We are talking a lot about
    budget and appropriations and not a lot about finance and Ways
    and Means. We are very possibly the only legislative body left
    on the planet that divides budget, appropriations, and revenue
    in the way that we do. I don't think it is the main problem,
    but it is a quite convoluted way to do our business.
        And the final point I will make is that success in this
    process depends on goodwill. The House has their Rules
    Committee in which they establish a rule for a bill, which
    usually deviates from the normal rules. And in the Senate, just
    to be clear, the only way the Senate functions and the only way
    the Senate has ever functioned is if you deviate from what they
    call the regular order.
        We need unanimous consent on a daily and sometimes hourly
    basis to allow the Senate to function, and the only way you get
    UCs is if you have goodwill. So I want to be cautious about our
    instinct to establish new rules when, in fact, what we need in
    the Senate in order for things to function is the waiving of
    the rules on a regular basis.
        But the reason that I am hopeful is that this process is
    the beginning of establishing trust and goodwill, and that is
    at least what will help on the Senate side.
        So I yield back.
        Chairman Womack. I thank the gentleman.
        To Missouri, the distinguished Senator from Missouri, Roy
    Blunt.
        Senator Blunt. Well, thank you, Chairman.
        And as my friend Mr. Yarmuth pointed out, everybody has
    said almost everything now, and with great commonality,
    actually, which is the interesting thing here. The tremendous
    sense of common purpose and an understanding that what we are
    doing now is just not working. We are down, essentially, to one
    bill that not only, as Mrs. Lowey pointed out, is the
    appropriations bill, but now is more and more the one big
    legislating bill.
        And this really has to stop. We are in a situation now
    where, basically, four members of the Congress, the leaders of
    the House and the leaders of the Senate, maybe five, maybe
    possibly six, and a dozen staffers make way too many decisions
    in way too closed an environment with not nearly enough
    information. And all these bills always reflect how far afield
    some of those decisions have wound up in that environment.
        At least the appropriators in the House and Senate get a
    chance to have input on the initial bill, and many questions
    are decided before they get to those four leaders. But bringing
    this down to one vote, you have one vote on one bill to decide
    whether you are going to do all the things in that bill and try
    to weigh that balance.
        The system was never designed that way. Early on, there was
    one vote on one bill, but it was a little bill that spent, what
    did we learn the other day, maybe $5 million was the funding of
    the government. And that is not the case.
        The President then has also one decision. He gets a chance
    to sign that one big bill and keep the government operating or
    to veto that one bill.
        This is a foolish position we have gotten ourselves in, and
    I think everybody understands that. Last week we had 229 years
    of congressional history in 36 minutes. But it was a pretty
    good reminder of just how this system worked so well for so
    long and has stopped working in recent years.
        Today we have two really extraordinary witnesses who
    understand this process as well as anybody, Mr. Chairman. And
    thanks to you and thanks to Congresswoman Lowey for leading
    this effort.
        Co-Chair Womack. And finally, to the great State of Texas
    and the Chairman of the House Rules Committee, Mr. Sessions.
        Representative Sessions. Mr. Chairman, thank you very much.
    Much has been said here today that I completely agree with. I
    am just going to add my few comments. I am not sure it has all
    been said yet, but a lot has been said.
        First of all, let me say this: I think we need to use the
    word ``common sense.'' I think we need to use the word
    ``goals.'' And I think we need to use the word
    ``recommendations.''
        I think that there is a cadre of things that we see. We
    should call them out. We talk about balls and strikes. There
    are about probably 200 pitches along the way that take place in
    not only the budgeting process, but the appropriations process,
    and I think we should delineate those.
        I think we should have a good idea upfront about, what are
    our goals? What are our recommendations? What do we look at as
    common sense? Perhaps we can or cannot come to an idea.
        The gentleman, Rob Woodall, spoke clearly about, not
    disagreeing with Mrs. Lowey or others, but about raising the
    debt ceiling. I think that that should be a huge stop sign. I
    don't think it should be something that we should blow through
    and take as pro forma. I think we should expect that that is an
    important element for us to look at.
        Once again, I will agree with Mrs. Lowey, but we have to do
    it. We cannot allow us to default. But we need to look at it,
    at what is the goal and what is the recommendation that we
    would receive out of it.
        I think we should also include, and I intend to be a part
    of this, making sure that we put some delineation in about cost
    of noncompliance. A few people have talked about the real cost
    that happens to the United States Navy since 2011, us not
    accurately giving the government, in particular Health and
    Human Services, and in particular the United States military,
    their money day one.
        I think it should come as a goal, I think it should come as
    a recommendation that the largest elements of the United States
    Government must be funded first. It must be a goal. It must be
    a recommendation.
        And we should look at those items on a bipartisan basis, on
    a bicameral basis, and with, certainly, the President of the
    United States and Article II of a delineation that we believe
    would be common sense. And that is, giving someone that has
    $600 billion worth of responsibility, that you must allow them
    that opportunity to effectively make plans, do the things that
    are in the best interest of the country.
        You can vote for it or against it, but we ought to decide
    that we are going to do it day one.
        The other areas, look, I would like to say, sure, we need
    to fund all the other areas, and we should not drag that on.
    But the largest items, I think, common sense should prevail.
        Secondly, I think we should have an idea, and it has been
    spoken about by our Republican and Democrat colleagues, that I
    am very pleased to hear, but I think we should call it a
    pathway to balance. What are we aiming at? We have used the
    terms, ``can't get there overnight,'' I agree with that. But I
    think we ought to have an idea about a goal and a
    recommendation that we follow about how we are going to proceed
    and not add to it.
        Lastly, I am going to see if I can push to getting my arms
    around a look at nonfunded or unfunded liabilities in the
    future. I think we have got to be driven by facts that we all
    agree with. Instead of saying, ``Well, we didn't get our work
    done, maybe the American people did not expect us to do that,''
    I think that there has to be some opportunity for us to
    understand why we are doing what we are doing and that we make
    tough decisions.
        I was elected to make tough decisions. We all were. I hope
    we can use this time to effectively look at goals,
    recommendations, and common sense.
        Thank you, Mr. Chairman.
        Co-Chair Womack. I thank the gentleman.
        In the first hour of this first public hearing, you have
    heard from 14 of the 16 members of this Joint Select Committee,
    a very thoughtful opening discussion of the challenges that we
    face and the opportunities that lie in front of us.
        I would like now to, again, welcome our witnesses, Dr.
    Holtz-Eakin and Martha Coven. Thank you for your time today.
    The committee has received your written statements. They will
    be made part of the formal hearing record. You will each have 5
    minutes to deliver your oral remarks.
        At this time, I would like to briefly yield to the
    distinguished Co-Chair, Mrs. Lowey, to welcome our first
    witness.
        Co-Chair Lowey. Well, thank you.
        And it is such an honor for me to introduce Martha Coven,
    who brings 25 years of experience working on domestic policy
    and the federal budget, inside and outside of government.
        She is currently a visiting professor, lecturer at
    Princeton University's Woodrow Wilson's School of Public
    Affairs. Ms. Coven started her career as a staff member in the
    House of Representatives, spent several years at the nonprofit
    Center on Budget and Policy Priorities. She has a BA in
    economics, a JD from Yale.
        And we look forward to hearing your testimony. Thank you
    for being here today.

        STATEMENTS OF MARTHA COVEN, J.D., LECTURER AND JOHN L.
    WEINBERG/GOLDMAN SACHS & CO. VISITING PROFESSOR, WOODROW WILSON
         SCHOOL OF PUBLIC AND INTERNATIONAL AFFAIRS, PRINCETON
    UNIVERSITY; AND DOUGLAS HOLTZ-EAKIN, PH.D., PRESIDENT, AMERICAN
                              ACTION FORUM

                       STATEMENT OF MARTHA COVEN

        Ms. Coven. Co-Chairs Lowey and Womack and Members of this
    Joint Select Committee, thank you for inviting me to testify
    today.
        When I arrived at OMB, I had no idea I would soon acquire
    such skills as how to implement a midyear sequestration,
    including how to furlough staff; how to prepare to hit the debt
    ceiling; how to structure exception apportionments under
    protected continuing resolutions; and how to manage the
    government during shutdowns.
        So much wasted energy has gone into tasks like that over
    the last several years. So I commend the Congress for forming
    this committee.
        As a further sign that it is time to rethink things, I
    found myself earlier this year cutting dozens of pages from my
    syllabus. Teaching students how Congress assembles and enforces
    a budget resolution felt quaint, to put it mildly.
        So my hope is that I have only temporarily lightened my
    students' load and that by this time next year they will be
    reading about the well-considered reforms you have produced.
        Let me begin by offering a few reflections on the existing
    process.
        However imperfect a tool the Congressional Budget Act has
    become, it has left an important legacy. It has created the
    Congressional Budget Office, a neutral voice telling it
    straight to members of both parties. And more broadly, as the
    saying goes, plan beats no plan.
        And the Budget Act has had a pretty good run. Its framework
    and complementary measures, like the PAYGO rule, helped guide
    Presidents and Congresses of both parties to a situation where
    we fleetingly had budget surpluses. So I would caution you
    against tearing up the existing rules until you are certain you
    have a better approach.
        I will turn now to some specific recommendations for
    improving the process. So I will start with a caveat.
        A wise colleague once observed to me that budget rules are
    much better at enforcing agreements than at forcing them. What
    we most need, as many of you have said, is for Congress and the
    President to set responsible fiscal goals and make tough
    choices.
        With that said, there are three specific measures I would
    urge you to consider.
        My first recommendation is to restructure the
    appropriations calendar to match the congressional calendar. It
    has become laughable to imagine that appropriations bills could
    be done by September 30.
        Chronic delays in the appropriations process make
    implementation difficult and get in the way of a shared
    bipartisan goal of making the most efficient use of whatever
    funds are appropriated. Your jobs may be done when you finally
    pass the bills, but for everyone else, the work is just
    beginning.
        Delays are frustrating, not only to federal agencies, but
    also to the many other individuals and institutions across the
    country whom we ask to carry out activities with those funds,
    including state and local governments, nonprofits, and private
    contractors.
        It is hard to make smart decisions or do good planning if
    you have to scramble midyear just to get the money out the
    door.
        Nothing can fully prevent delays, but two steps would help
    restore regular order.
        First, shift the federal fiscal year to the calendar year.
    Both Congress and the President take office in January, so it
    makes sense to treat that as the start of the budget year as
    well. You would have the full year to get your work done, and
    legislation does tend to get wrapped up in December as jingle
    bells start to chime.
        Secondly, at the beginning of each Congress, both Chambers
    and the President should negotiate aggregate discretionary
    levels for the next 2 years. You have done this three times
    already through bipartisan budget acts, but not at predictable
    times or in standardized ways.
        My second recommendation is to end the debt ceiling
    brinksmanship. Indulging in buyer's remorse at the point when
    Treasury has to pay the bills risks damaging our economy and
    harming vulnerable citizens.
        And my third recommendation is to reserve reconciliation
    for fiscally responsible legislation. Reconciliation should be
    used for the politically difficult work of deficit reduction,
    not the politically convenient work of cutting taxes or
    increasing spending.
        Let me close by echoing the comments many of you made in
    encouraging you to approach your tasks in a politically neutral
    manner. Efforts to stack the deck in a progressive or
    conservative direction will hamper your ability to carry out
    your mission.
        Future Congresses need to retain the flexibility to make
    decisions about the appropriate levels of revenue and spending
    to meet the changing economic needs of their time and stay true
    to the people they represent. You can provide a framework for
    those decisions, but you can't make decisions for them.
        To that end, I encourage you to set aside proposals that
    would establish rigid targets or enforcement mechanisms that
    aim to steer mandatory spending or revenues in a particular
    direction or to lock our nation onto a particular fiscal path
    without knowing what the future holds.
        Thank you, and I look forward to your questions.
        [The prepared statement of Martha Coven follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. Thank you, Ms. Coven.
        Our next witness is Doug Holtz-Eakin, who has served in a
    variety of very important policy positions since 2001. During
    2001 and 2002, chief economist for the President's Council of
    Economic Advisers, where he also served as the senior staff
    economist. But most notably, from 2003 to 2005 as the sixth
    Director of the nonpartisan Congressional Budget Office.
        He brings a wealth of experience in the subject matter
    before this Select Committee, and we are delighted that he has
    joined us here this morning on this panel.
        Dr. Holtz-Eakin, the time is yours.

                    STATEMENT OF DOUGLAS HOLTZ-EAKIN

        Mr. Holtz-Eakin. Chairman Lowey, Chairman Womack, Members
    of the Committee, thank you for the privilege of being here
    today. And let me open by simply thanking you for your
    willingness to serve on this very important committee.
        I am a long-time observer of this very broken process, and
    everything I have heard today leaves me in the early optimistic
    stage as well. I hope I see you again later in a comparably
    optimistic stage and that your service turns out not to be
    thankless.
        There are enormous budget problems. They take the form of
    both debt trajectory as a threat to this nation and a process
    that regularly threatens shutdowns of the government,
    brinksmanship over the debt ceiling, and I think it is
    important that everyone here recognizes that. I think that it
    is an important early sign.
        We know that those problems will not be solved by process
    reforms alone, that, in fact, there will have to be some very
    important policy changes as well.
        But in thinking about the process reforms, there really are
    two branches, and we have heard both of them today. I would
    urge you to pick early between radical reforms, clean pages,
    starting over from scratch, versus modifications of the Budget
    Act.
        I am willing to entertain the former, but I think my
    experience leads me to suggest that on the timetables you have,
    the latter might be the way to go.
        I would concur with some previous sentiment that those
    process reforms should be policy-neutral. This should not be a
    committee that stacks the deck for a particular set of
    outcomes, however much I might want one or the other.
        And in my written testimony I have some suggestions, for
    example, in reformulating the baseline so that it is truly
    neutral between tax and spending decisions as you come to terms
    with the large debt problem.
        And I guess I would echo what has now been said several
    times about the importance of building on success. There are
    things that the Congress and the President have gotten done in
    recent years, and they have been 2-year agreements on how to
    fund the appropriations and what the levels of spending will
    be.
        Those are, perhaps, a sign that the budget resolution
    should be a 2-year resolution, that we should have something
    closer to a biennial budget. It is also true that the President
    has signed those agreements in every case.
        Perhaps that is indication that it is time to move from a
    concurrent resolution to a joint resolution where there is
    agreement on budgetary totals, appropriations, mandatories,
    taxes, and the borrowing between the House, the Senate, and the
    White House, something that doesn't happen right now.
        I regularly tell people, the U.S. Government does not have
    a budget. It doesn't have a fiscal policy. It doesn't have any
    single document that everyone agrees on for how it will add up.
    Instead, we have budgetary outcomes, usually bad. And it is
    time to change that record. And so I think building on that
    success, I think, would be an important thing.
        There is a lot of talk about different ways to manage
    internally the enforcement, carrots and sticks on getting
    things done. And there have been attempts at No Budget, No Pay,
    No Budget, No Recess, a variety of sticks.
        I was encouraged to think about carrots in the process of
    preparing my testimony. I try not to think about vegetables
    very often, but I did. It is hard.
        But it seems to me that there are some techniques that
    would be modeled on, essentially, the Gephardt Rule, which used
    to provide for deeming the debt limit as being passed when you
    pass the budget resolution, that would allow Congress to
    address some votes that are politically toxic, but which are
    real, like giving yourself a pay raise, which should happen and
    which is an impossible vote for anyone to take, and that if you
    pass a budget resolution, there would be a process to expedite
    those kinds of votes.
        And I would encourage you to think about those things,
    because we do need to both fix the budget process, but we also
    need to fund the government and fund the people who make this
    government run in a timely and efficient fashion.
        And so I thank you for the chance to be here today. I would
    say that I would be happy to aid this process in any way, not
    just at this hearing, but in the months to come.
        [The prepared statement of Douglas Holtz-Eakin follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. Thank you, Dr. Holtz-Eakin, and Ms. Coven
    as well, for your prepared testimony here today. We are going
    to move into the Q&A period.
        Dr. Holtz-Eakin, you have a thoughtful analysis in your
    prepared remarks of the pros and cons of making the budget
    resolution a joint resolution and sending it to the President
    early in the year.
        On one hand, it certainly establishes executive branch buy-
    in early in the process, but on the other hand, could be giving
    the White House a little more power than they currently have
    and turn even more authority over to them, even make the
    congressional budget process worse if, in fact, there is no
    agreement.
        So expand on your prepared testimony on these thoughts.
    Talk about the tradeoffs, if you will.
        Mr. Holtz-Eakin. I think you expanded on it perfectly.
        I offer it with mixed emotions, quite frankly. Funding the
    government is a congressional obligation under the
    Constitution. The power of the purse belongs in the Congress.
    The Congress is responsive to the voters, and I think there
    should be a deep commitment to that.
        But the way we are doing things right now, as I said,
    doesn't constitute genuine budgeting. There is no place where
    we require that it all add up and that people sign off on that
    plan on behalf of the voters.
        So the argument for going to a joint resolution is to have
    some vehicle for that buy-in by all parts of the government so
    that we actually get coherent fiscal policy and don't find
    ourselves in the position we are today.
        It could make things worse. It certainly changes the
    balance of power. You now have a President who has to sign off,
    and it is one more person who can play brinksmanship, one more
    person who can hold up the process. And it might, in the end,
    turn out to produce outcomes that are even worse than right
    now. I don't know for sure.
        So I can't give an enthusiastic no reservations
    endorsement, but I do think we need to be cognizant of the fact
    that we aren't really doing budgeting. We are doing a subset of
    it, and not very well.
        Co-Chair Womack. Ms. Coven, you mentioned in your testimony
    that delays in getting the final appropriation numbers for an
    agency in any given year produces a significant impact on the
    agency's operation. Can't plan, and when they do a lot of
    contingency planning, a lot of what-ifs, there is a lot of
    inefficiency in that type of process. As an appropriator, I
    certainly agree with your testimony.
        Automatic CRs have been suggested as one way to reduce the
    potential of this brinksmanship. What impacts would an
    automatic CR have on the appropriations process and agency
    operations, in your opinion?
        Ms. Coven. Well, with all due respect, Mr. Chairman, I
    think if you passed automatic CR legislation, you may as well
    disband the appropriations committees. It removes the incentive
    for there to be that process of carefully looking at the
    funding levels for each program.
        I think, further, it creates a risk that we will not have
    adequate funding. Our funding will go to the wrong places,
    speaking of inefficiencies, if the government just continues.
    Circumstances change on the defense side of the equation, on
    the nondefense side of the equation.
        We have private market forces that affect where those needs
    are in veterans' medical care, in housing assistance.
        So the idea that the default plan is to just continue where
    the funding had been previously, I think is recipe for greater
    inefficiency rather than for a better process.
        Co-Chair Womack. My last question for you is that many
    state and local governments have procedures in place to ensure
    that government still functions even if a new budget is not
    passed. I particularly like what Arkansas does. You know, it
    has a Revenue Stabilization Act, a form of a balanced budget
    agreement that forces the legislature to have to look at
    different components of government from time to time.
        Are these forms of government guardrails, as it were,
    appropriate? And if so, is there a model out there that we
    should look to?
        Ms. Coven. Well, I don't know the precise model that you
    are pointing to in Arkansas. I will caution you, I think it is
    wonderful to set out to provide yourselves with information
    about where we are heading so that you can judge whether the
    sum total of the actions that you have taken are pushing you in
    the right direction.
        I think if you move to something that is more rigid, like a
    cap, like a balanced budget requirement, anything like that,
    you are setting up a situation where you are ignoring the
    underlying factors, which we know are an aging population and
    healthcare and revenues and the matters that you have
    considered, and you are sort of dodging the idea of making
    thoughtful policy choices, and instead, potentially letting
    some sort of automatic mechanism, like sequestration, be the
    solution. I don't think that was very popular here and I don't
    think it was very popular around the country.
        So I think it is wonderful to provide yourself with
    information, and that is one role that budget committees can
    play, but I would really caution against putting yourselves on
    some kind of autopilot.
        Co-Chair Womack. My distinguished Co-Chair, Mrs. Lowey.
        Co-Chair Lowey. Thank you.
        And thank you both for your testimony.
        It is interesting to me that while our two witnesses have
    different perspectives, you both make the point that budget
    process reforms should be policy-neutral. And we would hope
    that reforms should help facilitate good decision-making by
    Congress. But we should avoid things that try to force
    particular policy outcomes, such as fixed targets enforced by
    automatic spending cuts.
        I would appreciate if either of you would elaborate on that
    point.
        Mr. Holtz-Eakin. I think there are a couple of reasons why
    this committee is not the right place to do that policymaking.
    First of all, you are tasked with the budget and appropriations
    process, not the fiscal policy of the United States. And so it
    seems like a bit of an overreach.
        The second, though, is if there isn't genuine buy-in, not
    just by your colleagues in the House and Senate, but by the
    public, inevitably whatever targets, triggers, mechanisms you
    put in place will be overridden.
        We have seen this again and again and again, whether it was
    the SGR mechanism in the docs pay in Medicare. I am old enough
    to remember Gramm-Rudman-Hollings and fixed deficit targets,
    which we overrode because we couldn't hit them. People hadn't
    bought into matching them.
        As Martha said, you can use these kinds of things to
    enforce an agreement, but you can't force a policy outcome. And
    I would urge you to not try.
        Ms. Coven. I agree with that. The only thing I would add is
    that you really--and this is really as to what Doug said--you
    want your reforms to be durable. And as you all know, control
    of Congress and the Presidency shifts from time to time, and
    you don't want the first order of business of each new Congress
    to be to rejigger the rules that the previous one set.
        So I think establishing policy-neutrals will help make sure
    that these are lasting reforms.
        Co-Chair Lowey. I think I will save my other questions and
    give opportunities to others. Thank you, Mr. Chairman.
        Co-Chair Womack. Thank you.
        Senator Perdue.
        Senator Perdue. Thank you.
        And I am so excited by your testimony. I have been through
    every word of it.
        Mrs. Coven, there must be something wrong today. You are
    the Democratic witness today, and I agree with every word you
    have written here.
        In all seriousness, you make four recommendations: shift
    the fiscal year, look at biennial budgeting, get rid of debt
    ceilings, and use reconciliation, if you are going to use it at
    all, use it for what it was written for, and that is to reduce
    the deficit.
        But the thing I like the most, and we have all said this in
    different ways, not just the process here of the Select
    Committee should be politically neutral, but I believe the
    budgeting and funding process itself, the process, should be a
    politically neutral platform. And you say: I encourage you to
    approach this task in a politically neutral manner.
        Dr. Holtz-Eakin, you say the same thing.
        Here is my question for both of you. There are a lot of
    things we can do to change the process, but there are two
    issues. One is policy and one is outcome.
        The policy we are talking about. Let's separate the process
    from the policy in this Select Committee, is my opinion, and
    look for a politically neutral platform.
        Senator Hirono said it best, I think, in our first meeting,
    that her only wish here is that we have a process in which we
    will never have to use a CR again. I think that is a high
    calling, and I love it, because I think it is very simple and
    it ought to be our outcome. The thing that we are trying to do
    here is fund the government.
        Would you both help me? You both talked about consequences.
    You both talked about incentives. But if we have a process and
    we get to the end of the fiscal year, and let's say it is 12:31
    along with the calendar year--Ms. Coven, would you start, and,
    Dr. Holtz-Eakin, I would love to get your opinion--what can we
    do to hold ourselves accountable and get that done so that we
    don't have to deal with, ``What if we don't do it?'' That is
    where sequestration was born. That is where the Budget Control
    Act was born.
        We need a process that functions without all the drama. And
    by the way, every other country in the world, every company I
    know of and every state I know of does this without the drama
    of the U.S. federal government.
        Would you guys just address how we get there at the end of
    this process?
        Ms. Coven. So I will start, I guess. Thank you. And I
    thought a bit about this, obviously, after being invited to
    testify.
        I think the best you can do is look for the natural
    breakpoints for the U.S. Congress. And December, usually the
    end of the year is the most natural breakpoint in the action
    for you. Sometimes it is the end point, because you know a new
    Congress is taking over.
        Senator Perdue. Yeah, I agree with that. And it gives us
    more time during the year, too.
        Ms. Coven. Right.
        Senator Perdue. So my question is, if you don't get that
    done by that date, what happens? And what are the things you
    would suggest to us to hold us accountable to where we would do
    it?
        Ms. Coven. So, I mean, Doug put some of those ideas on the
    table. You all are adults. You take your responsibility
    seriously. To me, having something that actually withholds your
    pay or something else from you, I don't know if that is a road
    that you want to walk down.
        My hope is that by rejiggering the calendar so that there
    is an expectation--and a lot of budget process operates through
    norms and expectations--that that is enough to get things on
    course. But if you want to talk about stronger measures, I
    don't know----
        Senator Perdue. Well, I am sorry, I am not looking for
    stronger measures. But the reality is, if you start January 1,
    which we do today, you get a document from the White House.
    When we start, we have 14 weeks for budgeting. In the Senate,
    you have 16 authorizing committees.
        And by the way, we haven't authorized in years. The State
    Department for a while wasn't authorized for 15 years, until 2
    years ago. It is a joke. We are the only real entity that still
    uses an authorizing process.
        But that is 16 weeks. Another 12 weeks for the
    appropriations. That is if you do one a week in the Senate,
    which has really never been done, obviously. Well, that is 42
    weeks out of a 52-week calendar. Even if you change the fiscal
    year, it is not going to happen. So I understand there have to
    be some structural changes.
        But, Dr. Holtz-Eakin, help us with it, very quickly, as I
    want to yield time to the other guys here as well.
        Mr. Holtz-Eakin. I don't have a magic solution on that. I
    really don't. I mean, if you walk through the mechanics that
    you just outlined, the first thing that jumps out is maybe
    there are too many appropriations bills. Maybe 12 is the wrong
    number.
        Senator Perdue. Is that what you meant by potentially
    incrementalizing our way there? Then let's say you do that, you
    go to biennial, you reduce the number of appropriation bills,
    you give yourself a better chance. Then the question, major
    question is, do we still need an authorizing process?
        I don't have time. I will submit that question to both of
    you. I would love to get your response on that.
        Mr. Holtz-Eakin. Sure.
        Senator Perdue. Most every other entity we looked at in the
    last 3 years has a budgeting process that has efficacy, it has
    an appropriating process that works. Very few, if any, had an
    authorizing built in there. Authorizing was part of the
    budgeting allocation process.
        Are you familiar with that?
        Mr. Holtz-Eakin. Yeah. Why don't I get back to you in
    writing?
        Senator Perdue. Okay. All right.
        Thank you, Mr. Chair.
        Co-Chair Womack. Senator Whitehouse.
        Senator Whitehouse. Thank you both for your testimony, not
    only here but in many other Budget Committee hearings.
        Is it fair to say that you can't even calculate the deficit
    in any given year without looking at revenues, appropriated
    spending, healthcare spending, and tax spending? It is just a
    mathematical truth, correct?
        Ms. Coven. Yes.
        Mr. Holtz-Eakin. Yes.
        Senator Whitehouse. Both witnesses agree that is a
    mathematical truth. Good.
        And how broadly accepted is debt-to-GDP ratio as the
    metric, whatever the number actually is, but as the metric that
    we should be looking at with respect to a sustainable national
    debt?
        Mr. Holtz-Eakin. I think that is pretty widely accepted.
    The footnote on that would be what measure of debt do you want
    to put, debt of the hands of the public or the total debt.
        Senator Whitehouse. Correct.
        Mr. Holtz-Eakin. So I would be a fan of debt in the hands
    of the public as the economically relevant measure.
        Senator Whitehouse. Ms. Coven.
        Ms. Coven. I would agree. But you made an important
    distinction, which is what the number actually is, and that can
    vary with the business cycle. So it is not that there even is
    one number, but as a general measure----
        Senator Whitehouse. The conversation should be about debt-
    to-GDP with those asterisks.
        Ms. Coven. It is a very useful conversation to have.
        Senator Whitehouse. Okay. That is good to know.
        And are we going to be able to fix this in a year or do you
    need to plan for a glide slope that gets you from where we are
    to where we need to be?
        Mr. Holtz-Eakin. It will certainly take many years.
        And in terms of where you need to be, I think the
    economically relevant thing is that the U.S. display to global
    capital markets that debt-to-GDP is on a downward trajectory,
    even if a tiny slope. But right now it is going straight up.
        Senator Whitehouse. Let me jump in on that because that is
    a point that I would like to ask you guys about.
        Let's say that all that this committee was to secure the
    passage through Congress of a plan that set a sustainable debt-
    to-GDP ratio and set a mechanism for a glide slope to get there
    and some alarms to let you know if you got off course. How do
    you believe global markets would react to that achievement now?
        Mr. Holtz-Eakin. I don't think they would react at all
    because I think global markets would view that the way I view
    it, which is a fairly empty promise since you haven't got
    political buy-in on the policies that would make it happen.
        Senator Whitehouse. So you would actually have to start
    doing it.
        Mr. Holtz-Eakin. Yeah.
        Senator Whitehouse. Okay. And then how would they react?
        Mr. Holtz-Eakin. That would be a very good day.
        Senator Whitehouse. Okay.
        You have talked about the reconciliation process. In my
    view, in the Senate it has been hijacked to completely
    unrelated purposes from dealing with the debt or the deficit.
        It is a bipartisan sin. We used reconciliation to help pass
    ObamaCare. The Republicans just used reconciliation to pass
    massive deficit-creating tax cuts.
        And make this a response for the record if it is going to
    take a long time, but I would be interested in what constraints
    or restrictions you think we might be able to agree on that
    would actually be effective in limiting reconciliation to its
    intended purpose now that it has kind of gotten out of control.
    How do we get it back in the cage?
        Ms. Coven. Yeah, I want to make one very important
    distinction, though, which is that, whatever your feelings on
    this panel may be about ObamaCare, that was not legislation
    that was scored as adding to the deficit. I think we have seen
    that more in the tax arena. But it is certainly possible in the
    entitlement arena.
        Senator Whitehouse. And as somebody who supported it very
    energetically, I like it, too. I get all that. But I don't
    think it was our view that we were doing that as part of a debt
    and deficit measure.
        Ms. Coven. That was not the primary purpose, right.
        Senator Whitehouse. That was designed as a healthcare
    measure and to help people across the country. And we used this
    process because it worked, not because we were trying to solve
    primarily a debt or deficit problem.
        Ms. Coven. Right. Right. But I think the point, the
    important thing is that it is more important that
    reconciliation not be abused and increase the deficit than to
    set some particular target for how much deficit reduction has
    to be achieved in order to have that tool.
        Senator Whitehouse. Exactly.
        Ms. Coven. The risk is in the negative direction. So what I
    do is implement something like what used to be the Conrad Rule
    in both Chambers, which is to say that you can't use it to
    increase the deficit.
        Senator Whitehouse. Okay. And if you have any further or
    more complicated thoughts than that that you want to put in
    writing for me, I would be interested. Because we do need to
    solve, I think, the abuse of the reconciliation process in all
    of this.
        Mr. Holtz-Eakin. So, briefly, the thing I would just
    mention for everyone is that reconciliation is really a way to
    get around the rules of the Senate.
        Senator Whitehouse. Yeah. Exactly.
        Mr. Holtz-Eakin. In the end.
        Senator Whitehouse. And the Senate Budget Committee has
    become a delivery system for that rule breaking.
        Mr. Holtz-Eakin. And so, since this is a general entity, I
    would hesitate to dictate to one Chamber how they are going to
    run themselves.
        Senator Whitehouse. I am just asking for recommendations.
    You are not going to be dictating.
        Last thing is the debt ceiling. Upside? Downside?
    Specifically, what does it look like if one day we should fail
    at passing a needed debt ceiling and went into default?
        Mr. Holtz-Eakin. U.S. Treasury's are the foundation of the
    global financial system. Impairing their liquidity even a
    little bit would be an economic catastrophe. It can't happen.
        Ms. Coven. And similarly, the programmatic consequences of
    having to tell the American people, our contractors, everyone
    else we do business with that we are not sure when we can pay
    you is--and we had to deal with planning for this a few years
    ago when we actually got up to it--it is no way to run a
    railroad.
        Senator Whitehouse. Thank you both.
        Thank you to the chairman.
        Co-Chair Womack. Mr. Arrington of Texas.
        Representative Arrington. Thank you, Mr. Chairman.
        And I want to thank the panelists for your thoughtful
    testimony and responses to our questions.
        As a new Member, I have been surprised by a lot of things,
    but not the least of which has been the lack of accountability
    and oversight, which is the governing part of the job I thought
    was going to take most of my time.
        I think in my, again, year of service, whether it was on
    the VA Committee or some other, Agriculture, Authorizing
    Committee where we have oversight responsibilities, I think the
    lack of oversight has created a culture that lacks
    accountability and a focus on results. And so the federal
    government is not operating effectively in service to its
    citizens.
        I can't tell you how many times I have asked the question:
    So tell me, before we fund or reauthorize your program or make
    recommendations for such, how is it going? Are you achieving
    the desired outcomes? Are you off-the-chain great or are you
    way underperforming? And maybe we need to invest more money in
    this because it is working so well to serve the veterans or the
    farmers or what have you.
        So I believe that we could have a policy-neutral
    recommendation to have oversight before we actually throw money
    at something that may not be achieving its desired outcome,
    whether it is a Republican idea or program or it is a Democrat
    idea or program.
        Can you both comment on how in the world we get back to
    that component of regular order, good business, and as my
    friend and fellow Texan says, common sense?
        Ms. Coven. So I absolutely agree with what you are saying.
    I think we don't take a hard enough look at, particularly, some
    of the programs that we set in motion and ask ourselves: Do we
    know it is working? Is it achieving the result that we are
    asking?
        The question was raised earlier, I think by Senator Perdue,
    about what the role for the authorizing committees are. And I
    think one useful reform coming out of this process could be to
    step up the expectation that they are the partners with the
    Appropriations Committee in asking those hard questions.
        Now, in fairness to the appropriators, those questions do
    get asked of federal agency witnesses and others who come
    before them every year to defend their budget request and
    explain why the administration thinks funding should be
    increased in one place and cut in another.
        But the authorizing committees have a lot of scope to do
    this, to delve more deeply to answer the questions you have
    asked. And I think their thoughts should have more input into
    the decisions that are made by appropriators.
        Representative Arrington. Thank you.
        Mr. Holtz-Eakin. I am going to echo that, and I will do it
    via a very particular example, which is Chairman Womack
    recently had me testify in front of an oversight hearing for
    the Congressional Budget Office. It was the first time I had
    delivered such testimony, even though I ran it. There were no
    oversight hearings.
        The closest that I came to an oversight hearing was the
    legislative branch appropriations bill when I had to defend
    CBO's budget request and to explain what it did and how we were
    going to use that money. I think that's a real problem.
        And I would echo that a good use of the authorizing
    committees is to have them be your partners with a much more
    explicit role for this. And if you have a different calendar,
    they can go first and then you can appropriate based on the
    results.
        Representative Arrington. Senator Whitehouse has gone. Is
    he here? No, he has left.
        Well, I want to say that I align my thinking about how we
    ultimately get at responsible and effective outcomes. I
    recognize that we may not get there and we may just have a
    better process, a smoother and more seamless process. I am for
    that, by the way. So I like the glide slope. I like the
    targets.
        I don't know what mechanisms or accountability or pain or
    shame or carrot or stick that is going to move this seemingly
    immovable body. So it is discouraging after we got the history
    of almost 200 years of reforms and then we look and it is $21
    trillion in debt.
        I do think the fixed target and glide slope idea, I think
    it is a great idea. I just don't know how in the world we are
    going to change the behavior of the United States Congress.
        Isn't that the million-dollar question here on anything,
    whether it is timeliness, whether it is unauthorized to now
    authorized spending? Whatever it is, isn't the million-dollar
    question how do we change the behavior of this animal that
    doesn't seem to want to change?
        Give us some ideas on that in that regard.
        Mr. Holtz-Eakin. So this has come up a number of times
    around the globe. And the essential issue is that there is
    nothing that you can do in the way of a mechanism that you
    can't also undo. And so you can't bind yourself to delivering
    any particular outcome or process or whatever.
        So in other places, Scandinavia, there are a couple
    countries who did this, you adopt fixed fiscal rules that
    bind--the parliament in that case--that they have to adhere to.
        In our case, that would require amending the Constitution.
    That is the thing which you cannot change to which you must
    adhere, and that is a very high bar for changes.
        Representative Arrington. I yield back.
        Co-Chair Womack. The gentleman from the Commonwealth of
    Kentucky, Mr. Yarmuth.
        Representative Yarmuth. Thank you, Mr. Chairman.
        Thank you both for your testimony. And I am glad to hear
    you both reject the notion of No Budget, No Pay or No Budget,
    No Recess. It seems to me that is a recipe for doing shoddy,
    sloppy work. There is an incentive to do anything to avoid
    those repercussions rather than to do responsible work.
        Ms. Coven, I have a question for you. Dr. Holtz-Eakin
    suggested that we consider a joint budget resolution to get the
    President more involved in the process earlier. He also
    suggested that change would have pluses and minuses. What is
    your view of that potential change and how would you weigh the
    advantages and disadvantages for that change?
        Ms. Coven. So I am not a fan of that proposal. And Doug
    helped to explain some of the pitfalls. Let me just amplify
    briefly.
        So, first of all, if you think what we need is more
    gridlock, that, to me, is the recipe for it. It is hard enough
    to get an ordinary budget resolution done. As you all have
    said, they often don't get done. Inviting another party into
    that negotiation could make it more difficult.
        Secondly, it is a power shift in two directions, not only
    shifting some of your Article I power down the other end of
    Pennsylvania Avenue, but also, if we are talking about this
    resolution being a 51-voter, shifting power away from the
    minority party in the Senate.
        And as the saying goes, sometimes you are the windshield,
    sometimes you are the bug. You don't know which party you are
    in that situation. So the idea that you would permanently say,
    ``Well, the minority just doesn't have a voice,'' doesn't make
    sense to me on something as important as this.
        And the third thing is that it risks, if it is a bill,
    which it would be if it were signed into law by the President,
    becoming a Christmas tree, a mega budget bill, a mega revenue
    bill that tangles everything up in one big knot.
        So while I understand and appreciate the notion that you
    want the Congress and the President to be on the same page, and
    I have suggested it with regard to caps and appropriations
    because that is just practical, otherwise the government shuts
    down, the idea of trying to do the whole ball of wax in one
    fell swoop seems to me too ambitious and likely to deteriorate
    the process rather than improve it.
        Representative Yarmuth. I appreciate that.
        This morning I woke up to see that Senator Enzi has floated
    the idea of possibly doing away with the Budget Committee. I
    don't know if he was talking about in just the Senate. So I am
    interested in getting your thoughts on that.
        And also something that occurred to me once, an idea, I
    have no idea whether it makes any sense or not to even think
    about it, but the possibility of a Joint Committee to
    essentially save a step, where the Senate and House developed a
    budget resolution together. Any thoughts on either of those?
        Mr. Holtz-Eakin. I am not familiar with what possessed Mr.
    Enzi to suggest getting rid of this committee, so I won't
    answer that one.
        In the template that was the Budget Act, the Budget
    Committee as a coordinating function and as a consolidator and
    as handling the reconciliation process made perfect sense. Like
    much of this, it just hasn't worked out so well, so that
    suggests that some change does make sense.
        I see no reason why a Joint Committee wouldn't be a good
    first step. If nothing else, the act of looking at the problems
    together, identifying the range of solutions together would
    inform both Chambers in a much more effective fashion than we
    are getting right now. There is a lot to be said for just
    knowing what ideas will and will not fly on the other side of
    the Capitol.
        Representative Yarmuth. Thank you.
        Do you have some thoughts, Ms. Coven.
        Ms. Coven. Just really briefly. The only thing I would say
    is that I do like the idea that a number of people have
    expressed, and I think members of this panel, is making sure
    that the Budget Committee can speak for both Chambers, whether
    that is a Joint Committee or separate committees, and is well
    represented in terms of your leadership, the tax-writing
    committees, the entitlement committees, and so on.
        So I just think if it remains, it should make sure that it
    does speak for the Chamber and can provide leadership for the
    rest of the Chamber.
        Representative Yarmuth. Thank you very much. I yield back.
        Co-Chair Womack. Senator Ernst.
        Senator Ernst. Thank you, Mr. Chair.
        And I would like to go back and revisit. We have had an
    interesting conversation about the sticks and the carrots.
    Because it is wonderful we are going through this process, and
    I believe it is extremely important that we find a solution
    that we can adhere to. But I think that many that have served
    in the Senate and the House before us thought that they also
    had a process that we could adhere to.
        And I would argue, I again want to go back and visit some
    of the sticks, because like No Budget, No Pay or No Budget, No
    Recess, we have found that--and I am going to push back on the
    shoddy workmanship, because I would say the omnibus bill that
    we just had was shoddy workmanship. Four or five people
    involved in a process. It is thrown together, we vote on it, we
    go home. You know, everybody is maybe not necessarily happy,
    but, wow, look, we have a product.
        We have to do our job. And what we have seemed to find
    lately in the United States Senate is, especially if you look
    at our nominations process, which also seems to be hampered, is
    that when the leader starts threatening to hold over weekends
    or cancel recesses, all of a sudden we start getting our
    nominations through the process.
        So I do think that we should have a discussion. We should
    not dismiss this just outright. I think that we need to be
    doing our jobs. But we are humans, and we like to go home on
    the weekends and we like to see our family at Christmas and
    Thanksgiving. If those sticks are out there, perhaps we know
    and we can plan ahead and understand that we need to get our
    jobs done.
        Would you please, if you could, maybe make comments about
    sticks and carrots that have been used in the past, maybe in
    your experience, that have tended to work or not tended to
    work?
        Mr. Holtz-Eakin. I don't have a long list of things. Most
    of the things that have been used have been mechanisms designed
    to make you hit a particular budgetary target, say, a deficit
    target or a spending target. And you can override those
    mechanisms. So they have not been effective at all. By and
    large, process doesn't produce solutions.
        There has been some No Budget, No Pay sort of sentiment,
    and at least my understanding is that is probably not
    constitutional, so I would suggest not going that route. It is,
    however, I think constitutional for you not to see your family.
        So I would echo what Martha said about the empirical
    regularity with which things get done as you back up against a
    recess or some other part of the calendar. That does seem to
    motivate people to get things done.
        Senator Ernst. Thank you.
        Ms. Coven. Just one thing to add to that, which is that, as
    you think about those kinds of mechanisms, make sure that the
    collateral consequences fall on Congress and not on the
    American people.
        Senator Ernst. Exactly. I would agree wholeheartedly with
    that. It is incumbent upon us to make sure that we get our jobs
    done. And I would say, just as I stated in my opening comments,
    that for 44 years only four times have we done our job.
        So that speaks to, it is wonderful going through a process,
    making sure we have rules in place to do that, but we have to
    have the desire to get it done. Otherwise we just find ways
    around it and we end up with continuing resolutions and omnibus
    bills.
        Yes, Dr. Holtz-Eakin.
        Mr. Holtz-Eakin. I want to just echo something that Martha
    said earlier, which I think is a good thing that you revisit
    the budget process. There is no reason why you should budget
    the same way all the time. Budgets should reflect priorities
    and problems, and these change for the nation, and the process
    should change with it.
        And if you make changes, I believe the folks who make those
    changes, meaning your colleagues and you, will have a buy-in to
    make them work. And there is more to this than rigid mechanical
    things. There is pride of craftsmanship and doing one's job
    well. And if you settle on a new budget process, I think it
    will, at least for some time, be in and of itself enough to get
    things moving better.
        Senator Ernst. Thank you. And I appreciate the time. And,
    again, I am truly looking forward to this. I think we can find
    a solution that hopefully we will be able to market and sell to
    the rest of our colleagues. But it is up to us to get it done
    and not look for specific loopholes that we can use in the
    process.
        So thank you. I yield.
        Co-Chair Womack. Representative Kilmer.
        Representative Kilmer. Thanks, Chairman.
        And thanks again for being with us.
        I think this conversation around carrots and sticks is
    actually kind of an important one, in part because it seems
    like a lot of the sticks that have been used that damage has
    accrued to the American taxpayer or to the military. And in
    part because when the sticks accrued to Congress, it finds a
    way to get around it, right? It waives them.
        So I think it is worth thinking about, is there more of a
    positive inducement to get Congress to do the right thing? And
    I know you have been asked that in various ways. But I would
    just encourage us, collectively, to think about that down the
    road.
        I want to ask about when we get on the eve of a shutdown.
    The Chairman asked should there be an auto CR. Some have
    suggested an auto CR minus a percent or some have suggested an
    auto CR plus a percent. And it seems like the problem is,
    whichever route you choose, someone will like that route. And
    it creates an incentive for inaction.
        I understand that during the Clinton years they said no CR
    beyond 2 days, and they did 21 of them, but they eventually got
    there on an agreement.
        What is the right, what do you think, on the eve of a
    potential shutdown, what would you recommend as a smarter
    approach?
        Mr. Holtz-Eakin. My first recommendation would be for this
    committee to be so successful that we are not on----
        Representative Kilmer. Amen, I am with you.
        Mr. Holtz-Eakin. That is the fundamental indictment of this
    era, right?
        Representative Kilmer. Yeah.
        Mr. Holtz-Eakin. The second is, I think you should not rely
    on a mechanism. Mechanisms become someone's preferred policy,
    whether you anticipate it or not. Mechanisms can be overridden.
    That happens all the time.
        So if you are going to have a situation like that, empower
    someone in the Congress, someone who has been elected to make
    decisions, to make a decision to keep the government open. And
    the idea of you handing over all of your hard-earned clout from
    running for elections and being in the Congress, handing it
    over to someone else to do whatever they want, is going to
    really make you not want to do it.
        Ms. Coven. I agree with that. I think you can't automatic
    anything in this process.
        Representative Kilmer. I know that there has been some
    suggestion of taking OMB out of the budget process. I wanted to
    get your reaction to that. And if that happened, wouldn't CBO
    need a whole lot more resources?
        Mr. Holtz-Eakin. I was unaware of that. It is a bad idea.
    The CBO was created because up until the 1974 Budget Act the
    only source of budgetary information was the Office of
    Management and Budget, and prior to that the Bureau of the
    Budget. It is a good thing for the executive and for the
    legislature to have their own entities.
        And, bluntly, competition is a good thing. It is a good
    thing for CBO to look over to OMB and say, ``Gee, do you think
    they did a better job of figuring out what is going to happen
    here?'' and vice versa. So I am inherently skeptical of
    monopolies and government monopolies who know better than any
    other.
        Ms. Coven. I would also add to that that another really
    important function of OMB, and particularly agency budget
    offices, is they just have a lot more information about what is
    going on, because they are operating in the executive branch.
        So CBO performs a somewhat different function, and it is
    the ultimate truth-teller, but you also need the agencies and
    OMB aggregating this information, which they are privy to
    because they are actually in the day-to-day operational mode.
        Representative Kilmer. Yeah. You spoke about the importance
    of CBO as a neutral voice, sort of calling the balls and
    strikes. Are there measures you think we ought to take to
    protect the integrity of CBO as an impartial referee in the
    budget process?
        Ms. Coven. I think it does a pretty good job. And I would
    more caution you against tampering with their ability to tell
    it straight than say that there are major reforms that are
    needed now.
        Representative Kilmer. Okay. You know what, I think I am
    just going to leave it at that.
        Thank you, Chairman. I yield back.
        Co-Chair Womack. Thank you.
        Senator Lankford.
        Senator Lankford. Thank you. I appreciate this.
        Let me try to pepper you all with a whole series of
    questions. And first let me push on a little bit what we were
    already talking about with auto CR.
        You had mentioned not wanting to have auto anything, and I
    understand that. We are trying to figure out how to be able to
    make sure we protect us from having shutdowns. And at the end
    of the day at some future Congress there is no resolution, how
    do we keep us going, as you mentioned, hold the American people
    harmless, put consequences here, to be able to get it done?
        That has been the conversation about we don't go home,
    there are automatic quorum calls where we stay in session
    continuously until we get it finished. But there has to be some
    kind of process to make sure that the American people are held
    harmless in this. That is going to require some mechanism in
    place, policy-neutral or not, some mechanism has to be there.
    Agree or disagree? That would mean something has to be
    automatic, I would say.
        Ms. Coven. Not if it means an automatic CR, no.
        Senator Lankford. Okay. What would you recommend instead,
    you get to the end of a budget year?
        Ms. Coven. I think what we find is Congress pretty quickly
    figures out that it has created a mess and it cleans it up. And
    that is a better thing than putting the government on
    autopilot.
        Senator Lankford. Okay.
        Mr. Holtz-Eakin. My suggestion was an automatic decision-
    making process, kick it to the majority leader of the House and
    the President pro tempore of the Senate, just to make it up on
    the spot. But somebody has to make a decision on what will or
    will not get funded, and the threat of handing it over to those
    individuals is what should motivate you to not end up there.
        Senator Lankford. Okay. Let me bring back up the issue
    about Budget Committee going away. That is an issue that has
    been around for several decades at this point.
        As I go through the notes of this body, in 1993, kicking
    around budget reforms even at that point, 20 years into the
    Budget Reform Act, the act of 1974, there was already this
    conversation that was brewing about leadership establishing the
    302(a)'s. And it would be leadership of the House and the
    Senate being able to work through the process and then bringing
    that to the body to be able to vote on. And then the body
    establishes those 302(a)'s.
        But basically you have got, as the term that was used
    during that time by Senator Kassebaum, you have got someone
    with a little more clout in the process to be able to make that
    decision earlier on.
        What is your thoughts about a budget, the 302(a)'s being
    established by a leadership group, voted on by the House and
    the Senate, obviously the President would have to vote on that
    as well to be able to make it law, and then to be able to work
    on from there?
        Mr. Holtz-Eakin. So I think the key insight is that the
    budget committees as they are currently constituted can't
    remain. And the question is, do you want to make them more
    powerful by putting on them leadership, Ways and Means, Senate
    Finance, key committees like that, or do you want to make them
    go away?
        But they existed the way they do now because there was
    supposed to be the entire scope of operation, revenues,
    mandatories, discretionaries. They had that key coordinating
    function. No one is doing all that so the Budget Committee has
    no role.
        Senator Lankford. Right.
        Martha, do you have a thought on this.
        Ms. Coven. I agree with that. I would just say that there
    is some role for oversight of the budget broadly and that it
    worries me to think that Congress would have no group of people
    whose task was to be looking at the reports that CBO comes out,
    to be thinking about the long-term fiscal trajectory, et
    cetera.
        Senator Lankford. No, I would agree with that. Currently,
    our process is leadership decides everything at the end. How do
    we switch it to where there is a decision at the beginning on
    what the main number is and get more people involved in
    oversight throughout the process, rather than no oversight
    anywhere in the process and try to figure out how to be able to
    resolve that?
        Ms. Coven. Right.
        Senator Lankford. The concept of CBO in some of the scoring
    issues brought up before, CHIMPs, pension smoothing, payments
    shifts. Even PAYGO has become just a speed bump of late rather
    than something that is an actual mechanism.
        Are there recommendations that you would make to be able to
    reform some of these processes to make sure that they work?
        Mr. Holtz-Eakin. So that is an issue that is broader than
    CBO. There are scorekeepers, the OMB folks, CBO folks,
    appropriators, Budget Committee staff, minority and majority,
    who have met regularly for years and years, decades, and agreed
    upon the budgetary treatment of certain transactions like
    CHIMPs and a variety of other things.
        You could legislate that they go away. Other than that,
    there is nothing else that can you do.
        Senator Lankford. Is there a gain to having them?
        Mr. Holtz-Eakin. They are the little grease that is left to
    get things through. And grease is great until you abuse it. And
    so the question is, is it being abused?
        Senator Lankford. Okay.
        Ms. Coven. There is a stock of them built into the base. So
    I think you can't just say let's get rid of CHIMPs without
    acknowledging you are getting rid of billions of dollars of
    budget authority that is supporting programs that you all have
    voted for.
        Senator Lankford. Does that budget authority, does that at
    the deficits or is that----
        Ms. Coven. It is part of the aggregate totals that you
    provide when you pass an omnibus spending bill. And I just
    think we need to acknowledge that that is part of the totals
    that we----
        Senator Lankford. Totally agree. Yeah, I totally agree. And
    that has been my challenge, is if CHIMPs go away, you are not
    reducing deficit, but you are getting a more accurate number
    that is out there.
        And part of the challenge that we have right now is
    actually getting to the number. We have the number that is
    budgeted, then you have CHIMPs, then you have OCO, and then you
    have emergency funding. And everyone just says, no, but just
    look at this number. But the total aggregate debt is something
    completely different.
        And if we are going to go through this process, I think
    there should be some gain and to try to clean up so we get a
    number that is actually the number.
        With that, I yield back.
        Co-Chair Womack. Senator Hirono.
        Senator Hirono. Thank you, Mr. Chairman.
        Thank you both for testifying.
        Just before this hearing White House economic advisor Larry
    Kudlow said, and I quote, ``Never believe CBO,'' end quote,
    because he claims they don't score tax cuts right. Do you
    agree?
        Ms. Coven. I don't agree with that.
        Mr. Holtz-Eakin. I have a lot of disagreement with that,
    beginning with his misunderstanding the Joint Committee on
    Taxation is responsible for scoring tax bills.
        Senator Hirono. Congressman Kilmer asked whether we should
    move to protect CBO's independence. And, Ms. Coven, you said
    that you thought they do a pretty good job. But when we start
    talking about some people wanting them to engage in dynamic
    scoring and other ways to make whatever programs they are
    pushing look better, maybe we do need to ensure the
    independence of CBO, as long as we are looking to them as that
    independent voice for us.
        Ms. Coven. I think anything you can do to strengthen that
    function would be terrific. And it is interesting to see how
    that discussion played out on dynamic scoring because there is
    what the Joint Tax Committee said and then there is what lots
    of other people said. And then there is what a one-pager out of
    the Treasury Department said. And people are hanging their hats
    on whatever is convenient.
        But I agree that protecting the integrity of what they
    produce and the Joint Tax Committee is really important.
        Senator Hirono. Do you agree?
        Mr. Holtz-Eakin. I do. I would just hasten to add that in
    my experience this is a very common occurrence. People are
    always lobbying for their programs to be fantastic and free,
    and they want you to say that. And it is business as usual to
    ignore that and just do the work.
        Senator Hirono. Well, I like what you said, that
    competition is good, that we have the executive branch putting
    out their best explanation of what is going to happen and then
    we rely on CBO as an independent voice.
        Well, hope does spring eternal that this Select Committee
    will be able to come up with a budget reform that is policy-
    neutral, because the broken process we have hurts real people.
        And I wanted to ask Ms. Coven, one of our tasks is to
    explain to the American people why the budget and
    appropriations process, or lack of process, matters in their
    everyday lives. And I am sure many people are unaware of the
    serious challenges that agencies face during shutdowns or CRs.
    And in particular, I am sure many people don't realize that
    agencies like Labor, Education, and the others that you oversaw
    face potential life-and-death concerns when faced with
    congressional inaction.
        My question to you is, could you elaborate on the situation
    or situations you were referring to in your testimony where you
    had to determine when a situation was so precarious that there
    is a threat to human life?
        Ms. Coven. Yes, I would be glad to. And thank you for
    asking that.
        So we have a law that has existed I think since the 1800s,
    I want to say, called the Anti-Deficiency Act, that makes it
    such that the executive branch cannot expend funds that
    Congress has not provided.
        So when the government is operating during a shutdown, one
    of the tasks that executive branch officials are engaged in is
    making sure that we do not violate that statute. There are
    criminal penalties attached, too, if you want to talk about
    sticks.
        So we were in a situation during one of the shutdowns where
    the WIC program, which provides nutritional support for infants
    and pregnant women and young children, was starting to run out
    of carryover and contingency funds.
        And right before the government, thankfully, reopened, we
    were in the process of trying to make a determination of
    whether or not, per the terms of the Anti-Deficiency Act, there
    was an imminent threat to the safety of human life if babies
    were not going to be able to get nutritional support,
    consulting with medical experts.
        These are hours of my life I can't believe I spent and I
    would love to have back. The idea that that is what we should
    be engaged in when we are implementing the federal budget is
    absurd, and it was heartbreaking to go through those
    discussions with medical experts.
        Senator Hirono. And that is just one concrete example of
    our inaction, our inability to do our jobs, how it impacts real
    life people, literally, in life-or-death situations.
        Are both of you familiar with the Convergence Center's
    ``Building a Better Budget Process Report''?
        Ms. Coven. Yes.
        Senator Hirono. So would you care to comment, both of you,
    on the report or any of the recommendations?
        Mr. Holtz-Eakin. I would be happy to get back to you. It
    would be a long, long answer. I would be happy to provide it.
    There are a lot of interesting ideas in there.
        Ms. Coven. I think the one quick thing I would call out is,
    I do like the idea of sort of standardizing and more regularly
    presenting to Congress and the public the snapshot of where we
    stand and where we might be headed. And CBO does lots of
    products like that. But I think there is some logic to
    consistently providing information in a form that people start
    to recognize and can use.
        Senator Hirono. I think that is really important because of
    their suggestion that we have a fiscal state of the nation
    report every 4 years, for example, and a pretty regular
    performance of portfolio of federal programs reports just to
    let people know what the heck is happening. I think that is
    good.
        And then they also say that we should synchronize the
    budget cycle with the electoral cycle. That is a pretty
    straightforward recommendation. Do you have an opinion about
    that particular recommendation?
        Ms. Coven. The only thing I would say I think there was
    some hinting at things that are a little bit more like a joint
    budget resolution in that document, and I have urged caution on
    that. I think that is not the best path to walk down. But in
    terms of synchronizing the calendar, and particularly setting
    limits on appropriations every 2 years, makes a ton of sense to
    me.
        Senator Hirono. Did you want to add to that?
        Mr. Holtz-Eakin. I concur with that.
        Senator Hirono. Thank you very much, Mr. Chairman.
        Co-Chair Womack. Mr. Woodall.
        Representative Woodall. Thank you, Mr. Chairman.
        I will pick up on the Anti-Deficiency Act. We have talked a
    lot about the 1974 Budget Act. But prior to the
    reinterpretation of the Anti-Deficiency Act during the Reagan
    era we didn't have these kinds of shutdowns, we were kind of on
    autopilot.
        Given your experience at OMB, Ms. Coven, you would have
    said you would not support an autopilot. You don't want to go
    back to the Carter days where the American people are held
    harmless and the shutdown is just a word document. You want it
    to have consequences.
        Ms. Coven. I want Congress to make choices, yes.
        Representative Woodall. Right.
        Thinking about your calendar year idea, of course, we
    started down this road in 1976, went back in 1986, and moved
    the fiscal year from July to October. I went back and looked.
    Just over the past 20 years, it turns out in 11 of those last
    20 years, we didn't make it by January 1 either. So you have
    solved half the problem with that idea.
        Candidly, I think solving half the problem sometimes is a
    pretty good start. Knowing of our failure to have those funding
    decisions resolved even by January 1, you still see the merit
    of the calendar year vision.
        Ms. Coven. I do because the delays are shorter, which means
    the implementation can happen more quickly and the agencies and
    others who receive federal funds can make better use of them,
    yes.
        Representative Woodall. Mr. Holtz-Eakin, when we talked
    about misusing reconciliation, I appreciate those comments in
    Ms. Coven's testimony. She quickly corrected the record of
    ObamaCare being a money saver, which, of course, is exactly
    what CBO reported. Any time you start taxes in year one and
    benefits in year five, you tend to create a money saver. We
    gamed the system there. If we looked out over 20 years, we
    would have gotten a different number, 30 a different number.
        You said some of those games, CHIMPs, in response to
    Senator Lankford's questions, weren't the purview of the CBO to
    sort out. But given your experience as the scorekeeper, in the
    same way that process changes can be used, to Mr. Kilmer's
    point, in favor of or against folks who simply prefer that
    policy, I found our CBO scores to be that very same way. I can
    draft the legislation to achieve my goals in ways that pervert
    CBO's scoring to give me the freedom I need to have my
    language.
        What have you learned about how we could address CBO in
    ways that limit the perversion of some of the scoring games
    that go on now?
        Mr. Holtz-Eakin. CBO's job is to identify the federal
    budget costs of legislation. That is its primary function as a
    scorer. And it is not supposed to identify the benefits. It
    identifies the federal budget costs over the budget window
    specified by the budget committees at that point in time.
    Sometimes it has been 2 years. Right now it is 10. It has been
    a lot of things.
        And for that reason, it is always possible to, quote, game
    CBO, because they will score the legislation and not the
    legislation's intent. And you can, by front-loading things and
    leaving things out of the budget window, give a misleading
    presentation of the intent of a bill.
        I don't think you should pretend that you can fix CBO or
    fix the scoring process to avoid that. You need to provide a
    lot of information. You can ask CBO, what do the second 10
    years look like? You can bring that into the debate on the
    floor. And the way you stop those things is voting no.
        Representative Woodall. I find it incongruous to have a
    conversation about the critical importance of a nonpartisan
    referee calling the balls and the strikes as they exist and the
    understanding that I can recraft the rules for CBO to get just
    about any result I want.
        At the same time, it seems that the utility of an unbiased
    scorekeeper is undermined by biased rules. I would also point
    out, when we no longer even use the CBO's baseline, when we
    find it not useful, there is some opportunity for change.
        But let me close with this and ask you if you have counsel.
    Yes, it is true we do things differently than anybody else
    does. We have a budget that seems fairly partisan. We have
    authorizers that do some oversight and not. And we have
    appropriators who actually get the job done at the end of the
    day.
        I think that structure can be politically useful. It allows
    lots of places to let steam out the system. Yes, we could be
    more efficient. But I am not sure that efficiency and utility
    are synonyms.
        Do you all have thoughts on that as experts in the field?
        Mr. Holtz-Eakin. I think it is a good observation. I mean,
    I can say honestly that I thought one of my jobs at CBO was to
    have Congress scream at me and vent their frustration. And that
    was just part of going to the office, and that was fine,
    because Congress needs to vent on occasion, but it also needs
    to get its work down. If you need to do the venting first,
    good.
        Ms. Coven. The only thing I would add is that the biggest
    observation I had, shifting from working in the legislative
    branch to the executive branch, is that here there are 535
    people all up for reelection. In the executive branch there is
    one person up for reelection at most once. So it makes sense
    that your process, with 535 people constantly responding to the
    needs of the American people, is going to be a little bit more
    complex than it is when one person is making decisions.
        Representative Woodall. Thank you both.
        Mr. Chairman, I yield back.
        Co-Chair Womack. Ms. Roybal-Allard.
        Representative Roybal-Allard. I apologize for being late,
    but I had another hearing at the same time.
        Being that I just came out of an appropriations hearing, I
    am going to ask the question with regards to the appropriations
    process.
        One of the things that has always been annoying is to
    receive a President's budget request that zeroes out funding
    for a popular program that the administration knows Congress is
    going to add back to the final appropriations bill. And then
    this has a ripple effect throughout the budget and
    appropriations, because in order to fund the program that is so
    popular something else has to give. And then there is the
    debate as to what that is going to be.
        What recommendations do you have to maybe stop this
    practice, which has been used by both administrations and both
    parties? And what are your thoughts about how we should look at
    the duplicative programs or cases where agencies are operating
    somewhat outside the lanes even if the programs are popular?
    Because I believe that that contributes to the overall budget
    delays and problems that we face today.
        Ms. Coven. So I think this happens in two kinds of
    circumstances, and one, I think, is legitimate and one isn't.
        The nonlegitimate use of what you described is when the
    President fully supports that activity and is just playing
    games to get the numbers to fit. And I think that is not
    something that should continue. And, Congress, whatever
    pressure you can apply to make sure it discontinues,
    particularly in the agencies.
        But there is a legitimate use of it, which is if what you
    are asking the President for is a request that reflects what he
    or she thinks the best distribution of resources across the
    country is, it may well be that the President, again, who is
    not quite as interactive with the voters on a regular basis, is
    exerting some courage and saying: This isn't working and I am
    zeroing it out, and I know it is popular, but I think these
    resources can be spent somewhere else.
        And I, frankly, think you want a President's budget that
    makes some of those kinds of choices and shows you where, with
    the full expertise of the executive branch, where you can make
    shifts towards better use of resources. Then you all can decide
    if that is a direction you want to follow or not. But you
    wouldn't want the President anticipating what your political
    choices are rather than providing you his or her best judgment.
        Mr. Holtz-Eakin. So let me echo the second part of that. In
    my experience in two White Houses, there were a long, long list
    of programs that the career staff at OMB had identified as
    candidates for elimination.
        And so it wasn't so much the political process that was
    doing it, it was the review process that looked for the
    effectiveness of programs and whether they were meeting their
    objectives. And then if they weren't, they should not be there.
    So I think that is a legitimate thing and that you should
    respect it.
        I think the second part of the question was about really
    oversight, right? If we have got duplicative programs and we
    have things that are wandering outside their legislative
    intent, the oversight process should be catching that and
    reining it in. And if it is not, then that is the call for
    better oversight.
        Representative Roybal-Allard. And when I came in, was there
    a question by Senator Hirono with regards to how we could make
    the budget more transparent and understandable for the public?
    Did I hear that?
        Ms. Coven. I think she was referencing a proposal by the
    Convergence Group that included this fiscal report, yes.
        Representative Roybal-Allard. And you are going to be
    responding in writing to that?
        Mr. Holtz-Eakin. She asked for our thoughts on the whole
    Convergence report and I thought it would be more efficient to
    just get back to her.
        Representative Roybal-Allard. Okay. All right. Okay, then I
    will just leave it at that.
        And it seems to me that there has been a growth also in the
    number of policy riders that we have been considering in the
    appropriations bills and that these policy fights are also
    contributing to delays in the process.
        Why do you think that is happening? And are there any ideas
    that you might have as to how we can address this?
        Ms. Coven. So I think it is happening because you have the
    must-pass bills. And the remedy lies not necessarily in your
    committee, the Appropriations Committee, although stricter
    parameters, keeping those riders out would be terrific, but
    more in the rest of the Congress making sure that there are
    other pathways for those legislative priorities to get
    addressed so the appropriations bills don't get bogged down
    with them.
        Representative Roybal-Allard. Okay. I think my time has
    about run out.
        Co-Chair Womack. All right. So the gentlelady is yielding
    back.
        All right. We have completed the Q&A round. Recognizing
    that there is only a handful of our members left, I think it
    would be appropriate, if anybody has a burning question that
    can elicit a very brief response, I would be more than willing
    to give that alibi right now to somebody if they wanted to ask
    something.
        Senator Perdue.
        Senator Perdue. I am sorry. I would like to iterate,
    though, for the record, I would love to ask both these
    witnesses to provide this back to us, though, as a more in-
    depth conversation about the Senate's--the budget is a
    resolution. We pass it with 51 percent of the votes. The
    authorization is a law. We pass it with 60. The appropriation
    is a law. We pass it with 60.
        Once the minority party has a budget resolution crammed
    down their throat, it is very difficult for them, Republican or
    Democrat, to come back in the authorizing process and play
    ball. It is very difficult for them to come back in the
    appropriation process and play ball.
        Please give us your thoughts about that three-step process,
    and talk to us about other countries that you found that have
    done that. We can't find anybody that does a three-step
    process.
        So I think this authorizing issue is one we need to really
    focus on. We haven't talked about it much today. But in
    subsequent hearings, I suspect that we will end up going more
    in-depth. But because of your two backgrounds, I would love to
    get you on the record relative to that issue.
        Thank you.
        Co-Chair Womack. Thank you, Senator.
        Mrs. Lowey.
        Co-Chair Lowey. In conclusion, I think we have all asked
    many questions, and perhaps we will save some of the other
    questions or repeat them again for the next time. So I would
    like to thank you both.
        As I look back upon the appropriations process, it would
    seem to me there are two things that are very evident. Number
    one, when we got a topline number, the 302(b)'s, for each of
    the committees, no problem. Our staffs worked together.
        Number two, the only thing that caused some problems was
    169 of them, shall we say, what some of us would call poison
    pills, others might say, oh, this is a very important policy
    decision.
        So maybe if the authorizers did their work and the question
    would be how do we keep those authorizing items away from the
    appropriations process, we would be better off.
        And I think, Mr. Holtz-Eakin, you mentioned something about
    OMB, I think that is what you said, that we should be
    respecting it and the process. And it really depends on who is
    there at the time, because I would say I have had totally
    different experiences.
        And I don't want to blame it on different parties. But I
    can remember one head of OMB who used to check in with me
    three, four times a week. And I don't think I have spoken to
    this head of OMB in the last 6 months.
        So how do you keep the politics out of the process? Give
    us, as appropriators, the information so we can move forward.
    Because once we get those numbers, and I want to emphasize this
    again, on Appropriations, the bipartisan work of our 12
    subcommittees was so impressive. We got the numbers, we went to
    work, we got the job done, and then some other policy issues
    came up that would extend the process.
        But how do we move it forward so that Democrats and
    Republicans can do their work? And that is what I see as a
    major challenge here.
        But I think it is time for us to close this hearing. So let
    me thank you both for your excellent testimony and say it is a
    pleasure for me to work with my co-chair.
        Thank you.
        Co-Chair Womack. Always a pleasure and a privilege.
        Thank you, Dr. Holtz-Eakin and Ms. Coven, for appearing
    before us today.
        I want to advise our members that they can submit written
    questions to be answered later in writing. Those questions and
    your answers will be made part of the formal hearing record.
    And any member that wishes to submit a question or any
    extraneous material may do so within 7 days.
        And with that, let's go eat. The committee stands
    adjourned.
        [Whereupon, at 12:44 p.m., the committee was adjourned.]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                          BIPARTISANSHIP IN BUDGETING

                                  ----------

                             WEDNESDAY, MAY 9, 2018

                              House of Representatives,
                          Joint Select Committee on Budget and
                                 Appropriations Process Reform,
                                                       Washington, D.C.
        The committee met, pursuant to call, at 10:00 a.m., in room
    HVC-210, Capitol Visitor Center, Hon. Steve Womack and Hon.
    Nita M. Lowey [co-chairs of the committee] presiding.
        Present: Representatives Womack, Sessions, Woodall,
    Arrington, Lowey, Yarmuth, Roybal-Allard, and Kilmer.
        Senators Perdue, Lankford, Ernst, Whitehouse, Bennet, and
    Hirono.
        Co-Chair Womack. The committee will come to order.
        We have a little bit different seating arrangement than we
    did before. I am up here in a different ZIP Code, you know. And
    we will see how this goes.
        Good morning, and welcome to the second public hearing of
    the Joint Select Committee on Budget and Appropriations Process
    Reform.
        The most important role given to Congress under the
    Constitution is the power of the purse. Our panel is charged
    with ensuring we can fulfill this essential duty.
        Today's hearing is appropriately titled ``Bipartisanship in
    Budgeting'' and reflects the consensus regarding our mission
    and the goal for any potential recommendations. To be clear, we
    are not in the business of prescribing specific budget outcomes
    to benefit Republicans or Democrats. We want to ensure a budget
    process that works for either party, regardless of who holds
    the majority.
        As we continue talking through possible improvements in
    this committee, it is a pleasure to welcome other perspectives
    to the ongoing conversation. Today, we are joined by a group
    who have extensively studied the current process, observed some
    of the problems with it, and developed their own solutions for
    making it work.
        From the Bipartisan Policy Center, we have Bill Hoagland
    and Don Wolfensberger, both of whom have extensive backgrounds
    in congressional procedure and history. And representing the
    findings of the Convergence Building a Better Budget Process
    Project, we have Emily Holubowich--I hope I have that name
    correct--and Matt Adams--or Matt Owens. I am sorry.
        Thank you.
        And, with that, I yield to my co-chair, Mrs. Lowey, for her
    brief opening remarks.
        [The prepared statement of Steve Womack follows:]
        [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Lowey. And I do want to thank Co-Chair Womack for
    his collaboration in arranging this hearing.
        I welcome our witnesses here today to discuss
    bipartisanship as it relates to the budget process. Our
    witnesses include Bill Hoagland and Don Wolfensberger, two very
    experienced former senior congressional staff who are now
    affiliated with the Bipartisan Policy Center.
        And I am pleased that we have Emily Holubowich and Matt
    Owens, two participants from the Building a Better Budget
    Process Project of the Convergence Center for Policy
    Resolution. They will talk about the Convergence Center
    process, which convenes groups of disparate stakeholders to try
    to arrive at consensus recommendations, as well as the
    substantive proposals that emerged from their dialogue on the
    budget process.
        Thank you all for coming. I look forward to an interesting
    hearing.
        [The prepared statement of Nita M. Lowey follows:]
        [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. In my introductions, I said ``Matt
    Adams.'' I want the record to reflect that the first baseman of
    the Washington Nationals is not with us today; it is Matt
    Owens. I am a big baseball fan, so I don't know how I just came
    up with that, but thank you.
        I would now like to welcome our witnesses. Thank you for
    your time today. The committee has received your written
    statements, and they will be made part of the formal hearing
    record. You will each have 5 minutes to deliver your oral
    remarks.
        Mr. Hoagland, you can begin when you are ready. The floor
    is yours, sir.

       STATEMENTS OF G. WILLIAM HOAGLAND, SENIOR VICE PRESIDENT,
    BIPARTISAN POLICY CENTER, U.S. SENATE STAFF, 1982-2007; DONALD
      R. WOLFENSBERGER, FELLOW, BIPARTISAN POLICY CENTER, FELLOW,
        WOODROW WILSON INTERNATIONAL CENTER FOR SCHOLARS, STAFF
     DIRECTOR, HOUSE RULES COMMITTEE, 1991-1997; EMILY HOLUBOWICH,
        PARTICIPANT, BUILDING A BETTER BUDGET PROCESS PROJECT,
     CONVERGENCE CENTER FOR POLICY RESOLUTION; AND MATTHEW OWENS,
        PARTICIPANT, BUILDING A BETTER BUDGET PROCESS PROJECT,
                CONVERGENCE CENTER FOR POLICY RESOLUTION

                    STATEMENT OF G. WILLIAM HOAGLAND

        Mr. Hoagland. Thank you very much, Mr. Chairman.
        Co-Chairmen Womack and Lowey and members of the committee,
    thank you for the opportunity to appear before you.
        I have my list of favorite reform options, but today I will
    focus just on one, and that is the often-discussed-but-never-
    agreed-to biennial budgeting and appropriation process.
        The written testimony provides the long history of the
    congressional efforts in this regard. There are various
    approaches to biennial budgeting and appropriations. But my own
    thinking on this has evolved from initially not supporting it
    to, today, supporting it from a split biennial budget and
    appropriation process.
        As early as 1987, a bipartisan agreement between the
    Congress and President Reagan was reached, setting 2-year caps
    on discretionary spending. This was followed with similar
    bipartisan agreements in 1990 and 1997.
        And the Budget Control Act, as you know, of 2011 set
    appropriation caps for 10 years, through 2021. But those caps
    were adjusted by the Bipartisan Budget Acts of 2013, 2015, and,
    of course, most recently, 2018. And I predict that you will
    adjust those final 2-year caps again in 2019.
        In other words, 2-year caps over time periods seem to be
    what Congress has abided to, and, therefore, institutionalizing
    what has become standard practice seems like a recommendation
    this committee could find consensus around.
        Most recently, in 2016, both the House and Senate Budget
    Committee chairmen, Mr. Price and Mr. Enzi, advanced biennial
    budget proposals. Like previous proposals, they proposed that
    the budget resolution be adopted in the first session, setting
    forth appropriation allocations for the next 2 fiscal years.
        But, unlike previous versions, they proposed splitting the
    12 appropriation bills into half, 6 appropriations being
    considered in the first year of the biennium and 6 in the
    second. Mr. Price's legislation even specified what those six
    bills would be, and they included Defense and Labor-HHS, so
    that 75 percent of all appropriations would have been done in
    that first biennium.
        The Bipartisan Policy Center issued a brief report in 2015
    entitled ``Proposals to Improve the Process,'' authored by two
    of my former bosses, the late Senator Pete Domenici and Dr.
    Alice Rivlin. Among other reform items, it recommended that we
    move to a biennial budget cycle to address the goal of
    transparency and timeliness.
        A couple of quick comments addressing the skeptics of
    biennial budgeting process.
        Incentives are important for Congress to do its work.
        On the stick side of the incentives, in the private sector,
    nonperformance of a contract results in nonpayment. The
    Domenici-Rivlin biennial budget recommendation concluded that
    garnishing your pay would not pass constitutional muster, but
    legislation to prevent all planned congressional recesses until
    a biennial budget resolution was adopted could.
        This is consistent with existing statute that makes it out
    of order to consider any adjournment resolution in the House of
    Representatives in the month of July that provides for an
    adjournment of more than three days unless you have completed
    annual appropriations or a reconciliation bill if ordered. A
    similar prohibition for all months could apply to both the
    Senate and House for failure to adopt a conference agreement on
    a biennial budget.
        I would make it mandatory, also, that the last
    appropriation bill considered in a biennium is the legislative
    branch bill, your funding bill.
        On the carrot side, once a biennial budget agreement is
    reached, setting the 2-year appropriation allocations, if it
    does that, Senate rules could be adopted to eliminate the
    filibuster on the motion to proceed the consideration of the
    appropriation bill. This would not jeopardize in any way
    senators' right to filibuster the underlying legislation but
    would guarantee at least a debate moving forward on
    appropriation bills themselves.
        Finally, one of the reoccurring criticisms of biennial
    budget has been the argument that making accurate projections
    two years in advance is difficult. Nothing in a biennial budget
    process precludes funding of supplemental appropriations if
    needed for unanticipated and therefore unplanned emergencies. I
    would argue that 1 off-year supplemental, however, is better
    than having to do 12 appropriation bills every year.
        Let me conclude with what so many others have stated
    before. No process changes will make your decisions any easier.
    Budgeting is governing, and governing is challenging. But the
    failure of this committee I don't think is an option. Failing
    to reach some consensus would once again telegraph to the
    American public that the Congress was not willing to address
    its most obvious, fundamental Article I responsibility, and the
    result would be a further erosion of the confidence in this
    critical institution.
        But if this committee could reach agreement, if even on
    limited changes to the process, it could set the stage for even
    more fundamental comprehensive changes in the next Congress.
        Your time is short, and the litany of reform options is
    long. But I believe one of those bipartisan reform options'
    time has come, and that is biennial budgeting.
        Thank you, Mr. Chairman.
        [The prepared statement of G. William Hoagland follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. Thank you very much, Mr. Hoagland.
        Mr. Wolfensberger.

                  STATEMENT OF DONALD R. WOLFENSBERGER

        Mr. Wolfensberger. Thank you very much. And congratulations
    to you all----
        Co-Chair Womack. Just make sure that mic is on.
        Mr. Wolfensberger. Got it.
        Co-Chair Womack. There we go.
        Mr. Wolfensberger. Yeah. I just wanted to congratulate you
    all on being appointed to this important committee and wish you
    well in coming to some solution by your November 30th deadline.
        I have been asked by the staff to give some background on
    previous bipartisan efforts to reform the Congress. And so, I
    have not confined mine simply to budgeting, but there is a lot
    of that in this.
        And what I have done in my testimony is look at six
    examples of things that I was involved in through the Rules
    Committee, through my leaders, Trent Lott and later Jerry
    Solomon, and, prior to that, John Anderson, my first boss, to
    try and improve things in the Congress.
        So I am just briefly going to go through those six examples
    and talk about briefly what prompted the formation of these
    bipartisan panels to begin with, how they did, did they succeed
    or fail, and then what lessons have we learned from previous
    bipartisan efforts.
        The first thing that I was involved in, 1969, was--or 1965,
    I am sorry. I was an intern up here, and my boss, John
    Anderson--I am from his home district in Illinois--sent me to
    the Joint Committee on the Organization of Congress. It was
    having hearings on congressional reform. So I monitored those
    hearings, reported back to him, helped prepare his testimony
    before the panel. He, at the time, wanted a joint committee on
    government research, as I recall, and that was what my work was
    on.
        But the joint committee went through a long litany of
    hearings that summer of 1965. They finally reported something
    in 1966, but then it laid dormant for about four years. Why?
    Well, it seems that the Congress no longer was broken, so there
    was no need to fix it. Why? A guy name Lyndon Johnson was
    President, and he was putting through his juggernaut of Great
    Society legislation. And so things sort of laid dormant there
    for about 4 years.
        I returned to the Hill full-time in 1969. And, lo and
    behold, it came back to life; the recommendations of the joint
    committee came back to life. Why? Well, there was another guy
    in town called Dick Nixon, who had some other ideas about how
    to run government. And so Congress thought it might be a good
    thing to address the ``imperial presidency'' now. So the
    recommendations came to life. They were passed.
        I think you could say that the whole idea behind that joint
    committee was to modernize Congress, yes, improve its
    resources, staffing, and so on. But, also, the Democratic study
    committee was behind a lot of this, and they wanted to really
    address the problem of conservative committee chairmen there
    through the seniority system who were blocking a lot of
    progressive legislation.
        So one of the things done in that law that was enacted in
    1970, the Legislative Reorganization Act, was a committee bill
    of rights. And the Democrats addressed other issues through
    their caucus rules changes, such as electing of committee
    chairmen for the first time. I think that was in 1971 or 1972.
        So that was my first experience. The next thing, though,
    came about in 1972 when President Nixon started impounding
    funds, withholding funds that had been appropriated by
    Congress. Congress was furious. They appointed a joint study
    committee, similar to this, to come up with some ideas as to
    how to address that. What they came up with: a suggestion for a
    congressional budget process and also an impoundment control
    regime.
        So those two things were recommended, but the Democratic
    leadership decided, first of all, to go with impoundment
    control. So they put that through the House and the Senate, and
    then they became stalled in conference committee because one
    side wanted a two-house approval of impoundments, the other
    wanted a one-house veto of any Presidential impoundments.
        When that stalled, they finally came around to what the
    Republicans had been urging them, which is put the two
    together, have some balance, have a congressional budget
    process, impoundment control. That was done, and it went
    through. And that became, of course, the Congressional Budget
    and Impoundment Control Act of 1974.
        The next thing that I was involved with in the 1973-1974
    was a select committee, bipartisan, a select committee on
    committees in the House. And they were tasked with realigning
    committee jurisdictions. They came up with a proposal. It was
    very sweeping, comprehensive, but unfortunately it got stalled
    in the Democratic Caucus. Finally, the Democratic Caucus
    brought out their own substitute, which left the jurisdictions
    intact. And, as a result, the Bolling recommendations were
    doused in favor of, basically, status quo.
        The next thing that I was involved with, the Beilenson
    bipartisan task force on budget reform in 1982. That basically
    went on for about 3 years. Actually, it was renewed in the next
    Congress. They came up with a set of recommendations. The Rules
    Committee reported them, but it never came up on the floor. But
    then, lo and behold, in 1985, we had a debt limit bill that
    went to conference, and the opportunity was there, and the
    Beilenson proposals were finally brought in together with the
    Gramm-Rudman-Hollings deficit control measure, which had
    sequestration.
        Well, my time has run out. I did want to talk about the
    other things. There was a leadership task force on ethics in
    1989--Vic Fazio and Lynn Martin. I worked for Lynn Martin at
    the time. Came up with some recommendations. The big thing that
    you all may have heard of was they gave up honorary in favor of
    a congressional pay raise. So that was sort of the carrot with
    that one.
        And the other thing was the Joint Committee on the
    Organization of Congress, 1993-1994. Their recommendations
    didn't go anywhere because the leadership, Democratic
    leadership, in the House pulled the plug. They were not behind
    it.
        But we can talk a little bit later about what lessons were
    learned from these various things. It is a mixed bag,
    obviously, but leadership has a lot to do with--making sure
    they are behind whatever recommendations do come out.
        Thank you.
        [The prepared statement of Donald R. Wolfensberger
    follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. Thank you, sir.
        Ms. Holubowich.

                     STATEMENT OF EMILY HOLUBOWICH

        Ms. Holubowich. Co-Chair Womack, Co-Chair Lowey, and other
    members of the Joint Select Committee, I thank you for the
    opportunity to testify before you today as a member of the
    Convergence Building a Better Budget Process Project. It is a
    distinct honor to be invited to represent my Convergence
    colleagues.
        As a senior vice president at CRD Associates, I have
    advocated on behalf of several health groups through several
    appropriations cycles. I participated in the Convergence
    project in my role as executive director of the Coalition for
    Health Funding, an alliance of 95 national health organizations
    representing more than 100 million patients and consumers,
    health professionals, and researchers.
        In both the Convergence budget project and in my testimony
    before you today, I am representing the views of myself and not
    those of the Coalition for Health Funding, my employer, or the
    health groups I represent.
        I am not an expert in budget rules and procedure like my
    colleagues from the Bipartisan Policy Center, but I am an
    expert in what the Federal budget means to Americans and what
    happens when the process goes off the rails.
        As you know, the vast majority of Federal funding for
    discretionary public health and health research flows from
    Federal agencies to State and local governments, academic
    institutions, and nongovernmental organizations in communities
    across the nation. These entities rely on predictable, stable
    funding to pursue their missions of protecting and promoting
    Americans' health.
        When the Federal budget process breaks down, dysfunction
    disrupts their operations. New initiatives and new hires are
    put on hold, procurement cycles lapse, opportunities are lost,
    and the American people are ultimately hurt.
        In the Convergence project dialogue, I saw an opportunity
    to work with others who, despite our differing perspectives,
    share an interest in making the process work. None of us are
    naive enough to believe we can perfect the process or that
    changes can work without the political will to make them work.
    But even marginal improvements that bring about greater
    predictability and stability would be welcomed by the
    communities we represent.
        So how did our group of strange budget bedfellows find
    consensus?
        In 2015, Convergence was funded by the Hewlett Foundation's
    Madison Initiative, with additional support from the Stuart
    Family Foundation, to elevate the voice of stakeholders who
    represent those directly affected by Federal revenue and
    spending decisions.
        Convergence staff first conducted more than 100 interviews
    with myriad stakeholders across sectors, constituencies, and
    ideologies to solicit their perspectives on the budget process
    and ultimately invited 24 stakeholders, including my colleague
    Matt Owens and myself, to participate in the project.
        For the next 16 months, we met under the guidance of the
    Convergence staff and a professional facilitator to find common
    ground and reach consensus. After our first meeting to identify
    pain points in the current budget process and build camaraderie
    and trust in sharing our misery, we focused on developing
    principles that would serve as our true north in guiding our
    discussions and evaluating our proposals.
        After several meetings and iterations, we ultimately agreed
    on nine principles to which a budget process should adhere and
    that we have submitted to the record.
        For me, the principle that resonated most is that the
    process should be neutral or unbiased. As several of you noted
    during your first hearing and as you noted this morning, Mr.
    Womack, the process should not be designed to favor a
    particular policy or outcome or ideology. This principle is
    essential to any successful process reform and was key to
    reaching consensus on our proposal.
        If we had allowed our discussions to veer away from process
    toward outcomes, I don't believe we would have reached
    consensus. Without this principle and others, we don't believe
    your attempts to reform the process will succeed either.
        During the development of our nine principles for process
    reform, four themes emerged that informed our thinking and may
    inform yours.
        The first theme is that elections drive outcomes. The
    ultimate incentive for lawmakers to address any issue,
    including the Federal budget, is whether or not their
    constituents care about it and the extent to which it
    influences their vote.
        The second and third themes are that credible information
    provided at the right time matters and that effective budget
    institutions like CBO are crucial to the production of trusted
    information.
        The final theme and what I believe the group thinks is most
    important is that new norms are needed to break bad habits. For
    any budget process to work, you and your colleagues have to
    want it to work and see the value in it doing so. As someone
    who works in public health, I appreciate that behavioral change
    is hard. If changing people's behaviors was easy, we wouldn't
    be in the midst of an opioid crisis and an obesity epidemic. It
    will take concerted effort on the part of you and your
    colleagues to make lasting changes.
        I hope my testimony has helped frame the Convergence Budget
    Process Project and has provided additional context for our
    proposals. My colleague Matt Owens will now review our five
    consensus proposals for you.
        Thank you again for this opportunity to be here today. I
    look forward to your questions.
        [The prepared statement of Emily Holubowich follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. Thank you, ma'am.
        Mr. Owens.

                       STATEMENT OF MATTHEW OWENS

        Mr. Owens. Thank you to the co-chairs and members of this
    important panel for the opportunity to testify.
        I have worked on behalf of research universities for over
    20 years, and I have seen the consequences of Federal budget
    process dysfunction. Student financial aid decisions are held
    up, important medical research is delayed, and long-term
    planning is made more complex and time-consuming because
    Congress does not complete the budget in a timely or
    predictable manner. This is highly inefficient. It wastes time
    and institutional and taxpayer resources that would otherwise
    be used to achieve the teaching, research, and service missions
    of universities.
        I chose to participate in the Convergence project for this
    reason and in the spirit of what people at research
    universities do every day; they seek to address and solve
    difficult problems facing the Nation. My employer, the
    Association of American Universities, supports the Convergence
    group proposals for these same reasons.
        Understanding that you have copies of the report, I will
    briefly highlight our five consensus proposals.
        The first proposal is what we call the Budget Action Plan.
    It synchronizes the budget process with the electoral and
    governing cycles, and it calls on each new Congress to adopt a
    2-year budget that is signed into law by the President.
        The Budget Action Plan has three required elements and one
    optional provision. First, it sets discretionary spending
    levels for 2 years. Second, it lifts the debt limit by any
    shortfall agreed to in the legislation. And, third, it
    authorizes a lookback report to analyze the impact that
    enactment of the budget would have on the long-term fiscal
    outlook. Additionally, the plan allows Congress the option to
    consider one reconciliation bill per fiscal year.
        Our second proposal requires the CBO to produce a report
    that we entitled ``The Fiscal State of the Nation.'' It would
    be issued during the Presidential election cycle and would
    outline key information about our Nation's finances, including
    but not limited to: long-term projections for debt, deficits,
    interest payments, revenues, and spending; a breakdown of all
    major revenue sources and tax expenditures; and any estimated
    shortfalls in long-term spending programs.
        This report would be widely distributed and provide
    information in reader-friendly ways to allow non-Washington-
    insiders to better understand the budget. We believe this
    report would provide a full picture of the Nation's finances,
    elevate public discussions about the budget, and help voters
    make more informed choices at the polls.
        Our third proposal seeks to reinforce the importance of the
    long-term effects of budget decisions. We propose that every 4
    years the GAO review portfolios of programs that involve long-
    term or intergenerational commitments. The reviews would cover
    programs grouped by topics such as retirement security, health
    coverage, or national security. This information would also be
    included in the ``Fiscal State of the Nation'' report.
        Our fourth proposal is to strengthen the Budget Committees.
    It was irresistible for some in our group to suggest
    eliminating the committees; however, we agreed that the stature
    of the committees needs to be restored to help improve their
    ability to lead the process. We propose that the chairs and
    ranking members of key fiscal and authorizing committees, or
    their designees, serve on the Budget Committees. We believe
    this proposal would ensure that those who are responsible for
    carrying out the budget would be vested in the process to
    develop it.
        Our last proposal calls on Congress to give budget support
    agencies, such as the CBO and the GAO, the resources necessary
    to provide credible, high-quality, and independent information.
    Our proposal includes new responsibilities for these agencies,
    so it is important that they have adequate resources.
        These five proposals will not yield a perfect budget
    process; however, we believe they contain practical and
    achievable measures that can be developed further to implement
    a process that facilitates informed, unbiased, and sound
    decision-making.
        In closing, I will offer a shared view among our group:
    namely, no single budget process reform or package of reforms
    can by themselves remedy the prevailing dysfunction. Process
    reforms alone cannot force Congress to reach budget deals.
    Political will is needed.
        But process matters, and small or large changes can create
    ownership and buy-in for new expectations and norms for
    budgeting. Right now, expectations are low and norms are
    broken. It has been more than 20 years since all appropriations
    bills were passed prior to the start of the fiscal year. Just
    27 percent of Senators have seen the process work, and for
    House Members it is only 16 percent.
        As such, we believe our proposals are a strong starting
    point for your consideration. On behalf of all the Convergence
    project participants, we wish you success. Your work is
    critical not only to effective Federal budgeting but also the
    governance of our Nation.
        Thank you.
        [The prepared statement of Matthew Owens follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. We appreciate the opening comments by our
    witnesses here this morning. We are now going to begin our
    question-and-answer period. I will begin first.
        Mr. Hoagland, do you believe the debate over 2-year
    budgeting has evolved? Is it time?
        Mr. Hoagland. Absolutely. I go back a long way. When I
    first arrived to the Congressional Budget Office in 1976, there
    was discussion about this. In my written testimony, you will
    see that even this young House Whip called Trent Lott was
    recommending it back in 1981-1982. Leon Panetta, chairman, all
    the way through, including his final job at Department of
    Defense, was recommending it. It has evolved, and I think it--
    as I said, it is a direction that is necessary.
        As I also said, Mr. Chairman, in my opening comments, I
    originally did not support it, but I see that we basically have
    gone to the 2-year system, so let's go ahead and
    institutionalize it through a biennial budget.
        Co-Chair Womack. What do you think is different, in your
    view, as we think about both the structure of the budget
    resolution and the ability of the modern Congress--and I stress
    the word ``modern'' Congress, ``modern Congress,'' meaning this
    isn't your grandfather's Congress; I mean, this is a much
    different time--our ability to handle all of the appropriation
    bills in one cycle?
        Mr. Hoagland. Absolutely. Part of my evolution over that
    period of time when I was staff director of the Senate Budget
    Committee was that I felt it was the responsibility of the
    Budget Committee to produce a budget every year. As I watched
    the evolution of an inability to get appropriation bills done
    within the timeframe, it was a basis that gave me the thought
    process to revise my thinking that maybe it is better to do a--
    with the time that is limited to all of you, the issue of
    transparency, the ability to have authorizations work their
    will, I think it is--you just--your time is just limited more,
    it seems to me, than in the days when I was up here back
    working here.
        I am not here, I am not watching you as closely as when I
    was here on the Hill, but it does seem to me like your time is
    much more restrictive than it was when I was working as staff
    director of the Senate Budget Committee. And that time
    limitation is what you are really working with.
        Also, let me just say there is redundancy. It seems to me
    like you vote on things an awful lot in a redundant way. Let me
    give you a best example. I have a number of other
    recommendations besides the biennial budgeting, but one of them
    is that, if you pass a budget resolution, even a biennial or
    even an annual, you have voted on increasing the debt limit. In
    the budget resolution that you adopted earlier last fall, you
    have a debt limit figure. You have already voted on it. And it
    does seem to me like you ought to somehow institutionalize the
    fact that you have voted once, that is enough.
        Co-Chair Womack. Mr. Wolfensberger, your testimony
    references congressional turf, ``turf'' with a capital ``T,''
    relating to the congressional-executive branch relationship.
        As you think about episodes of bipartisanship in budgeting,
    how have Presidents and Congress been involved in either
    promoting or inhibiting bipartisanship?
        Mr. Wolfensberger. Yeah, that is a very good question. I
    think Bill remembers better than I, because he was involved in
    some of these things. But back in the old days, when you had
    split control of the White House and the Congress, there were a
    lot of budget summits, where they would convene the President's
    top advisers and top leaders and committee folks from Congress
    would convene out at Andrews Air Force Base and try and, at the
    last minute, come up with some kind of a resolution.
        You know, since then, I think that there has been more of a
    low-key type of negotiation going on, on an ongoing basis,
    between the executive and the Congress through each
    appropriations bill, starting with the subcommittee levels. I
    noticed that Mulvaney, the OMB Director, just sent a letter to
    Chairman Frelinghuysen flagging some increases in the
    legislative branch budget that is being looked at for this
    coming year. And so I think that is kind of interesting to see,
    you know, how much in advance he is keeping an eye on it. But
    he is a former chairman of this committee and has a pretty good
    idea of what goes on in that process.
        But, you know, I think that the best that we can hope for
    is that we have more agreements where they come together
    earlier. And that is the main thing for me, is coming together
    earlier. Waiting until you are into the new fiscal year
    already, and you are still kicking the can down the road. So I
    think that is the key challenge that this committee will face,
    is how do you go about that, and I think biennial budgeting
    would help in that regard.
        Co-Chair Womack. Thank you.
        Mrs. Lowey.
        Co-Chair Lowey. Thank you.
        Mr. Hoagland, you note in your statement that Congress
    failed to adopt what you would consider to be real budget
    resolutions in 7 of the last 10 years. You compare that to the
    previous 34 years, when Congress failed to adopt a budget
    resolution only 4 times.
        What do you think accounts for the difference, and why has
    the budget resolution process apparently fallen apart in the
    last 10 years or so?
        Mr. Hoagland. I wish I could answer that question directly.
        I work for the Bipartisan Policy Center. It was founded by
    Senator Dole, Senator Howard Baker, Senator George Mitchell,
    and Senator Tom Daschle. We worked together to find common
    ground. I don't mean to be critical. I just want to highlight
    that the partisanship that exists here, I think, complicates
    our ability.
        The second thing is, I believe deficits matter. I think we
    should reduce the deficit. But the tradeoffs here are so great
    and so difficult that I think that has complicated the
    decision-making process and forced the delays in making the
    very, very hard decisions you have to make.
        Let me also say, Madam Co-Chair, I was careful in what I
    said. I don't want to offend anybody. But I don't consider the
    last two budget resolutions to have been real budget
    resolutions. They were adopted well after they were supposed to
    be done, and they also were done with one purpose in mind, and
    that was simply to create the fast-track reconciliation process
    for consideration of legislation. That is not what--when I
    began here, that was not what the budget resolution was meant
    to do.
        Co-Chair Lowey. I would like to follow up, Mr. Hoagland. I
    see the benefit of setting budget targets every two years. But
    as for appropriations, doing annual bills is one of the most
    powerful oversight tools available to Congress, in my judgment.
        The main source of delays, from my experience in recent
    years, has been political disagreements about top-line totals,
    not the time needed to actually write appropriation bills once
    those disagreements were settled.
        And I understand that a substantial majority of States and
    almost all of the larger States now practice annual budgeting.
    Should we see that as a caution against moving in the opposite
    direction at the Federal level?
        Mr. Hoagland. I think it is 19 States that have biennial
    budgeting. I think it varies in terms of how they operate.
        I do not see that the annual appropriation process is
    working here. I am just simply suggesting, why not look at the
    two-year process? You will be able to set those caps for two
    years. And I think there is some efficiency to be gained in,
    first of all, your ability then to have that second year be the
    authorization and oversight year. That would take away some of
    the pressure that is placed upon you.
        And, in fairness, Madam Co-Chair, it is authorizations
    first and then appropriations. And I am not suggesting the
    appropriation process doesn't do a lot of oversight, but it is
    really the authorization process, to me, that has failed under
    this system. And this would strengthen--from my perspective, it
    would strengthen the authorization process.
        Co-Chair Lowey. Well, I am not sure we can resolve that in
    the minute I have left. So I disagree on that. But----
        Mr. Hoagland. Fine.
        Co-Chair Lowey.----you are saying in your statement that
    Congress failed to adopt what you would consider to be real
    budget resolutions in 7 of the last 10 years. You compare that
    to the previous 34 years, when Congress failed to adopt a
    budget resolution only 4 times.
        What do you think accounts for the difference, and why has
    the budget resolution process apparently fallen apart in the
    last 10 years or so?
        Mr. Hoagland. Because of the increased degree of
    partisanship up here and the very difficult decisions you have
    to make as it relates to spending and revenues.
        Co-Chair Lowey. I thank you for that answer. And I won't
    have any time to go on, but it seems to me that that is the
    real problem. And I am not sure that changing the system is
    going to address the partisanship that, to me, is the core and
    the base of the system.
        Mr. Hoagland. Yes, ma'am.
        Co-Chair Lowey. Thank you.
        Co-Chair Womack. Senator Perdue.
        Senator Perdue. I couldn't disagree more. We have been
    trying to do it with kumbaya and all of that for 44 years. It
    hadn't worked. We have only funded the government on time 4
    times in 44 years since the 1974 budget act. And I have talked
    to all the people who signed that bill who are still living; we
    have looked at best practices. This is not something that we
    are going to tweak around the edges and think that we are going
    to all of a sudden eliminate partisanship and make this budget
    process work.
        First of all, it is not a budget process; it is a funding
    process. And I want to echo what Senator Hirono has said every
    time she has spoken in this committee, and that is: Whatever we
    do in here, we have to, I believe, have a goal of never having
    another CR, okay, that leads to an omnibus situation.
        The problem in the Senate is different than the problem in
    the House. The problem in the Senate--and I want to get to two
    questions, because you four people have brought up now three
    recommendations in here that I think are very salient.
        Number one, I think the biennial budgeting has merit. I
    think we need to talk about it. I don't think it is a panacea.
    If we do nothing but that, everything else will fail, period.
        Number two, I believe that there have to be consequences.
    Mr. Hoagland, you talked about consequences, and I would like
    to come back and ask you about that.
        But I want to emphasize what Senator Hirono was forcing us
    to think about, and that is this is about funding the Federal
    Government, not just creating a budget resolution. We created a
    budget resolution. We did one in 2015. It only lived four
    months, and it was a way to do the grand bargain.
        I agree with you, Mr. Hoagland, that we have not done a
    real budget since I have been in here in three years in the
    Senate. Senator Enzi, the chairman of the Budget Committee,
    actually has said publicly he would do away with the Budget
    Committee unless we make some substantial structural changes.
        And he has also said publicly that, in the Senate, we
    probably have produced the last budget that can be done under
    the current law, and that is that you cannot provide, unless
    you do all the gimmicks that are out there and the fraudulent
    things that if somebody in the private domain did they would go
    to jail, like delaying expenses and accelerating revenue--
    without doing all of those things, we will never be able to
    comply with the balanced budget that we are talking about.
        I want to talk about over here, though, Ms. Holubowich and
    Mr. Owens, you mentioned the makeup of the Budget Committee,
    and I would like to dwell on that just a second.
        For three years, we have looked at the makeup of Budget
    Committees and the process. The problem in the Senate is we
    have a resolution--and it is not a law--that says 51 percent
    can pass it. That is nothing but a political statement crammed
    down the throat of the minority. Both sides have done it
    repeatedly for 44 years.
        Then you go to an authorization process that is a law. It
    is 60 votes, has to be signed.
        And so here is the problem. The minority party gets ignored
    in the budget, now they come over and are asked to participate
    in the authorization, they never do, neither side. Then you go
    to appropriations, same thing. We have only averaged 2\1/2\
    appropriation bills being voted on over 44 years, 2\1/2\ out of
    12.
        In the Senate, this thing is broken. Going to biennial
    alone will not fix that. I believe that consequences have to be
    considered.
        The question I have for you is: The makeup of the Budget
    Committee--we looked at best practices in other countries and
    States. States have consequences. Nobody goes home until they
    get a budget done. Other countries have gone away from a three-
    step process to combining the budget work and the authorization
    work into one, and the way they do that is what you are
    suggesting.
        So would you talk about how you would combine the--totally
    change the makeup of the Budget Committee to include a
    representation of ranking members and chairmen of the policy or
    authorizing committees.
        Until 2 years ago, we hadn't authorized the State
    Department in 15 years. The authorizing thing is a fraud. We
    have not done that for 20 years, maybe, in the way that we
    should.
        So if we could combine it, is there a way to address that?
        I wish we had time to get more into consequences and all
    that, because I would love to get you to comment on that, Mr.
    Hoagland. But please be brief, and maybe we will get time to do
    that.
        Mr. Owens. Thank you for the question.
        Our group discussed this in depth multiple times. And,
    again, where we came out, through a consensus proposal, was to
    get that buy-in, to have the chair and ranking members of these
    committees come in representing those priorities, understanding
    in some cases that may not always be possible in the Senate
    because you have so many committee assignments, but bring in
    their designees, and that the bringing those issues, to know an
    authorization bill is coming forward in that calendar year, to
    make sure that is reflected in what is developed in that
    budget.
        There were all sorts of discussions. We said at one point
    maybe we ought to eliminate the Budget Committee. We talked
    about reorganizing all of Congress and decided that was way
    beyond our scope because of the issues you just identified,
    Senator.
        Senator Perdue. Well, we have changed committee
    jurisdictions repeatedly over the last 100 years. That doesn't
    scare me. And one of the problems we have, we have 16
    authorizing committees in the Senate and 12 appropriating
    committees, and it looks like a jigsaw puzzle, really, the way
    the jurisdictions cross, and it is counterproductive.
        So the question is, how would you deal with things like an
    NDAA, for example--which is about the only thing we try to
    really authorize every year? How would you deal with that if
    you didn't have a formal authorization process but it was done
    actually at the oversight level, in the Budget Committee, made
    up of--if you made up the committee of ranking members and
    chairs of these policy committees?
        Mr. Owens. You know, I don't believe we went to that level
    of depth to where you would be----
        Senator Perdue. Okay. So you didn't get into those details.
        I want to go back. Mr. Hoagland, you wanted to make a
    comment----
        Co-Chair Womack. The gentleman's time is up.
        Senator Perdue. Oh, I am sorry.
        Mr. Hoagland. The original Budget Committee in the Senate
    was made up of exactly what you are talking about, which was
    leadership. Senator Tower was defense. We had Senator Byrd on
    the appropriation. We had the chairman and the ranking member--
    early on. You had buy-in early on.
        And I would also suggest that you could rotate--say, we
    have the ag bill coming up for reauthorization. You could
    rotate in the chairman and ranking member of those committees.
    If get buy-in early, it seems to me, on the budget resolution,
    that makes a difference.
        Senator Perdue. Yeah. I would like to engage--in some of
    our working groups; I would like to engage with you guys more
    on those four topics you brought.
        Mr. Chairman, I apologize for going over.
        Co-Chair Womack. Let me remind our members up here to leave
    these distinguished witnesses some opportunity to explain their
    answers. They do deserve the time to give a good, articulate
    response to our questions.
        Mr. Yarmuth.
        Representative Yarmuth. Thank you, Mr. Chairman.
        I want to go back to biennial budgeting for just a second.
    And one of the thoughts I had--I was a co-sponsor of
    Congressman Ribble's proposal I guess in the last Congress. It
    may have been two Congresses ago. I have lost track. And one of
    the things that I was thinking about was that possibly, because
    the exercise had become, in my experience, pretty much a
    rhetorical exercise and it was a messaging exercise more so
    than any serious budgeting operation, that by taking it to a
    biennial basis you would actually begin to think more seriously
    about longer-term consequences and longer-term spending.
        Is that something that you think is an advantage of it
    possibly, Mr. Hoagland?
        Mr. Hoagland. I have always listed timeliness, long-term
    planning, simplification, and transparency. And I consider
    long-term planning to be an element of the biennial budgeting,
    yes.
        Representative Yarmuth. And a corollary, I guess, of that
    of that question is that--some of the opposition to biennial
    budgeting is that it is harder to project in a fast-moving
    world and so forth and it is harder to project income and
    occurrences. How would you respond to that argument?
        Mr. Hoagland. I would respond that you are at least
    setting--right now, you have already started the process of
    setting along the discretionary side 2 years, so that is a
    given.
        Also, I would respond that, as I said in my oral testimony
    and written testimony, there is nothing to preclude Congress
    from having a supplemental for emergencies and unexpected in
    that second year. So I still think it is possible to adjust.
        Representative Yarmuth. Okay. Thank you.
        The Convergence recommendations didn't deal with biennial
    budgeting. You obviously had to have talked about it at one
    point. What was, I guess, the deliberation there, and why did
    you decide not to?
        Ms. Holubowich. Sure. Thank you for that.
        I think, for us, as we looked--one of our first exercises
    was to map out the budget process and, with sticky notes,
    identify what we saw as the pain points, and we realized that
    they were really front-loaded, that when you have a top line
    established and there is buy-in and agreement, the
    appropriations process tends to really flow.
        So I think, on our part, and part of our discussions, we
    weren't convinced that the appropriations process was the
    problem. It was the bottleneck created at the front as you saw,
    sort of, political documents coming out that just, frankly,
    weren't really based on reality and then the breakdown of
    trying to operationalize that by the appropriators and trying
    to make, for example, really deep cuts in nondefense
    discretionary spending a reality. And that is where you see
    bills like Transportation-HUD fall apart on the floor.
        From my own perspective, I think, from a public health
    standpoint, as we look at public health preparedness, biennial
    appropriations, for me, is a problem. You know, we have
    microbes evolving every day. Just this week, we have 17 new
    cases of Ebola in the Congo. We have a new Australian virus
    that is 1,500 years old that is making a resurgence.
        So setting numbers at the top line for 2 years, I think,
    makes sense. What we need, though, is that appropriations
    process to make those course corrections on an annual basis, at
    least from a public health perspective, to respond to these new
    threats.
        And, certainly, emergency supplementals are an option, but,
    to be honest, you know, in my view, an emergency supplemental
    should support acute, sort of time-limited, discrete events--an
    infectious disease, a natural disaster.
        There are lots of things that are happening that are more
    systemic and chronic, like, for example, we now have babies
    born from Zika moms who, as they now become toddlers of moms
    who were infected with Zika and become school age, they are
    going to have developmental disabilities, so now do we need to
    reinvest in those areas. Or with the opioid crisis, we now are
    seeing resurgence in cocaine-related and meth-related deaths.
    And so those don't necessarily warrant an emergency
    supplemental.
        I think the emergency supplementals, as we know with Zika,
    are not exactly predictable and stable and they sometimes take
    way too long. And that whack-a-mole approach to, sort of,
    supporting public health readiness is not ideal. We would
    prefer to see those midcourse corrections sort of through an
    annual review of really what is needed and where we need to
    reprioritize.
        Representative Yarmuth. But you could, even under your
    argument, you could set top-line numbers for 2 years and then
    appropriate on an annual basis.
        Ms. Holubowich. Absolutely. And that is where we came out
    in the Budget Action Plan----
        Representative Yarmuth. Right.
        Ms. Holubowich.--which is, again, reflective of sort of our
    current reality. Our view would just be, let's try the best we
    can to move that to the front end of the process at the
    beginning of a new Congress, so we set that plan in that stage
    at the outset and allow the appropriations process to flow
    annually from----
        Representative Yarmuth. Thank you.
        A quick question for Mr. Owens. On a debt ceiling, is there
    any difference between your proposal, which is to increase the
    debt ceiling by whatever the budget prescribes, or just
    eliminating the debt ceiling?
        Mr. Owens. The way our group discussed it, we sort of left
    that to the Congress to decide. But it is important that, when
    you are making the spending decisions, and if it is going to
    mean there is going to be a shortfall, that that should be
    acknowledged in the same piece of legislation.
        Representative Yarmuth. Thank you.
        I yield back.
        Co-Chair Womack. Senator Ernst.
        Senator Ernst. Thank you, Mr. Co-Chairman.
        And thank you, for the witnesses that are here today.
        Mr. Hoagland, in your testimony, you mentioned the
    importance of incentives for Congress to get their work done on
    time. And, as you know, since 1974, Congress has passed all of
    its appropriations bills just four times, and that is pretty
    paltry. And in the past 20 years, Congress has passed a budget
    resolution only 11 times.
        And, unfortunately, this hasn't stopped Congress from
    taking a month-long recess right before the start of each
    fiscal year. And if Congress hasn't passed a budget and regular
    appropriation bills by August, they shouldn't be able to go on
    vacation. That is what I think.
        And can you discuss the impact that this type of reform
    would have on ensuring that we get our work done on time?
        Mr. Hoagland. Yes, Senator. Thank you.
        The bottom line here is that we have looked at exactly what
    you are talking about, a way that penalizes you for not getting
    your work done. Senator Domenici and Dr. Rivlin looked at the
    issue of pay. There may be a way to dock your pay for not
    getting your work done, as it happens in the private sector.
        But there are provisions within the existing law that says
    the House cannot go on recess until you have completed your
    appropriation bills through the month of July. You cannot take
    recess. So I see no reason why you can't change the Budget Act
    to make it apply across the board: no recess unless you have
    passed either a biennial budget or a budget resolution on time.
        Now, you waive this, obviously. I don't know how to prevent
    Congress from waiving the points of order that lie against you
    for going on recess. But it is easy--it seems to me you have it
    already in the law that you are not supposed to go on recess.
        Senator Ernst. Yeah. And I do think that is a great point.
    And it circles back something I brought up, I believe, in our
    last meeting as well, but that we have processes in place and
    we don't follow them. We can put new processes in place----
        Mr. Hoagland.----and not follow them.
        Senator Ernst.----and not follow them.
        So we have got to get this figured out and find a way for
    us to get our work done. Because we have a lot of folks that
    just truly don't have the intestinal fortitude to get it done,
    and we are failing the American people.
        Second question. Mr. Hoagland and Mr. Wolfensberger, as
    congressional staffers, you both witnessed something as rare as
    a unicorn here in Washington, D.C., which was a budget surplus.
    And over the past 50 years, the United States has only had a
    balanced budget four times, 1969, and then from 1998 to 2001, I
    believe.
        So, as our deficit approaches $1 trillion, what can we
    learn from those past Congresses?
        Mr. Hoagland. Very briefly, and then I would turn it to
    Don.
        The bottom line there again was that--I was involved in the
    1997 balanced budget agreement that we reached. That was
    reached in a bipartisan manner, including President Clinton and
    a Republican-controlled Congress. It meant giving up on
    revenues, that Republicans had to agree to some revenues. And
    it also meant that Democrats had to agree to reductions in some
    entitlement spending.
        It has to achieve the bipartisan--we also--let's be honest
    about it. We had a lucky economy that was also helping us reach
    that balance during that period of time. But it was bipartisan.
        Senator Ernst. Uh-huh. Thank you.
        Mr. Wolfensberger. Yeah, I retired in February of 1997, so
    I missed being on that glory road that Bill was talking about.
        But, interestingly, I think the balanced budget agreement
    that you had was in 5 years, and actually it was achieved in 2
    years because of a little thing going on out in Silicon Valley.
    I don't know what it was about, but----
        Mr. Hoagland. Yes.
        Senator Ernst. Very good. Well, I appreciate it very much.
    I appreciate the input. And just bottom line, we need to figure
    out what is going to get us to actually do our jobs. So I
    appreciate it. Thank you to the witnesses today.
        Thank you, Mr. Chair.
        Co-Chair Womack. Thank you, Senator Ernst.
        Before we go to Senator Bennet, there has been some
    discussion recently about a previously scheduled Joint Select
    Committee hearing on May 18. I just wanted to say for the
    record today, because we have members that are coming and going
    and staffs that are coming and going, the co-chair and I talked
    about this last week, and we both have agreed that, due to the
    funeral of Senator Daniel Akaka and the fact that our Hawaiian
    members are not going to be here that day, and there are others
    that have indicated they may not be here that day, that that
    May 18th hearing is going to be rescheduled.
        So, for planning purposes, let's go ahead and make sure
    everybody is on the same page there. Date to be determined, but
    the Member day will, of course, be rescheduled.
        Senator Bennet.
        Senator Bennet. Thank you, Mr. Chairman, and thank you for
    this hearing.
        Mr. Hoagland, I wanted to start where Senator Ernst ended
    with you, which was in the 1997 agreement. And you mentioned
    you got lucky because you had a strong economy. We have a
    strong economy right now, and we are going to have a trillion-
    dollar deficit next year.
        And I wonder whether you could share with the committee
    what the common elements were that made it possible to reach
    the kind of agreement that you participated in in 1997 and what
    is missing today.
        I mean, you mentioned that Democrats gave on revenue,
    Republicans gave on entitlements. I don't actually think about
    it that way, really. I think about the responsibility that
    people seemed to have--or the consideration that people seemed
    to give to the next generation of Americans, which we seem not
    to give to the next generation of Americans.
        Mr. Hoagland. Yes, thank you, Senator.
        I will simply say that a critical element of that 1997
    agreement--you have to remember, we came off a very tough time.
    In 1994 and 1995, we had government shutdowns, we had clashes
    here, we had a long period of discontinuity in all that we were
    doing. But it turned out that we finally had leadership, and
    leadership out of the White House, particularly. And I am sure
    I am getting myself in trouble here by saying this as a
    Republican. But you need leadership to say that debt does
    matter, that deficits do matter, and that we should be focusing
    on those issues.
        There was consensus up here that deficits mattered. I am
    not convinced today that, with all due respect to all of you
    members here, that you consider deficits to be really a
    situation that is going to impact our future generation.
        Senator Bennet. I heard testimony earlier today about the
    importance of having the annual budget so that we could respond
    to health situations. And it made me think about an opioid
    crisis which we have barely responded to. We claim that we have
    responded to it, but we have barely responded to it, and I
    think because the deficit has robbed us of our imagination to
    do that. I mean, for the first time since John Glenn went to
    space, America can't send anybody into space. And I think that
    is a consequence, also, of our deficit.
        Mr. Hoagland, I also wondered--I know this is an issue that
    you care a lot about and have for a long time as a Republican--
    whether you could talk about your view of the debt limit, the
    debt ceiling, and its use as a device for claiming fiscal
    responsibility. Whether the threat to the sovereign debt of the
    United States is something that we should appropriately do, or
    is there some other way that we should--what good could this
    committee do on that question, Mr. Hoagland?
        Mr. Hoagland. First of all, I think Congress should find an
    alternative to the periodic threat of a government shutdown or
    the brinkmanship over the debt limit to force action. Because
    my impression is that it really hasn't. Maybe back in 1985,
    1986, when we went through Gramm-Rudman-Hollings. That was a
    debt limit issue. We got Gramm-Rudman-Hollings because it was
    tacked on to a debt limit increase. Senator Gramm was worried
    about the debt going up to $2 trillion, and so that--and now we
    are at $22 trillion or so.
        So, first of all, in fairness, the Bipartisan Policy Center
    has a group of six bipartisan individuals, former Members and
    former executive officials, and we have been working on a
    proposal. It is no surprise here, it builds upon the old
    Gephardt rule that, once you pass a budget resolution, it is
    automatic. In fact, that was something the House used to do.
    The Senate did not have that Gephardt rule. Or in combination
    with the McConnell rule, which is that if you do not pass a
    budget resolution, then the President should submit a
    suspension request, and then Congress should vote on a
    possibility of a resolution to approve or disapprove of that
    suspension.
        I think it is critical that you try to get this thing out
    of being the brinkmanship. It has not solved the issues of debt
    and deficits going forward, and I think it jeopardizes the
    country's economic future when you have to go through this.
        Senator Bennet. Well, I appreciate that answer. And I am
    sure there are other members who feel this way too, that when
    you develop that proposal we would be very interested to see
    it.
        Mr. Hoagland. I would be happy to.
        Senator Bennet. Thank you, Mr. Hoagland.
        Thank you, Mr. Chair.
        Co-Chair Womack. Mr. Arrington.
        Representative Arrington. Thank you, Mr. Chairman.
        And I want to thank the panelists for your input, insight,
    and counsel as we deliberate on how we can put some sanity and
    responsibility into this process.
        I am a new Member, so don't blame me. No, I am kidding. But
    my conclusion that I have come to very quickly and I think is
    painfully obvious to everyone else on the outside: The
    political will collectively does not exist on the budget
    outcome piece of this.
        Now, I do think we can find ways to have a more timely
    process and add certainty--which I think there are good,
    fiscally responsible aspects to having certainty and stability
    and continuity.
        But I am just very concerned about how in the world--and to
    my colleague Senator Ernst's comments about incentives. We are
    looking so desperately for ways to force us to do things that
    this body politic will not do, that the dynamics just don't
    exist. And they don't exist with Republicans any more than
    Democrats, I learned this year.
        We sent a budget to the Senate, and it was a
    reconciliation, got it mandatory spending, which is driving the
    debt--we all know that too--and we couldn't get it out of the
    Senate.
        Representative Arrington. So give me a suite of--or us--a
    list of incentives or accountability measures that we should
    consider that maybe have not been considered so that we can
    just take those and begin to noodle on them and debate them
    among ourselves. And that is for timeliness, efficiency,
    process-oriented and for the, sort of, responsible outcome
    orientation. What are those?
        And if you don't mind, we will start with Mr. Hoagland and
    just kind of work our way down. Just rattle them off.
        Mr. Hoagland. Real quickly, I have already stated, I think
    no budget resolution, no pay, no recess. I think those are the
    strongest ones. That is on the stick side.
        On the carrot side, I still believe that if you could pass
    a budget resolution, a conference agreement, that we should
    eliminate the filibuster on the motion to proceed on
    appropriation bills in the Senate.
        Representative Arrington. Mr. Wolfensberger.
        Mr. Wolfensberger. Thank you.
        I am not quite as drastic as no budget, no pay, but I had a
    compromise that, for every day after October 1 where you have
    not completed action on your appropriations bills, you put in
    escrow $100 a day of Members' pay. You get about $400 a day,
    believe it or not. But that might drive some things.
        With respect to the comments Mrs. Lowey made about losing
    control of the process, I have been very sympathetic to the
    appropriators, even though I support biennial budgeting, but I
    have been thinking through a process whereby you might do four
    of the big bills annually and the rest biennially.
        And I am looking at the four that you would do annually--
    because all but one requires an annual authorization--defense,
    MILCON, vets, foreign ops, and homeland security. Homeland
    security does not yet require an annual authorization. But
    those four I think might be worth doing on an annual basis as
    sort of a compromise.
        But I know that, in the past, the appropriators have been
    very successful in defeating biennial budget proposals when
    they get to the floor. Mr. Dreier had 245 cosponsors for his
    measure to have biennial budgeting, and when he got to the
    floor on an amendment that he offered to do that, he only got
    201 votes. Some people went south. So it is a very difficult
    nut to crack, and----
        Representative Arrington. Let me keep it moving----
        Mr. Wolfensberger. Yeah.
        Representative Arrington.----if you would.
        And the question is, what carrots and sticks should we
    consider to motivate the House and Senate to do the job that
    everyone in the country does but us?
        Ms. Holubowich. Well, thank you. We spent a lot of time
    discussing this. You will notice we did not make
    recommendations around incentives. In part, we didn't feel like
    that was our role, and, also, I think we couldn't come to
    agreement. You know, it wasn't clear that, to Senator Ernst's
    point, you could do much of anything to force yourselves to
    make these choices.
        Ultimately, again, to our theme that elections drive
    outcomes, I think where we get at this is through the proposal
    for ``Fiscal State of the Nation,'' in the same way that my
    organization presents my financials to my members, as
    corporations share with their shareholders. There is a real
    disconnect, and it is not their fault, but Americans just
    simply don't understand what the government is doing or what it
    is paying for. And they say they want a smaller government, but
    when you propose cuts, they don't want you to cut anything, and
    definitely don't raise my taxes.
        So, I mean, you are in a box where it is hard to make these
    choices because, I think, the American people just simply don't
    know what you are doing. So the hope is that the ``Fiscal State
    of the Nation'' can help elevate the conversation about our
    Federal Government's budget and sort of bridge that disconnect.
        Mr. Owens. I would just add briefly, as Emily said, we
    didn't reach any consensus on this, but we did talk about no
    budget, no pay. We talked about no budget, no recess. We even
    talked about no budget, no fundraising. We talked about a lot
    of different things, that, again, what drives outcomes are
    elections ultimately.
        So we couldn't reach consensus, but if there is something
    this body can adopt that you think will propel you towards
    action, then you should most certainly consider it.
        Representative Arrington. Mr. Chairman, I have gone over my
    time. I yield back.
        Co-Chair Womack. Mr. Woodall.
        Representative Woodall. Thank you, Mr. Chairman.
        And thank you all for being here. I value your expertise.
        I want to pick up where my friend from Texas left off. Lots
    of ``no budgets, no something'' in the tool of incentives, and
    yet my Budget Committee chairman in the Senate says we might as
    well just abolish the Budget Committee because it is not a
    functional process anyway. My friend Mr. Hoagland says, you
    know, we have gotten two budgets passed the last two cycles,
    but I don't consider those real budgets anyway, though they
    would have met the standard for any ``no budget, no anything.''
        I want to explore the notion that maybe it is not that
    folks aren't doing their jobs, but maybe folks are doing their
    job. And some folks are sent here to slow a process down as
    opposed to speed a process up. I think it was Coolidge who said
    his most important job was vetoing bad legislation, not signing
    good legislation. A lot of Members of Congress feel the same
    way.
        Mr. Hoagland, you talked about the debt ceiling. And
    everybody has had a similar conversation, of course. I have
    been here since the big freshman class of 2010. Every single
    measure that has moved spending and deficits in the right
    direction--and, for me, the right direction is down--came in
    the context of a debt ceiling debate--no other measure, only
    debt ceiling debates.
        And so I want you to reconcile for me your real desire to
    see real progress made and my real experience that the only way
    that progress has been made has been through debt ceiling
    discussions and your position that we should eliminate those
    debt ceiling discussions, moving them into the budget
    discussions.
        Mr. Hoagland. Congressman, I understand where you are
    coming from on this.
        I do not think that Gramm-Rudman-Hollings, which was
    designed to bring the deficit down--when we look back on the
    history of that, it turned out that that was not successful in
    that regard.
        The last exercise you went through in increasing the
    statutory debt limit had no effect whatsoever on spending, from
    my perspective. Your adjustment to the caps came later.
        So I just respectfully disagree. I have not seen where the
    debt limit has done nothing more than create a crisis, as it
    relates to the financial markets out there, that we are
    possibly going to default. And I don't think we ever--I don't
    think this country ever will default.
        Representative Woodall. The most constructive deficit
    reduction measure in my 7 years was the Budget Control Act,
    pushed by John Boehner and President Obama that set budget
    caps----
        Mr. Hoagland. In 2011.
        Representative Woodall.----reduced spending, came only in
    the context of a debt ceiling deal.
        Mr. Hoagland. But then you adjusted the caps every year
    thereafter.
        Representative Woodall. Well, not----
        Mr. Hoagland. Not the first year.
        Representative Woodall. But that is exactly right. And
    traded off with spending reductions up to or beyond the change
    in those caps, with the exception of this last cycle.
        Let me think about the work that you all are doing with
    reconciliation at Convergence. Part of the Budget Control Act--
    again, I think it was the best vote I have taken since I have
    been here--was creating the joint select committee to bring
    deficit reduction measures to the floor or tax increase
    measures to the floor, whatever you wanted to bring to the
    floor. Thoughtful members, 16 thoughtful members, looking at
    literally hundreds of trillions of dollars in Federal outlays
    going out over decades, and found not one penny on which they
    could agree.
        I don't actually think our challenge is too many chances at
    reconciliation. I think our problem is not enough chances at
    reconciliation.
        Tell me how, knowing that we have shared concerns about the
    fiscal direction of the country, how limiting our ability to
    move a 50-plus-1 deficit reduction measure, limiting those
    opportunities to once a year, as opposed to currently under
    Senate rules three times a year, moves us in the right
    direction.
        Mr. Owens. I think it was the view of our group that
    reconciliation, in some ways, has become used basically just to
    get around and move other types of legislation.
        And so, as we thought about it and deliberated, we thought
    the reality is, if you had one per year and it was authorized
    in that Budget Action Plan, as we call it, it really would
    focus the discussion up front so everybody knew what they would
    be debating and what they would be discussing, and you would
    have two opportunities within a Congress to accomplish what you
    want to accomplish.
        Representative Woodall. I credit Reid Ribble on biennial
    budgeting. Much of his success was because folks knew who he
    was as an individual, and he would vote for anything that he
    thought would save his children and his grandchildren some pain
    and frustration in the future.
        I would just put on your thought list reconstituting that
    Joint Select Committee on Deficit Reduction, a bipartisan,
    bicameral committee much like this one. Anytime we have an idea
    that may move us in the right direction, I would like to see
    that come to the floor for that 50-percent-plus-1 to see if we
    can make a difference.
        I thank you, Mr. Chairman.
        Co-Chair Womack. Senator Lankford.
        Senator Lankford. Thank you, Mr. Chairman.
        Thank you all for being here as well.
        Let me click through a couple of things.
        There has been some good conversation about finishing
    elements, as far as how to get Congress to be able to act and
    move on things. What about things like automatic CRs to try to
    have something in place so we don't have a government shutdown
    while Congress is negotiating and finishing things out? Let's
    just pretend for a moment Congress doesn't get their work done
    on time. How do we actually get that to move and hold the
    American people harmless in the process?
        Mr. Wolfensberger. Let me just dive in first.
        I think that would be an incentive for inaction. Once you
    have things on automatic pilot, there is no reason for Members
    to go forward then on finishing the appropriations.
        Senator Lankford. Is there a way to be able to design that
    so that the pressure is put on Congress to be able to finish
    the task so the American people are held harmless?
        Mr. Wolfensberger. I commend your imagination to that
    project, but, you know, I haven't thought of one.
        Senator Lankford. Yeah. Okay.
        Mr. Hoagland. Of course, there have been proposals in the
    past to have an automatic CR, and the Domenici-Rivlin proposal
    had an automatic CR. But we also talked about it in terms of
    the context that that CR would start to--the amount of funding
    would start to come down every month by a certain percentage if
    you continued to enter that CR. That would create some
    pressure, it seems to me, to address the issue that there
    wouldn't be action on doing appropriation bills.
        Senator Lankford. If we combine that with things like the--
    let's say, in the Senate, you have mandatory quorum calls three
    times a day, so you can't leave; you are there over a weekend.
    So, while we are in that period, you are here----
        Mr. Hoagland. Yes.
        Senator Lankford.----and you have to be able to work
    through it, so they are intended to be short-term.
        Mr. Hoagland. Yes.
        Senator Lankford. Okay.
        Ms. Holubowich. Our group spent a lot of time talking about
    automatic CRs or, you know, a CR-plus-inflation, or we even
    talked about the idea of a super-sequester, again, as one of
    those penalties, those sticks.
        You know, I think, ultimately, we couldn't come to
    agreement that this would be an effective tool. And I think the
    fear, certainly on my part, again, as I spoke about public
    health, is that the default becomes we just don't do it, and we
    end up in sort of perpetual CR mode.
        You know, I think we had hoped that, you know, through the
    Budget Action Plan, again, getting that difficult decision
    making up front would, you know, minimize the need for CRs
    further down the road.
        Senator Lankford. Which I would certainly hope for, by the
    way. By the way, we are in a mode of perpetual CRs right now.
    And so, to say that----
        Ms. Holubowich. And it is not helpful.
        Senator Lankford.----if we put some mechanism in place to
    keep us from having a government shutdown, that is the target
    for me, is how do we not have government shutdowns, because
    that is detrimental to the entire Nation.
        And when you try to weigh a government shutdown versus an
    automatic short-term CR, I am going to go with an automatic
    short-term CR every time rather than have a shutdown. But the
    goal is those are very short and those are very temporary and
    we stay here until things actually get done.
        Tell me a little bit about the President's budget. Has that
    been a useful document or non-useful document for us? It is
    millions of dollars to create it every year.
        Ms. Holubowich. Well, we talked about that. One of our
    exercises was to actually take a step back and pretend we don't
    have a budget process, we have a Constitution; how would you
    design it? Matt and I were in the same group, and I was very
    much, at the time, in a camp that the President's budget is not
    helpful at all.
        It is, though. I think if you think about it as a reporting
    tool, you know, those congressional justifications really get
    into the weeds. And that is your oversight tool, and that is
    the reporting back to you on how they are spending the money.
    Those are critically important. So, again, I think we thought--
    --
        Senator Lankford. So the information is important but not
    necessarily the proactive look.
        Ms. Holubowich. Correct. And I think, again, as part of
    that Budget Action Plan, bringing the President in on those
    conversations around the top lines and reconciliation and get
    agreement up front really helps. That President's budget can
    then be a symbolic policy document, in the same way our Budget
    Action Plan would not preclude Congress from doing budget
    resolutions if they similarly felt they needed to put out a
    policy statement.
        Senator Lankford. By the way, I would have no issue with
    that, bringing the President on board. And so if we do a budget
    document with leadership, with key members of Senate and House
    committees, with the leadership of the House and the Senate,
    creating a document that goes into law, that sets those top-
    line numbers, gets that established early, gets the President
    involved early. The President can still make recommendations
    through the appropriations process to get it, but the
    President's budget seems to be a distracting document more than
    it does anything else. It has never, ever become law. But it is
    a set of ideas. I am glad to be able to have the President and
    agencies submit ideas, if nothing else.
        Let me ask you one last question about authorizing and
    appropriating. What about an idea like--we always get in to
    this fight of we never authorize in appropriation bills, which
    is a myth that goes back to 1974, because there has been
    authorizing in every single one of them on some level.
        What about combining the work and saying, if something is
    going to be authorized in an appropriation bill, the
    authorizing committee has to pass it first? So there is a
    mechanism to say the authorizing committee, as a committee--it
    may not go to the whole floor, but it goes to the committee.
    They pass it as a committee. Then it could be inserted, and the
    whole body would vote on it then in an appropriation bill to be
    able to add it.
        What about a blending of the two to be able to get those
    committees working together?
        Mr. Wolfensberger. I think that is more realistic than the
    present rule, which says you have to have the authorization
    signed into law before you can appropriate for them. So I think
    putting the action in the particular house, authorize, at least
    pass your authorization before you take up the appropriation,
    that makes good sense to me.
        Senator Lankford. Okay.
        Thank you, Mr. Chairman.
        Co-Chair Womack. Mr. Kilmer.
        Representative Kilmer. Thank you, Chairman. And my
    apologies. I was actually in an Appropriations subcommittee,
    hearing from some constituents.
        I want to start by asking the Convergence duo, your
    proposal had us looking at some of the long-term drivers of
    debt and deficits once every 4 years. We had bit of a
    discussion in a committee markup yesterday about the notion of
    having a fiscal state of the nation address, having the
    Comptroller General come in. That is a proposal that Mr.
    Renacci and I have introduced, which would really try to have a
    joint session that is focused specifically on these long-term
    fiscal issues.
        I would love to get your sense of that, if you think that
    having that type of mechanism in place would create more
    transparency and maybe put a little political pressure on both
    houses to try to get something cooking.
        Mr. Owens. I would just say I think that proposal is very
    consonant with what our group came up with, this notion of
    having a deliberate way to look back and look ahead, where we
    are going with our spending and revenues.
        Ms. Holubowich. And, importantly, in a way that is
    accessible to the American public. There is a wealth of
    information out there that is available through CBO, GAO, Joint
    Committee on Taxation. It is not accessible to the average
    American.
        So our idea was that, through this fiscal state of the
    nation, CBO is combining and culling all that information and
    synthesizing it, probably working with a communications firm to
    help, but to translate that for the American public and to
    really actively disseminate that. Our goal is not to produce
    another report that just sits on the shelf and nobody looks at;
    that it really becomes a part of the electoral process, it is
    elevated in the debates, it is a part of the conversation, you
    are referring to it on the stump.
        And so whoever is delivering that message--I used to work
    at GAO, so I would be happy to see the Comptroller General do
    that. But it is certainly consistent with our recommendation.
        Representative Kilmer. Thank you.
        You touched on CBO, and I know that part of the report also
    looks at the independence and maintaining the independence of
    the CBO. I think that is really important. You want to make
    sure there is an umpire who is calling legit balls and strikes.
        Can you talk about some specific measures you think our
    committee should look at that would maintain that independence
    of the CBO?
        Ms. Holubowich. We focused principally on resources for the
    CBO and the other congressional support agencies, in part
    because we have expanded their scope of work, so that is very
    reflective of our proposals.
        I can also tell you from my experience at GAO--and this was
    a long time ago, but I worked on the healthcare team. At any
    one time, we had 200 requests in the queue. It was at least a
    year until we got to start on a project. That was more than 10
    years ago and before the Affordable Care Act, so you can
    imagine now what the backlog looks like, you know. So I think
    it is extremely important to make sure you are investing in
    those institutions.
        We did not get into the issues around, you know, protecting
    their credibility. That was not something, I think, we really
    discussed, but certainly something we think is important.
        Representative Kilmer. Do any of you have suggestions in
    that regard?
        Mr. Hoagland. I have one suggestion, Congressman. That is
    that we had a major commission that you established; it was the
    Ryan-Murray Commission on Evidence-Based Policymaking. It seems
    to me that there ought to be a way to formalize the Evidence-
    Based Policy Commission within the Congressional Budget Office,
    establishing an organization that really looks at evidence-
    based in terms of making policy.
        Representative Kilmer. Thank you for that.
        I know there has been some conversation already about how
    do you ensure Congress doesn't just ignore whatever process we
    come up with.
        You know, I think some of the conversation has been around,
    sort of, negative disincentives. Unfortunately, by and large,
    when Congress has done that, the negative hit has been to the
    American public. I think sequestration is a good example of
    that.
        We have been trying to noodle on whether there is some sort
    of positive incentives that could push Congress to act, whether
    that be expediting processes here or something else. I would
    like to get your impressions, maybe collectively, if you have
    suggestions on what that might look like.
        Mr. Owens. Our group did discuss some of those carrots, so
    to speak. And expediting processes was one of the attractive
    features.
        We didn't reach consensus, time and time again, on this
    one. Because, at the end of the day, what someone saw as a
    positive someone could easily construe a way that that could be
    used against them as a negative for their interests. And so
    that is why we just couldn't reach agreement on this one.
        Other ideas that we surfaced on more of the carrot or
    positive side dealt with setting aside, sort of, a pot of
    money, that if Congress met its deadlines, then they would have
    a way to expedite expenditures for certain things that they
    considered a priority.
        Again, that led to other people saying, eh, that is a
    disincentive for me, because I would like to see spending go on
    the down side, not the up side. So, hence, we couldn't reach an
    agreement.
        Representative Kilmer. Thanks.
        Thank you, Chairman.
        Co-Chair Womack. Thank you.
        That completes our round. I understand that Senator
    Whitehouse is on his way back, and so I do want to give him an
    opportunity to ask questions. So, for the good of the order, is
    there anybody else here that has a follow-up question that they
    would like to ask of the panel while we wait on Senator
    Whitehouse?
        Mr. Woodall.
        Representative Woodall. Thank you, Mr. Chairman.
        Several folks have made reference to that we are kind of
    existing in a biannual budgeting world today. But the truth is
    we are existing in a biennial 302(a) allocation world today,
    but we are doing none of the other work.
        Candidly--Mrs. Lowey and I talk about it all the time--the
    Appropriations Committee is working just fine. They do good
    work every single year. They are successful every single year
    once they get a 302(a) number. I don't actually consider that
    to be the problem.
        The problem is looking out, whether it is making a national
    conversation out of a fiscal order of the United States--you
    tell me which Presidential candidate in the last debate was
    pressed on his or her plan for deficit reduction. Right? It
    just wasn't a topic for the American people.
        So help me to distinguish between where we are, which is a
    302(a) world, and where we would all like to be, which is a
    forward-looking glide path towards deficits going down, fiscal
    sustainability of entitlement programs, et cetera.
        Because I don't want to define what we are doing as
    success. It seems to me to just be enabling the one group that
    is getting its work done but doing nothing to empower all of
    the other groups of government that need to begin to get their
    work done.
        Can anybody help me with that?
        Mr. Hoagland?
        Mr. Hoagland. The establishment of the 302(a)s before we
    get to the 302(b)s is predicated upon there being a budget
    resolution. So that is why I keep coming back to at least
    having a budget resolution that establishes that or doing it,
    as you had been doing it, external to the budget resolution,
    passing a law that essentially sets those caps.
        So I think that you are getting your work done because
    there is a 302(a). You are getting your work done because there
    has been an agreement to set that, either through the budget
    resolution or through statutory legislation.
        So I agree. I am looking at--I guess you have six markups
    here in the House this morning, most of those in
    Appropriations. The difficulty is, of course, you have to deal
    with my old stomping ground across over here called the United
    States Senate, and they have 302(a)s too. But if you can't get
    those bills to the floor in the Senate, you will never get to
    conference.
        And so that is why I keep coming back to, if you could pass
    a budget resolution and then you eliminate and get an agreement
    on that, what those 302(a)s are, then you eliminate the need
    for the filibuster on the motion to proceed.
        Representative Woodall. Though, as you point out, when we
    have been successful at that, it has not been with real
    budgets, it has been with faux budgets that have gotten that
    done, at least over the last couple years.
        Don, you were working on trying to reorganize committees
    and making them work better.
        Mr. Wolfensberger. Well, you know, what the House has that
    the Senate doesn't is the Rules Committee, which you sit on as
    well as the Budget Committee. But what they have done there
    when a budget resolution has not gone through the House and
    Senate, the same one, is the Rules Committee puts out a special
    rule saying that the amounts recommended by the Budget
    Committee shall serve for the 302(a) purposes.
        But then, if the Budget Committee doesn't report, well,
    then you go back to something else. I guess we had it once
    where the leadership decided what they would be. So it is very
    tricky. But, you know, when you get to the Senate, you don't
    have those same mechanisms that the House does.
        Mr. Hoagland. That is right.
        Co-Chair Womack. Senator Perdue.
        Senator Perdue. Well, thank you.
        Just a quick question for anyone who would like to respond
    on this.
        In 1965, our mandatory spending was about 34 percent of
    what we spend as a Federal Government. Last year, it was almost
    78 percent. And yet all of this hoopla that we have around the
    budget and appropriations is around discretionary spending,
    which is $1.2 trillion, $1.3 trillion. We are going to spend
    $4.3 trillion this year.
        I understand we have two trust funds, and they get income,
    Medicare and Social Security. But, today, out of the $2.2
    trillion of tax revenue we get in, we spend almost a trillion
    dollars of that in mandatory--subsidizing Social Security,
    subsidizing mandatory, and paying for Medicaid.
        The question is, how can we really ever get control, long
    term, of our debt situation unless we deal with the total
    spending?
        This is the only entity I have found in the world where the
    budget process and the funding process only deals with 25
    percent of what we spend.
        Does anybody want to take that on?
        Mr. Wolfensberger. Well, let me----
        Senator Perdue. The question is----
        Mr. Wolfensberger. Yeah.
        Senator Perdue.----should we being looking at all of the
    expenses, the subsidy expenses, not the parts of Social
    Security and Medicare that are paid by the trust fund, but the
    other parts that we are subsidizing into those?
        Ms. Holubowich. So, if I may, this was one of the issues
    that we discussed. I think, for Matt and I, we live on the
    discretionary side, and, in some ways, we thought this is
    unfair. We have to be reviewed every single year, and there is
    no commensurate review on the other side of the ledger.
        So I think part of our recommendation here around the
    proposal to have the GAO conduct these long-term reviews for
    multigenerational commitments would set up an opportunity to
    have that conversation.
        We spent a lot of time talking through, well, you know,
    should we be sunsetting these programs? I think there were
    those in our group who felt very strongly, and I know some of
    the groups that I work with in my coalition--people rely on
    these programs. You know, the idea that you could yank out the
    safety net from under them, you know, because we let a program
    sunset was very concerning.
        So the idea here was, have these 4-year reviews by GAO,
    have them be incorporated in the fiscal state of the nation to
    elevate that conversation. And that deliverable provides an
    opportunity for Congress to have that conversation around those
    issues.
        Did I capture that?
        Mr. Owens. Yeah.
        And if I can just add, respectfully, Senator, I don't think
    most Americans understand exactly what you put forth. That is
    not top of mind, understanding the Federal budget. And so that
    is what is behind our recommendation, especially the fiscal
    state of the nation.
        And the reviews that Emily spoke to is, if more Americans
    are better informed and it is discussed during a Presidential
    election cycle and Members of Congress are forced to talk about
    and take questions for that, that political will that is the
    undercurrent of this entire discussion will become stronger,
    because more Americans want to see action on this. But,
    frankly, they don't have the information they need to help
    encourage you to take certain actions.
        Co-Chair Womack. Senator Whitehouse.
        Senator Whitehouse. Thank you, Chairman.
        And thank you all for being here.
        As a member of the Senate Budget Committee, my
    recommendations are focused mostly on the budget side and on
    the Senate side, not on the appropriations side or the House
    side.
        And I would like to ask to put into the record of the
    proceeding a letter that I have written to the chairs, making
    some of those recommendations in writing for the Senate Budget
    Committee.
        Co-Chair Womack. Without objection.
        [The information follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Senator Whitehouse. Thank you.
        I also want to acknowledge the good work and advice of my
    colleague Senator Perdue in some of the conversations we have
    had leading up to that.
        It seems to me that there are some very baseline facts that
    need to inform any conversation about our long-term debt. And I
    would like to ask all the witnesses just to kind of go through
    this like a checklist, because I don't think there is much
    debate about them.
        It is commonly accepted, is it not, that the metric by
    which a sustainable amount of debt would be measured is the
    debt-to-GDP ratio? Whatever the disagreement might be about
    what that ratio should be, the metric of debt to GDP is the
    commonly accepted metric, correct?
        Mr. Hoagland. Debt held by the public.
        Senator Whitehouse. Correct.
        Mr. Hoagland. Not the total debt.
        Senator Whitehouse. Any further dispute with that?
        Okay. We got all yeses with that adjustment?
        The second observation I have is that we are highly
    unlikely to achieve that debt-to-GDP ratio, whatever we should
    determine it to be, instantly, which, to me, suggests that
    there needs to be a glide slope of some period of years that
    will put us on the path to that.
        Is there any disagreement that that is simply a necessary
    part of the analysis of getting to a sustainable debt-to-GDP
    ratio?
        Mr. Hoagland. I agree.
        Senator Whitehouse. All agreed.
        Mr. Hoagland. I agree completely.
        But to Senator Perdue's comment, two-thirds of that budget
    is on automatic pilot, so to speak, that being the Social
    Security, Medicare, the entitlement programs. The only----
        Senator Whitehouse. Well, that is a good lead-in to my next
    point, which is that, if you are going to calculate deficit in
    any particular period, you won't mathematically get it right if
    you don't look at appropriated spending, plus healthcare
    spending, plus tax spending--and when I say tax spending, I
    mean the more than we actually collect that goes out the
    backdoor of the Tax Code in various tax provisions--and then
    revenues.
        From a point of view of the mathematics, are those not the
    four key elements without which you can't actually get to a
    correct answer?
        Mr. Hoagland. Correct.
        Ms. Holubowich. Correct.
        Senator Whitehouse. Correct. Okay. Good.
        So the reason I ask what I think are these basic
    foundational questions is because the present Budget Committee
    process does not require us to do any of those things. It does
    not require us to sit down and consider and vote on a
    sustainable debt-to-GDP ratio. It does not require us to sit
    down and discuss and vote on a glide slope that gives us a
    reasonable period of time to get there. And it does not require
    us to look at those four elements.
        So, from a process point of view, that is part of the focus
    of this letter.
        Another piece of our problem is that, as has been
    repeatedly pointed out, the budget reconciliation process has
    been more or less hijacked to provide a fast lane around
    traditional Senate regular order for particular political
    priorities of the majority and, indeed, in some cases, deficit-
    increasing priorities of that present majority.
        Could I ask each of you to provide for the record your
    recommendations as to what language we might consider to cabin
    the budget reconciliation process so that it is redirected back
    to its original goal, which is to keep our deficits and debt
    under control?
        That is going to take too long in my remaining 39 seconds,
    but would you send that to us in writing so we have your views
    on that?
        Ms. Holubowich. Absolutely.
        Senator Whitehouse. The last thing that I will mention, and
    it is a corollary of this, is that presently there is no
    procedural path in the Senate Budget Committee for bipartisan
    work. I don't think we are going to get this done if we don't
    have an avenue that encourages us to work in bipartisan
    fashion. We can trade blows back and forth with majority-
    driven, jammed-through-with-simple-majorities budgets and
    reconciliation measures, but ultimately we are going to have to
    look at this in a bipartisan fashion.
        And so my urgent concern is that we create a parallel
    bipartisan budget bypass just in case that bipartisanship can
    be achieved. You can't mandate bipartisanship, but, by God, you
    ought to make a way for it if it can happen.
        Mr. Hoagland, you are energetically signaling.
        Mr. Hoagland. I don't know if this rule still exists, but
    under the earlier timeframe, if the budget resolution had not
    been reported out of the Budget Committee in the Senate by
    April the 1st, budget resolutions that had been introduced--if
    you and Senator Perdue had introduced a budget resolution
    yourself, it would have been automatically discharged and put
    on the calendar.
        That is one way of creating a--if the chairman and the
    ranking member are not getting their work done, that doesn't
    preclude the two of you from putting together your own
    resolution and putting it out there.
        Now, getting it off the calendar is a different issue. But
    you could still do that under existing rules, as I understand.
        Senator Whitehouse. There is an opportunity for
    considerable mischief there, as well as considerable
    bipartisanship.
        Co-Chair Womack. Last question. Mr. Arrington, bring us
    home.
        Representative Arrington. Well, I want to associate myself
    with Senator Whitehouse and the whole concept, notion of a
    glide path and debt-to-GDP targets. We are looking for a
    bipartisan way to move forward. I don't see any policy
    orientation, Republican or Democrat, in that. It is just the
    reality is we have to walk back that ratio to a healthy,
    responsible level, and then it can be determined what dials to
    use to get there.
        I think, ultimately, though, you are going to have to have
    some consequence if you don't get there. I just don't know
    that--but it would be a great start, and I support that 100
    percent. We have been talking about that.
        So my question is this super-sequestration, because I would
    have an idea--I don't know that it would be supported, but--and
    I ran against sequestration, but I have to tell you, since I
    have been here, I just think it was wrongly applied. I thought
    that the idea was good in concept, but it missed 70 percent of
    the spending.
        So what is this idea of super-sequestration that you all
    kicked around? And some of your thoughts around--I just was
    intrigued, and that was my follow-up.
        Ms. Holubowich. Sure.
        You know, so I think where we came out is that ultimately,
    again, that stick is a failure. And as I have known--full
    disclosure, I am the founder and co-chair of NDD United
    campaign. We advocated to raise the caps; we advocated to stop
    sequestration. We are three for three. Thank you for that.
        This is more than dollars on a ledger. This funding is
    impacting people's lives every day. We have spent the last 6
    years documenting the impact of this. It is too blunt a tool--I
    am speaking for myself----
        Representative Arrington. Yeah.
        Ms. Holubowich.----too blunt a tool. It is too dramatic.
    And it is not the glide path that I think you seek.
        I would just say, you know, a word of advice, I think, from
    our process, again, is to focus on process. We had these
    conversations, and policy and process blur, but when you get
    toward the outcomes, the energy in the room would shift, the
    body language would change, and we would bump up against
    impasse.
        So I think for you all, focus on the true process, build
    that foundation that will allow you through proposals like
    ours--the Budget Action Plan, the long-term reviews--to address
    the policies and the outcomes. I think you will be more
    successful. I think that is how we were successful. And if,
    again, we had focused on what is the appropriate debt-to-GDP
    ratio, we would not be here today with a set of proposals for
    you.
        Representative Arrington. My only concern is I think you
    make a smoother path right off the cliff. I mean, it won't be
    as bumpy, we will be able to enjoy the ride a little bit while
    we are, you know, still intact, and then we crash. And then it
    is forced upon us, ultimately.
        So, if you think the blunt instrument of having reasonable
    walking-back of whether it is the dial of tax on the revenue
    side or spending, wait until the sovereign debt crisis hits.
    And you think the blunt instrument of any of these dials being
    thrust upon us because of our lack of will--then I think that
    is a much worse scenario to avoid. And I think we have to think
    in pretty extreme terms to avoid that.
        And, again, I would put revenue, just to be fair, and the
    spending cuts, and then I would not negotiate away 70 percent
    of the budget that is really driving the debt. That is really
    my----
        Ms. Holubowich. Yeah. I think we would see that as outside
    of the process. I mean, that is the outcome that you are
    striving for. You know, your charge is really, how do we build
    a foundation and a framework to allow those conversations to
    happen? I fear that, if you go down that path in this body, you
    will not get to creating that foundation.
        Representative Arrington. You know, I am kind of revealing
    my--I want to get----
        Ms. Holubowich. I agree with you completely. Yeah.
        Representative Arrington. So, Mr. Chairman, I don't want to
    take any more of everybody's time, but thank you, panelists,
    and appreciate the feedback.
        I yield back, Mr. Chairman.
        Co-Chair Womack. Mr. Hoagland, Mr. Wolfensberger, Ms.
    Holubowich, Mr. Owens, thank you so much for being with us
    today.
        Be advised that members may submit written questions to be
    answered in writing. Those questions and your answers will be
    made part of the formal hearing record.
        Any members who wish to submit questions or any extraneous
    material for the record may do so within 7 days.
        And, with that, this committee stands adjourned.
        [Whereupon, at 11:35 a.m., the committee was adjourned.]

          THE BUDGET RESOLUTION--CONTENT, TIMELINESS, AND ENFORCEMENT

                                  ----------

                             THURSDAY, MAY 24, 2018

                              House of Representatives,
                          Joint Select Committee on Budget and
                                 Appropriations Process Reform,
                                                       Washington, D.C.
        The committee met, pursuant to call, at 10:45 a.m., in room
    HVC-210 Capitol Visitor Center, Hon. Steve Womack and Hon. Nita
    M. Lowey [co-chairs of the committee] presiding.
        Present: Representatives Womack, Sessions, Woodall,
    Arrington, Lowey, Yarmuth, Roybal-Allard, and Kilmer.
        Senators Ernst, Whitehouse, Schatz, and Hirono.
        Co-Chair Womack. Good morning. The Joint Select Committee
    will come to order.
        Welcome to the third public hearing of the Joint Select
    Committee on Budget and Appropriations Process Reform. The most
    important role given to Congress under Article I of the
    Constitution is the power of the purse. Our panel is charged
    with ensuring we can fulfill this fundamental and essential
    duty.
        Long before we began our work, there was bipartisan
    agreement that the current process for completing this basic
    function of government needs substantial improvement. And
    during our hearing so far, we have identified some of the main
    challenges with the current budget process.
        Today's discussion will be more focused on the opening
    piece in the process, the annual budget resolution. As
    designated by the 1974 Budget Act, the budget resolution was
    intended to help Congress govern effectively.
        Unfortunately, the budget resolution, as we know it today,
    is often associated with government dysfunction and
    consistently missed statutory deadlines.
        There even seems to be some confusion from Members in both
    Chambers on both sides of the aisle about the value of even
    doing a budget resolution each year. That is regrettable.
        This apathy was clearly exemplified just 2 weeks ago in the
    House Budget Committee during our Member's Day hearing, a
    required forum and formal opportunity for Members to present
    their budget ideas for fiscal 2019. Aside from members of the
    Budget Committee, that forum was utilized by one Member.
        While I was disappointed by the lack of participation, it
    was a sobering illustration of the budget's need for our select
    committee to succeed. During today's conversation, I am hopeful
    that we can start determining ways to make the budget more
    useful to Members of Congress and encourage engagement in the
    process. And I also look forward to talking about ways to make
    the budget resolution more realistic as a governing document,
    ensuring that it can be effectively enforced.
        Even though today is about the budget resolution, we cannot
    ignore the fact that the appropriations process is inextricably
    linked. The sooner that a budget resolution is passed in final
    form, the less likely Congress will have to rely on an omnibus
    or a continuing resolution.
        However, as both an appropriator and as chairman of the
    House Budget Committee, I recognize that we must be honest and
    ask ourselves whether the modern Congress will ever be able to
    successfully process 12 individual appropriation bills in a
    single year.
        This morning, to add to our conversations on this important
    topic, we welcome several experts who have studied the budget
    and appropriations process extensively.
        Joining us for today's discussion, we have the president of
    the Committee for Responsible Federal Budget, Maya MacGuineas.
        Jim Capretta is here from the American Enterprise
    Institute, where he serves as a resident fellow and the Milton
    Friedman Chair. Jim brings a wealth of experience from his time
    at OMB and as a Senate Budget Committee staffer.
        Bill Dauster also joins us today, bringing his unique
    perspective as a 30-year Senate staffer and the author of a
    book on budget process law.
        Finally, offering an outside academic's view, we have
    Joseph White, a political science professor from Case Western
    University.
        Thank you.
        And, with that, I would yield to the distinguished co-
    chair, the gentlelady from New York, Mrs. Lowey for her opening
    remarks.
        [The prepared statement of Steve Womack follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Lowey. Well, thank you very much. And I would like
    to welcome everyone to this hearing on the subject of budget
    resolutions, their content, timeliness, and enforcement.
        Once again, we have a very good group of witnesses. We have
    Bill Dauster, who has formerly served as staff director and
    chief counsel of the Senate Budget Committee and in several
    other senior staff positions in the Senate and the White House.
        We have Professor Joe White from Case Western Reserve
    University, who, throughout his long career, has written,
    thought, and taught about Federal budget policy and politics,
    as well as about healthcare policy. And, further, the committee
    will hear from two other distinguished budget experts. Maya
    MacGuineas of the Committee for a Responsible Federal Budget
    and James Capretta of the American Enterprise Institute.
        I want to thank you all for coming. I look forward to an
    interesting hearing, and I am sure you will share with us some
    very important information on which perhaps we can come up with
    some suggestions for change.
        Thank you very much.
        [The prepared statement of Nita M. Lowey follows:]
        [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. Thank you, Mrs. Lowey.
        I would like to now welcome our witnesses. Thank you for
    your time today, all of you. The committee has received your
    written statements. They will be made part of the formal
    hearing record, and each will have 5 minutes to deliver oral
    opening remarks.
        And, Ms. MacGuineas, we are going to begin with you. It is
    an honor to have you, and I am going to turn the floor over to
    you. Thank you so much.

       STATEMENTS OF MAYA MAcGUINEAS, PRESIDENT, COMMITTEE FOR A
    RESPONSIBLE FEDERAL BUDGET; JAMES C. CAPRETTA, RESIDENT FELLOW
    AND MILTON FRIEDMAN CHAIR, AMERICAN ENTERPRISE INSTITUTE; BILL
     DAUSTER, FORMER DEMOCRATIC STAFF DIRECTOR AND CHIEF COUNSEL,
    SENATE BUDGET COMMITTEE; JOSEPH WHITE, PROFESSOR, DEPARTMENT OF
     POLITICAL SCIENCE AND CENTER FOR POLICY STUDIES, CASE WESTERN
                           RESERVE UNIVERSITY

                      STATEMENT OF MAYA MAcGUINEAS

        Ms. MacGuineas. Thank you so much. And thank you for
    inviting me here today. I am really honored to be talking with
    the committee and appreciate all of you serving on it. And what
    has been great is it seems like you are off to a very strong
    start, so that is very encouraging.
        In our written testimony, we offered 26 different
    recommendations which follow the five different budget areas
    for improvement. These things range from changing the budget
    calendar to standardizing baselines to making it more difficult
    to waive PAYGO.
        What I would like to do in my couple minutes of remarks
    here is focus on three areas, and I am happy to discuss any of
    the others we submitted as well. And those three include the
    importance of getting something done. The importance of this
    committee succeeding at getting something done.
        Number two, ending crisis-driven budgeting. And number
    three, developing a process, a neutral process that makes it
    easier to agree to sound, sustainable budgets.
        So, to start with it, it is clear that the budget is no
    longer a statement of the Nation's principles or reflection of
    a strategic national plan. When the budget even does exist, it
    tends to be political statements filled with wishful thinking,
    and it puts all of you as our leaders in the counterproductive
    position of getting sucked into the partisan battle instead of
    thoughtful policymaking.
        This committee is not going to be able to fix how broken
    our politics are right now or the extent of broken fiscal
    situation facing the country, but getting something done that
    both sides see as fair would be helpful as serving as a way to
    reboot the whole process and will start with a new commitment
    to actually following the reasonable budget rules.
        The types of changes could include things you have heard a
    lot about from other witnesses before from biennial budgeting;
    changing the fiscal year; using the Fiscal State of the Nation
    Report, which Congressmen Kilmer and Renacci and Convergence
    and others have all talked about; changing the makeup of the
    Budget Committees. But little steps can lead to bigger steps.
        Second, one of the main problems that I assume you want to
    solve is the threats of defaults and government shutdowns and
    how to create dangerous situations in crisis-driven budgeting.
        So, we encourage the committee to address these land mines
    by, one, reforming the debt ceiling. By requiring votes to lift
    the debt ceiling along with the votes for policies that would
    actually increase the debt.
        So, for instance, this would have required a debt ceiling
    vote along with the debt increases that went along with the
    recent tax cut and spending bills.
        If you have to recognize the effects of the debt directly,
    it would create at least more accountability and transparency,
    and perhaps it would give lawmakers pause before adding to the
    debt.
        Another one of the ideas that we support is auto CRs or an
    expedited procedures to adopt short-term CRs to avoid
    shutdowns, with the understanding that you don't actually want
    to be encouraging the use of CRs as a way to budget.
        Finally, we also encourage allowing more option for
    bipartisan deficit reducing bills to be considered, which would
    encourage alternative budgets and/or consideration of broadly
    supported legislation. I have been interested in what Senator
    Whitehouse have been talking about on this topic and others,
    but I think it is really important to create the incentives for
    the things that we want to get done, bipartisanship, and the
    things that are harder to get done, deficit reduction.
        So, finally, perhaps the most important thing you could do
    is improve the process to encourage consideration of serious
    fiscal plans to improve our debt situation. No amount of
    calendar changing, baseline improving, auto-CRing will be
    sufficient to accomplish a serious fiscal plan and the
    political will to enact that.
        So, while we all recognize that budgeting is about
    tradeoffs and hard choices, one merely needs to look at the
    current fiscal situation of upcoming trillion dollar deficits,
    projections of unprecedented debt levels, and interest being
    the fastest growing part of the debt of the budget to know that
    this isn't happening in our current budget. And the potential
    damage could harm our country for decades.
        So, to address this, we support the adoption of a system of
    establishing medium-term debt target along with new enforcement
    mechanisms. And in 2010, our board of experts came up with an
    idea called a Debt Stabilization Act, whereby there would be a
    medium-term debt-to-GDP target, annual targets to create a
    glide path to get there, and the budget resolution would comply
    with those targets, and both spending caps and PAYGO's would be
    in place.
        There would also be an additional trigger mechanism, and I
    emphasize that my board thought it was really important that
    trigger mechanism be half revenues, half broad-based spending
    cuts to really have both sides object to it, and it would be a
    mechanism that would help have budgets comply with those
    targets.
        There are a number of ways to structure these different
    targets. At the time, we were shooting for a debt-to-GDP ratio
    of 60 percent by 2018. So, we are going to have to wiggle room
    that a little bit, not quite on track for that. But there are a
    lot of different ways to make this mechanism work. We would be
    delighted to work with people figuring out that structure.
        But, frankly, just moving to a process that includes a
    fiscal goal as part of the budget process would be a
    significant improvement from what we currently have. And the
    time to do this is right because the economy is strong; at the
    same time, the fiscal situation is precarious. And
    bipartisanship, which we desperately need, is at a low, but you
    have the start of a really good working environment here.
        So, lastly, whatever you do, we encourage you to add to
    your new process stronger enforcement mechanisms because, right
    now, if you look at how we try to enforce the budget with
    spending caps and PAYGO, the holes in that are so large; it
    really results in them being meaningless. And a budget process
    that is meaningless undermines the entire faith in our system
    to do the most important thing that there is for the country,
    which is to set the thought-out plan for where we want to go.
        So, again, thank you so much for having me here today. We
    have a number of recommendations we are pleased to share with
    you.
        [The prepared statement of Maya MacGuineas follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. Thank you, Ms. MacGuineas.
        Mr. Capretta.

                     STATEMENT OF JAMES C. CAPRETTA

        Mr. Capretta. Thank you, Mr. Chairman.
        Thank you, also, to Mrs. Lowey. I am very pleased to be
    here. Thank you for inviting me to participate.
        I agree that the work of this joint committee is very, very
    important. It is very timely. And so, I really am pleased that
    the Congress created this committee and asked you to take a
    look at these very difficult questions.
        The Federal Government is running very large annual
    deficits, and those deficits will grow in the future as the
    U.S. population ages and health spending continues to grow more
    rapidly than the economy.
        The current Federal budget process is not helping Congress
    grapple with this fundamental challenge. Also, it does not
    facilitate an orderly and timely decision-making process.
    Congress wastes too much time on small and irrelevant matters,
    even as it fails to focus much attention on the issues of real
    budgetary consequence.
        There are many aspects that need to change. Today, we are
    focused on the budget resolution. I am going to make just three
    recommendations here. Although, I agree that many more things
    need to be done beyond the three I am talking about today.
        First, I think the budget resolution should become the
    vehicle for establishing and amending the statutory caps on
    discretionary spending. Second, the budget resolution should
    become the vehicle by which an automatic increase in the debt
    limit occurs. And, third, and most importantly, the budget
    resolution should be modified so that it includes a medium- and
    long-term outlook.
        So, to the first recommendation on the caps. Obviously,
    under the Constitution, establishing budgetary policy is a
    shared responsibility between the executive and legislative
    branches. This is part of our constitutional structure, which
    is very important, of course, but one consequence is that we
    rarely have a budget that is enforced in total across the
    executive and legislative branches.
        Something of an exception to this is the caps, which have
    been in place since 1990, more or less, with a couple of
    exceptions. These caps, while very much a part of the process
    today, are not part of the regular budget process in the
    Congressional Budget Act. They have been enacted on an ad hoc
    basis. I think the Congressional Budget Resolution should
    become the vehicle for establishing and amending those caps.
    Allowing the budget resolution to become the vehicle for this
    would make the budget resolution a much more serious
    legislative vehicle than it is today. It would also bring the
    executive branch into budget negotiations with the Congress
    earlier in the year, which might help prevent the kind of end
    of year political standoffs that now regularly occur.
        There are a number of ways that this could be done. I think
    the most straightforward is that, as a final resolution made it
    both through the House and Senate, it would automatically
    trigger the sending of new legislation to the President for his
    signature or veto, changing the caps and statute to comply with
    whatever is in the budget resolution.
        The President, of course, could either veto or sign it. If
    he vetoed it, then the Congress could try to override or, and
    if not overridden, the caps would still apply, at least in a
    budget resolution sense, to the Congress.
        The second recommendation is to get rid of the debt limit.
    I think the debt limit has outlived its usefulness. Congress
    should get rid of it all together because it really is a self-
    inflicted wound if we fail to pay our creditors. But if we
    can't do that, the budget resolution should become the vehicle
    for automatically raising the debt limit consistent with the
    budget levels in the budget resolution. This, too, would make
    the budget resolution a much more serious legislative vehicle.
    It would make it meaningful as a vote because this would be the
    vote that would trigger the debt limit being raised or not, and
    it would bring the executive branch also into the negotiations
    because of the legal questions associated with the debt limit.
        Lastly, and most importantly, again, bringing a long-term
    outlook to the budget resolution.
        You can see the importance of a long-term outlook by
    looking backwards. If we had, as a country, made changes in the
    mid-1990s, as was recommended by two bipartisan panels on
    budget outcomes and reforms, if we had made those changes 25
    years ago, we would be in much better shape than today we are.
        Similarly, we have to start making decisions now that
    affect the fiscal outlook of the country in 2030 and 2035. It
    takes that long to get some of these things right. And so, I
    know that is a difficult task to ask people who are here to
    represent the here and now and what is going on in the lives of
    their constituents now, but attending to that situation is
    absolutely critical. And the budget resolution really doesn't
    facilitate that today.
        So, my testimony covers this in more detail, but one simply
    way to do this is to bring into the budget resolution an
    agreed-upon measure of the Federal Government's fiscal outlook
    going out the next three decades, such as a present value
    calculation of expected revenue and expected spending, make
    that a target for reduction over time, and use something like
    the reconciliation process to bring progress on meeting that
    goal.
        Thank you. I will be happy to answer questions.
        [The prepared statement of James C. Capretta follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Representative Womack. Thank you, sir.
        Mr. Dauster.

                       STATEMENT OF BILL DAUSTER

        Mr. Dauster. Thank you, Mr. Chairman, Chair Lowey, members
    of the committee, thanks for letting me be here today.
        Let me start by acknowledging the dirty little secret.
    Okay, maybe it is not so secret. A lot of members hate the
    budget process. I am here to tell you: It is okay to hate the
    budget process. It is frustrating. It gets you blamed for
    failure that you did not cause, and it is full of unnecessary
    drama. But there are five things, probably more than that, but
    I will talk about five things that you can do that will help us
    hate the budget process less.
        First, don't make it worse. Take the Hippocratic Oath of
    budget reform: First, do no harm. Don't set yourself up for
    more frustration and failure. Don't create a system that
    punishes you when leadership fails to do its job. A good budget
    process should be like your favorite car. It gets you where you
    want to go. It doesn't force you to go where you don't want to
    go.
        Chairman Womack was right when he said that a good process
    is not in the business of prescribing specific budget outcomes.
    A bad budget process is sort of like an overambitious New
    Year's resolution. You know, those promises that would be nice,
    but we just can't keep. By February, we are denying we ever
    made them. Gramm-Rudman was like that. And I would argue the
    unrealistic budget control caps were as well. So, I would say
    make changes that are like your favorite car and not like a New
    Year's resolution.
        Second, we should use Senator Bennet's term, de-weaponize
    the debt limit. Senator Whitehouse is exactly right when he
    said that it is like a bear trap in your bedroom. Many
    Republicans and Democrats alike agree that now may be a time to
    end this drama.
        The Gephardt rule, which automatically changed the debt
    limit when you adopted a budget resolution, should be applied
    in both Houses. And if that fails, there is the McConnell rule.
    That is the rule that you delegate power to the President to
    suspend the debt limit for a period of time subject to a fast-
    track resolution of disapproval.
        Third, a lot of Senators hate the budget process and the
    budget resolution, in particular, because of vote-a-rama, the
    all-night vote marathon on amendments that no one has seen
    before. None of us have liked pulling all-nighters since
    college, and if we admit it, we didn't like it in college.
        One problem is that the vote-a-rama is one way that the
    minority can get its voice heard. But you can solve that by
    guaranteeing that the minority leader gets a vote on a certain
    number of amendments. You can haggle over the number, but it
    has got to be something less than 50. After a certain number,
    the press stops paying attention anyway, so why torture
    yourself?
        Fourth, I like the Convergence Center idea to facilitate a
    budget action plan at the beginning of a new Congress. The
    election cycle is the cycle that Congress pays attention to
    anyway, so you should recognize that reality in the process.
        I also agree with Chair Lowey, and I would not move to a 2-
    year appropriations bill. Annual appropriations bills are one
    of the few ways you guys have to get the Secretary of such and
    such to answer your telephone call.
        Fifth, I like the Convergence Center's idea to make the
    chairs and ranking members of other committees, members of the
    Budget Committees and for many of the same reasons that Senator
    Perdue expressed here.
        As spots open up on the Budget Committees, give the other
    chairs and rankers a right of first refusal to join you on the
    Budget Committee. If enough do, it would become a place where
    deals get done. There are five suggestions. Good luck and
    Godspeed in your efforts.
        [The prepared statement of Bill Dauster follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. Thank you, sir.
        Mr. White.

                       STATEMENT OF JOSEPH WHITE

        Mr. White. I hope I am doing this correctly. Distinguished
    co-chairs and members of the committee, thank you for the
    opportunity to share some analysis and ideas with you as you
    search for useful ways to reform the congressional budget
    process doing no harm along the way.
        Many of the sources of complaint about current budgeting
    and budget resolutions in particular, such as failure to meet
    deadlines or complete parts of the procedure at all, are due
    mainly to the intense political conflict of our time. And new
    processes can't fix that. But I think a bit of good can be
    done, and it is encouraging to see that there is some agreement
    among the participants on this panel, the careful statements by
    the committee leadership, and other efforts, such as the
    Convergence Project.
        On one issue I didn't address in my written testimony, I
    would just like to say that I agree with Mr. Capretta and Mr.
    Dauster and the Convergence Project that it is time to
    eliminate the ways that the debt ceiling encourages hostage-
    taking and brinksmanship full stop.
        Any further reforms--or if you can do that one, that would
    be a huge one--but any reform that would be designed to
    accomplish some set of goals and sort of meet some standards,
    and these standards should not consist only of beliefs about
    effects on budget totals as the so much discussion seems to
    think.
        So, I would like to emphasize four others. First, budget
    should serve representative government with democratic
    accountability. They should make it easier for citizens to see
    what the government is planning and promising and delivering,
    and they should be affected by elections.
        Second, budget processes should help policymakers encourage
    efficient operation of government programs.
        Third, Federal budget decisions have some effects on the
    national economy so the process should encourage debate and
    attempts to influence those effects. Most important, the basic
    task of budgeting is to relate preferences about details to
    preferences about totals. Normal budgeting proceeds in
    iterations. Totals in details are proposed. If there are
    mismatches, those are identified, and negotiations search for a
    combination that is acceptable.
        The details, such as what is done for national security or
    who pays how much tax or what healthcare the government
    guarantees for what cost, are in aggregate at least as
    important as the economic effects of budget totals.
        Top-down approaches that set totals without considering the
    effects on details, therefore, are fundamentally bad budgeting.
    So, by these standards, I would say there should be budget
    resolutions because resolutions provide a public statement of
    the economic policy based on the governing group's beliefs
    about the effects of spending, revenues and their balance.
        Resolutions also can trigger reconciliations, significant
    changes in government priorities. But these kinds of broad
    policies, broad priorities, or basic economic approach
    basically reflect elections. They are unlikely to change
    between elections. And by that logic, resolutions should be
    biennial, functioning as the U.S. version of what OECD calls a
    medium-term budget framework. There is no need to do
    resolutions twice in a Congress.
        The annual appropriations process, however, provides a
    review of agency plans that is useful both for encouraging
    efficiency and making agencies accountable to Congress and the
    public.
        Agency activities involve details that can change from year
    to year, and there are good reasons why most organizations
    budget in this sense annually. So, I would like to see
    resolutions passed biennially but set 302a allocations for the
    appropriations for 2 years with the appropriations remaining
    annual. I think that fits the purposes of both processes.
        Now, other witnesses have agreed with some of these
    recommendations. And there will be a lot more disagreement over
    my third point. You are receiving today and will surely receive
    more recommendations that the budget process be focused on
    estimated consequences for budget totals, even further in the
    future than the current 10-year terms of resolutions.
        I tried to explain in my written testimony why that is not
    a great idea, but just a few points here. One, long-term
    discretionary spending targets fundamentally ignore details.
    That is why they eventually break down because you don't really
    belief in the details that would fit those targets.
        Two, procedures that claim to budget for the long run are
    just a subject of manipulation and gimmicks as any other
    procedures. As you must know from experience with evading the
    BCA, discretionary caps.
        Three, the dominant factor in projected long-term spending
    increases is healthcare programs, but there is no good way to
    estimate that cost. I provide a chart as an example of that in
    my testimony.
        In fact, focusing on long-term Medicare costs misses the
    point, that we have a national healthcare cost crisis now and
    not just in government programs.
        Much more could be said about this topic, but perhaps we
    can engage about that in the discussion period. Thank you very
    much for the opportunity to testify.
        [The prepared statement of Joseph White follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. Thank you, Mr. White.
        We appreciate the testimony of each of our witnesses here
    this morning.
        I will begin the Q&A with a question for Ms. MacGuineas.
    Your testimony contains a lot of solid suggestions for Congress
    to more effectively address long-term debt. In the current
    budget process, we definitely have, at best, some tension, if
    not an outright conflict, between budgeting for the short term
    that leads to an annual appropriations process and then doing
    something that addresses the long term without it becoming just
    some fictitious goal in mind that really doesn't carry a lot of
    merit. Which, if any, of the elements in our current budget
    process, Ms. MacGuineas, would you keep?
        Ms. MacGuineas. Well, that is an interesting question, so I
    think I would shift a lot of the focus on to thinking about the
    budget more comprehensively.
        One of the things I don't want to do is sacrifice the long
    term just to focus on the short term or vice versa. And so, I
    think I would go to the very root of what budgets are for,
    which is for tradeoffs, and they admit that they have
    constraints, and I would hold yourselves responsible for
    looking at what the glide path for the current projections are
    on a regular basis.
        Many times I have actually heard Members of the Congress
    say, you know, there is two-thirds of the budget that we can't
    even look at. And, of course, we can, it is not through the
    appropriations process, but you are responsible for overseeing
    the portion of mandatory spending and revenues. So, what I
    would do is I would add in a piece that requires reviews of
    that, and I would increase more transparency as you figure out
    how to do the really hard pieces of making changes so those
    have alignment, which they currently don't.
        Co-Chair Womack. We have had a lot of discussion in
    previous hearings about carrots and sticks. What can we do to
    motivate, incentivize, coerce, shame Congress into actually
    doing something?
        Ms. MacGuineas. So, I think there is a couple of things
    that you want to create the carrots and/or sticks for. One, of
    course, is getting a budget done. And the second is for
    improved fiscal outcomes.
        On getting the budget done, I do find myself kind of liking
    the simple idea of you shouldn't leave, you shouldn't have a
    recess until the budget is completed. I know people want
    carrots, so I figured we can just make that a carrot instead of
    a stick, which you get recess when you've done the budget. We
    can just flip it.
        But I do think in terms of the long term, there are lot of
    things you can do with the debt ceiling where you replace that
    with a different form of budget constraints, something that
    only comes into play when you are spending and revenue programs
    in the longer term are out of whack. So, you would not have to
    have debt targets, debt ceilings, other kinds of constraints,
    unless they are there to remind you that changes need to be
    made. And avoiding them, I assume, would be a carrot.
        Co-Chair Womack. Mr. Capretta, some observers have noted
    the challenge of focusing on medium and long-term fiscal
    outlooks. At the same time, the unfunded liabilities of the
    Federal Government, depending on who you ask, are at least in
    the tens of trillions, if not into the hundreds of trillions of
    dollars.
        So, help me understand why in spite of the challenges,
    Congress should attempt to build in a longer term focus as part
    of the budget resolution and do so in a politically neutral
    way?
        Mr. Capretta. Well, it is quite true that projecting out
    Federal outcomes, 15, 20, 30, 40 years from now is very
    difficult to do, but there is little question that the
    population aging of this country, plus the commitments that
    have been made in programs relative to the revenue base has
    left the country with a very, very large gap.
        And, you know, we can argue about degrees and how much, but
    it is going to be very, very significant. I would also note
    that many other countries have adopted some kind of a long-term
    focus because they understand this problem. Many countries,
    frankly, advanced economies have taken much more proactive
    steps than we have to try to get this under control in advance
    of it occurring because it is, for them, maybe accelerated some
    because of their demographic questions.
        So, there is no question that we have a big unfunded
    liability problem. How are we going to deal with it? If we
    don't make some changes in the processes that are pushing the
    Congress to address it, and the President to address it, there
    is very little reason to do anything.
        The Congress could drift on for another 10 or 15 years
    without anybody even realizing how big the problem is and, you
    know, until it is almost on top of us. And so, I think much
    more focus needs to be brought to Congress on how big it is and
    what needs to be done now to try to affect outcomes in 10 and
    15 and 20 years.
        You cannot change this problem with a small, you know,
    adjustment, and, you know, turn around and expect it to, you
    know, be implemented right away. You are going to have to do
    big things, and that means, you know, things that are going to
    take a long time to phase in.
        Co-Chair Womack. I am about out of time. I was going to
    share some of my new Year's resolution with Mr. Dauster, but
    since I have broken all of them anyway, we will just save that
    for another day.
        Mr. Dauster. I broke mine as well.
        Co-Chair Womack. I do like the comparison, though, to our
    business and breaking New Year's resolution.
        Mr. Dauster. Thank you, sir.
        Co-Chair Womack. Mrs. Lowey.
        Co-Chair Lowey. For whoever cares to respond regarding
    budget resolutions. In the past, the budget resolution has been
    a powerful tool for creating, implementing, and enforcing
    budget plans, but that only works if there really is actual
    agreement on a plan. And recently, budget resolutions seem to
    be becoming more vague with little real purpose other than to
    launch reconciliation bills and sometimes attempt to show
    declining deficits on paper.
        Would any of you like to comment on how budget resolutions
    can be made more real again?
        Mr. Dauster. Well, I will start by saying that I do with
    the Convergence Center idea that it makes sense to set those
    overall appropriations levels early on in a Congress. And I try
    to encourage that to happen by making it sort of a disappearing
    fast track. You get the fast track if you can do that at the
    beginning of the Congress where it is useful to the
    appropriators, but you lose that, say, in April or May of the
    first year. If you don't do it by then, you don't get the fast
    track reward that you would have otherwise.
        Mr. Capretta. I would also just suggest that the
    recommendation I made in my testimony that said that you should
    tie the statutory caps on discretionary spending, on
    appropriated spending to the levels that go--that are in a
    budget resolution and send legislation to the President for
    signature or veto on those caps, it would make the budget
    resolution the vehicle by which the annual appropriation caps
    are set for both the Congress and the President. That would be
    a real legislative item, and it wouldn't be fictitious.
        If it was signed, you know, that would be, everybody would
    be signing on, you know, subject to loopholes and trying to get
    around it through some practices that need to be stopped. But,
    you know, caps on discretionary spending have generally, not
    always, but generally worked over the last 25 years.
        And if you put them into the budget resolution, the budget
    resolution becomes more real for both the Congress and the
    President.
        Ms. MacGuineas. I would point out that reconciliation is an
    incredibly powerful tool. And I think that it should be changed
    back to the original intent so reconciliation can be used for
    things that improve the deficit situation, not used in other
    ways. And I also think that budgets should be pushed back to
    where they are taken seriously, and they are meant to be
    serious, and not just political documents where the numbers
    don't add up.
        And ways to consider doing that is that if you have savings
    in your budget, you need to put them into reconciliations. You
    need to direct for them to have reconciliation to move those
    savings along so that they aren't just put there on paper and
    never used. And ending the amount of gimmicks that we have on
    these budgets, so there are heroic assumptions. There are
    timing changes. There are all sorts of spending that is assumed
    to bypass the caps, but plugging up those gimmicks would be one
    important tool in showing that budgets need to be taken
    seriously. And they are at the point now where they aren't at
    all.
        Mr. White. If I may, just a few points. One is that the
    original purpose of the reconciliation process in the original
    budget resolution was not simply to reduce deficits. There was
    disagreement about that. I am not saying that, at this point,
    given the current situation, I wouldn't support that, but
    sometimes, for example, you want an expansive fiscal policy, or
    you might want an expansive fiscal policy. And one of the
    original ideas was that reconciliation could be used for that.
    So we shouldn't talk about original intent here.
        I also think, I think the most ridiculous thing that is
    being done with reconciliations right now is the use of these
    $1 billion reconciliation instructions, which are ways to
    basically get around the Senate filibuster without actually
    having any fiscal policy or any policy involved. And so, if
    there is a way to ban these $1 billion reconciliations, I think
    that would be a good idea.
        The other thing I would like to emphasize is that it sounds
    nice to say that there should be agreement between--that the
    President should sign off on the budget resolution, but the
    budget resolution process was originally created in part
    because, you know, President Nixon and the Congress at the time
    did not agree on basic fiscal policy.
        And I have a hard time imagining what the budget resolution
    produced by Speaker Ryan would have been that President Obama
    would have signed. And so, I think it probably is better to
    view the budget resolution as something for Congress. Getting
    the House and Senate to agree is tough enough.
        Co-Chair Lowey. I misunderstood. I thought, in your last
    response, you were suggesting that the President get involved.
    I guess I misunderstood. I can't imagine bringing the President
    into the budget process now. We have enough trouble when we
    finish our work, but that is not here nor there. Did I
    misunderstand you? It seems your first----
        Mr. White. No, no, no. I think it is very optimistic to
    recommend, as the Convergence project does and as other people
    have, that the budget resolution be some sort of joint
    resolution that the President signs. I think that is going to
    be very, very tough.
        Co-Chair Lowey. Oh, we agree that it would be very, very,
    very, very tough.
        Mr. White. It would be great if you could get agreement,
    but I am not sure you can have a process that forces that.
        Co-Chair Lowey. Okay. I just wanted to be sure that I
    didn't misunderstand.
        Mr. White. Sorry.
        Co-Chair Lowey. Thank you very much.
        Co-Chair Womack. Representative Arrington.
        Representative Arrington. Thank you, Mr. Chairman.
        I must say, I find this panel, so far, the most helpful and
    most practical and most specific in getting at what I hope we
    can all agree to with specific strategies for a more timely,
    orderly process. And if we can be aspirational, I would like to
    get at some ways to improve getting to better outcomes, not
    necessarily--in a policy-neutral way.
        I think, let me start with the reconciliation process
    because it has come up. You say we shouldn't use the
    reconciliation for these $1 billion--and I agree, actually. I
    mean, I voted for the tax reform because I think we have got to
    grow the economy. And I think that is part of it. And I think
    we are going to more than cover the cost there, but,
    regardless, I don't think that that is necessarily the intent
    or a good pattern to enter in to.
        Why don't we use reconciliation for its intended purpose?
    And I will open that up to any of you. Why don't we use that
    for its intended purpose more often given that we are $21
    trillion and counting?
        Mr. Dauster. I think of the reconciliation bill from the
    Senate standpoint. And from a Senate perspective,
    reconciliation is a way to get a majority vote on something
    when the normal rule in the Senate is that you need 60 votes to
    go to the bathroom. So, it could be, it could be used for a lot
    more things than it is.
        But in the end, it ends, as you have said in earlier
    committee hearings, it often relies on the political will if it
    isn't there to put together the costly difficult things that
    you would have to put in the reconciliation.
        Representative Arrington. So, if that is the way to get at
    the 70 percent of the spend that we know is one part of the
    equation here to reduce deficit spending and debt and if we
    know that there are some really big programs within the
    mandatory side, why don't we use that reconciliation more
    often, Ms. MacGuineas?
        Ms. MacGuineas. Well, I think the problem is that what
    happens is to use that reconciliation usually means it is going
    to be one party that uses it, just by passing the 60 in the
    Senate. And for big fiscal improvements, you are going to need
    both parties to buy in. There is no way that we are going to
    get real deals, real progress, real improvements with one party
    owning all the hard choices.
        Representative Arrington. We couldn't even get the
    Republican Party on a simple majority to agree to $204 billion
    reduction using reconciliation during the tax reform. I don't
    know how in the world we are going to get--we have people in my
    party that won't even mention the word Social Security or
    Medicare when it comes to reconciliation.
        I mean, there are all kinds of ways to say it to avoid
    people thinking you are trying to take their Social Security;
    you know, making it more sustainable for my generation and all
    that. But I mean, isn't it always going to come back to, will
    we have the guts to actually take on some things that we know
    are going to send us into oblivion, into the debt crisis that
    will wreak havoc on generations to come, blah, blah, blah? I
    mean, please.
        Mr. Capretta. If I could just say one thing about
    reconciliation, which I think has been lost over the years,
    which is that it was quite true that it is used mainly to get a
    majority vote in the Senate these days. But in the eighties,
    because there was split government between--you had a
    Republican President and a Republican Senate and a Democratic
    House, it had to be bipartisan, and the theory of the Reagan
    Administration, why they pushed for reconciliation to be used
    frequently during that period, was you ended up with one vote
    where there was some positive thing a Member might be able to
    say about it as opposed to all the individual items. You could
    claim: Hey, if we pass this bill, it will reduce the deficit by
    $300 billion, $400 billion.
        And that was the impetus to try to put it all together into
    one package and say Congress was taking a very important step
    to reduce the deficit.
        You are never going to get deficit reduction of that
    magnitude if you try to pass a lot of little individual bills.
    They all get mired down in political controversy, and every
    committee wants to be budget-neutral. So that is really the
    main purpose of reconciliation.
        Representative Arrington. Each of you have mentioned the
    debt targets. I am all for that. I think it is policy-neutral,
    Mr. Chairman, as to how you get at the outcome. But I think
    having a glide path to something more responsible, how do we
    put teeth into that to make sure that whatever the strategy, we
    walk it back to a responsible level? And I yield back.
        Co-Chair Womack. Senator Whitehouse.
        Senator Whitehouse. Thank you, Chairman. I was struck by
    Chairman Womack's opening statement regarding the disinterest
    that we all see in the budget resolution. And I think one of
    the reasons for that is that the question, the budget
    resolution to what end, hasn't been answered.
        If the purpose is to create a reconciliation bill that is
    not even relevant to the fiscal task of the Budget Committee,
    which it has become recently--and it is hard to get too excited
    about that unless you are the proponent of the measure that is
    being driven through the reconciliation process--if you are
    doing budget resolution without a strategy or a timeline or a
    goal, it is hard to get excited about that as well. And I
    appreciate very much Mr. Capretta's focus on a target and
    getting there over time, because I think that is an important
    part of any serious budget fiscal process.
        It is also hard to get excited about a budget resolution
    where you don't even get the arithmetic right and add the
    elements that add to the deficit and the debt, which are
    revenue, appropriated spending, health spending, and tax
    spending. And if we are not looking at all of them, we are not
    even getting the arithmetic right.
        And, finally, if the budget resolution doesn't help the
    appropriators get their 302s and it doesn't help solve the debt
    limit problem, again, it is hard to get too excited about it.
        So, I think that gives us an array of tasks that can make
    the budget process meaningful again. And I want to particularly
    focus in my questioning on the debt ceiling because I think you
    have all been really excellent on that subject.
        As Bill Dauster was kind enough to point out, I view this
    as a zero-upside bear trap in the bedroom. Worst-case scenario,
    you step in the damn thing, and bam, now you have got a hell of
    a problem on your hands. Best-case scenario, you avoid it, and
    nothing good has been accomplished. That is not a really good
    equation.
        Bill, you have looked at this for some time. You have a lot
    of experience in the Senate. Can you think of one good thing in
    your experience that was accomplished in the Senate by virtue
    of the debt ceiling? Some people say it is an opportunity to,
    like, give the minority a chance to hold the majority's feet to
    the fire, demand something. Has that actually ever happened?
        Mr. Dauster. I am not going to be able to find that
    example. And, in fact, I think that you are right about, and
    many of you have expressed the concern with the debt ceiling.
    We carry around in our pockets little pieces of paper like this
    that are basically just promises based on the promise that the
    government is going to do what it says it is going to do in the
    budget process.
        Senator Whitehouse. Let the record reflect he is showing a
    dollar bill.
        Mr. Dauster. It could have been, though, a Treasury bill, a
    Treasury bond. If we have pieces of paper like that, we sell
    them for real money, real things of value in the world. But if
    we mess up the debt limit, then we have to pay people more in
    order to borrow from them by giving them little pieces of
    paper.
        So, whenever we do debt limit crises, we put in danger the
    whole system that relies on little pieces of paper like this.
        Senator Whitehouse. Let me ask you if you could get back to
    me in a response to a question for the record because I don't
    think we have the time to really drill into this now. But as I
    think my House colleagues will be first to recognize, the
    Senate is a peculiar place, and----
        Mr. Dauster. We will stipulate----
        Senator Whitehouse. And I think your idea about using the
    budget process to, quote, ``automatically change the debt
    limit,'' I think makes a lot of sense. But I think it would be
    helpful to us if you brought your experience in the Senate,
    with its procedures and with its parliamentary rules and so
    forth, to drill down through that automatically changed concept
    and see what kind of language you might, perhaps, even run by
    the Parliamentarian, and see how we would actually do that.
        I think that is a really good concept. And I think one of
    the things that makes the budget resolution relevant again is
    if it does move the debt limit so you don't have that bear trap
    waiting out there for you.
        But as you know, the Senate is a peculiar place, and if you
    could drill through to that, that would be, I think, very
    valuable for all of us.
        Mr. Dauster. I am happy to do so, sir.
        Senator Whitehouse. And to go back to Mr. Capretta's
    statement. You talked about setting a target for debt and
    deficit reduction over time. My observation has been that the
    current budget process, at least in the Senate, doesn't do
    that. There is no point in that process. We are asked to set
    what the target is. And I think every witness so far has agreed
    that the target is a debt-to-GDP ratio. Whatever the number is,
    that is the metric for it. And we are not asked that in the
    budget process at any point. And given that we are looking at
    $21 trillion, as Congressman Arrington said, we are not going
    to do that overnight. So there has to be a glide slope to get
    there, and presumably, there also has to be warning bells to
    let us know when we are off course.
        Is that the general concept that you had in mind about a
    target and over time?
        Mr. Capretta. It is generally. I would support that as a
    way of doing the business. I would also look at, potentially,
    present value calculation. That would be another way of
    bringing it down to one number that the public might be able to
    understand. Just have CBO----
        Senator Whitehouse. Or you do both.
        Mr. Capretta. You could do both.
        Senator Whitehouse. So, you can't game it so much.
        Mr. Capretta. Yeah. That is----
        Senator Whitehouse. Does everybody agree that debt-to-GDP
    is the metric that we should be looking at in terms of----
        Mr. Dauster. I would quibble on two grounds, if you will
    forgive me. One is----
        Senator Whitehouse. I am out of time, so keep it brief,
    Bill. I yield back.
        Mr. Dauster. You should be looking at the rate of change,
    not just the stock. So, deficits are just as important. Where
    you are going is important. And why you are going is important.
    If you had a high debt-to-GDP ratio and you are fighting
    Hitler, that is okay. But if you are not doing something
    important, then it is not.
        Senator Whitehouse. Got it.
        Co-Chair Womack. Mr. Sessions, Texas.
        Representative Sessions. Thank you. I want to ask a
    different question. 2011, 2012, 2013, 2014, 2015, 2016, we went
    through in this body and in the Senate, a process that
    essentially was CRs and essentially held discretionary spending
    flat. It produced a flat budget. It held government to making
    decisions, in my opinion, based on priorities. It refocused
    administration agencies, and it made them dig deep, in my
    opinion.
        It also caused, on the other side, some indecision about
    infrastructure decisions that we would make and deferred lots
    of decisions. So, some, I think, was good. Some, I think was
    deferred. What do you think?
        Ms. MacGuineas?
        Ms. MacGuineas. So, I thought the purpose of the spending
    caps would have been, would have been most effective if what it
    had done was pushed lawmakers to replace them with more
    thoughtful targeted changes to the budget that would have
    improved the fiscal situation. I thought the caps were the
    easiest thing to do because you don't have to specify what the
    savings are, and so it sounds like you are doing a lot work,
    but you are not picking the policies. There were some savings
    that were smart. There were some savings that were excessive.
        Now that we have gotten rid of the caps, and what we should
    have done is when we busted through those caps, replaced them
    with savings elsewhere, we no longer have that spending
    constraint. But we also have the problem where discretionary
    spending, which really hadn't been the driving problem in the
    budget before is about to be a big significant problem again.
        So, I would pick reasonable spending caps along with pay-
    as-you go rules. Reasonable meaning they are built from
    policies that you can stick to and you plan to stick to. But
    this time I would include the full part of the budget, not the
    part of the budget which at the time was the least, the least
    of the drivers of the debt.
        Representative Sessions. A hungry person will gorge
    themselves. A person that eats consistently may be able to
    offer some bit of disciplined in their eating and sleeping
        Ms. MacGuineas. That is right. You want budgeting
    constraint that is realistic. We want budgets that are
    realistic, and we want enforcement mechanisms that are
    realistic. And once we have things that are on paper add up to
    huge aggressive claims that we are never going to get, the
    whole process becomes impossible to stick by, and then there is
    no credibility to it.
        Representative Sessions. Mr. Capretta.
        Mr. Capretta. I think that the discretionary caps were
    useful for trying to drive a lot of productivity improvement in
    certain ways. I think they became counterproductive to some
    degree with respect to the defense budget. I think that there
    is pretty clear evidence that, you know, if you just look at
    defense over the nineties and to where we are today, given the
    security questions going on, it seems like it is not going to
    work to have the levels that were there previously. And so,
    something was going to have to give. And when you gave on that,
    you ended up giving on the other side as well. So that, I
    think, was the basic equation.
        Discretionary spending isn't necessarily the fundamental
    problem. There is lots of waste in it. It is very hard to
    target the waste. I think one idea that should be given more
    consideration is delegating to the agencies that are running
    these programs some more incentives to drive productivity
    improvements in their agencies so that they make the decisions
    to cut spending so that they can then spend the savings on
    bigger investments that they can find.
        So, you know, new models of running the agencies is
    probably a better answer than just blunt across-the-board
    cutting.
        Representative Sessions. I am not trying to give the answer
    for you, but I was out in Hawaii several years ago and met
    General Brown, United States Army, who spent a good bit of time
    trying to convince us that sequester was a difficult issue for
    the military. And I took 1 minute to suggest to him that I
    thought that the levels were fine, and we needed to give it to
    them October the 1st instead of March the 20th. And he got his
    head around that.
        So, I am not saying the answer I expected from you, but I
    think timeliness is the most important aspect to run the
    government.
        Sir?
        Mr. Dauster. I agree with a lot of what you just said and
    what the other witnesses have said. Make it early so that the
    appropriators can react to it and the government can react to.
    Make it rational and achievable, or else people will blow
    through it. But setting a cap is one of the best ways to get
    the agency to focus on achieving at savings.
        Representative Sessions. I think, no matter what the level
    is, timeframe of efficiency, of giving the government time to
    effectively take whatever they are is important knowing we
    probably won't go back, but they have got--meaning how much
    money, we probably won't take back a lot of money, but giving
    them time to effectively do it.
        Sir?
        Mr. White. If I may, there is a lot that could be said
    here, but I just want to emphasize that we should not assume
    that there is a lot of productivity that can be pulled out of
    our programs. It is not clear to me, for example, that the
    effect on the Social Security Administration of the kind of
    budget constraints it has faced is something that could have
    been solved by greater productivity.
        So, I think we have to be very careful about making these
    assumptions in any part of the budget.
        Representative Sessions. Well, I think you could just look
    to the VA. That would be exhibit A, to me, with the size. Thank
    you very much.
        Thank you, Mr. Chairman.
        Co-Chair Womack. Mr. Yarmuth of Kentucky.
        Representative Yarmuth. Thank you very much, Mr. Chairman.
        Thanks to all the witnesses. I have found the discussions
    very interesting, as all our discussions have been interesting.
        I want to focus a little bit on the issue of long-term
    budgeting. It seems to me that three of the four witnesses have
    said we should be doing that, and Mr. White takes a contrary
    position. I remember several years ago when Tim Geithner was
    the Secretary of the Treasury, and he came before the
    committee. And Paul Ryan was then chairman and had all of these
    40-, 50-year projections of expenses and so forth and
    increasing the deficits.
        And I asked Secretary Geithner, you know, how realistic do
    you think 40- and 50-year projections in a world that is
    changing as rapidly as this one is?
        And he said: I don't think projections outside of 5 years
    are worth anything.
        So, would you elaborate, Mr. White, on what your opinion is
    on the perils of longer term budgeting, and what you think may
    be a realistic timeframe that is viable and meaningful?
        Mr. White. Sure. It varies somewhat with the program. And
    you can do a better long-term focus for a pension program than
    you can for a healthcare program.
        Healthcare cost control is simply a year to year problem
    because the entitlement to healthcare is not simply to the
    beneficiaries. The reason our care is so expensive is we pay so
    much for everything we get.
        In other words, the providers are getting much more money
    here than in any other country, or the overhead expenses are
    much more than in any other country.
        And these are powerful important people who, if you try to
    reduce their incomes, they will fight you. And you cannot
    budget in the long run to control the costs that the medical
    community will generate because there are just no policies that
    will do that. So, healthcare cost control is a short-term
    problem. And it is problem for the whole country, not just for
    the government. And we really need to do much better on that.
        And that is the most important thing we could do for the
    long run of the Federal budget. If we got our healthcare costs
    down to something resembling the most expensive other country
    in the world, our long-term forecast would look a lot better.
        So, one, some programs are different from other programs.
    Social Security is different from Medicare and Medicaid. Beyond
    that, I think anything more than 2 years is probably a bad idea
    for discretionary spending because there is no--first of all,
    there is no good way to do the baseline. What is the baseline
    from which you start?
        The CBO baseline is usually, well, increased with
    inflation, but for some programs, that may be too much, but for
    a lot, it is too little. The population grows. You are serving
    more people. And so, I don't think there is any really good way
    to do long term.
        And I think that the most important thing you could do
    about the long term is get better control of the American
    healthcare system now.
        Representative Yarmuth. You also, in your written
    testimony, talk about the point that budgeting should be more
    about just aggregate totals of spending and revenue, that it
    has to be more about the policies that are reflected. And I
    totally agree with that. The American people deserve to know
    what policies will underlie the allocations that we are making.
        And I remember so well, Mick Mulvaney coming before the
    committee earlier this year. And he said: I could have come up
    with a balanced budget, but we would have been making stuff up.
    We would have been basically fabricating policy.
        And in prior Congresses, they have done the same. You
    arrive at a number, and then you say: Well, details are to be
    determined.
        What kind of details in terms of policies in the budget
    resolution do you think are appropriate?
        Mr. White. Well, I think that this obviously raises the
    question of which committees are going to make decisions about
    details. I think in the past when reconciliation has been used
    to reduce the deficit, which hasn't happened for a while, but
    when it did, what actually happened is that the leaders of the
    committee, such as Senator Dole in particular, told the
    leadership of the Budget Committee and so on: Hey, I think we
    can do this much. We have ideas about how we will do this much.
        I think it is in practice that there should be consultation
    with the leaders of the authorizing committees about: What do
    you think you can do this year? How much can you do? No, we
    need more.
        And, again, it is iterative.
        I don't think the budget resolution should specify the
    policy details. I think that the budget resolution, however,
    should be based on careful consultation about what details
    might work, about what totals might work.
        Finance Committee, what can you do here? Ways and means,
    what can you do here?
        And the budget process can push, the Budget Committee can
    push, and say: Hey, how about some of this?
        But that is all before the resolutions are adopted.
        Representative Yarmuth. Thank you.
        I yield back.
        Co-Chair Womack. Senator Ernst.
        Senator Ernst. Thank you, Mr. Chair.
        And thank you to our witnesses today. It has really--I
    agree with Congressman Arrington--this has been a very, very
    helpful discussion and debate this morning.
        I would like to start just by going back to having the
    budget as a joint resolution signed into law. And I know, Mr.
    White, you have expressed great concern there. It would be very
    difficult. But if the panel could go back and maybe, from your
    perspective, why would a--because a lot of our witnesses have
    brought this up in other meetings as well.
        But from your perspective, what would be a positive to
    having a joint resolution signed into law, and what might be
    the negatives of that same proposal?
        Jim, if you would like to start?
        Mr. Capretta. Yes. Back to the recommendation I made in my
    testimony. First of all, the recommendation I made was just to
    make the budget resolution the vehicle for spinning off a piece
    of legislation that would go to the President, that would amend
    the caps on discretionary spending.
        Mr. Capretta. So, it wouldn't be covering everything that
    would be going on in the budget resolution. I actually in the
    past have favored that. That may be a step too far for this
    committee to take, so let's just focus on the recommendation I
    had in my testimony today.
        If you put into the budget resolution the option that, at
    the end of it, if it was approved by Congress, a separate bill
    would go to the President, and he could sign or veto it, and it
    would change the caps on discretionary spending, this would get
    around the problem of a fake budget resolution, because the
    resolution would be setting caps that everybody would have to
    live with.
        And these would be the real caps. They wouldn't be the fake
    caps with $40 billion in reductions that nobody planned to
    actually enact.
        So that is one very big positive, I think, that this would
    become a real vehicle for really setting the caps, and it would
    be the caps that the President would also have to live with. He
    wouldn't be signing on to anything else.
        Now, some people have said, well, why do we want to bring
    the President into the budget. The President is in the budget
    process. The President, at the end of the day, is going to be
    in agreement or in disagreement around the total amount of
    discretionary spending. They will weigh in on that one way or
    another before the process is out. If you can get agreement on
    that earlier in the year, you are better off than later.
        Now, I am not guaranteeing this would lead to agreement
    right away. This could mean protracted negotiations like
    everything else. It could go on for months. But it would become
    a vehicle for trying to get that debate going.
        And by the way, if the President vetoed it, Congress would
    just go on like it already does. So, you wouldn't really lose
    anything by doing this.
        Senator Ernst. Yes, Joe.
        Mr. White. If I may, Senator, but that raises the question:
    What is the period of the caps?
        If the period of the caps is, say, 5 years, then next time
    it is time for a budget resolution, hey, we already have some
    caps. We don't need to enact a resolution to have caps because
    we already have caps.
        So, there might be an argument for, if you go to a biennial
    budget resolution, for having 2-year caps, and I think that
    would be responsible in terms of relating totals to details.
    But if the caps are for longer than that, then the argument
    that it is an incentive to pass a budget resolution no longer
    becomes true.
        Senator Ernst. Maya.
        Ms. MacGuineas. So, I think it is a perfect example of how
    there are pros and cons in all of these policies, instead of
    that it is just one simple answer. And I think Doug Holtz-Eakin
    testified before in a way that made it really clear and
    helpful.
        The benefit of is right now the budget doesn't have the
    force of law. It would be desirable if it did, it would be more
    meaningful, and it would strengthen the budget in guiding the
    entire process.
        The problem is how you feel about giving the President more
    power than he already has, because Congress should be able to
    take some of its power.
        And then I think the real issue is, where do you want those
    hard choices to come. Should they come at the beginning of the
    process, which they probably should, which is why I would, if I
    had to choose, go for a joint budget resolution, but it could
    make getting the process started much easier.
        And you want to have a backup plan so that if you can't
    come to agreement, you can still have revenue and spending
    levels that you can move forward with.
        Senator Ernst. Very good. I appreciate that.
        I have got less than a minute left, but I want to quick ask
    you, Ms. MacGuineas about, you mentioned mandatory versus the
    discretionary spending and greater transparency, having a look
    at mandatory spending at some point during that budgetary
    cycle. How would you envision that?
        Ms. MacGuineas. Yeah. Well, I absolutely think that you do
    need to budget in the longer term, you need to make projections
    and look at things in the longer term if you are going to make
    commitments for the longer term, which we do in programs like
    Social Security and Medicare. And there are a lot of important
    things that we need to be predicting going forward over the
    longer term, like things that are driven by demographics.
        So, the first key is absolutely increased transparency. We
    have very good work on this from the trustees of Social
    Security and Medicare, but having other ways that we really put
    forth the projections that these plans are on.
        Then the next step would be coming up with actual--if your
    programs are out of alignment, if we are making promises that
    we aren't able to keep, which we are doing right now, there
    would be some action-forcing mechanism where you would start to
    grapple with those.
        It would, as we have said throughout this hearing, be
    policy-neutral. It has nothing do with how you would fix these
    programs. It would be that we should no longer be able to
    abdicate the responsibility to look at programs where we are
    making promises without a plan for how to pay for them, and
    making changes to them sooner rather than later would
    beneficial.
        Senator Ernst. Thank you.
        I apologize, Chair. I yield back.
        Co-Chair Womack. Ms. Roybal-Allard.
        Representative Roybal-Allard. Thanks, Mr. Chairman.
        I want to ask a little bit different kind of question to
    see whether or not this fits into the equation as to what we
    are trying to do.
        You know, it is been mentioned that the congressional
    budgeting math doesn't match up with reality, that we should be
    looking at projecting outcomes further out to see what the
    impact is of our decisions, immediate decisions are, and how it
    impacts us in the future.
        And it was also mentioned that we had better get better
    control of our healthcare system, because that is something
    that is also contributing to our deficits now and in the
    future.
        The thing I am asking about is how we score things, for
    example, in terms of healthcare, the fact that we cannot score
    certain policies. And I will use healthcare as an example.
        For example, prevention, when the information we get says
    that if we invest in prevention, for every dollar that is
    saved, we eventually will save $12, sometimes $24. I don't
    remember the exact number. And so, because it is not scorable,
    at least that is what we are told all the time, we do more
    treatment policy rather than prevention policy.
        And so, I guess my question is, in terms of scoring, is
    there anything that you think could be done in terms of scoring
    so that the savings that we could realize, if we were able to
    invest more in prevention, would become a reality?
        Because right now every time we want to invest in
    prevention, we are told: No, we can't do this because it can't
    be scored and it breaks the budget caps or it goes beyond
    whatever restraints that we have.
        So, my question is about the scoring, if something can be
    done to include long-term savings.
        Mr. White. If I may, there are two issues here.
        One is the boundaries between discretionary and mandatory
    spending. So, if you increase discretionary spending this year,
    the question is, that runs up against the caps in discretionary
    spending. And yet, it is budgetarily sort of silly to let the
    caps stop you from doing that if it, in fact, will save you
    money on Medicare and Medicaid and so on down the road.
        And that would require some sort of changes in the rules so
    that mandatory savings, as scored by CBO, would be allowed as
    offsets against discretionary spending. You could do that by
    the rules within the caps.
        But there is a second issue, which is whether prevention
    actually saves money. And most of the time, CBO does not score
    prevention as saving money because most of the time it actually
    doesn't. The advocates will say it will, but finding data that
    actually supports that for most prevention measures turns out
    to be very difficult.
        And this goes back to Louise Russell's book 30 years ago
    on: Is prevention cheaper than cure? And prevention may, in
    fact, help, you may get healthier people from it, but most of
    the time CBO won't score it because they don't have the
    evidence to score it.
        So, there are those two different issues.
        Representative Roybal-Allard. Ms. MacGuineas, in your
    testimony you say that Social Security deserves a place in the
    budget process. And as you know, any time we mention doing
    anything with Social Security it raises a lot of red flags for
    a lot of different reasons.
        So, can you please elaborate a little bit on how you think
    Social Security should fit into the budget process? And how
    could we avoid some of the pitfalls that so many see whenever
    we even talk about Social Security in any way?
        Ms. MacGuineas. Yeah. Let me first agree and empathize that
    having a discussion, a national discussion about Social
    Security, is incredibly difficult because it becomes demagogued
    immediately, and you quickly move away from what the actuaries
    tell us to sort of threats of people trying to harm seniors or
    do this and that.
        That is about a national discussion. We are not having very
    good national discussions on a lot of things right now, and we
    need to change that tone and that tenor and the way that we
    talk about things. And that is why I do believe things like the
    trustees of Social Security, CBO, impartial arbiters, are
    really critical in all of these discussions.
        The reason I think Social Security needs to be a part of
    the budget, and, again, policy-neutral, we can fix Social
    Security all by revenue increases. We can fix it all by
    spending reductions. We can do it with a combination. It is not
    about how you fix it. It is that we have made promises that we
    are unable to pay right now. So, we do want to think about
    that.
        But it is also the point that budgets are about resources
    and how we are going to allocate them. And it is really
    important that, at some step, and that step should be the
    budget, we look at all of our resources in total, how they are
    allocated in the budget pie, and ask ourselves the question:
    Does that reflect our national priorities?
        And in most cases, I am sure it probably will, and that is
    a good thing. But we should not take pieces, big pieces of the
    budget off and say we are not going to look at them, because
    budgets can't look at the whole picture unless you understand
    all our tax dollars, where they are going, what the tradeoffs
    are.
        Everything with Social Security is controversial, but this
    shouldn't be. This is just a basic principle of how one should
    budget. And, again, it has nothing to do with outcomes. But we
    should fix the program. It has nothing to do with directing how
    we should.
        Representative Roybal-Allard. Okay. Thank you.
        Co-Chair Womack. Mr. Woodall.
        Representative Woodall. Thank you, Mr. Chairman.
        I agree with Ms. MacGuineas, everything with Social
    Security is controversial. But I suspect, now that more than
    half of the Congress got here when I did in 2011, or more
    recently, not a one of us has been asked a question about the
    1983 Social Security amendments. Not a one of us has been
    grilled over the increase in payroll taxes. Not a one of us has
    been grilled about the reduction in benefits.
        To Mr. Capretta's point, we did something that was going to
    take place 30 years later. We phased it in over a large period
    of time. And we all knew that, born in 1970, I am not going to
    get my Social Security benefits until 67 instead of 65.
        And I am vexed about how, to Mr. Dauster's point, how we
    get folks to focus that far out on the horizon. But I know it
    would require a reconstitution of the budget committee process.
    So many State legislatures, the budget committee, the
    appropriations committee, same committee. And so, I understand
    some of the recommendations for getting the President involved.
        Today it actually is pretty clear to me that we are
    performing three separate functions. I am doing aspirational
    goals in a budget to tell my bosses back home what I would do
    if only I were king for a day, which I am not.
        Then I do an authorization process to say: Just so you
    know, we can all work together, and these are all the things we
    would do for you if we had the money to do it, which we don't.
        And then I come along once a year and say: This is actually
    what I am going to fund, but don't forget about the really good
    authorizations I did for you and the really good budget that I
    passed for you earlier.
        And so, I don't think we can reject that political reality
    that those things play a role.
        So, I want to focus on appropriations, because that is
    where the rubber meets the road every year. And I have a letter
    from the CBO where they talked about how the fiscal year 2017
    appropriations were being spent.
        And, Mr. Chairman, I would like to ask unanimous consent to
    put this in the record.
        Co-Chair Womack. Without objection.
        [The information follows:]

        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Representative Woodall. What the CBO was asked is: What is
    that spend rate? Because we really do want to hold folks
    accountable. I think it was Mr. Dauster who said this is the
    only way I can get the administration to come back and visit
    with Congress day in and day out.
        And what the CBO found in this report--and I apologize if
    my colleagues don't have a copy of it--is that about half the
    money did go out in year one, but the other half of the money
    went out in year two, or year three, or had absolutely no time
    limit on it whatsoever, just went out whenever.
        So, my question for each of you in the 2-1/2 minutes I have
    left is, knowing that the spend rate is different, that folks
    are spending annual appropriations over many years out into the
    future, and knowing that that number is actually 50 percent of
    the money that is going out not in year one, does it change
    your expectation of what keeps the administration coming back
    to Congress?
        I want to stipulate that Article I is who I want to
    protect. Could I really move to biennial or triennial or some
    different cycle, given the spend rates that we see in
    appropriations today?
        Mr. Dauster.
        Mr. Dauster. I think that is an argument for annually
    appropriating, because then you go back and you see are you
    spending it where it needs to go. And if you aren't, then you
    can grab some of it back and use it somewhere else.
        Mr. Woodall. Now, I can only grab it back if I have an
    appropriate President who is willing to work with me on a
    rescissions bill. And if I have a President who is willing to
    work with me on a rescissions bill, then I don't need the club
    of appropriations to get the agency to come back and visit with
    me, is my expectation. So, I am thinking this is an adversarial
    situation that comes up most often.
        Mr. White.
        Mr. White. Well, I think what we are talking about here at
    some level is the difference between budget authority and
    outlays. And so, when Gramm-Rudman was passed, which focused on
    outlays, they had to have this massive negotiation among CBO
    and OMB staff to come up with spend-out rates for every
    program, project, and activity.
        Because if you are going to buy an aircraft carrier, it is
    going to take a very long time to spend the money for an
    aircraft carrier. And if you are going to build a road, again,
    you don't spend all the money on the road that year.
        On the other hand, there are things for which you spend
    money immediately, or it is sent out this year for next year,
    like support for education.
        And so most of what is going on in this situation is just
    the natural differences among types of programs. And I don't
    think that that will really have much effect on what you are--
    --
        Representative Woodall. Well, from an accountability
    perspective, my experience with the Department of the Navy is
    they are very interested in what I have to say when we are
    talking about buying that aircraft carrier. Once we have half
    an aircraft carrier, they are pretty sure we are going to get
    that second half down the road. The military contractors are
    pretty sure they are going to get that second half, too.
        So, I know we are all worried about what happens with the
    appropriations cycle. I am just not an appropriator, trying to
    understand how that mechanics work.
        Mr. White. Well, I think that they are worried about
    getting the budget authority in the first place. And if they
    get the budget authority for the aircraft carrier and they
    screw it up, then maybe there is a possibility you won't give
    them another aircraft carrier.
        Representative Woodall. I see my time has expired, Mr.
    Chairman. I yield back.
        Co-Chair Womack. Mr. Kilmer.
        Representative Kilmer. Thank you, Chairman.
        And thanks to all of you for being with us.
        You know, there is a lot of conversation about carrots and
    sticks. And, Mr. Dauster, I wanted to get a sense from you
    regarding what sort of positive incentives could be put in
    place to encourage bipartisanship and sound budgeting. You
    raised the notion of a fast track, and I am not entirely clear
    what that looks like.
        I guess I can see how you could create an incentive in the
    Senate to act in a bipartisan way if it gets around vote-a-rama
    and filibusters and all that. But why would a majority in the
    House be incentivized to go that route when they can do
    whatever they want with 218 votes?
        Mr. Dauster. I should say that I pray every morning for
    humility and sometimes it takes. So, I should say that I am not
    an expert on House procedures and I shouldn't pretend to be.
        I want to agree, though, with what you said in an earlier
    hearing, that often when Congress puts a gun to its head it
    pulls the trigger. And so, if you are putting in sticks in the
    progress, you want to make sure that you are willing to accept
    those sticks. So, I am much more of a carrot person.
        And I think that from the Senate perspective, the
    particular carrot that works best is to create an opportunity
    for a fast track where you are able to move something quicker,
    with fewer amendments, and get it done.
        And the cost for that is often you need a supermajority in
    the committee or a deadline to produce it before X date in
    order to get the right to use that fast track.
        Representative Kilmer. If you or others have thoughts about
    how you could get the House to buy into that approach, I would
    value it, because we have been trying to think about what
    carrots might look like.
        Maya, you have spent a lot of time working on these issues.
    And I know one of the reasons that you are as vocal on this is
    that I don't think Congress is going to do anything on this
    issue unless the American public demands it. And to me, that is
    part of the appeal of the Fiscal State of the Nation idea, to
    try to drive some conversation around budget deficits and our
    Nation's debt.
        Can you talk about how you see that having some potential
    value?
        Ms. MacGuineas. Yeah, I really do. And one of the things
    that I really like about something like the Fiscal State of the
    Nation is that it is not hard to do, there is nothing that is
    hard about it, but it could start this positive process.
        Because, I agree with you, nothing is going to change
    unless you all go home and feel like your voters actually want
    you to make some of these hard choices. And that has to be a
    stronger sentiment, that they enjoy you giving away lots of
    things, not paying for them, and fighting with each other.
        But the public will not make that change on their own. That
    will ultimately only come from political leadership. And so, we
    have got a little bit of a catch-22.
        I think the best thing to do is give people information,
    give you all, the political leaders, and the President
    information, and insist that it be shared in a way that this is
    the effect of our budget.
        Another idea I was thinking about when I was listening to
    you all talk is, at the end of the budget cycle we should
    actually look back and see how much you stuck with your budget
    and how that played out.
        But the biggest piece of it is sharing the information in
    terms of the longer-term issues, what we are facing, what the
    effect it would have from our political leaders, and then that
    will create an understanding.
        CBO, all you have to do is read a CBO document and
    understand how real this is. But finding a way to share that
    with voters who are dealing with a lot of things that affect
    their lives personally will help them be able to support the
    hard choices that you know you need to make that are hard to
    make.
        Representative Kilmer. You also put in your testimony, you
    called out the value of establishing the discretionary spending
    allocations earlier in the process. I tend to agree with that
    because until there is agreement on the 302(a)'s, the
    appropriations processes kind of churn without real progress.
        So, can you talk about, maybe elaborate a little bit about
    why you think that can help reduce some of the friction in the
    budget process?
        Ms. MacGuineas. Well, I think one of the most important
    thing is to end crisis budgeting. Right now, things only get
    done when there are action-forcing moments, and those things
    are almost always suboptimal. So, you want to put a way in the
    process where we know that we are not going to have shutdowns,
    where these things will move more smoothly, but also they are
    attached to some of the bigger choices.
        So, what you want to do, I think, on the appropriations
    part, is find a way where you know you can set the numbers that
    appropriators will be able to start doing their work, but not
    as an excuse not to do the full budget.
        For instance, right now, when we have 2-year budgets in
    place, you hear people already saying: Well, we don't need to
    do a budget. We don't want that to be the outcome.
        So back to the tradeoffs, like there are with joint
    resolutions, you want to get those numbers on early and people
    can make their decisions so that we are not doing the last-
    minute budgeting, which really leads to poor outcomes. We have
    many examples of that recently. But we don't want it to be an
    excuse to drop the rest of the budget process.
        Representative Kilmer. All right.
        Thanks, Chairman. It looks like I am out of time. I yield
    back.
        Co-Chair Womack. Senator Schatz.
        Senator Schatz. Thank you, Mr. Chairman.
        Thank you to all the testifiers. Great conversation so far.
        First, a comment about the purpose of this committee on a
    bipartisan basis. The problem that we are here to try to solve
    is CRs, shutdowns, debt ceiling, a lack of the regular order on
    the budget and appropriations process.
        The problem we are not here to solve is long-term solvency
    of the Social Security Trust Fund, Medicare, and Medicaid. That
    is for another day, and that is sort of outside of our ability.
    I mean, remember that the statute that enables this committee
    is supposed to provide something to both houses for an up-or-
    down vote by the end of the calendar year.
        And so, although all of those conversations are
    interesting, and I am tempted to engage with you, Ms.
    MacGuineas, about Social Security, I will resist that
    temptation.
        But actually, that illustrates my point, that we want to
    make sure that we calibrate our ambitions so that what we do is
    what is possible this year and we don't have an academic
    discussion that either goes completely sideways by the end of
    the year or ends up becoming a partisan conversation.
        If all this committee did was get us on a path towards the
    regular order, maybe by eliminating the debt ceiling as a
    weapon, maybe by rationalizing the budget process, that would
    be a tremendous accomplishment. We don't have to fix the
    country at this table in the next 6 months. We should just get
    ourselves on a path to do so.
        So, along those lines I am going to talk about some small
    things, what I think are small things. The 1974 Budget Act
    provides that the President is required to submit a budget by
    the first Monday in February, and then 6 weeks later the
    committees are requested to submit their views, and then the
    Budget Committee is supposed to act by April 15.
        I guess my question is, at least as long as I remember
    paying attention to politics in this town, we always ignore or
    reject the President's budget. And to the degree and extent
    that this committee is literally about asserting our Article I
    authorities, our constitutional prerogatives, I guess I am just
    wondering why we need a President's budget at all.
        So, it is in certainly direct contradiction from your
    proposal, which would actually elevate and make meaningful the
    President's budget, and then we have to make our own, and then
    it is subject to signature or veto.
        My view is, if what we really think is the executive
    proposes and the legislative disposes, why don't we just go
    ahead and move quicker and take out that one step, because I
    think from a timing standpoint, in addition to aligning the
    fiscal and the calendar year, those are just kind of some minor
    tweaks that would allow us to sort of get to business right
    away.
        And I will just go down the line.
        Ms. MacGuineas. Okay. So, I would say, by all means, the
    process should start earlier. There is nothing wrong with
    changing the calendar.
        There are some good things to be said for the President's
    budget. One is that it is important to understand from the
    executive branch the statement of values. And two, there is a
    lot of good policy work that goes into it. So, if you read the
    fine print, there are a lot of ideas you can pull out and use
    that are very helpful.
        But I think recognizing that the beginning of the real
    process is Congress' budget makes sense.
        Senator Schatz. Okay. That is fair. That is fair. So we can
    still have a process.
        Ms. MacGuineas. You don't need to wait.
        Senator Schatz. But there is no reason to start the clock
    upon receiving the Pres budg.
        Ms. MacGuineas. I would agree with that. Right.
        Senator Schatz. Okay. Mr. Capretta, go ahead and disagree
    with me.
        Mr. Capretta. Well, that is okay. First of all, a longer-
    term perspective would show that Presidents' budgets have had,
    in past times, depending on the political circumstances, a lot
    of influence. So, 1981 was not 2018. Neither was 1993 or 1997.
        So sometimes in our history Presidents' budgets have been
    very consequential, so I would be careful about just saying we
    don't need this.
        I would also agree with the point that there is lots of
    detail that is very important. The appropriators would never
    agree to get rid of the President's budget, because it is
    chockfull of detailed information about what is really going on
    at the account level that they need to then write the
    appropriation bills.
        Senator Schatz. Right. But maybe we don't, I am serious,
    maybe we don't need to call it a budget if it is really not a
    budget and it is not the basis for our budget.
        Mr. Capretta. Well, a lot of people would disagree that it
    is not a budget. But, anyway, I think it depends on the
    circumstances.
        Senator Schatz. Mr. Dauster.
        Mr. Dauster. I am going to bring my recollection of working
    at the end of the Clinton administration in the White House,
    and the budget was a useful document to get the rest of the
    government to pay attention to what the President wanted to be
    done.
        The OMB has to organize the government to be reactive to
    the administration's priorities, and for that purpose alone it
    is a very useful thing.
        And I agree with what was said earlier as well.
        Mr. White. Well, I think, first of all, remember the basic
    problem is to relate details to totals. And so long as the
    President doesn't have too many magic asterisks, the
    President's budget does create a template that does sort of do
    that and that you can then work off of in other directions.
        I think that, again, so long as OMB actually has enough
    staff and isn't doing all sorts of other stuff, it provides a
    review, a scrubbing of the estimates, which is also useful to
    the appropriators.
        Somebody once told me that the National Cancer Institute
    direct pass-through budget is totally useless because it is too
    big and you don't know what to do with it. So, the Presidential
    scrub is useful on appropriations. The President's budget gives
    a template, if he doesn't lie too much, about fitting totals to
    details.
        And the last thing the President's budget does is it gives
    an ability to pass on blame. So, if the President proposes
    something and it is unpopular but you sort of want to do it
    anyway, you say: Hey, it is his idea.
        And if the President proposes something and it is unpopular
    and you don't want to do it, then you say: Okay, we are going
    to go cut something else, and the people we cut will be really
    angry at us, but then we have the people we saved from the mean
    old President's budget.
        So, the President's budget is partly about blame allocation
    and serves some useful purposes for Congress in that.
        Senator Schatz. I don't think we need another mechanism for
    blame allocation.
        Mr. White. Avoidance, blame avoidance.
        Co-Chair Womack. Thank you, Senator.
        Senator Hirono is on her way back from a vote, so we are
    going to hold this hearing open for a few more minutes waiting
    on her re-arrival.
        I do have a question, though. And while we are waiting on
    her, if anybody else has a question, we will take those as we
    can.
        There has been a lot of discussion about the appropriations
    piece of this whole process. I have a theory, and I am an
    appropriator, that once we do appropriations work, once we have
    302(a)'s and sub-allocations and we actually complete our
    appropriations process, the Appropriations Committees,
    certainly the subcommittees, are finished. They don't do a lot
    more. At least that has been my experience.
        Would an appropriations process that would scan longer than
    an annual process open up the opportunity for more and better
    oversight?
        Anybody.
        Mr. Dauster. I think some of your best oversight is when
    they have to come in and talk to you about the budget, though.
    If they don't have to worry about the budget or about being
    funded, they are going to be less concerned with the oversight.
        Mr. White. Yeah, I guess the question is, if they have some
    time to do more work--obviously, most of the work, sorry, is
    done by the staff, right? It is like being a student. There are
    these really heavy periods and then these slower periods. And
    they, unlike you, don't have to go back and talk to the public,
    and so they have some time which could be used studying and
    learning more about the agencies, in theory.
        I am not sure. Biennial appropriations would just get less
    attention, and I don't think it would give extra time that
    would really be helpful, my perception from the years I have
    spent looking at the Appropriations Committee. But really that
    is more sort of the Members' judgment as to what could be
    better accomplished.
        Co-Chair Womack. Mr. Capretta.
        Mr. Capretta. Yeah. I think that it is possible that not
    spending so much time on appropriations could free up more time
    for the Congress to do other things in various ways, not just
    the appropriations subcommittee.
        I think the real question is that Congress, I think, needs
    to spend a lot more time doing oversight work of mandatory
    spending, too, frankly, that there is lots of detail going on
    in the mandatory spending side, where the money is going out
    the door without any annual appropriation, where a little more
    scrutiny would be helpful.
        Some of these programs have a big label on it and there are
    15 things going on below the surface, and not a lot of Members
    of Congress, I think, understand that.
        And so, looking at military pensions and all the things
    that go on with that, looking at the entitlements in the
    Veterans Affairs area, looking at even Social Security and, of
    course, Medicare and Medicaid, they are big programs. They are
    spending literally hundreds of billions of dollars. More and
    more oversight of what is really going on in those programs, I
    think, is most useful.
        Co-Chair Womack. Maya.
        Ms. MacGuineas. Yeah, I agree with Jim's point in terms of
    where the oversight is most lacking.
        There is actually a lot of good evaluation that goes on of
    a lot of our discretionary programs. It is not worked into the
    budget process probably as much as it should be.
        But where I think we need to be spending more time is both
    on oversight of the big mandatory programs, and also,
    thinking--and this is again why I think the long-term is so
    important--thinking about not just where our resources should
    be right now, but where they are going to need to be.
        And when I look at the world in the next 10, 15 years, one
    thing I am pretty certain of is we don't understand how our
    economy is going to look, with the future of work, with
    technology, with AI. These things are changing dramatically.
        And somewhere in the budget process you also want to be
    really working in the time and space and thought for evaluating
    how we want our budget to help the whole country move forward.
        So, there are a lot of things we need to use extra time for
    more of, and I would focus on some of these big, big, thorny
    issues and evaluation of the big programs.
        Co-Chair Womack. Senator Hirono, welcome back.
        Senator Hirono. Thank you very much for holding this
    meeting opening.
        And I want to thank all of you.
        As we sit here, be honest with me, all of you, whatever we
    come up with, unless there is the political will to do it, is
    for naught, right? So that is the thing.
        I mean, to me, I would like to lay out some parameters so
    that we have something to shoot for. It is sort of like the
    Constitution, there are ideals exemplified in the Constitution.
    One hopes that we can work toward those ideals.
        But I just don't know what it is going to take for the
    political will to actually abide by whatever we come up with.
    But that doesn't mean that we shouldn't make an attempt.
        So, I do have a question for you, Mr. Dauster. You have
    been around for quite a while, and you have been through myriad
    debates about drafting of and living with budget process reform
    legislation. And I think you said that you are more of a carrot
    person than a stick person.
        So, of all of the various processes and reforms that you
    have seen enacted during your time on the Hill, which were the
    most effective in your view, and what made them effective?
        Mr. Dauster. Thank you, Senator. I agree with your general
    introduction. You want to try and do the best possible, but no
    more.
        The one that I enjoyed the most or I thought was the best
    change was in 1990. We were coming out of a fixed deficit
    target regime under Gramm-Rudman, and we changed that to a cap
    and PAYGO system, where you make the people who do the deed
    responsible for what they do.
        And so, I think that was the direction of change that makes
    the most sense: Make your process punish the people who do the
    thing that went wrong. Don't punish everybody.
        Senator Hirono. I think that the PAYGO system--which we try
    to abide by. I mean, that is one that we usually try to come up
    with, how we are going to pay for whatever changes we are
    making.
        Now, I think, Ms. MacGuineas, and maybe some of the others
    of you, talked about how transparency is really important and
    that we don't really spend a lot of time especially educating
    the public, much less Members of Congress. But we do have many
    more opportunities to find out what the ramifications of our
    processes are and our appropriations, et cetera.
        But where does the public understanding of all of this come
    into play? And what role could conveying more information to
    the public play in informing the kinds of actions that Congress
    takes?
        Ms. MacGuineas. I do think it is critical--and we have
    talked a bit about the Fiscal State of the Nation or other
    approaches like that, which I am a big supporter of--I think it
    is more critical now than it is ever been. Because, frankly,
    when you talk about budget process and all the different terms
    that you all are familiar with, they are not just meaningless
    to the public, they are alienating.
        And it is just another example of kind of a language where
    Congress is using something where your constituents don't
    understand what you are talking about. And I think it leads to
    the frustration and just throwing your hands up with
    Washington: I don't even understand what they are talking about
    and it makes me feel not a part of the process.
        So, I think transparency is really important. I also think
    simplifying the process in ways that it can be conveyed to
    people is really important.
        And to your first point, I think everybody agrees, I know I
    certainly agree, that there are a lot of aspirational things
    that you want to do on this committee. But the best things that
    have worked in the past is when members of different parties
    and different bodies have gotten together and come up with
    something.
        So, again, I will kind of end with where I started, which
    is getting something done is one of the key things. And if you
    take a small step here it can really lead to something.
        Senator Hirono. I agree that getting members of both
    parties to buy in, maybe one of the ways structurally we can
    encourage that, is for the chairs and the ranking of the
    authorizing committees to be members of the Budget Committee,
    because that is not what happens now.
        Anybody want to respond to that?
        Mr. Dauster. I definitely think that makes sense. Senators
    Inouye and Kassebaum were advocates of that back in the day.
    And it would get more buy-in.
        The only problem is you have members of the Budget
    Committee right now who view their membership as a thing of
    value. That is why I would argue as openings come up----
        Senator Hirono. I don't know. Have you talked to Senator
    Whitehouse recently?
        Mr. Dauster. As openings come up, and there may be more
    openings, give the other chairs a first right of refusal to
    join in and sort of move to a place where you have the chairs
    and rankers, not all members.
        Mr. White. I think it is important not to--there are two
    different things being talked about here, right? One is, what
    would make the budget process itself get better attention and
    so on and more buy-in? And the other is what to do about the
    process of changing the budget process. And I think that quite
    possibly making up the Budget Committee from chairs of other
    committees might make sense.
        But I don't think anything is going to really get the
    public's attention in a positive way. I think people are always
    blaming public distrust of government on whatever it is about
    the government that they don't like. And whether the public
    actually cares about any of this stuff, or many members of the
    public, seems quite questionable to me.
        And for transparency to matter people have to be willing to
    look. And we can try to propagandize the public by coming up
    with a statement about our fiscal future, but somebody is going
    to write that statement. And whoever writes that statement,
    there might be some arguments about the way they write that
    statement.
        So, I would like to provide much more information. I am not
    sure I would disagree with CBO writing a statement maybe.
        But I really think that, at least for the current purposes,
    focusing on what could be done about the budget process would
    do a little bit of good. This year, sort of along Senator
    Schatz's lines, that would feel nice, to have something nice
    happen.
        Senator Hirono. Well, if we can automatically increase the
    debt ceiling, that would be a very positive thing as far as I
    am concerned. But this is why the Fiscal State of the Union may
    be a really good way to educate.
        You know, I don't expect the public to understand what is
    going on, et cetera, but at least you give them a tool that
    they could look at, not to mention all of us.
        And I think my time is up. So, thank you.
        Co-Chair Womack. Thank you, Senator.
        Ms. MacGuineas, Mr. Capretta, Mr. Dauster, Mr. White, thank
    you for appearing before this committee. Very interesting
    discussion that we have had today.
        I would like to advise members that they can submit written
    questions to be answered later in writing. Those questions and
    your answers will be made part of the formal hearing record.
    Any member who wishes to submit a question or any extraneous
    material for the record may do so within 7 days.
        I think it should be noted that our ability to sit in here
    today and have the conversations that we are having, those
    privileges are secured by the hardships and the sacrifices made
    by people that we will recognize on Monday, Memorial Day.
        It is my hope, as chairman of this committee, co-chair of
    this committee, that each and every one of you have a great
    Memorial Day weekend and reflect on the sacrifices made by the
    men and women who give us this outstanding privilege.
        And with that, this hearing is concluded.
        [Whereupon, at 12:25 p.m., the committee was adjourned.]

    MEMBERS' DAY: HOW TO SIGNIFICANTLY REFORM THE BUDGET AND APPROPRIATIONS
                                    PROCESS

                                  ----------

                            WEDNESDAY, JUNE 27, 2018

                              House of Representatives,
                          Joint Select Committee on Budget and
                                 Appropriations Process Reform,
                                                       Washington, D.C.
        The Committee met, pursuant to call, at 9:11 a.m., in room
    HVC-210, Capitol Visitor Center, Hon. Steve Womack and Hon.
    Nita M. Lowey [co-chairs of the Committee] presiding.
        Present: Representatives Womack, Woodall, Arrington, Lowey,
    Yarmuth, Roybal-Allard, and Kilmer.
        Senators Perdue, Ernst, Whitehouse, Bennet, and Hirono.
        Co-Chair Womack. The hearing will come to order.
        Good morning and welcome to the fourth public hearing of
    the Joint Select Committee on Budget and Appropriations Process
    Reform: Members' Day.
        This select Committee is focused on ensuring Congress can
    fulfill the most important and essential role described under
    Article I of the Constitution, the power of the purse. Long
    before our Committee was formed in February, there was
    bipartisan agreement throughout the Capitol and across the
    country that the current process for completing this basic
    function of government is in need of substantial improvement.
    That agreement led to bipartisan, bicameral support for the
    creation of this panel as part of the Bipartisan Budget Act of
    2018.
        This Committee of 16 members has already spent a lot of
    time building consensus on some of the problems and conducted
    three previous hearings to consider solutions. Today's hearing
    gives members who know that budget and appropriations reform is
    necessary the opportunity to participate in this essential
    work. This hearing is meant to engage all Members of Congress
    from both sides of the aisle and both ends of the Capitol and
    solicit their ideas for possible reforms to improve the current
    process. We believe doing so is key to our continued efforts
    and eventual success.
        I am encouraged by the level of interest and participation
    from those testifying in person and those submitting statements
    for the Committee's consideration. We are grateful for your
    input and your ideas.
        We are particularly excited to welcome some of the House
    leadership. Speaker Paul Ryan, Democrat Leader Nancy Pelosi,
    and House Democrat Whip Steny Hoyer. Thank all of you for being
    here.
        And thank you to everyone for joining us and offering your
    valuable perspective. We are eager to hear your ideas.
        And, with that, I want to yield to my friend and co-chair,
    the gentlelady from New York, Nita Lowey.
        [The prepared statement of Steve Womack follows:]
    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Lowey. Well, thank you. And welcome to our
    Members' Day hearing where we will hear from Members of the
    House and Senate about what should be done to improve the way
    Congress handles budget and appropriation matters. There is no
    shortage of complaints about the budget process. Budget
    resolutions are often adopted late or not at all. Budget rules
    are routinely waived.
        All too often, appropriation bills don't get enacted until
    the fiscal year is well underway, creating major uncertainties
    and problems, and appropriation bills get encumbered with all
    sorts of extraneous legislative riders, which contributes to
    the controversies and delays.
        Changes to the budget process might help reduce some of
    these problems, and that is our task here. For example, we need
    to find a way to get agreement on appropriations top lines
    early in the year so that the appropriators can get to work
    filling in the details. We need to find a better way to deal
    with the debt ceiling, a law that serves no useful purpose but
    invites brinksmanship that threatens our Nation's credit rating
    and the health of our economy. And we need to find a way to
    make our budget resolutions more effective tools for
    formulating and carrying out budget decisions.
        But there are also limits on what can be accomplished with
    rules changes. Flawed rules and procedures aren't the root
    cause of much of what people complain about in budgeting.
    Rather, the root cause often lies in deep divisions over
    policy, combined with misplaced priorities, partisanship, and
    polarization. We need to find ways of alleviating those as
    well.
        It is gratifying and encouraging to see the number of
    Members participating in this hearing. And we are particularly
    honored to have with us the Speaker of the House as well as the
    Democratic leader and the Democratic whip. I look forward to
    everyone's testimony.
        Thank you.
        [The prepared statement of Nita Lowey follows:]
        [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. Thank you, Ms. Lowey.
        With several Members testifying today, we have a long
    morning ahead of us. Therefore, before we begin, I would like
    to inform Members that we plan to take a brief recess at about
    10:30 this morning so that you can check email, make phone
    calls, and take a comfort break.
        As a reminder, Members will have 5 minutes to give their
    oral testimony, and their written statements will be submitted
    for the record. Additionally, members of the Committee will be
    permitted to question the witnesses following their statements.
    But out of consideration for our colleagues' time and to
    expedite today's proceedings, I would ask that you keep your
    comments very brief.
        I would like now to recognize our first witness of the day,
    the Speaker of the House, Paul Ryan from Wisconsin. We
    appreciate your time today.
        It is no surprise to anybody on this panel or those
    watching that you have an interest in this process, that you,
    perhaps more than any person on Capitol Hill and, indeed,
    throughout the Nation, know more about this process and about
    the budget and appropriations process than virtually anybody.
    So, your testimony is critical to the outcome that this
    Committee will achieve sometime later this year.
        We have received your written statement. It will be part of
    the formal record. You have 5 minutes to deliver your oral
    remarks. And the floor is yours, Mr. Speaker, with our thanks
    for being here.

        STATEMENT OF THE HON. PAUL D. RYAN, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF WISCONSIN

        Speaker Ryan. Thank you very much, Chairman. I have never
    actually had my remarks ever time-limited since I have had this
    job. So, this is going to be a challenge here.
        Co-Chair Womack. Yeah. No magic minutes around here.
        Speaker Ryan. Exactly.
        So, first of all, it is a wonderful to be here. I can't
    tell you how excited I am about the fact that this Committee
    exists. Obviously, I had a big hand in making sure that this
    occurred. I want to thank you, Co-Chairs Lowey and Womack, for
    doing this work. I am going to stick with some of my written
    testimony. Then I am going to go off the cuff.
        As you know, I chaired the Budget Committee, chaired the
    Ways and Means Committee. I have spent basically my adult life
    working within the 1974 Budget Act and the budget process. So,
    I have a great deal of background in this area. And I think
    that this panel is so urgent at this time.
        As things stand, I think we are basically falling well
    short of our tasks. We continue to fail the taxpayer. Worse, we
    continue to set ourselves up for failure with the way the
    budget process works these days. And it is obviously clearly
    time for a new approach. And I think I can feel comfortable
    speaking on behalf of Republicans and Democrats in saying that.
    So, because I have this background, I just want to basically
    give you a sense of my perspective on this.
        Whenever, you know, there is a new Speaker, there is hope
    for a new process. Members clamor for more influence, more
    input. I experienced that. I came in, not running up the
    leadership ladder but up the Committee chair ladder, wanting to
    decentralize power in this place, empowering the Members. I
    have got to say the way this budget process works effectively
    is it centralizes power too much in this institution.
        We do not have a decentralized power structure here. We
    have a centralized power structure here that is not fair to
    Members of Congress, their constituents, and the taxpayers.
        So, the way I look at this, the budget and appropriations
    process, it starts with good intentions. It has a good
    foundation. You have a tight timeline. Even under the best
    circumstances, that tight timeline leaves no room for detours.
    Invariably what happens now is the process seizes up, and not
    long after, the whole thing falls apart. And as a clock ticks
    down, final decisions are kicked up to leadership, and that
    kicks back to final numbers--a final product that Members find
    unsatisfactory.
        And we sit in these rooms, the four corners, so to speak,
    and look over $1.3 trillion, for example, and make decisions
    that ought to be made by the Members who spend all of their
    time on the Committees doing the research, doing the oversight.
    They are the ones who should be making these decisions. So, we
    do not have a functional process, and it is--the power is too
    concentrated.
        So, I would even say calling this organized chaos is too
    generous a description. And so, to me, all of these omnibuses
    and these continuing resolutions, they are a little more than
    local anesthetics. It is like an anesthesia, but the pain goes
    away, but the problem doesn't go away. And it just feeds on
    itself, fueling pessimism on all sides. Members become less
    engaged. The public becomes more disenchanted. And with each of
    these stumbles, with each new year, we are handing over more
    spending decisions to the executive branch.
        So, I see this as a squandering of our institutional duties
    of oversight. I see this squandering the talent we have among
    our Members on the Committees or jurisdiction, like the
    Appropriations Committee. And more fundamentally, it is an
    abdication of our critical power of the purse for the
    legislative branch of government. So, I am one of those people
    who is--I see the glass of life as half full. I an unapologetic
    optimist. And I do believe we can solve tough problems, even
    this one. And that is why I am encouraged at what you are doing
    here.
        The reforms that we need I think are bold, but I think they
    are right in front of us. I think some of the ideas we have
    been talking about for years, they are ready; they are time to
    do it. And, you know, the way I look at this thing is we may
    not be able to change the deadlines, but we can change the
    calendar. Looking at what we are doing right now and look at
    the entire appropriations process. How many of you--and I ask
    Senators here. I see, you know, just a couple. How many of you
    think the Senate is ever going to again do 12 appropriation
    bills, separate appropriation bills, 12 conference reports,
    before the fiscal year? Not going to happen. Let's just get on
    with acknowledging that and come up with a process so we
    actually go back to regular order on appropriations.
        And this is why I ultimately think the best idea of all the
    ones that we have been looking at--and I have done hearing
    after hearing after hearing, 8 years at the Budget Committee as
    either ranking member or Chairman, Ways and Means chair. I
    think biennial budgeting is the smartest way to go. And I think
    biennial budgeting has great bipartisan roots. So, it, to me,
    offers a path to rewriting the process, not just reforming it.
    It makes budgeting an ongoing process instead of all these
    demoralizing fits and starts that we have. It brings renewed
    transparency and accountability, and it sets us up to be better
    stewards of taxpayer dollars.
        There are a lot of different proposals I have seen on
    biennial budgeting. I myself have introduced multiple
    congresses the Biennial Budgeting and Enhanced Oversight Act. I
    think the recent--and this really takes a lot of Senate
    involvement. The recent proposal by Chairman Enzi makes a lot
    of sense to me. Do six appropriation bills 1 year, six
    appropriation bills the next year. So, you are appropriating
    every year, and you are doing it in a workload that is doable.
    And you have biennial budgeting on top of that with
    reconciliation instructions. And I think it is not too much to
    ask for the way the Senate works to do six this year and then
    six the next year. That, to me, is probably one of the best
    ideas I have seen. I don't think this violates any partisan
    issue. This isn't an ideological thing. This is just, how can
    Congress work better?
        The way I look at this, if properly implemented, this will
    empower Members to do a deeper dive on the most troublesome
    issues, and it will enhance their ability to oversee the
    executive branch. I think it will reinvigorate Member
    participation. It will encourage actual conference Committees
    and actual conference reports on individual appropriation
    bills. And I think it will also enhance the importance of
    reconciliation.
        In 2013, Patty Murray and I got together as budget chair,
    and she was--as budget chairs, and we put together a 2-year
    deal. Then John Boehner and President Obama put together a 2-
    year deal. And then we just recently put together a 2-year cap
    deal.
        So, we have sort of demonstrated that we can put together
    2-year deals, 2-year spending cap deals that work. But now we
    want to have, I think, an appropriations process that follows
    that kind of a track.
        So, the way I look at these things is take a look at the
    record we have. I am just going to read from my notes here.
    Last fall, the House passed all 12 appropriation bills on time.
    This is the first time the House has done that since 2009. The
    last time the House and the Senate passed all 12 appropriation
    bills on time was in 1994.
        So, 12 percent of the current Members were here for that. I
    was a think tank staffer at the time. Twelve percent of the
    people in the House were here the last time we passed all 12
    appropriation bills. So, we have an entire generation of
    people's Representatives have become accustomed to, if not
    acclimated to, a failed budget process. So, we have basically
    taken this failed budget process as just the way things work,
    and there is nothing you can do about it.
        Let's reject that kind of thinking. Let's reinvigorate a
    budget process. And I am just simply giving you a suggestion as
    a person who has observed this process for many, many years.
    And if this body comes together and presents a plan for
    reinvigorating the budget process, I really believe we will--we
    can get buy-in. And I would like to think that the Members of
    Congress who have known nothing but budget dysfunction would
    love and welcome the day and the opportunity to actually have a
    reinvigorated, workable, practical budget process where every
    Member of Congress has more franchise, more influence, more
    say-so. And that means the taxpayer is going to be more
    respected at the end of the day.
        So, I really believe, as a person who fought to create this
    Committee in the last omnibus appropriations bill, I think that
    you have a great opportunity in front of you. I think a lot of
    these ideas are bipartisan. In the old days, as in, like, 10
    years ago, it used to be appropriators against budgeteers or
    against authorizers. This doesn't have to be to the case. This
    does not have to be appropriators versus other Committees
    because the appropriators themselves are losing their ability
    to effect change.
        When we do these omnibus appropriation bills, we are taking
    the pen away from the appropriators and writing these bills
    with just a few people. By having a biennial process with six
    bills, the appropriators write those bills. The appropriators
    go to conference Committee. You have a budget process that is
    more likely to be adhered to. And so that to me seems like one
    of the sweet spots we could have with a bipartisan, bicameral
    compromise to make this budget process work. And I simply
    submit this for your consideration. And I hope you really come
    up with something that we can take and be proud of and restore
    this branch's power of the purse.
        And, with that, thank you very much.
        [The prepared statement of Paul Ryan follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. We appreciate your comments this morning,
    Mr. Speaker.
        To be respectful of your time, do you have a couple of
    minutes----
        Speaker Ryan. Sure.
        Co-Chair Womack.----in the event that any of our members
    would like to ask a question.
        The chair would recognize anyone that might have a question
    for the Speaker this morning.
        Anyone?
        Senator Bennet.
        Senator Bennet. Thank you, Mr. Speaker.
        Thank you. I just would ask for your impression about how--
    what has caused the centralization that you described? Why have
    so many Members of Congress yielded to so few the decisions
    that are made around here about budgeting and, you know, sort
    of made themselves props in somebody's else play?
        Speaker Ryan. Yeah. That is a good question.
        So, a House guy could easily go beat up the Senate for
    having cloture and motions to proceed and all of the rest of
    that. But I will resist the temptation.
        I think it is easier to push decisions elsewhere and not
    own the consequences. I think if we have a structure that has a
    chance of that--see, I think people gave up on thinking the
    appropriation process works. I think people gave up thinking we
    are going to do 12 bills.
        First of all, think of the calendar. You get the
    President's budget in March. Then you have a statutory deadline
    by April 15th to pass a budget resolution, which gives you the
    budget instructions, the 302(a)s, which then the Committee goes
    and writes the (b)s. And then you may start your appropriations
    process, hopefully as early as May but probably not until June.
    And you have got to get 12 appropriation bills done through the
    House and the Senate conference before September 30.
        So, the thing backs up, and it just doesn't work. And so
    most Members just don't think it is going to happen. So, they
    don't invest themselves into participating in a process that is
    going to yield results because they just know the calendar just
    doesn't work. So that is why I believe if you have a biennial
    budget with the caps already sort of preordained--you know,
    every 2 years you rewrite those caps; I would encourage annual
    reconciliation, but you have an appropriations process that can
    start earlier, and you have half as many bills to do--I believe
    Members will have more faith and confidence that they can
    actually get the work done. So, they will actually participate
    and get involved in actually getting a good product. Because
    what invariably happens is we do a CR to buy us a little more
    time. And then we have the appropriators kind of write their
    bills and move it up. And then it comes to, you know, the
    Speaker, the minority leader, the majority leader and the
    minority leader in the Senate. And then we put together some
    massive bill.
        That is not a good way to run government. The power is
    too--I am the person who gets the power. I don't want it. It is
    too concentrated. It is not how government should work because
    the person who is the Chairman and ranking member of the Energy
    and Water Committee are spending time after time in hearings
    reading GAO reports, listening to inspector generals. They know
    their jurisdiction better than anybody else. They know how
    these bills should be written. They know how taxpayer dollars
    are being guarded or not. And they should write the bills, not
    somebody who is, you know, juggling every other thing in
    Congress. That, to me, is the breakdown in the process.
        And by having the executive branch come to an
    Appropriations Committee where they know that that Committee is
    going to be writing their bill, I think the executive branch is
    going to be far more responsive to the legislative branch and
    the power of the purse because they know it is not going to be
    some omnibus. They know it is going to be that person I am
    looking at across the rostrum is going to be writing my
    Appropriations bill. I think they are going to make our
    government far more responsive and accountable if that is the
    case.
        Co-Chair Womack. Once again, Speaker, we appreciate you
    being here. And, again, to be respectful of your time, I know
    you have other appointments to deal with. Your insight is
    valuable, and we appreciate the fact that you led on getting
    this joint select Committee established and charging us with
    the responsibility of coming to a solution.
        Do you want to say something very quickly?
        Ms. Lowey.
        Co-Chair Lowey. I want to thank you also, Mr. Speaker,
    because I really think if we can talk through these issues,
    hopefully, we will make major changes in the process.
        But I want to emphasize one point again. And I mentioned in
    my opening statement. In my judgment, the root causes often lie
    in deep divisions over policy combined with misplaced
    priorities, partisanship, and polarization. And as an example,
    I just recently met with Senator Shelby, and it hasn't been
    completed, but they are working together, swimmingly. No poison
    pills. They are moving through the process, getting ready to
    bring the bills to the floor.
        Now, I agree the process isn't over. But compare that with
    the House and the process--we all work together, but each of
    our bills are loaded with poison pills.
        So, I just put that out there because there is a real
    contrast now on appropriations the way the Senate is operating,
    working together. And we all like each other. But our bills in
    the House are loaded with poison pills. So that is something
    that we really have to think about.
        Speaker Ryan. Well, I won't do much of a retort other than
    I am expecting a big bipartisan vote on the defense
    appropriation bill this week. We had bipartisan support, not as
    much as we would have liked on the three appropriation bills we
    already passed a couple of weeks ago.
        But you are right. We are going to have differences of
    opinions on these things. Labor-H is a perfect example. But
    let's have it on its own. Let's have those fights. Let's have
    those votes. Let's have those amendments. Let's have those
    conference Committees. That is the way the process should work.
        And, again, Ms. Lowey, you are constricting the process. If
    we just say, ``This isn't going to happen, let's just kick it
    all upstairs, let's just put it in a big omni and have a bill
    that is this big that spends this much,'' that is not good
    government no matter how we disagree on individual riders.
        Co-Chair Lowey. Perhaps we can talk again another time.
        Thank you for appearing before us.
        Speaker Ryan. Thank you.
        Co-Chair Womack. Thank you, Mr. Speaker.
        I am now pleased to welcome our next witness, the
    distinguished leader of the House minority, gentlelady from
    California, Nancy Pelosi.
        Representative Pelosi. Good morning, Mr. Chairman.
        Co-Chair Womack. Welcome, Madam Leader. And we are going to
    give the floor to you. And then we will be respectful also of
    your time in potential Q&A.
        The floor is yours.

        STATEMENT OF THE HON. NANCY PELOSI, A REPRESENTATIVE IN
                 CONGRESS FROM THE STATE OF CALIFORNIA

        Representative Pelosi. Thank you very much, Mr. Chairman,
    Madam Chair. Thank you to members of the Committee from both
    sides of the House. I am very encouraged by the fact that this
    discussion is taking place. I think it is very important and
    long overdue. I do believe that a budget should be a statement
    of our national values. What is important to us as a Nation
    should be how we allocate our resources and that that budget
    process that we are engaged in should be something that is
    respected as we go forward into the appropriations process.
        I have a different view on some of these subjects than the
    Speaker because I come here as a long-time appropriator. I
    heard the perspective of a Ways and Means Committee person, but
    I do believe that 2 years for the budget, 1 year for the
    appropriations legislation is the appropriate route to go.
        It was music to my ears to hear the Speaker say that he
    didn't think we should have legislation on appropriations
    bills. Of course, that is what upsets the apple cart and all
    the smooth workings of the Appropriations Committee. I have
    always said, left to their own devices, the appropriators, in a
    bipartisan way, know how to allocate resources, respect each
    other's points of view, and can come to a balance that is
    important for the Congress. It is when the legislating on
    appropriations bills that enters into it, which started in the
    late 1990s--I don't say that you never should have one piece of
    legislation on an appropriation bill. You shouldn't have it
    unless there is bipartisan agreement that, for whatever reason,
    this engine is leaving the station; in the national interest,
    we need to move something immediately by a must-pass, must-sign
    bill.
        But that is not what is happening in this case. And that,
    in my tenure on appropriations, which goes way back, was what
    made the difference between a smooth running of appropriations
    instituting the budget agreement or not.
        The Speaker said very eloquently that people on these
    Committees know their briefs, oversight responsibilities on the
    Appropriations Committee. And left again to its own devices, I
    think it could do a very good job.
        So, a few principles I want to put forth. First, I do
    believe that when we have sent Members to any of the
    discussions on budget, we just say go--be agnostic. Just go
    into that room, put growth in the middle of the table, and say,
    what will promote growth, create good-paying jobs, and reduce
    the deficit? Those are our standards. We don't give you any
    assignment to say do this, do that. Growth, good-paying jobs,
    reduce the deficit.
        I do think that we should return in that light to pay-as-
    you-go budgeting, which Republicans abandoned in favor of
    creating huge deficits and then using those deficits for
    another purpose, cutting Medicare--Medicare and Social
    Security. I will get to that in a moment.
        Second, we should amend the reconciliation process so it
    never is used to increase the deficit. So, it is never to
    increase the deficit in the budget window.
        And, third, Republicans should do no harm. None of us
    should do harm to the process. We must pass constitutional
    amendment--not pass constitutional amendments or implement cap
    limits on mandatory spending. And they must stop using the
    budget resolution as a messaging document to call for
    unspecified and unrealistic spending cuts not included in the
    reconciliation instruction. I don't want to waste your time. I
    am being very direct in what I am recommending.
        We hear people blaming Medicare, Medicaid, and Social
    Security for the record deficits and debt levels, but the
    driver is simple demographics, not extravagant spending. For
    example, I think it is important as we go forward that we note
    the reality of the demographics. We reduce the replacement rate
    in Social Security when the average retiree benefit is only
    $1,400 a month. Medicare does not cover vision, dental, or
    hearing benefits; does not have an out-of-pocket limit. Most of
    the elderly has a form of supplemental coverage costing around
    $150 a month. So, it is not about extravagance on that end.
    Medicaid is by far the least generous initiative in terms of
    reimbursing providers.
        The elderly population--now, this is the demographic issue.
    The elderly population will double between 2010 and 2035. The
    elderly population increasing from 40 million to 80 million
    people, from 13 percent of the population to 20 percent of the
    population. In fact, demographics account for 80 percent of the
    increase in outlays for these initiatives from fiscal year 2018
    to 2028.
        I am sticking to my notes on some of this in the interest
    of time--because I could go on. In light of these demographic
    shifts, we need to work on a bipartisan basis to reduce health
    spending. We are proud of what we did in the Affordable Care
    Act, slowing annual Medicare spending program per capita from
    2.3 percent in the 5 years prior to the enactment of ACA to a
    negative 0.3 percent in the year since enactment. We must build
    on that progress through far stronger reform than those
    proposed by the Trump administration. We need to allow Medicare
    part D--we have been trying to do this for years. We need to
    allow Medicare part D to negotiate lower drug prices, push
    payments and delivery reform through Medicare and Medicaid
    innovation center, and work toward paying for value rather than
    volume of health services.
        This should not be a partisan debate. Hardworking families
    across the country cannot afford the skyrocketing cost of
    healthcare today. When we passed the Affordable Care Act, in
    terms of budgeting, if everybody loved their healthcare and
    their health insurance, we still had to do it because of cost:
    cost to the individual, cost to small business, cost to
    corporate America, cost to the public sector. We simply could
    not afford the escalating rate of increase. As I said before,
    reduce that, but the cost of prescription drug is still the
    biggest obstacle to levelling all of that.
        So, to return to responsible budgeting, I encourage
    Congress to move toward the 2-year budget agreement. I agree
    with the Speaker on that. Maintain annual appropriations. I
    agree with Congresswoman Lowey on that. And do not adopt
    automatic continuing resolutions. Imagine that we had five CRs
    between last year and when we passed our omnibus.
        We must make it easier to pass debt limit increases. That
    shouldn't be taking up time, debate, and leverage. Members have
    attempted to hold the country's credit hostage to individual
    demands, risking grave consequences for our economy and our
    country and our credit rating. Even when we didn't do it, just
    talking about it lowered our credit rating. We should urge the
    Senate to adopt the Gephardt rule. The Gephardt rule enabled
    that just to go through that, as the Constitution says. The
    full faith and credit of the United States is not in doubt;
    just have it go through. So, we take that off the table.
        While some pay lip service to the principle of fiscal
    responsibility, we have fought to put our fiscal house in
    order. I am very proud that, in the 1990s, President Clinton
    put us on a trajectory of job growth. We come back to that, job
    growth and smaller deficits, despite inheriting a massive
    deficit. The last four Clinton budgets were in surplus or in
    balance.
        President Clinton handed President Bush a projected $5.6
    trillion 10-year budget surplus. But when you do away with the
    pay-as-you-go, that surplus was squandered again with massive
    tax cuts for the wealthy that did not--two unpaid for wars, not
    negotiating for Medicare prescription drugs, all of that,
    according to the CBO, is what added to the deficit.
        The tax cuts and spending sprees exploded the deficit, plus
    a new $5 trillion--that is an $11 trillion turnaround. We went
    from $5 trillion plus on a path to reducing the debt to $5
    trillion additional debt. $11 trillion turnaround. We cannot--
    this fiscal recklessness cannot continue.
        Passing a tax scam for the rich--I will express my
    disagreement with that--has increased the deficit. And it has
    not--it has increased the deficit, and it is going to be at the
    expense of Medicare, Medicaid, et cetera.
        When the President took office, he said the current
    services projection of deficit over the period for fiscal year
    2018 to 2027 was $9.4 trillion. Now, due to the Republican tax
    bill, the CBO's latest current services projection that they
    send here is over $2.3 trillion larger. It just can't continue
    with that to a staggering--the reckless giveaways have exploded
    the projections for the annual average deficit to 8.4 percent
    of GDP. The deficit, not the debt, the deficit to 8.4 percent
    of GDP.
        So, in this--where we find common ground: 2-year budgeting.
    What I would advocate as an appropriator, very important, to
    have 1-year--the annual appropriations bills. What I think is
    problematic to that is the massive legislation, sometimes in
    the form of poison pills, that are being placed on these bills.
    It almost makes us want to make everybody be a member of the
    Appropriations Committee. It is no use for other Committees to
    exist because we can just pile it on the Appropriations
    Committee and in a way, that is not bipartisan. I don't think
    either party should do it.
        So, Members of Congress must honor our responsibility to
    make smart investments, promote growth, create good-paying
    jobs, reduce the deficit, and do so in a way that keeps the
    deficit under 3 percent of GDP when the economy is healthy
    while driving strong, again, sustainable growth.
        I thank you for your attention to this important issue. I
    hope that--just looking at this Committee, I think that there
    is real opportunity for you to do something that will make more
    efficient, more predictable, more timely the process. But,
    again, it is all about our values, what is important to us as a
    Nation.
        We have sufficient time in our Committees of authorization
    to debate the policy. That shouldn't be something that is
    placed--you know, appropriating is policymaking in itself.
    There is enough going on there. But to use the appropriations
    process as a vehicle for poison pills and partisan
    policymaking, it just discredits the responsibility we all
    have.
        When I was a little girl, my father was a member of the
    Appropriations Committee. He would talk in his political
    speeches in Baltimore about the all-mighty powerful
    Appropriations Committee. As a very little girl, not even in
    grade school yet, it would, to me--all-mighty powerful, that
    was only identified in one way, in a heavenly way. And now it
    was attributing it to the Appropriations Committee.
        Let's have the Appropriations Committee retain its power,
    assume no more, and be responsive to a responsible bipartisan
    budget resolution.
        Thank you for the opportunity to share some thoughts with
    you. Again, it is no use wasting your time. I thought I would
    get right to some clarity of thinking on my part to propose.
        [The prepared statement of Nancy Pelosi follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. We truly appreciate your insight here this
    morning.
        Does the gentlelady have time for maybe a question or
    comment or two?
        Representative Pelosi. Sure.
        Co-Chair Womack. Does anybody----
        Representative Pelosi. If anybody has one.
        Co-Chair Womack.----on the Committee have a question or
    wish to make a comment?
        Hearing none.
        Representative Pelosi. Thank you.
        Co-Chair Womack. Thank you very much for your time.
        Representative Pelosi. Thank you for your good work. And
    good luck in your deliberations. Hopefully a nice bipartisan
    advance into the cause will spring from your good work.
        Thank you so much.
        Co-Chair Womack. Thank you so much.
        Representative Pelosi. Thank you.
        Co-Chair Womack. At this time, we will welcome our next
    witness. He is the Democrat whip in the House, the gentleman
    from Maryland, Steny Hoyer.
        Mr. Hoyer we appreciate the opportunity to hear from you
    this morning. We will hear your testimony. And then, if time
    permits, may have a question or two.
        The floor is yours, sir.

       STATEMENT OF THE HON. STENY H. HOYER, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF MARYLAND

        Representative Hoyer. Thank you very much for welcoming me,
    Chairman Womack and Co-Chair Lowey. I appreciate very much this
    opportunity to share my thoughts with the Joint Select
    Committee on the Budget and Appropriations Process Reform. In
    context, I served actively on the Appropriations Committee for
    23 years. Obviously, I am on leave for some years now.
        In the few minutes I have, Mr. Chairman, I want to talk
    about three important areas where reform ought to occur. The
    first is congressionally directed spending. Now, this may not
    sound like some great reform issue to people. But as somebody
    who served on the Appropriations Committee, I see it as a
    critically important connection to my district, that I can
    respond to the needs of my district, which I believe I know as
    well as any other person and certainly any other person in the
    executive department.
        Members of Congress know their districts, as I said, better
    than anyone of the Federal agencies and better than the
    Appropriations Committee as a whole. When Republicans came into
    the House majority in 2011, they made a mistake by eliminating
    congressionally directed spending through changes in their
    conference rules. Unfortunately, they also changed the Gephardt
    rule.
        My own view, Mr. Chairman, is the debt limit ought to be
    eliminated. It is a phony issue. It lends itself to
    gamesmanship and brinksmanship which is harmful to our country
    and not honest with the American people. They both gave up
    Congress' constitutional power of the purse to the executive
    branch and made it more difficult to forge consensus in major
    legislation.
        It is true that some Members abused the process in the
    past. That is why, when Democrats came into the majority 2007,
    we reformed the process to make it transparent and to hold all
    Members accountable by showing the public which Member
    sponsored each item, requiring Members to certify they had no
    financial interest and published all requests on their websites
    and blocking for-profit entities from receiving them. This
    Committee should consider bringing back congressionally
    directed spending, at a minimum, with the Democrats' successful
    reforms and others to make it more transport if you thought
    that was necessary.
        The second area, Mr. Chairman, I want to address is paying
    for what Congress buys. The problem is not spending. The
    problem is not taxing. The problem is paying for what we buy.
    That is the discipline in the system. And to the extent that we
    allow ourselves to simply borrow to buy what we want to buy,
    that discipline disappears. I would suggest to you it also has
    disappeared in tax cuts. To give a $1.5 trillion headroom is
    simply to give additional debt credence. If you had to pay for
    that, if you had to offset it by spending cuts either to
    mandatory or to discretionary spending, that would be
    discipline in the system. But we have eliminated the discipline
    in the system.
        This Congress ignored the statutory paygo rule, law that
    Democrats enacted in 2010, and the current House majority
    replaced the effectively House paygo rule. I would suggest to
    you, when we were operating under paygo, we balanced the
    budget. We balanced the budget because, frankly, Republicans
    limited spending. Clinton wouldn't allow tax cuts, and the
    economy exploded. Those three things are why we balanced the
    budget four years in a row.
        The House Republican alternative to cut--of CutGo only
    deals with spending which left the door open for this majority
    to pass a tax law that raised deficits by $1.8 trillion last
    December and trillions more over the period it has been a House
    rule.
        Paygo deals with both spending and revenues in a balanced
    way. To pretend that it is only spending and not the cut in
    revenues that put you in the hole is dishonest. This allows
    Congress full flexibility to make our collective political
    decisions as to the best mix of policies to offset the cost of
    any new legislation.
        Third, any budget process will only be successful if there
    is the political will to follow it. Pretending the process will
    solve this problem is a delusion. The current process had been
    effective when Congress chose to pursue it. If the Budget
    Committee were allowed to do its job and did it honestly and
    responsibly and not simply as a political message--no party is
    immune from passing budgets that are simply and solely
    political messages without relevance to reality--it would be
    the legislative branch's loudest voice in setting overall long-
    term fiscal policy if we would be honest.
        Too often, in recent years, the Budget Committee has been
    sidelined, only called upon when the majority decided
    reconciliation instructions were necessary to force through
    partisan legislation. Last year's tax law was a perfect example
    of abusing the budget process by using a tool intended for
    deficit reduction ironically to be one of the largest deficit
    increases that I have voted on in my 37 years in the Congress
    of the United States.
        Mr. Chairman and Madam Co-Chair, I should note that it is
    not my assessment of the fiscal impact of that legislation. It
    is the combined assessment of the Congressional Budget Office
    and Joint Committee on Taxation. Collectively, we must rely on
    their status as nonpartisan arbiters in order for any budget
    process to function as intended. Mr. Chairman, just yesterday,
    we heard from the CBO that our debt as a share of the economy
    is set to double over the next three decades.
        Mr. Chairman and Madam Co-Chair, I have three children. I
    have three grandchildren, and I have four great-grandchildren.
    The fiscal policies we have been pursuing are not only fiscally
    bankrupt; they are morally indefensible. I hope that this
    Committee will include in its recommendations a restoration of
    transparent accountable congressionally directed spending that
    restores Congress' constitutional role and a return to the
    proven enforcement of paygo.
        I also hope that, in making recommendations, you also
    recognize that, at the end of the day, regardless of what
    changes you make or propose, in order to be effective, Congress
    has to want to follow whatever process it creates for itself.
        We have biennial budgeting. We call it the fixes to our
    structure of saying that we are going to spend at a certain
    number. And then we say that doesn't work. That is unrealistic.
    It was good message. It was good pretense. And then we change
    it. We make a 2-year rule to suspend, sequester, which is a
    complicated word, which starts with S which stands for stupid.
    It is up to the majority to see that through, to set the tone,
    even when it is not convenient.
        The Speaker said he wanted to consider things one at a
    time. He thought the Committees had the advantage. Yes. Then
    bring those bills discretely to the floor, and let them be
    considered one by one. It is inconvenient, particularly when
    you don't want to vote on the Labor-Health bill; you don't want
    to vote on the Defense bill. You package them. You hide them.
    You dissemble.
        As you can tell, Mr. Chairman, I feel pretty passionately
    about this because I think neither side has come to grips with
    the real problem, and that is we don't follow fiscal
    discipline. We pretense. We talk. But then it becomes too
    difficult because life and budgeting is a series of tradeoffs,
    and we don't like to make tradeoffs because tradeoffs sometimes
    cost you political capital. You can do all the debate you want
    about process. But if we don't have the will to do what is
    right fiscally, our people will not be well served.
        Thank you, Mr. Chairman.
        [The prepared statement of Steny Hoyer follows:]
    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. I appreciate the comments of the Democrat
    whip in the House.
        Are there any members who have a question?
        I will throw one at the distinguished gentleman from
    Maryland, and that is, in your discussion, you talked about
    three things, the third topic, that being the political will.
    One of the things this Committee has discussed numerous times
    and is under consideration, the concept of carrots or sticks,
    whatever it is. What can we do to motivate, influence in a
    positive way the kind of outcomes that we are looking for
    versus holding Congress accountable with a series of
    consequences for failing to do its job?
        Where is the Democrat whip on the subject of positive
    reinforcement or some kind of consequence as a means of
    bringing us to the political will to make these changes?
        Representative Hoyer. You mean beyond ``atta boy, good job,
    that was the right thing to do,'' I presume.
        Co-Chair Womack. Beyond optics. It has got to be beyond
    optics.
        Representative Hoyer. I think the paygo is where you get to
    the rubber meets the road. It is where you--if you want to cut
    taxes, if you think, you know, we are spending too much and we
    ought to cut revenues, fine. Cut spending. Don't cut taxes and
    then never cut spending. We don't cut spending. It is that we
    have different views of what spending ought to be on.
        I noted to the majority leader: zero rescissions in
    defense. Zero. Raise your hand--and I am saying this
    rhetorically; I don't want to put you on the spot--if you think
    there is not zero rescissions in $700 billion dollars we give
    to the defense fund. Of course not. So, you spend--some parties
    spend it here; some parties spend it here. But we spend it.
        If you had paygo, if you really had to make choices, they
    would be tough choices. And we ought to make those tough
    choices. And the only way you make them is bipartisan way. And
    we don't do things bipartisan way.
        When I was, frankly, the majority leader, we passed all 12
    appropriation bills seriatim, one at a time, prior to the end
    of August--excuse me--the end of the July break, or might have
    been the first week in August.
        So, I am not sure what you mean the carrots and sticks. But
    what we ought to do is discipline ourselves and have the will
    to be honest with the American people, to tell them there is
    not a free lunch, to tell them: If you want a tax cut of $1.8
    trillion, then there is going to be a tradeoff. Something is
    going to give. It is not going to be we are going to grow the
    economy, and wonderful things are going to happen. CBO is
    saying that has not happened. The economy is showing that has
    not happened. It is not going to happen. It didn't happen in
    1981 when I came here. It didn't happen in 2001, in 2003. We
    were promised great things were going to happen. We had the
    deepest, worst economy that I have experienced, that anybody in
    this room has experienced starting in December of 2007.
        So, what I am saying, Mr. Chairman, is process is terrific.
    Will and courage are what is needed: to be honest with the
    American people and with ourselves and say there is no free
    lunch. We are not going to cut revenues, and all of a sudden,
    magically we will have the resources necessarily to defend our
    country, to grow our economy, to feed our people, to make sure
    that America is all that it can be. That is what I am saying,
    Mr. Chairman.
        Co-Chair Womack. I appreciate your comments.
        Any other questions?
        Representative Hoyer. Thank you very much.
        Co-Chair Womack. Thank you, sir.
        Delighted to introduce our next witness, the gentleman from
    Tennessee, Senator Bob Corker. Sir, it is great to have you in
    front of the Joint Select Committee this morning.
        Again, as I said earlier, your written comments will be
    made part of the record. And we will give you the adequate
    amount of time to make your case this morning before this
    Committee, and we appreciate you being here.

    STATEMENT OF THE HON. BOB CORKER, A UNITED STATES SENATOR FROM
                         THE STATE OF TENNESSEE

        Senator Corker. Thank you. Thank you for holding these
    meetings. And I appreciate what you are doing. I will be very
    brief. I know we all are a little bit behind schedule.
        First of all, I came to Washington 11\1/2\ years ago. And
    one of the focuses was on fiscal issues. And what I have
    learned is that Democrats and Republicans both like to spend
    money. They just like to spend it on different things. I became
    a member of the Budget Committee a few years ago. It has been
    the biggest waste of time one can possibly imagine. It has
    nothing to do with the leadership of the Committee. It is that
    it is nothing but a political tool each side uses. There is no
    policy put behind the changes.
        And as I have said to Senator Perdue and others, Senator
    Whitehouse, we ought to actually do away with the Budget
    Committee because it performs no useful function as it relates
    to causing us to be fiscally sound.
        Secondly, we major in the minors. There is all this talk
    about appropriations. So, we spend the entire year focusing on
    30 percent of what we spend, which, again, is majoring in the
    minors; 70 percent of the money we spend is on mandatory
    spending. These are programs that people are counting on,
    especially during the latter years of their life, and we do
    nothing whatsoever to ensure that they are going to be fiscally
    sound.
        Everything ought to be, in my opinion, on budget,
    everything, including Social Security, which would cause us to
    focus on the fact that, in the not-too-distant future, it is
    going to be fiscally unsound.
        So, you know, again, there is a lot of talk and a lot of
    work that goes into appropriations and budgeting each year, but
    we major in the minors. The appropriations process is, you
    know, that we have authorizing Committees that have absolute--
    almost nothing is authorized. And so, seriously, we ought to
    consider combining the authorizing functions and the
    appropriating functions together. It ought to be one.
        I talk to people on the foreign ops side. I am Chairman of
    the Foreign Relations Committee. And there may be a little of
    hyperbole here, but they tell me they spend about 5 hours
    putting together over $50 billion worth of spending whereas the
    authorizing Committee itself spends all year doing hearings. It
    is totally ridiculous.
        So, look, I think you have got a big task. I would say,
    first of all, put everything on budget--everything. Look at
    combining the operations of both authorizing and appropriating.
    Do away with the Budget Committee and let a few leaders decide
    what the caps are going to be over the next couple years and
    quit using the budget itself as a political tool.
        Beyond that, I really don't have many comments.
        [The prepared statement of Bob Corker follows:]
        [[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. We appreciate the gentleman for his
    appearance here this morning.
        Any questions?
        Senator Whitehouse. If I may.
        Co-Chair Womack. Senator Whitehouse. Welcome.
        Senator Whitehouse. Senator Corker joins me on the Budget
    Committee. So, he knows whereof he speaks. And I wanted to
    thank him for his work on the Budget Committee. He is one of
    the reform-minded folks.
        Before we entirely get rid of the Budget Committee, at
    least in the Senate, I think we should give it one last chance.
    And as I have said in my earlier comments and in the proposal
    that I have shared with the Committee, I think there is a
    chance to create a bipartisan path that would actually have to
    be bipartisan in order to be taken that would take into the
    account the mathematical elements of the budget, all of them,
    healthcare spending, tax spending, the whole bit, and see if
    the Budget Committee can work together to get a bipartisan
    agreement that picks a debt-to-GDP safe point out in the
    future, figures out how long it will take to get there, creates
    that glide slope, creates alarm bells for that glide slope, and
    then, in a bipartisan basis, you know, polices us towards a
    safe and sustainable landing.
        If we can do that, then I think we will have done the task
    that the Budget Committee was originally established to do. Now
    it is simply a support system for a reconciliation measure that
    allows a simple majority for a pet political project of the
    majority party, period, end of story.
        For that, it is not worth keeping it. But I do think that
    there is a step between getting rid of the damn thing and its
    current parlous state where we can give it one last chance to
    see if it can produce a sensible bipartisan result. And I would
    like to hear Senator Corker's response to----
        Senator Corker. Yeah. I think you may be putting off the
    inevitable. But I want to say that you and Senator Perdue have
    done great work together. You have very ideological--you all
    are vastly different in your view of the world, and yet you all
    have worked together to come up with some processes that I
    think could well work.
        With Senator McCaskill a few years ago, I introduced the
    CAP Act, which capped spending at a percentage of GDP. And I
    think you all are looking at something very similar as it
    relates to total indebtedness. So, I would encourage this
    Committee to look at the work the two of you are doing.
        But everything has to be on budget, I think we would have
    to agree. And the problem is, as you mentioned, we use
    reconciliation with 50 votes, but it takes 60 votes in the
    Senate to put policies in place. So, there is never policy
    follow up to the budget proposals. I mean, just to talk about
    my side of the aisle, when you do away with ACA but you keep
    the revenues that ACA is generating, obviously, it is a hoax.
    And the other side of the aisle does the same thing.
        So, I hope that you will be very successful in this. This
    is the greatest threat to our Nation. There has been a lot of
    talk about the tax issues. And, obviously, from my perspective,
    it could have been done a little bit better. Then we turned
    right around and passed a spending bill that raises deficits $2
    trillion over the next 10 years, and we don't even talk about
    it. So, both sides are guilty of huge deficits. Both sides like
    to spend money, just on different things. But the processes we
    have will never, as they are now constructed, do the things we
    want to do as a country.
        So, thank you all very much, and thank you for your work.
        Co-Chair Womack. Thank you, Senator Corker, for your
    testimony this morning.
        The next witness I would like to welcome, the ranking
    member on the Defense Subcommittee of the House, Appropriations
    Committee, distinguished gentleman from Indiana, Pete
    Visclosky. Welcome, sir. The floor is yours.
        Representative Visclosky. Chairman, thank you very much.
    And I understand my entire statement is entered into the
    record.
        Co-Chair Womack. That is correct.

     STATEMENT OF THE HON. PETER J. VISCLOSKY, A REPRESENTATIVE IN
                   CONGRESS FROM THE STATE OF INDIANA

        Representative Visclosky. I will begin by taking a
    dangerous path in answering the question I have not been asked.
    You asked the minority whip about possible incentives, carrots
    and sticks, to have Members of Congress abide by some form of
    discipline. I will suggest to you our incentive is our
    responsibility to the next generation and have the discipline
    to make the hard decisions that my parents' generation made for
    me.
        The second point I would make is I came here 41 years ago
    and began my career as a staffer on the Appropriations
    Committee. At this moment in time, I absolutely agree with
    Senator Corker. If you would make one change tomorrow, I would
    get rid of the Budget Act of the 1970s. The fact is you have so
    few people--and think about your experience--on that Committee
    who are charged with making the hard decision of raising
    revenue, the hard decision of the expenditure of those revenues
    in an effective and an efficient manner that people make
    assumptions.
        I am the ranking Democrat on Defense Appropriations. DOD
    does not run on assumptions. It runs on hard decisions. There
    is nothing in any rule today in either body that prohibits us
    from getting our work done. And no rule or law we could create
    is going to imbue Members of Congress with the political will
    to act.
        I do not believe our budget and appropriations process is
    broken. Instead, it shows what happens when we avoid making
    decisions in a disciplined fashion. Some would point to the use
    of a 2-year deal, like multiple bipartisan budget acts of the
    past half-decade. However, I would argue that moving to a
    biennial budget does not fix the root cause of our
    unpredictable funding timelines but simply creates severe risk
    to good governance as it has become Congress' habit to only
    pass bipartisan legislation on the eve of a governmental
    crisis. Our problems do not lessen if we just drag out that
    process for 2 years instead of 1. Agencies already tell us how
    hard it is to execute funds when they receive appropriations 5
    months late. Let's give them 2 years to drag this process out,
    and it will simply give agencies more time to fill our request
    with out-of-cycle demands.
        Let us take the fiscal year 2018 Defense Appropriations
    bill as an example. The House of Representatives voted for that
    bill five times before it became law last March.
        Representative Visclosky. It was comparatively painless for
    Members of Congress. However, it wreaked havoc in the
    Department of Defense.
        Just one example. The National Guard exercises had to be
    canceled, which affected over 102,000 service personnel.
        There is nothing in the current rules that make this happen
    except an absence of intestinal fortitude.
        By potentially reducing the required interactions between
    Congress and the executive agencies by extending the process to
    2 years, we also sacrifice, I believe, the most up-to-date and
    accurate information about how American taxpayers' dollars are
    spent, relinquishing our specified constitutional
    responsibility.
        An example from this year. This year has brought several
    executive branch trade enforcement changes, including tariffs
    on steel and aluminum. These actions have resulted in
    unexpected workloads for agencies. Both the House and Senate
    Appropriations Committees have been in constant contact with
    those agencies regarding the resources that are now needed to
    effectively manage these immediate changes.
        Regardless of what any of your position is on the tariffs,
    I think we can all agree that effective management of policy
    changes is key to the daily functioning of our government.
        Let's change the rules and that is going to solve our
    problem. We did that in 2010 with the Budget Control Act, and
    we had sticks. Nobody in their right mind would allow us to
    shut down the government or have sequestration. And the fact
    is, on four different occasions since 2010 Congress has set
    aside that act for 7 out of the last 8 years, because it does
    not work.
        We have our defense appropriations bill on the House floor
    last night and today again. If we do not address that rule
    change of 2010 between now and October, we have $71 billion
    that are going to be taken off that budget for the Department
    next year, so they are writing two different budgets.
        The rule change certainly solved our problems.
        I would simply say that the intervening 8 years have proven
    that absent a commitment to governing in a sober, deliberative,
    and well-intentioned fashion, this problem is not going to be
    solved.
        I believe we can solve the so-called budget problem if we
    approach the appropriations process in a serious manner, if we
    finally come together to meaningfully address entitlements that
    now consume two-thirds of our budget and prevent investment in
    the future and finally recognize, as my home State of Indiana
    has done, that a reasonable amount of new revenue is necessary
    if we are truly going to invest in the future of our children.
        Thank you very much, Mr. Chairman.
        [The prepared statement of Peter J. Visclosky follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. I appreciate the gentleman from Indiana
    for his testimony here this morning.
        I am pleased to welcome our next witness. We had scheduled
    in tandem both Rob Bishop of Utah and Devin Nunes of
    California. I know Mr. Bishop has got other commitments this
    morning.
        So, we are pleased to welcome Representative Nunes from
    California.
        Sir, thank you for being here this morning.
        Representative Nunes. Thank you, Mr. Chairman.
        Co-Chair Womack. We will give you the floor for 5 minutes,
    sir.

    STATEMENT OF THE HON. DEVIN NUNES, A REPRESENTATIVE IN CONGRESS
                      FROM THE STATE OF CALIFORNIA

        Representative Nunes. It is great to be here, and I will be
    brief, but I will make my points. But I want to also add that
    Mr. Bishop had a Committee hearing that he had to begin at 10
    o'clock and he had to be there. That is why he had to leave.
    But he is strongly in favor of this proposal that I am about to
    outline for the Committee here.
        This is something that I offered before the Republican
    Conference began in the beginning of this Congress, and it
    actually received 40 percent of the vote within our Conference.
    I think it failed largely because people get used to sitting on
    a Budget Committee, sitting on the Appropriations Committee,
    and they didn't want to make change.
        And, look, this is a big change that I am proposing here,
    because it would essentially abolish all the Committees and
    combine the authorizing Committees and the appropriations
    Committees.
        So, on the House side, which is what we would control, it
    would create 14 appropriating and authorizing Committees. There
    would be five select Committees. Every Member on the House side
    would be able to choose two of those Committees.
        And the Budget Committee would actually--you might like
    this, Mr. Chairman, being Chairman of the Budget Committee--the
    Budget Committee would become, I think, fairly powerful. It
    wouldn't meet very often, but it would be made up of the
    Committee chairmen and the ranking members, so that there was
    actually real authority pushing that power down to the
    authorizing and appropriating Committees.
        One of the concerns that was raised at the time by some of
    the Members when we lost that vote 60-40 in our Conference was
    that a lot of our Members, even though knowing they sit on
    three authorizing Committees with absolutely no power, some
    didn't vote for it, because they said: Well, I am in line to be
    Chairman of whatever authorizing Committee, even though I know
    you are doing the right thing.
        So, one of the things that we want to make sure of in this
    proposal is that, whether you are on the Appropriations
    Committee or their authorizing Committee, you would keep your
    seniority and you would fall in line with whatever Committees
    you fall under. So, there would have to be a fair process put
    in place for that.
        I will just close by another example just last night. I
    chair the Intelligence Committee, and last night in the Defense
    Appropriations Committee there are several provisions that
    allow authorizing on the defense appropriations bill that will
    be on the floor this week. And once again, that will happen,
    despite the objections from myself and the members of my
    Committee.
        So, this is never going to get fixed until we decide to
    pull it out by the roots and start anew. And I think that all
    Members, at least on the House side--I can't speak for the
    Senate side because I have never served in the Senate--but on
    the House side I think it would really allow Members to
    actually participate, hold the executive branch accountable,
    have real power.
        Because you guys may not admit this publicly, but I will
    tell you that nobody in the executive branch takes any of us
    seriously unless you are an appropriator and a senior
    appropriator. If not, all they do is feed you a line, they know
    they are going to wait you out, and nothing ever gets done.
        So sorry for those of you who only serve on authorizing
    Committees, but nobody really cares if you are here or not.
        And with that, I will yield back.
        [The prepared statement of Devin Nunes follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. I thank the gentleman from California for
    his testimony this morning. Thank you, Devin.
        Representative Nunes. Thank you.
        Co-Chair Womack. Our next witness, the gentleman from
    Pennsylvania, Representative Keith Rothfus.
        Good to have you here, sir. The Committee looks forward to
    your testimony. And the floor is yours.

      STATEMENT OF THE HON. KEITH J. ROTHFUS, A REPRESENTATIVE IN
                CONGRESS FROM THE STATE OF PENNSYLVANIA

        Representative Rothfus. Mr. Chairman, thank you, Co-
    Chairwoman, thank you for the opportunity to testify before
    this Committee, and thank the members of this Committee for
    this very challenging work that you have ahead of you.
        Here in Washington we hear so much about how our system is
    broken and Congress doesn't work, but I don't think we
    understand how profoundly broken it is. In the over four
    decades under our current budgeting process, Congress has only
    passed all 12 appropriation bills on time four times. Think
    about that. Failing to follow regular order isn't the
    exception, it is the norm.
        Due to this chronic failure, we in Congress are forced to
    vote on massive omnibus packages and continuing resolutions,
    often with very little time to read them. We are constantly
    presented a false choice between voting on these cumbersome
    bills or letting the government shut down. In effect, Members
    are given 1 vote instead of 12 votes or even hundreds of votes
    on the opportunity to offer amendments.
        When we are voting on legislation hundreds of pages long
    with very little notice, we cannot accurately represent what we
    see in our districts. This haphazard budgeting process also
    makes it virtually impossible to actually prioritize spending
    in any meaningful way while our national debt continues to
    explode.
        Further, it seems every time we pass one of these
    monstrosities, we hear about more provisions that seemingly
    nobody knew were included.
        This is absurd and needs to change. Issues should be
    debated on their merits one at a time. We should have ample
    time to dissect and read all bills considered. And we should
    allow for feedback from our districts before taking the vote.
        It is for these reasons in previous years that I introduced
    the Pay for Performance Act. This legislation would have
    withheld pay for either Chamber if they failed to complete all
    12 appropriation bills on time.
        There may be a better way to incentivize these bodies to
    get their work done. Perhaps no August recess until
    appropriation bills are done.
        We need an incentive like this to get our process back in
    order. Or maybe we need a new process entirely. Either way, a
    90 percent failure rate is unacceptable by any metric and we
    should demand better.
        Government is going to be funded, we know that. If it is
    not going to be funded on September 30, it is going to be
    funded by October 20 or November 18 or December 22 or February
    18. This is an act of the will.
        We know deadlines are coming. Every taxpayer in this
    country knows that April 15 they have to file something. Even
    if they have to file an extension, they have to pay taxes too.
        We know government is going to be funded. There is no
    reason why we can't get this done by September 30.
        I sincerely thank everybody for this work that you are
    undertaking. I encourage you to look at this from different
    angles. I was just listening to Chairman Nunes and his
    suggestions.
        We have 12 appropriations bills that lump different
    agencies together. Is that the best practice? You need to take
    a look at that.
        Should there be more types of bills? We can vote on these
    things.
        You take a bill, the one we considered last week where we
    did--or a couple weeks ago when we did the minibus, or even you
    look at something like the Labor-HHS, which combines three
    agencies. Should these be divided further?
        We also need a process where we can be having discussions
    about some binary choices and prioritizing. That is what
    families around this country do around the dinner table. If you
    have an emergency at home, you might have to put off resealing
    the driveway so that you know that the lights are going to stay
    on or the plumbing stays on.
        We need a mechanism of some sort where if we want to
    increase funding in one area, we should be able to ask that
    that could come from another area, and it shouldn't necessarily
    happen in the same appropriations bill. There may be something
    I want to propose for an increase in Labor-H, but I would want
    to pay for it out of another bill. There is no mechanism to do
    that.
        So, again, I applaud this Committee for the work that you
    are undertaking. I encourage you. And I look forward to further
    interaction with this Committee and I look forward to your
    reports.
        Thank you.
        [The prepared statement of Keith J. Rothfus follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. Thank you very much, Representative
    Rothfus, for your testimony this morning.
        We are going to stay in Pennsylvania. Our next witness is
    Representative Lloyd Smucker from Pennsylvania 16.
        Representative Smucker, we appreciate the opportunity to
    hear from you this morning. The floor is yours.

       STATEMENT OF THE HON. LLOYD SMUCKER, A REPRESENTATIVE IN
                CONGRESS FROM THE STATE OF PENNSYLVANIA

        Representative Smucker. Thank you, Chairman Womack and
    Chairwoman Lowey, Members of the Joint Select Committee on
    Budget and Appropriations Reform. Thank you for the opportunity
    to testify before you today.
        First, I would like to begin by extending my sincere
    appreciation for the work of this select Committee. You all
    have been tasked with accomplishing an incredibly important
    job, fixing the broken Federal budget process.
        As a freshman member of the House Budget Committee, I have
    received quite an education over the last 18 months about how
    we conduct business here in Congress. We lurch from one CR to
    the next, an average of four per year. Since our budget process
    was last overhauled in 1974, the government has been shut down
    more than 20 times. In fact, the 12 required appropriations
    bills have passed on time just once in 43 years.
        Particularly when contrasted with my experience as a
    business owner and then as a State legislator in Pennsylvania,
    I think it is fair to say that the wheels have completely come
    off our annual budgeting process. But you already know that and
    you know the results: a crushing debt that threatens our
    security and our economic vitality, a system that is failing
    the American people, and a rather bleak outlook for our kids
    and grandkids if we can't change the trajectory.
        We come here to solve big problems, and it is not too late
    to place this country on a sound fiscal path. We can do it and
    we must.
        I have come to believe that it must start with reforming
    the process. We must reform the budget process and reform the
    way Congress works to achieve the results that we need. And I
    also happen to believe that this commission is our best
    opportunity in a long time to do so.
        My purpose today is to share the experience of a commission
    in the Pennsylvania Legislature that worked, that took on a
    similar systemic long-term problem and found solutions.
        In fact, it had worked so well that I thought it was a good
    model to tackle budget reform and before the establishment of
    this select Committee had introduced legislation that would
    have established a similar joint commission.
        My hope is that sharing how it worked in Pennsylvania will
    spark a few thoughts or ideas that could be useful to you in
    your work and your ultimate success.
        So just a little background. The Committee in Pennsylvania
    was the Basic Education Funding Commission and it was tasked
    with determining a new formula to distribute education dollars
    to 500 districts all across the state.
        Everyone agreed, similar to what we have here, that the
    current system was completely broken, but multiple attempts to
    fix it over a period of 30 years had produced absolutely no
    results.
        The Commission was formed, worked for about 16 months, then
    provided a unanimous recommendation, which was taken up by the
    legislature, then passed and signed into law by the Governor.
    As chair of the State Education Committee at that time, I was a
    member of the Commission and sponsored the final bill.
        Several things about the Commission were important and may
    be helpful. The makeup of the Committee was important. It was
    bipartisan and bicameral. It was an inside Committee like this,
    three members from each party and each house, including the
    chairs of the relevant Committees. It also included three
    members of the executive branch, including the Budget Secretary
    and the Education Secretary. All of the key decisionmakers were
    in the room and were included in the process.
        The process itself was equally important. All deliberations
    were open and were transparent. And in our case, we held
    multiple hearings across the State, inviting anyone who wanted
    to participate to testify and provide input, including experts
    from other States, educators, and even members of the general
    public. That not only provided the best thinking available, but
    also created a loud echo chamber across the State and by and
    from all stakeholders.
        Remarkably, the work of the Commission in Pennsylvania
    spanned two administrations, Republican and Democrat. Members
    from the executive branch changed midway through the process.
    Even so, the recommendation was unanimous and was fully
    endorsed by the new Governor.
        Sticking to the original purpose of the Commission was also
    critical. It was tasked with finding a formula, but during
    hearings received a lot of pressure to increase the scope of
    its work. We worked really hard to keep the goal narrowly
    focused on the specific problem that we wanted to fix.
        While your commission may not be designed in exactly the
    same way as ours in Pennsylvania, I know it can work and that
    you can make a difference. I applaud you for your work and
    believe this is the best opportunity we have to fix the broken
    Federal budget process and deliver real systemic and meaningful
    budget reforms.
        I look forward to the work that you are doing and to
    supporting you in the best way that we can in the legislature.
    We share a common goal of wanting to fix the troubled state of
    our Nation's fiscal health, and that starts with reforming the
    broken Federal budget process.
        Thank you.
        [The prepared statement of Lloyd Smucker follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
        Co-Chair Womack. Thank you, Representative Smucker, for
    your testimony this morning.
        Our next witness is the gentleman from Ohio, Representative
    Warren Davidson.
        Representative Davidson, the Committee appreciates the
    opportunity to hear from you this morning. And with that, the
    floor is yours. Please engage your microphone. And you have got
    5 minutes for testimony.

      STATEMENT OF THE HON. WARREN DAVIDSON, A REPRESENTATIVE IN
                    CONGRESS FROM THE STATE OF OHIO

        Representative Davidson. Thank you, Chairman, and thanks to
    the full Committee. I really appreciate your attention to this.
    And we are all in the same boat, but you guys are doing the
    work.
        I really could spend the whole time talking about how
    important it is to move past the broken Budget Control Act of
    1974 and to do just really basic things, like have a meaningful
    Gantt chart that shows what can happen in parallel and what can
    happen sequentially, so that we get our work done on time, as
    the country should expect us to do.
        I couldn't emphasize how important it is that we put
    everything on appropriations, not just some things, and the
    autopilot has got us headed for a crash.
        But one of the more meaningful things that I think we could
    do in reform is to understand how our accounting department
    works.
        Essentially, the Congressional Budget Office serves as our
    accounting department. Each of us doesn't have one of these
    functions in our office. And, unfortunately, most of the time
    we don't even, as individual Members, have access to real
    reports from accounting. They might give us the final summary,
    but they won't show us the details.
        And so, I think the Congressional Budget Office should
    fully embrace our Show Your Work Act, and I ask that you would.
        I have received some feedback about some concerns and would
    love to try to address a few of those. For background, the
    Joint Select Committee on Budget and Appropriations was
    established by this act. So, we have got a process to review
    things.
        The CBO has an incredibly important role in providing
    budget and cost analysis for legislation in Congress. Given the
    weight of these scores Members of Congress have to use for
    policy decisions, it should be a top priority that CBO
    standards are of the highest possible quality so that they may
    provide the best possible analysis for policymakers.
        When CBO fails to accurately predict the impact of
    policies, legislators lack the resources to make educated
    decisions.
        Examples include healthcare. Upon passage of the Affordable
    Care Act, CBO projected 21 million people would be enrolled in
    the exchanges in 2016. In reality, roughly 10 million people
    signed up, making for an overshot of 120 percent.
        In the healthcare debate in 2014, CBO predicted Medicaid
    expansion would cost $42 billion in 2015. The reality was $68
    billion, about 62 percent higher.
        And most recently on tax reform, projected that the economy
    would only grow by 0.4 percent extra because of tax reform. We
    see the results are meaningfully different than that.
        So, what the legislation does is it requires CBO to publish
    online all data, models, and processes utilized in their
    analysis and scoring. It specifies that data and information
    provided must be sufficient so that individuals outside of CBO
    can understand, replicate, and reproduce the results found
    within. Essentially, this is the same thing that academics
    expect and it would come with some of the same safeguards.
        CBO should not be allowed to disclose certain datasets.
    Instead, they would publish a complete list of data variables
    for that data, including descriptive statistics, averages,
    standard deviations and correlations, a reference to the
    statute or rule preventing them from disclosing, for example,
    personally identifiable information, and the contact
    information for the individual or entity that has unrestricted
    access to the data.
        So, for example, we wouldn't need to know the contents of
    everyone's tax return or, frankly, the detailed pricing of any
    one pharmaceutical. We would need to know aggregate data to be
    able to simulate the model. We might not need to know how an
    individual company priced their drugs to model prescription
    drugs, for example.
        The bill is very important because it would allow the same
    sorts of review that go on in normal companies. Accounting
    departments have healthy debates. They have accountability that
    comes from the board questioning the accounting department.
        If you ask a leader of a business unit how to steer the
    business unit, it is unfathomable that the leader of that
    business unit wouldn't be able to go to the accounting
    department and get a detailed answer as to why that was the
    cost model if you tried to apply this to the corporate world.
        I believe we are owed it, as Members of Congress,
    individual Members, and I certainly believe that the American
    people are owed it. And I hope that you can find a way to
    address the concerns that have been expressed that are valid
    about how to protect personally identifiable information or
    proprietary information.
        But the American people need to know how our accounting
    department derives their recommendations so that it can be
    truly respected as the nonpartisan entity that it is.
        Thank you.
        [The prepared statement of Warren Davidson follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. Thank you, Representative Davidson, for
    your testimony this morning.
        Our next witness is Representative French Hill, my
    distinguished colleague from Arkansas, a member of the
    Financial Services Committee.
        The gentleman from Arkansas is recognized for 5 minutes.

       STATEMENT OF THE HON. J. FRENCH HILL, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF ARKANSAS

        Representative Hill. I thank the Chairman. I congratulate
    the Chairman on a great victory by Arkansas last night in his
    district. I know he stayed up late watching that game.
        Co-Chair Womack. Go Pig Sooie.
        Representative Hill. My best wishes to the ranking member,
    members of the Committee.
        Experiencing frustration and dissatisfaction with the
    actual functioning of the Congressional Budget Act of 1974 is
    not new or remotely original. This Committee's shelves are
    stacked with binders of worthy and not-so-worthy suggestions
    from four decades of bipartisan complaining.
        My first exposure to concrete recommendations for wholesale
    change came from my former boss on Capitol Hill, Senator John
    Tower of Texas, an original member of the Senate Budget
    Committee and Chairman of the Senate Armed Services Committee.
        Senator Tower offered his restructuring proposals in his
    1991 memoir ``Consequences.'' He argued strongly for a 2-year
    budget cycle to get off the budgetary treadmill, and he argued
    that there be less executive branch testimony before
    authorizing, appropriating, and budget Committees by
    streamlining that witness approach.
        In the last two decades, Congress' budgetary muscles have
    atrophied, rarely completing a budget or passing appropriations
    measures prior to fiscal year ends. It is really sad how little
    that has happened since 1974. Gosh, not since 1996, and that is
    back when Vice President Gore was still inventing the internet.
        The results. The administrative state has grown unwieldy
    and more immune to oversight. In Article I, the Congress'
    appropriation oversight responsibilities are their most
    fundamental. The debt has grown unabated, with the burden of
    net interest that is expected to soon reach more than the
    entire appropriation for defense, and by 2027 reach
    approximately $1 trillion, the approximate size of today's
    entire discretionary budget.
        The government is run from one dysfunctional CR to another,
    periodically punctuated by an unaccountable omnibus
    appropriation that pleases no one.
        All the while, mandatory spending programs grow at three or
    four times the rate of macroeconomic growth, with little public
    discussion or oversight and rarely, if any, votes being held
    for restructuring in the Congress.
        So, what to do?
        Let me first endorse fully, Mr. Chairman, the 2-year budget
    cycle for annual budget resolutions and having a 2-year
    spending allocation under that resolution. Watching the House
    move all 12 appropriations bills last summer in a 120-day
    period made us all realize that our muscles can be strengthened
    and we can do that, and I commend Senator Shelby's work as well
    this year. So, I think the 2-year cycle is good.
        Unauthorized programs. You know, in business, where I spent
    three decades, this kind of thing just wouldn't even be
    considered in the real world. Establishing a budget procedure
    whereby spending is reduced by the amount of excess
    appropriations for unauthorized programs would be a worthy
    change. Thus, the Committees--the authorizing Committees would
    not fund--appropriations Committees would not fund unauthorized
    or expired programs.
        Likewise, all authorizing Committees would file their views
    and estimates, including a list of every program about to
    expire or that required reauthorization, and use a zero-based
    budget justification for every program so identified.
        I have a list of things that I entitle, Mr. Chairman, Stop
    Kidding Ourselves:
        Number one, prohibit budget gimmicks.
        Stop Committees from using one-time shifts in timing or
    asset sales to offset ongoing spending increases.
        Permit any Member to offer an amendment to strike emergency
    spending designation in any measure.
        Insist that the Congressional Budget Office and the Office
    of Management and Budget baseline budget eliminate their built-
    in discretionary inflation, automatic extensions of expired
    programs, and that mandatory spending programs continue at
    current levels even when trust funds are insolvent.
        On better transparency, I think every fact sheet by the
    Budget Committee and the Appropriations Committee for all
    Members and Senators should propose plainly what the outlay is
    for the proposed fiscal year compared to the past 5 years of
    actual outlays, noting the percentage increase and decrease.
        All Federal insurance and retirement programs, excluding
    Social Security, ought to be put on accrual budgeting,
    requiring the Congress to fully budget all the costs in those
    programs.
        And finally, Mr. Chairman, I really think that Tom
    McClintock's Default Prevention Act, which requires the
    Department of Treasury to continue to borrow to pay the
    principal and interest on certain obligations if the debt
    exceeds its statutory limit, is a worthy change that this
    bicameral Committee ought to recommend. I think it will take
    off the table the periodic debt ceiling limit that causes our
    debate to not be as positive as it could be.
        And finally, a regulatory budget. I hope that you will
    consider a regulatory budget in addition to a budget
    resolution.
        And I thank you for the time to testify.
        [The prepared statement of J. French Hill follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. I thank the gentleman from Arkansas for
    his testimony.
        We are going to hear from one more witness, then we are
    going to take our promised break, albeit about 15 minutes late.
    The gentleman from Ohio, Mr. Jim Renacci.
        Representative Renacci, we are pleased to have you this
    morning. The floor is yours.

      STATEMENT OF THE HON. JAMES B. RENACCI, A REPRESENTATIVE IN
                    CONGRESS FROM THE STATE OF OHIO

        Representative Renacci. Thank you, Mr. Chairman. I want to
    thank the co-chairs of the joint select Committee for holding
    this hearing and allowing Members of Congress to share their
    ideas and proposals.
        Look, I got here 7\1/2\ years ago as a business guy who
    balances budgets, who makes things work, and who continues to
    believe we need budgets. The problem is our budgetary system is
    broken.
        I have spent a lot of time since being elected here of
    looking at financial processes, everything from how we can
    develop a financial statement to how we can develop a process
    where we can start with a budget.
        But let's first say you can't even prepare a budget if you
    don't know where you are at. And one of the biggest problems I
    said in Washington is most Members of Congress don't really
    know financially where we are because we don't have a fiscal
    accounting, we don't have a fiscal financial statement, and we
    don't have a fiscal address.
        So, what I am proposing is two bills that actually I think
    fix the budget process.
        Number one, you first have to have awareness. I believe it
    is critical the American people and Congress are aware of the
    financial system that our country faces. So, I have introduced
    a bill that would just do that. It is pretty simple. All it
    does is require the Comptroller General of the General
    Accounting Office to provide a fiscal state of the Nation
    address to a joint session of Congress on an annual basis.
        The presentation would include an analysis of the condition
    of our country's fiscal status, including our budget deficits,
    long-term fiscal projections for our social insurance programs.
    It would be a presentation of our fiscal issues, and it would
    be public for all Americans.
        Right now, our country is on the cusp of a national debt
    crisis. By 2023, the CBO projects that we will spend more
    paying down our interest than we will on our national defense.
    By 2028, the debt held by the public as a share of GDP will
    increase to 96 percent, the largest since 1946.
        Most Members of Congress don't know that. By the way, I
    have also said that every Member of Congress should be on the
    Budget Committee at least one cycle. Most Members of Congress
    are not aware of that. And as lawmakers, we have a moral
    responsibility to address these changes and work together to
    find bipartisan solutions to stave off this pending crisis.
        A strong first step would be requiring Congress to come
    together once a year to hear from a nonpartisan Comptroller
    General what the fiscal state of the country is in order to
    highlight the crisis that we face and put Members on notice to
    the public that this is an issue that needs to be addressed.
        The best way to tackle a problem is to first shine light on
    the problem. At my request, the Comptroller General has
    testified before the House Budget Committee in recent years,
    and I believe that this issue is too important that the full
    Congress not be made aware of it.
        Some will say a joint session of Congress is not the right
    venue for this type of speech. I would highly disagree. I would
    counter by asking doubters why they believe this isn't an
    important enough issue to convene a joint session and why they
    are afraid to set the new precedent.
        I had almost 200 cosponsors on this bill the first time I
    dropped it last cycle. This cycle I am close to getting 200
    bipartisan Democrats and Republicans who agree to this. We
    shouldn't be afraid of doing it.
        Additionally, the legislation was included in the 2016
    Budget Committee budget reform white paper, has been endorsed
    by the Committee for a Responsible Federal Budget, the AICPA,
    the Concord Coalition, and the National Taxpayers Union.
        It is something we should not be afraid of. It is something
    we should be looking forward to seeing every year so we know
    where we have to start before we do the budget process.
        Along with that awareness, I think we need to do a better
    job at holding ourselves accountable. The second bill I have
    introduced would make Congress actually abide by the budget
    that we pass. Since 1974, we waive our budgets. Every time we
    turn around, it gets waived in budget--in the Committee that--
    anyway, it gets waived, and that is a problem. We can't waive
    the Committee.
        Too often, the Rules Committee waives budget-related
    issues, preventing Members of Congress to object to legislation
    that breaks the budget.
        If you want to break the budget, that is all well and good.
    In the business world, you break it all the time. But what you
    do is you come before management, which is the Congress, and
    you tell people why.
        This bill would allow Members of the House to call for a
    recorded vote on these waivers and put Members on the record
    whether they wish to waive the budget.
        As someone who has spent my career in the business world, I
    believe it is important that we pass a budget and follow the
    budget. This bipartisan legislation would hold Congress
    responsible to ourselves and ensure that we actually follow our
    budget.
        I commend the work that the Joint Committee is doing in
    reforming our broken budget process. I believe that these two
    measures that I discussed today should be considered as part of
    the broader reforms that are needed to fix the budget process.
        I want to thank you again for your time. And I yield back.
        [The prepared statement of James B. Renacci follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. I thank the gentleman from Ohio for his
    testimony this morning.
        Our next witness is here, but we have promised our
    Committee that we are going to take just a few-minute break for
    a comfort break, check email, make whatever phone calls you
    need to make.
        So, at this time, if it pleases the co-chair, I think we
    will take a break and resume our testimony at 5 till the hour.
    That would be in about 11 minutes.
        So, the chair declares this Joint Select Committee on
    Budget and Process Reform for Members' Day to be in recess for
    about 10 minutes.
        [Recess.]
        Co-Chair Womack. The Joint Select Committee on Budget and
    Process Reform Members' Day will resume.
        The co-chair and I do appreciate the cooperation and the
    participation of our Members of the Committee and those Members
    that are making presentations here today.
        We are running just a few minutes late. We do appreciate
    the patience of our next witness, Ms. Jayapal. And we will
    proceed now with her testimony and then go straight toward the
    end, in hopes of getting us back a little bit more on time,
    although running about 15 minutes late is about on time for
    Congress, in my opinion, based on my experience.
        But nonetheless, our next witness is Pramila Jayapal from
    Washington. And the gentlelady is recognized for 5 minutes in
    support of her positions on this subject.
        And the floor yours, Ms. Jayapal.

      STATEMENT OF THE HON. PRAMILA JAYAPAL, A REPRESENTATIVE IN
                 CONGRESS FROM THE STATE OF WASHINGTON

        Representative Jayapal. Thank you so much, Chairman Womack,
    and thank you to Chairwoman Lowey as well, for holding this
    hearing and for all your dedicated work.
        Since I have come to Congress, I have heard a lot of talk
    about the budget process being broken. And as the vice ranking
    member of the House Budget Committee under the great leadership
    of Mr. Yarmuth, I have been able to look at the process up
    close and consider how we use it.
        What is obvious is that there is a process on the books
    that has the promise of being able to be used effectively, but
    in reality, it has been thwarted time and time again.
        As a Budget Committee member, I plan to focus my remarks
    today on the Budget Committee's role. And first I would like to
    give a little bit of context.
        The budget resolution process was designed to give Congress
    a voice in setting fiscal policy. And prior to the enactment of
    the Congressional Budget Act of 1974, which established the
    Budget Committees as well as the Congressional Budget Office,
    Congress did not have its own source of budgetary information
    and didn't have a procedure to establish an overall fiscal
    framework.
        Rather, the executive branch housed budgetary information
    and was the only source of a fiscal plan. Congress acted on
    that plan in a piecemeal fashion, with each Committee reviewing
    proposals in its jurisdiction. There was no approval of overall
    levels of revenue, spending, and the resulting deficits and
    debt.
        Clearly, that was not a good way to budget. Revenue and
    spending decisions should not be made in separate silos. Each
    has an impact on deficits and debt. Changes in one are going to
    fundamentally require changes in the other, a change in the
    overall fiscal path, or both.
        And a perfect example is the recent tax bill. The
    Republican majority made a decision to cut revenue
    substantially, even though long-term deficits were already
    unsustainably high. That was then used to justify calls for
    even deeper spending cuts. And it had severe consequences for
    Americans across the country, who are struggling to make ends
    meet, to pay for healthcare, or even to put food on the table.
        The good news is that the budget resolution can and has
    been used to lay out a framework of priorities. Used properly,
    the budget resolution provides a way to lay out Congress'
    priorities, both for overall fiscal policy and for distribution
    across major functions or areas of national need.
        The reconciliation process provides a path to enact
    spending cuts or revenue increases included in a budget
    resolution that might require difficult votes. Major deficit
    reduction packages that implemented policies assumed in the
    budget resolution have been enacted, including those during the
    Clinton administration that led to budget surpluses.
        The budget resolution should and has set the stage for the
    Appropriations Committee to do their work.
        But sadly, the budget resolution has become only a
    messaging document rather than a governing document. It has
    incorporated policies that the majority doesn't actually plan
    to move during the upcoming year.
        And, for example, in recent years, trillions of dollars of
    savings are called for in the resolution, but are not included
    in the reconciliation directives.
        That is the mechanism to enforce the cuts. It is called
    reconciliation because the whole point of the process is to
    reconcile Federal law with the amounts assumed in the budget
    resolution. Failing to reconcile trillions of dollars in cuts
    suggests that the cuts are not meant to be real.
        Likewise, discretionary spending has been put at
    artificially low levels, even though there is widespread
    agreement that higher levels will be needed.
        Much of the savings in both categories has been
    unspecified, meaning that it is impossible to tell from the
    budget resolution what Congress' true priorities are. Revenue
    cuts have been sold as likely to cost nothing, even as the
    Joint Tax Committee's best estimates show that is not the case.
        None of this engenders respect or credibility for the
    process or for those of us who serve in Congress.
        It is time for all of us to step up and recognize that we
    can do better. The budget resolution process has a means to
    define what we want fiscal policy to be and a set of
    enforcement procedures to help us get there.
        There may need to be improvements to the process that can
    help make things move more smoothly, and we should welcome
    them. But realistically, we can't expect them to fix this.
        Rather, we need to approach the process with a realistic
    understanding of what we can do, a willingness to compromise
    when necessary, and a readiness to accept analysis on what
    policies will cost and save produced by our own in-house
    nonpartisan experts. If we don't do that, we have ourselves to
    blame for not being able to muster the resolve to use the
    process that we have efficiently.
        I thank you very much for your work and for your focus on
    this issue.
        [The prepared statement of Pramila Jayapal follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. I thank the gentlelady from Washington for
    her testimony this morning.
        Our next witness is Representative David Price from the
    great State of North Carolina.
        Representative Price, we appreciate you appearing before
    the Committee this morning. And the floor is yours, sir.

       STATEMENT OF THE HON. DAVID E. PRICE, A REPRESENTATIVE IN
               CONGRESS FROM THE STATE OF NORTH CAROLINA

        Representative Price. Thank you, Co-Chair Womack and Co-
    Chair Lowey and other members of the select Committee. I
    appreciate the chance to testify today, and I will submit the
    full copy of my text for the record.
        I have been following the work of this Committee and like
    much of what I have heard. The possibility of ending debt
    ceiling brinksmanship, for example, or moving to a calendar
    year budget cycle.
        But one of the ideas you are considering has set off alarm
    bells, and for that reason I would like to take a few minutes
    to detail my objections to a bad idea, namely, moving to a
    biennial appropriations process.
        I first testified about biennial budgeting about 20 years
    ago before the House Rules Committee, which was considering
    legislation to transition Congress to biennial appropriations.
        Then our fiscal situation was quite different. The
    enactment of comprehensive multiyear budget agreements in 1990,
    1993, and 1997, coupled with a growing economy, had produced
    several years of balanced budgets. In fact, we had been able to
    pay off $400 billion of the national debt.
        Since then, we have had two unpaid-for wars, unnecessary
    but expensive countercyclical response to the Great Recession,
    massive unpaid-for tax cuts, and now 7 years of extremely
    partisan and largely dysfunctional congressional budget
    politics.
        So, it is understandable that the idea of biennial
    appropriations would once again hold some appeal as a panacea
    for Members in search of solutions to our current woes. But
    this is truly a case in which the remedy would be worse than
    the disease.
        Of course, I understand the congressional budget and
    appropriations process have eroded significantly. The pressures
    of divided government and a polarized electorate, the increased
    use of the Senate filibuster, the general subjugation of
    Congress' constitutional power of the purse to partisan
    political considerations, all of these factors have greatly
    delayed the enactment of our annual spending bills and
    increased our reliance on continuing resolutions and omnibus
    packages.
        But biennial budgeting, by which I mean biennial
    appropriations, would do nothing to address the underlying
    causes of this dysfunction. It actually might 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 the regular order.
        I want to stress that these same arguments do not apply to
    a multiyear budget agreement of the sort that served us so well
    in the 1990s, nor do they apply to a 2-year budget resolution
    of the sort Congress passed a few months ago. Indeed, our
    current appropriations work is greatly facilitated by the fact
    that that is a 2-year plan.
        But appropriations is another matter. The thorough review
    of individual agency programs and the determination of new
    funding levels must have year-to-year flexibility and is
    distinct from determining budgetary topline numbers.
        My arguments this morning are directed to the 12
    appropriations bills that must be passed under any budget
    agreement, no matter the duration of that agreement.
        Now, proponents of biennial appropriations claim that it
    would free up Congress to conduct oversight in the off-year.
    That is a supremely ironic claim, for the most careful and
    effective oversight Congress does 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 further removed from actual funding decisions, reducing
    Congress' leverage.
        As the ranking member of the House Appropriations
    subcommittee on Transportation and Housing, I have seen
    firsthand the value of annual appropriations bills and how it
    bolsters congressional oversight.
        For example, last year the Federal Transit Administration
    made several administrative and policy changes, procedural
    changes to the capital investments transit program, the New
    Starts program. State and local agencies faced considerable
    uncertainty about how their projects would be reviewed and
    whether they could count on Federal funding commitments.
    Members of both sides of the aisle reached out to the
    Appropriations Committee with their concerns.
        So, in response, our Committee included several provisions
    and report language in the fiscal year 2018 omnibus
    appropriations bill on a bipartisan, bicameral basis, directing
    FTA to provide grantees with updated project ratings and to
    administer the program in accordance with the law.
        What if we had had to wait an additional year to do that?
    To wait an extra year to enact these policy provisions might
    have resulted in the failure of several large transit projects
    across the country. And the ability of the Committee to quickly
    respond to executive branch action proved decisive.
        Annual appropriations bill also serves as a way to respond
    to court rulings that may invalidate or make workable existing
    policies. They facilitate other policy tweaks that would
    otherwise fail to garner floor time. These housekeeping items,
    as we call them, almost always are dealt with on a bipartisan
    basis and they are vital to ensuring the effective function of
    government.
        A biennial appropriations process would also pose special
    challenges during the second year of the 2-year budget cycle.
        Just think about this. Under the existing appropriations
    cycle, Federal agencies typically begin formulating their
    budgets in the summer of the year before the President submits
    his budget request to Congress in February. That is a full 14
    to 15 months in advance of the start of the actual fiscal year.
        Now, if you ask agencies to put a budget request for the
    second year of a 2-year cycle forward, as much as 28 months in
    advance, that would require a level of planning and foresight
    that just might not be possible or realistic given the
    uncertainty of revenue and expenditure projections, the
    continually evolving challenges of the Federal Government.
        For example, the Tenant-Based Rental Assistance Program,
    often referred to as Section 8 vouchers, at the beginning of a
    cost cycle we receive estimates from HUD regarding renewals.
        Co-Chair Womack. The gentleman is running out of time. Your
    time has expired.
        Representative Price. All right. I will leave the Section 8
    example for the record and wrap up, Mr. Chairman.
        What I am saying, though, pertains to the second year of an
    appropriations cycle. And I just think we would have more
    supplemental appropriations bills, more reprogramming, and all
    the rest.
        So, in conclusion, the whole purpose of the biennial budget
    could be undermined by the proliferation of supplementals in
    the off-year. Perversely, we would have replaced the
    deliberative and democratic process of appropriations with
    supplemental bills that are sporadic, rushed, and heavily
    controlled by leadership.
        So, I don't think biennial appropriations is any better an
    idea today than it was 15 or 20 years ago. It would be a
    mistake to let recent budget disagreements lure us toward a
    supposed remedy that would actually make appropriations less
    systematic, less flexible, and less potent.
        We all know that the process has broken down, but biennial
    budgeting fixes none of this.
        Thank you, Mr. Chairman.
        [The prepared statement of David E. Price follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. Thank you, gentlemen, for your testimony
    here this morning.
        I am going to allow the co-chair to make a statement.
        Mrs. Lowey.
        Co-Chair Lowey. Thank you very much.
        I just wanted to comment quickly on your presentation,
    perhaps because I agree with you 100 percent. And I think you
    present very carefully crafted arguments, and I know that your
    testimony will be an important part of the final record that we
    will review as we are making decisions.
        So, I just wanted to thank you again for the careful
    preparation of your presentation. Thank you very much.
        Co-Chair Womack. I thank the gentlelady.
        And as is the case with all Members, written statements
    will be made a part of the official record of this event today.
        Thank you, Representative Price.
        Our next witness is the gentleman from Montana, the Senator
    from Montana, Steve Daines. Mr. Daines will have 5 minutes for
    his presentation.
        Co-Chair Womack. The joint select Committee appreciates the
    time that you have taken to appear before the Members' Day
    program here this morning, and we will give you the floor, sir.

      STATEMENT OF THE HON. STEVE DAINES, A UNITED STATES SENATOR
                       FROM THE STATE OF MONTANA

        Senator Daines. Co-Chairs Womack and Lowey, thank you for
    your leadership and for giving us this Members' Day. It gives
    us an opportunity to share our experience on how to improve the
    very broken budget and appropriations process.
        I serve on the Appropriations Committee of the United
    States Senate. So, my remarks are somewhat framed in my
    experience of about 3 years in the Senate. I also want to thank
    Senator Perdue for his commitment to reform the budget process.
    David and I have been working a lot before the select Committee
    was put together. I am grateful for it. Thank you for elevating
    it to this level.
        Many of the Members currently serving in Congress come from
    business backgrounds, and I think we can take some of that
    experience. It is not the only experience that is going to help
    in this area, of course, but it will help us, I think, to frame
    a better process going forward.
        This process is incredibly broken, and so it should be no
    surprise that a profoundly broken process delivers a very bad
    result. Having spent 28 years in the private sector, passing a
    budget is not optional. You must pass a budget. In fact,
    passing a balanced budget is not optional. You must do that as
    well, or else you are out of business. $21.1 trillion of debt,
    $33.8 trillion of debt in 10 years, we have no option but to
    change the budget and the appropriations process.
        I just want to jump right into policy. I am going to try to
    remove the bun and get to the meat here.
        Let me share four recommendations that I have for this
    prestigious select Committee. First of all, I would combine the
    authorizing Committees with the corresponding Appropriations
    Committee. Consolidate them and then completely dissolve the
    Budget Committee. By doing this, we can start having real
    conversations about where to spend and how to spend it.
    Currently, we have two processes on different tracks that
    simply don't sync up. Integrating the processes into one
    Committee will ensure more coordination and better outcomes.
    The biggest single challenge to doing that will be leadership
    itself in these Committees.
        Members stay here for a long time. They get to Committee
    chairs. That, I think, will be the single greatest barrier that
    we will face in trying to implement that reform. But I think
    Senator Perdue and others have shown this incredible spaghetti
    tangle of authorizing Committees and Appropriations Committees.
    And then we have this Budget Committee on top of that, and it
    is no wonder this process produces a bad result. It is very
    complicated, and it is not unified. I think we could
    significantly improve this process by dissolving the Budget
    Committee, bring authorizing and Approps into single Committees
    that line up with their respective jurisdictions.
        Number two, the budget should be a law, not a resolution.
    We need to have an up-or-down vote on the entire budget, one
    number. One number that includes discretionary and mandatory
    spending. In today's terms, that means we would be voting on a
    roughly $4 trillion spending budget, not $1.2 trillion in
    discretionary.
        Number three--and I respectfully heard Representative Price
    and his views on biennial budgeting. I think we need to take a
    look at, and I will tell you why. I am a subcommittee chair on
    Approps. I believe that by budgeting over a longer period of
    time, it can make the process and outcomes more predictable for
    all stakeholders. This removes some uncertainty for Federal
    agencies and adds much-needed capacity to the Senate. I don't
    know if that has been talked about a lot. But one problem we
    had in the U.S. Senate is floor time. And the appropriations
    process we have today would consume a lot of that Senate
    capacity. A biennial budget actually frees up more capacity for
    the Senate to do the work of the people. You are much more
    efficient in the House than we are in the Senate. You guys get
    a lot better gas mileage.
        Fourth, we need to create incentives to pass a budget. I
    think we should look at both carrots and sticks. If any of you
    have served in State legislatures--I have not--but I think 46
    out of 50, conservatively, some say 48 out of 50, require a
    balanced budget. We should look at that for Washington, D.C.,
    as well.
        But at a minimum, as we see--I know in the State of
    Montana, they don't get to leave town until the budget is done.
    And so, there is an incentive to keep members there until they
    actually get the budget completed. But I think we are going to
    put something here that compels this organization, this body to
    do it.
        I do think by moving forward on some of these ideas, we can
    fix this. We need to fix it. I know there have been many
    efforts--you know this--and failed attempts to reform the
    budget process. I hope it doesn't go down in history as one
    more failed Committee that came up with recommendations and
    nothing was done.
        I sincerely believe this is the number one reform facing
    Congress. I don't think there is anything more important than
    what you are doing right here. I think truly this is the most
    important work we can be doing at the moment.
        We need to act. No more CRs. No more omnibuses. Failure is
    not an option.
        Thank you for holding this session today and allowing me to
    share my thoughts.
        [The prepared statement of Steve Daines follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. Senator Daines, thank you very much for
    your testimony this morning.
        Our next witness hails from the State of Alabama. We are
    going to provide 5 minutes of testimony from Representative
    Robert Aderholt.
        Representative Aderholt, the Committee appreciates your
    time this morning. Look forward to your testimony. The floor is
    yours, sir.

     STATEMENT OF THE HON. ROBERT B. ADERHOLT, A REPRESENTATIVE IN
                   CONGRESS FROM THE STATE OF ALABAMA

        Representative Aderholt. Thank you, Mr. Chairman. And
    thanks to the co-chairs for an opportunity to speak. And also
    to all the members, thank you for allowing Members to come and
    address the Committee today.
        Let me start by saying that I welcome today's discussion
    and opportunity to engage with members about the ways that we
    can make rule changes that improves our budget and
    appropriations process. The fulfillment of Article I, section
    9, clause 7 to responsibly oversee spending of public funds is
    one of the most crucial and necessary tasks that are executed
    by the Federal Government.
        Serving now in my 22nd year on the House Appropriations
    Committee, I have reviewed the process extensively. I have seen
    it in work over the years as I have served the people of the
    Congressional District, Fourth Congressional District in
    Alabama. With the trend of stopgap funding bills and government
    shutdowns, in this environment, there is a lot that we can do
    to ensure the American people that they are receiving effective
    government that they deserve. The work of passing 12 individual
    appropriation bills through the subcommittee, through the full
    Appropriations Committee, and then on the floor of each Chamber
    is a challenging process. It requires consensus and certainly a
    lot of hard work by a lot of people.
        The House Appropriations Committee has had dozens of
    hearings, met with administration officials to hear the budget
    justification. We have moved through the subcommittee process,
    the full Committee process with bipartisan agreements on much
    of the content that is in these funding bills.
        In recent years, the House has been able to consider and
    pass bills through this process despite the challenges that we
    have seen in the Senate. This has caused Congress under the
    leadership of both Republicans and Democrats to use combined
    spending packages as a way of forcing funding through the
    process. However, the status quo is not working, and I think
    that is what you are hearing from a lot of our colleagues
    today.
        The President, as you know, has promised that he will not
    sign another consolidated 12-bill package. In the House, we are
    trying to do our part to ensure that the process moves forward,
    that we have bills to go to conference with the Senate once
    they have completed their work. To ensure these bills will be
    considered in a timely manner, I think the--or I would submit
    that the Senate has got to strongly consider doing away with
    filibuster rule on appropriation legislation. By eliminating
    this Senate practice on appropriation bills, the Federal
    funding can be streamlined, and this institution can get back
    to upholding our constitutional responsibility.
        The Senate's responsibility is to the people they represent
    and to their constitutional duty to fund the Federal
    Government, not the administrative rules that are governing
    their body. Even though our Founding Fathers gave the House
    authority to originate money--bills through the origination
    clause in the Constitution, the House somehow thinks that now
    it is in our best interest to take a step back to the Senate
    internal rules. And what we have found is ourselves
    prenegotiating House bills with the Senate.
        I believe the House should continue passing appropriation
    bills that reflect the will of the people. We should then
    present each appropriation bill for Senate consideration. And
    then, as the House, hold out for passage so that the Senate can
    get to a formal conference. This conference should reflect a
    bipartisan approach that can reach a majority in each Chamber--
    a simple majority and not a super majority. If the majority
    party wants to filibuster and shut down the government, then
    that would be their prerogative. This is what I would call, and
    I think most of us would consider regular order. It has worked
    for decades upon decades in this institution. But we have
    gotten away from that, and if we are going to be successful in
    making Washington work for the people instead of partisan
    gridlock, it is going to take getting back to regular order or
    these basics.
        Let me add that one proposal which I do not think is a good
    idea is having a 2-year appropriation bill. I am very concerned
    about the matter of oversight. The annual appropriations
    process allows for a relatively quick review of how response--
    agency in addressing congressional concerns. It allows the
    entire House and Senate to be involved in the process in
    contrast to the reprogramming actions, and they do serve a
    legitimate process.
        Above all, we must remember that the legislative bodies
    representing--we are representing our voters. We take money
    from our voters, from hardworking families. And it is very
    legitimate that we use both directive and be very diligent in
    our oversight as we turn that money over to the executive
    branch.
        And, with that, I see my time is out, and I yield back.
        [The prepared statement of Robert Aderholt follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. Thank you to the gentleman from Alabama.
        Representative Lowey, the co-chair.
        Co-Chair Lowey. I just want to thank the gentleman from
    Alabama. And on an optimistic note, I am aware that the Senate
    is moving rather quickly working in a bipartisan way. And I am
    hoping that at a time near the time they complete their work
    and we complete the work, the bills can be meshed in a
    bipartisan way, and the authorizing poison pills that have been
    attached to the House bill can somehow disappear, and we could
    all work together and have a good bipartisan process.
        So, I just want to thank you.
        Representative Aderholt. Thank you. Thanks for letting me
    come before the Committee.
        Co-Chair Womack. Thank you, Representative Aderholt.
        Our next witness is a gentlelady from Connecticut,
    Elizabeth Esty. And the joint select Committee appreciates the
    opportunity to hear your testimony this morning. And we will
    open the floor for you for 5 minutes ma'am.

     STATEMENT OF THE HON. ELIZABETH H. ESTY, A REPRESENTATIVE IN
                 CONGRESS FROM THE STATE OF CONNECTICUT

        Representative Esty. Thank you, Mr. Chairman and Ranking
    Member Lowey, for the opportunity to present some views of how
    I think we can improve the budgeting and appropriations process
    in this House.
        In particular, I would like to focus on a broader principle
    of the breakdown of long-term decision making and planning. I
    see this with great clarity as the vice ranking member of the
    Transportation Committee where we have been unable to pass
    major infrastructure planning. And I think the American people
    are largely unaware that, unlike States and unlike individuals
    who have capital budgets, that we do not do that in the U.S.
    Congress.
        And so, the normal political pressure to do short-term
    planning has now become, I believe, significantly aggravated by
    where we are with deficits and in our budgeting process. So, I
    would urge the Committee, regardless of what specifics you come
    up with, that we should be focused on making good long-term,
    wise decision making for the American people. And I think we
    have gotten away from that. And I think the budgeting process
    has now compounded that process.
        I think there are some things we could look at in doing
    that capital budget, which I know that we have had previous
    Members of Congress who advocated for strongly 2-year budgets.
    But the bottom line should be we need to empower and equip
    Members of Congress to think about how to make those long-term
    decisions.
        The CBO plays an important role there. We have met with
    them and tried to solicit some ideas about what they could do
    by limiting them to a 10-year time window to look at and
    requiring a specific figure rather than ranges. I think we are
    limiting their ability to inform us.
        We know, for example, in the field of healthcare,
    preventive care has the most important benefits, not 10 years
    out but 20, 30, 40 years out. But they are statutorily
    prohibited from considering those long-term benefits.
        When I have asked them directly about what it would take to
    do that, they say, for one thing, they need statutory
    permission to do that. But I think they would also be more
    comfortable if they were allowed to give ranges or confidence
    levels further out: You know, we have high degree of confidence
    10 years out, but in the outer--further out years, we would
    expect savings. But these are more guesstimates, perhaps. I
    think that could help inform our debate whereas now they are
    not allowed to do that whatsoever. So that can be in preventive
    care. Certainly, that is true for infrastructure where we are
    just gridlocked. And we will pay for pieces of paper in our
    offices, but we won't pay for replacements of bridges and
    roads.
        The American people don't get why that is happening. And
    part of that, frankly, is the scoring process makes it hard. It
    makes it easy to do the piece of paper and really hard to
    replace the bridge.
        So, whatever ends up happening, I think we have to look at
    how the budgeting process can empower and inform Members to be
    wise, to make those long-term decisions. And the budgeting
    process should be part of that.
        We know we have got gridlock on many political
    disagreements. But I think notions about the value of
    preventive care and healthcare, about the importance of
    infrastructure, we all know that. We don't need to go to school
    for that. So, therefore, we need to a take good hard look at
    our budgeting and appropriations process to find out what are
    current impediments to us making wiser decisions.
        So those were my 2 cents about how we should approach the
    objectives, not the specifics of how we do it but really the
    touchstone of what we need to be doing. We all know that is
    true. The American people can't figure out why we can't get
    these budgets done. And I believe some of those longstanding
    practices or those guardrails we set in place have, in fact,
    have become an impediment to exactly what we thought we are
    supposed to be doing and certainly what the American people
    believe we are supposed to be doing.
        Thank you very much.
        [The prepared statement of Elizabeth Esty follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. The joint select Committee appreciates
    your testimony this morning, Representative Esty.
        Representative Esty. Thank you.
        Co-Chair Womack. Our next witness has just entered the
    room. We are going to ask the gentleman from California if he
    is prepared.
        The Committee appreciates the testimony from all the
    Members.
        And, Representative McClintock, we are going to give you 5
    minutes. The floor is yours. And thank you for being with us
    this morning.

       STATEMENT OF THE HON. TOM McCLINTOCK, A REPRESENTATIVE IN
                 CONGRESS FROM THE STATE OF CALIFORNIA

        Representative McClintock. Great. Well, thank you for
    having me.
        All spending originates in the House. In a very real sense,
    the buck starts here. The government cannot spend a single
    dollar unless the House says it can spend that dollar. The 1974
    Budget Act gives the House a very powerful set of tools to
    control spending and balance the budget.
        For years, on the House Budget Committee, I have heard it
    said that the budget is merely an aspirational document
    offering our vision of the direction the government should
    take. That is simply not true. The budget is an operational
    document, the single most important tool that we have to
    control spending. The problem is we don't use it.
        I have also heard incessantly that it is the mandatory
    spending that is to blame, and that is beyond our control.
    Well, mandatory spending is out of control, but it is a lot
    easier to change than discretionary spending because the
    reconciliation bill gets expedited consideration in the Senate;
    the appropriation bills do not.
        The budget resolution sets limits on the discretionary
    spending that is appropriated annually. That is about one-third
    of our budget. It also limits the mandatory spending. That is
    set by statute. That is about two-thirds of our budget, and it
    gives us powerful tools to enforce both sets of limits. The
    problem is we don't use them. Why?
        Well, the first problem is on the discretionary side. Those
    limits are sent to the House Appropriations Committee which
    cannot exceed them. The House routinely meets this
    responsibility; the Senate does not because its dysfunctional
    cloture rule gives the minority the ability to block them. As
    the deadline approaches and the threat of a government shutdown
    looms, the appropriation bills are cast aside in favor of
    stopgap measures that continue the spending trajectory without
    serious reform.
        Now, that is easy to fix. Give appropriation bills the same
    expedited consideration in the Senate that the reconciliation
    bill already has. The bigger problem is on the mandatory side,
    and process reform is not going to fix it. The mandatory limits
    are supposed to be placed in reconciliation instructions that
    are sent to the House authorizing Committees. Those Committees
    are then required to make conforming statutory changes. If the
    Committees fail to act, the Budget Committee can do so
    directly. Either way, those statutory changes go into a single
    reconciliation bill that bypasses cloture. But this powerful
    process is never used. Why? Well, because decisions on
    reforming mandatory spending, mainly entitlement programs, are
    the most difficult decisions in our fiscal policy. It is easier
    not to make them and blame the process.
        Every year, the House Budget Committee produces a budget
    that it claims will balance in 10 years, and it lays out
    proposals on how to do it. But it never places these proposals
    in the reconciliation instructions that transform them from
    promise into action.
        This year's budget is case in point. It promises mandatory
    spending reforms to balance within 10 years but only places 5
    percent of those reforms into reconciliation instructions that
    will actually change spending. In other words, we are 5 percent
    serious about balancing the budget and 95 percent unserious.
        If we were serious about the mandatory reforms, we would
    put them in the reconciliation instructions and force the
    statutory changes necessary to make them. We would also include
    discretionary limits that would begin the trajectory back to
    balance in this year's spending. The fact is we didn't.
        With all due respect, that makes this Committee's work
    largely a fool's errand. The principal problem with the budget
    process is it requires very hard decisions. Changing the
    process isn't going to make these decisions any easier.
    Whatever the process, the decisions are going to get harder and
    harder every year that we don't make them.
        Let me close with a warning. The countries that bankrupt
    themselves aren't around very long. Debt the size that we are
    now carrying ends up either as a fiscal crisis like those
    paralyzing Venezuela and our own territory of Puerto Rico or as
    an economic crisis as the central bank buys up debt at the
    expense of economic growth as we are seeing in Japan and
    throughout Europe.
        Over the past 10 years, while populations increased 26
    percent, our revenues have more than kept pace. They have grown
    29 percent. But spending has grown 46 percent. In short, it is
    the spending, stupid. Our job is to control that spending. We
    have powerful tools to do so, but we have not used them. The
    fault, Dear Brutus, is not in our stars but in ourselves that
    we are underlings.
        [The prepared statement of Tom McClintock follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. Thank the gentleman from California for
    his testimony this morning.
        Our next witness is from Illinois, Representative Bill
    Foster.
        Sir, we appreciate the opportunity to hear your testimony
    this morning. I will speak for the entire joint select
    Committee in thanking you for your testimony. And we will give
    you 5 minutes. And the floor is yours, sir.

    STATEMENT OF THE HON. BILL FOSTER, A REPRESENTATIVE IN CONGRESS
                       FROM THE STATE OF ILLINOIS

        Mr. Foster. Great.
        Well, good morning. I would like to begin by thanking Co-
    Chair Womack and Co-Chair Lowey and the other members of the
    Joint Select Committee on Budget and Appropriations Process
    Reform for holding this Members' Day.
        I am here to discuss the debt limit, which I view as the
    most unnecessary and disastrous risk to financial stability and
    the economic recovery of the last 8 years. Over the last 6
    months, I have discussed this issue with various administration
    officials and many experts in hearings of the House Financial
    Services Committee and in private meetings.
        In the Committee, Secretary Mnuchin responded that he did
    not support it, the debt limit, as a mechanism for controlling
    spending and--last year. And in February of this year, he
    thought that the repeal should be one option discussed in the
    long term.
        I agree with that statement, and I hope to advance repeal
    as one option that this Committee considers. The debt limit is
    an artificial fig leaf over the fiscal irresponsibility in
    Congress. It sometimes gets referred to as being like refusing
    to pay for a meal after you have eaten it.
        On one hand, the debt limit instructs the administration
    not to issue debt beyond a certain point. On another hand--on
    the other hand, Congress slashes revenue without paying for it
    and increases spending across the board even on projects that
    do not make sense. The deficits created here inevitably trigger
    a crisis with the debt limit. As a result of the partisanship
    that has defined recent sessions of Congress, the debt limit is
    a self-inflicted risk that is unnecessary and obviously
    ineffective. Moreover, it creates a default risk that is not
    market-driven, complicating the calculation of risk and likely
    distorting pricing. The United States--if the United States
    ever exceeded the debt limit, results would be catastrophic for
    our economy and for hardworking Americans.
        This problem should not be a partisan issue. It is an issue
    that impacts middle class families in every congressional
    district and unnecessarily slowed the recovery from the Great
    Recession. A 2013 Treasury report found that when this Nation
    approached the debt limit without a clear path to raising it,
    the average mortgage in the United States increased $100 per
    month. We need to address our debt limit through the budget
    process, the Tax Code, and appropriations. We need to address
    our debt through the budget process, the Tax Code, and the
    appropriations, and not the artificial debt limit.
        Our economy should not endure a market-rocking event
    because of a partisan fight over an arbitrary number that is
    not related either to economic performance or to GDP.
        I asked the Federal Reserve Chairman Powell about the size
    of our debt relative to aggregate household net worth, which,
    as many have noted, recently exceeded $100 trillion. He agreed
    that we have to address our debt in the long run but that we
    are presently not nearing our carrying capacity.
        Our failure to provide adequate revenue to pay for the
    programs hardworking Americans need created a serious
    structural debt problem. Our economy is both rich and
    productive enough to fulfill our obligations to the most
    vulnerable.
        We can afford to ensure that Social Security, Medicare, and
    Medicaid are available in perpetuity. And I strongly believe it
    is a moral imperative that we do so. The debt limit does not
    provide fiscal discipline but does cause market problems. There
    is no hypothesized credit limit of the United States of which I
    am aware. But it is clear that it is greater than the current
    debt load based on the market appetite for Treasuries and low
    interest rates. Repeal would allow markets to impose this
    discipline. We should consider other mechanisms for forcing
    Congress to have real debates on fiscal policy. These could
    include changing House rules to provide for the privilege of
    the House for bipartisan budgets that balance or a queen-of-
    the-hill process that could provide for votes on either end of
    the political spectrum and a centrist alternative with
    bipartisan support.
        I appreciate the opportunity to the joint--to testify
    before the joint select Committee, and I am happy to answer any
    questions.
        Thank you.
        [The prepared statement of Bill Foster follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. The Committee appreciates your testimony
    this morning, Representative Foster. Thank you so much.
        Our next witness is the gentleman from Arkansas, Mr.
    Westerman, representing Arkansas' Fourth district. Bruce, the
    Committee appreciates the opportunity to hear your testimony
    this morning. You have 5 minutes, and the time is yours, sir.

      STATEMENT OF THE HON. BRUCE WESTERMAN, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF ARKANSAS

        Mr. Westerman. Thank you, Mr. Chairman.
        And I want to also thank the joint select Committee for
    hosting this session to obtain Members' input on the current
    budget and appropriation's process.
        As with many of you, I am deeply troubled by current levels
    of Federal outlays and appreciate the opportunity to share my
    concerns today.
        Federal Government spending is out of control, unlike State
    spending, which is generally limited to the amount of money
    collected from taxes, Federal spending is permitted to vastly
    exceed income, and indeed it does.
        In April, the Congressional Budget Office released its
    annual budget and economic outlook, the 10-year economic
    forecast based on projected cost of current legislation.
    Economists at CBO predict the overall spending will reach $56.6
    trillion over the 10-year period from 2018 to 2028, ultimately
    exceeding 23 percent of GDP. Due to this obscene level of
    spending, budget deficits will continue growing at ever-
    increasing rates. Altogether, deficits are likely to average
    4.9 percent of GDP, which is significantly greater than the
    projected average economic growth rate of less than 4 percent.
        And as the Nation's debt increases, so will interest
    payments. Annual interest payments are slated to reach $915
    billion by 2028. That is 3\1/2\ times what we have spent on our
    debt in fiscal year 2017.
        Deficit spending is easy. Balancing a budget is hard. It
    requires tough decisions that many do not wish to make and
    decisions that will inevitably upset certain individuals.
        But at some point, these decisions have to be made. We
    simply cannot continue spending beyond our means. I believe it
    is in our Nation's best interest to set priorities now while we
    have time to evaluate options and process decisions instead of
    just waiting for the day of reckoning unprepared with no good
    options when it comes. We owe it to our children and
    grandchildren and to all those hoping for a bright future in
    our country.
        Contrary to the assertions made of some, a plan to balance
    the budget within the next 10 years would not eliminate
    Congress' ability to respond to economic changes, natural
    disasters, or security threats. In fact, balancing the budget
    within 10 years is achievable even without slashing
    appropriations to government programs. We must simply just slow
    the rate at which our spending has been growing and is
    projected to grow.
        CBO projects that baseline spending at a year-over-year
    rate, growth rate of 6 to 7 percent over the 10-year budget
    period. To balance the budget, we don't have to cut spending.
    We just have to slow the rate of spending growth instead of
    growing it at the CBO baseline. We could balance by growing at
    the same rate as the economy grows, at the same rate as the GDP
    grows. And I believe we should tie and force ourselves to
    control the spending growth at the same levels that the economy
    grows. I think that is a fair shake, and that is what the math
    proves that it will take to balance a budget. Regardless of how
    we get to that number, we have to stay below those levels.
        In a graduate level statistics class, I remember two
    sayings that the professor made that I think apply to my
    service in Congress. The first one was he said that figures
    don't lie, but liars figure. And the second one was that
    numbers and people are the same; if you torture them long
    enough, they will tell you anything you want to know.
        It is time for us to quit torturing the numbers. It is time
    for us to use commonsense and math and look at the reality that
    if we continue growing government spending at the rates
    projected in the CBO baseline, we will never balance the
    budget. Let's balance the budget while we can with modest
    growth, not with cuts, but modest growth. It is a 2 to 3
    percent range that we are seeing in our economy.
        We also have to get back to regular order. And I am glad to
    see that the Senate is finally taking up appropriation bills. I
    hope we will get all those bills passed in the House. And I
    think it is the Budget Committee's responsibility to prepare--
    or to force as much as we can. And if we can't force it now, we
    need to put policies in place to force regular order in the
    House and the Senate so that all these appropriation bills are
    debated and open in a transparent way and so that we know what
    we are spending the money on. And we are not including new
    programs in large omnibus bills.
        I believe the Committee has the ability to enforce this.
    And as a member of the House Budget Committee, I will support
    you in your efforts to do so. And I am here to lend whatever
    resources or assistance I am able to.
        With that, I yield back.
        [The prepared statement of Bruce Westerman follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. Thank you very much, Representative
    Westerman, for your testimony before the joint select Committee
    this morning.
        Our next witness comes from Utah, Representative John
    Curtis.
        The Committee is delighted to have you in front of them
    this morning and look forward to your testimony. You have 5
    minutes, sir, and the time is yours.

    STATEMENT OF THE HON. JOHN CURTIS, A REPRESENTATIVE IN CONGRESS
                         FROM THE STATE OF UTAH

        Mr. Curtis. Thank you. Thank you, Chairman Womack and Co-
    Chair Lowey, for holding today's hearings on reforms to
    Congress' budget and appropriation process.
        The American people are justifiably frustrated with
    Congress and our inability to do our most basic job: pass a
    budget and fund the government. I applaud the work of this
    joint select Committee for holding this critically important
    hearing to look at potential reforms to fix our broken budget
    and appropriation process.
        I want you to know I find myself thinking about you a lot
    in this Committee, and I hope you feel me cheering in the
    background for your success. As a relative newcomer to
    Congress, many members of this Committee likely don't know who
    I am, so I would like to take a brief moment to introduce
    myself. I am John Curtis. I have the great honor of
    representing Utah's Third Congressional District. Before coming
    to Congress last November in a special election, I was mayor of
    Utah's third largest city, Provo, Utah, for 8 years.
        Like many of you, having served in local or State
    government, I have had to make hard decisions needed to balance
    a budget, especially when that involved cutting spending. I am
    proud to say that as a mayor, we balanced our city's budget
    every single year, including my first year in 2010 when we were
    required to close a gap of 8 percent between revenues and
    expenses. Not only did we do it without raising taxes, but we
    also increased the level of services given to our residents
    and, at the same time, improved employee morale.
        Those who know Utah know that some of Utah's core values
    are fiscal responsibility and restraint. The Utah values of
    fiscal responsibility and restraint are best demonstrated by
    the fact that Utah's State constitution requires, by law, that
    the State and city government balance their budgets every year.
        To maintain a balanced budget, we rely on many good
    policies and restraints on lawmakers. But I am here today to
    share with you only one of those practices that I believe, if
    adopted by the Federal Government, could dramatically change
    the quality of our budgeting process.
        The idea was born when a former Governor threatened to veto
    the entire budget if the legislature didn't include her pet
    project. The idea is not unique to Utah, and it is not
    revolutionary. In fact, it is almost too simple. In Utah, we
    call it the baseline budget. At the first of every legislative
    session, the legislature adopts a baseline budget. This is
    largely the previous year's budget. Therefore, the default, if
    we fail to come to agreement, is the continuation of last
    year's budget.
        Natural inflation puts pressure on the legislative body to
    come up with a new budget. But while we do so, we are under no
    threat of a government shutdown. Think of it as a kinder and
    gentler continuing resolution. It allows for the important
    wheels of government to keep churning while we, void of
    pressure, study and deliberate without throwing hundreds of
    government responsibilities into a tailspin.
        I have been in Congress for only 7 months, and I voted on
    four continuing resolutions, and I have seen two shutdowns.
    Each time, I felt like a hostage with no option. As Members of
    Congress, we are given a several hundred-page spending bill
    often with only a day or two to consider it and told that if we
    don't vote in support of the legislation, the government will
    likely shut down. When this happens, there is simply no way to
    do our jobs as promised back home.
        By passing a baseline budget or essentially adopting the
    previous year's budget at the beginning of the legislative
    session, the State legislature is able to make meaningful
    adjustments to the spending levels for next year's budget
    without a threat of a government shutdown if they fail to come
    to an agreement.
        Utah is doing a lot of things right, and I believe this
    baseline budget process is one of many that Congress can learn
    from States like Utah. I strongly recommend that the select
    Committee study Utah's baseline budget process and consider
    recommending that it be adopted in Congress' budgeting and
    appropriation processes moving forward.
        Thank you for this opportunity to testify today, and with
    that, I yield my time.
        [The prepared statement of John Curtis follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. Thank you, Representative Curtis, for your
    testimony this morning.
        I am going to move quickly to our next witness from
    Connecticut. Representative Jim Himes represents the Fourth
    District of Connecticut.
        Representative Himes, the Committee appreciates the chance
    to hear your testimony this morning on this very important
    subject. And the floor is yours, sir, for 5 minutes.

     STATEMENT OF THE HON. JIM HIMES, A REPRESENTATIVE IN CONGRESS
                     FROM THE STATE OF CONNECTICUT

        Mr. Himes. Thank you, Mr. Chairman and Madam Ranking Member
    and distinguished members who are here. I would really like to
    thank you for bringing us together to today discuss an
    important topic at the heart of our governance, how to budget,
    how to raise revenue, and how to spend on a rational and
    fiscally sustainable path.
        As chair of the New Democrat Coalition, I am proud that our
    forward-thinking members have been at the forefront of budget
    reform looking for opportunities to plan for our future in a
    thoughtful, bipartisan, and rational way, which is the exact
    opposite of how this process has worked for the 10 years that I
    have been here. This is a moment of optimism for me, though a
    small one, because in 10 years, I have finally decided that the
    number of people who are truly interested in fiscal
    responsibility in this body can be counted on one hand. My
    friends on the Republican side of the aisle are absolutely
    horrified by deficits right up until the moment there is no
    longer a Democratic President to blame for them.
        Democrats all too often see spending as the first solution
    to every problem. Special interests and our constituents have
    their wish lists, but nobody wants to pay for those wish lists.
        I am a pessimist because I did see one plan a couple of
    years ago that was a very tough but fair plan. I am referring,
    of course, to the Simpson-Bowles budget which came out of the
    super Committee process. It was really, really tough, but it
    was fair. It protected the most vulnerable American citizens.
    It asked everybody to give up some of the sacred cows of their
    party. Yes, there were slight progressive tax increases, and,
    yes, there were things like chained CPI, which people on my
    side of the aisle did not like.
        That proposal, which was the result of a lot of hard work
    and political sacrifice, received exactly 33 votes in the
    United States House of Representatives, less than 10 percent of
    the membership. That is where we are. That is why I am a
    pessimist. But I do appreciate the Committee focusing on this.
        The only question in my mind at this point, having given up
    on the idea that we are collectively going to take the hard
    decisions and look at our various constituents and say
    everybody needs to give something, my fear is that the capital
    markets will finally impose discipline on the United States
    Government. So, the question is who is going to finally blow
    the whistle? Will it be us or will it be the capital markets
    who finally define for us what it is meant to be unsustainable?
        Now, I will point out that we have set ourselves up for a
    real problem here. When I came here 10 years ago, Admiral
    Mullen said the single largest threat to our national security
    is the debt. I was warned each and every day that we were going
    to see spiraling Treasury rates, interest rates going up. We
    were on the verge of catastrophe. The exact opposite happened.
    Interest rates stayed low. We continued to spend in a long-term
    unsustainable pattern. We just got through a process of adding
    $2 trillion to the deficit over a 10-year period, and yet
    remarkably the capital markets don't raise a whimper. That will
    not remain the case.
        So, we will see. I actually, sadly, though I am not
    temperamentally pessimistic, believe that it will finally be
    the capital markets defining for us what sustainability is that
    forces us to act.
        In the meantime, I just want to offer three ideas that I
    think might help the process and at least get us to a more
    honest process. Number one, first, do no harm. I have seen in
    10 years any number of hostage situations associated with the
    debt ceiling which does absolutely no good in terms of
    controlling the overall amount of debt or forcing fiscal
    discipline. Let's get rid of the hand grenade that each party
    gets to use once every couple of years. It led to downgrades.
    It led to market insecurity. Let's get rid of it. It does
    absolutely no good to anybody.
        Number two, let's put together a process to be honest and
    level with the American people on the complex nature of the
    problem and the big steps that we need to solve it. Again,
    Simpson-Bowles, now a part of distant history and a very
    painful thing for those of us who voted for it, pointed in the
    direction of actually making people think about what sacrifice
    means and who should do that sacrifice.
        Third, let's plan for the long haul. Let's bring Members
    together early to look at the far-out horizon, come to a
    consensus, and develop a plan that can outlast the shifting
    partisan wins. This could include a shift to biennial
    budgeting, including tough allocations that genuinely last a
    full Congress and allow agencies to efficiently plan ahead.
        Again, I hope that this Committee can shake this place in
    such a way that we do what we have been elected to do, which is
    to take the tough choices, to speak truth to the American
    people, and to preserve not just those programs which have done
    so much for the American people but to keep the economy
    competitive and to be worthy of the people who send us here.
        So, thank you to the Committee, and I yield back my time.
        [The prepared statement of Jim Himes follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. I appreciate the testimony of
    Representative Himes this morning.
        Our next witness from Kansas, Roger Marshall, representing
    the First District of Kansas. Sir, we appreciate the
    opportunity to hear your testimony this morning. We are going
    to give you 5 minutes as soon as we change a name placard. If
    you would engage that microphone, sir, we are going to give you
    5 minutes, and the floor is yours.

       STATEMENT OF THE HON. ROGER MARSHALL, A REPRESENTATIVE IN
                   CONGRESS FROM THE STATE OF KANSAS

        Representative Marshall. Thank you, Mr. Chairman. And
    certainly, I don't need to preach to the choir here and explain
    to you the challenges before us and the inadequacy of our
    efforts and results since my time here.
        First of all, I want to just talk to you about solutions.
    My first suggestion is to consider separating the budget from
    the appropriations process. While it feels too much like an
    excuse I have heard from my own sons, having additional time to
    complete the annual budgeting and appropriation task would go a
    long way. While this city seems to live from new cycle to new
    cycle, I have never seen a company or organization that so
    often starts a year and continues working without a budget as a
    basic guide for the rest of their operations.
        While I don't like to admit that Congress is slower than we
    should be, there is something to be gained by recognizing this
    reality. Putting Congress on a 2-year budget cycle, a 2-year
    budget cycle allows an overarching agreement to be formed that
    Congress and then the work of Appropriations Committee can
    happen in a deliberate fashion rather than those two happening
    on top of each other, many times feeling like it is
    simultaneous to me. It seems like the budget has very little
    teeth to it.
        Next, I would talk about staggering fiscal years for
    appropriations bills. At first glance, I am not a person that
    likes to make things more complicated, but we currently are
    moving from a cliff-to-cliff governance that having all 12
    annual appropriations due in a single month creates. When all
    12 expire at the same time and Congress gets behind the eight-
    ball, it is too easy to combine them into a large omnibus that
    leads us to passing one continuing resolution after another.
        Next, I would talk a little bit about the increasing
    involvement with the authorizing Committees. And certainly, I
    know there are many appropriators in the group and that this
    suggestion may not be popular, and I salute those people that
    are doing the best job they can under the circumstances. But
    the reality is, despite your best efforts to reach Members
    through Member Days and the appropriation request process, non-
    committee members have much less involvement in the annual
    appropriation process. So, we need to look for ways to improve
    that.
        And then finally just to touch on entitlement programs once
    again. Right now, three-fourths of our Federal budget is going
    towards these entitlement programs, and it seems like we don't
    have a chance for the budget or appropriations Committees to do
    anything.
        Certainly, I understand the entitlement programs are
    necessary. The retirees in my district count on knowing how
    much and when social security checks and Medicare benefits will
    arrive. However, the current treatment of that spending sets up
    failure, as there is no practical opportunity to edit or adjust
    the programs, even if working decades into the future. Right
    now, healthcare expenses are responsible for actually 28
    percent of Federal spending. We have to find ways to have tough
    discussions and take this challenge head on.
        Much of what needs to be done is outside of the
    congressional budget process, things like putting consumers
    back in charge of their healthcare dollars, increasing
    transparency and supply chains, and freeing private companies
    to innovate. But structuring our budget process in such a way
    to provide additional scrutiny into where these mandatory
    dollars go can help us start to bring the healthcare costs
    down.
        Thank you so much for the chance to appear before the
    Committee.
        [The prepared statement of Roger Marshall follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. Representative Marshall, we appreciate it.
    The Committee thanks you for your testimony here this morning.
        Our next witness doesn't need a lot of introduction, been
    around these parts for a long time. He is authoritative in a
    lot of subjects regarding budgets and appropriations, having
    served as the overall Chairman of the appropriations process in
    the House for 6 years, continues to serve on the Appropriations
    Committee as a subcommittee chair.
        And, sir, The Joint Select Committee appreciates the
    opportunity to hear your testimony this morning. So, at this
    time, I am going to recognize the gentleman from Somerset,
    Kentucky, Chairman Hal Rogers.

    STATEMENT OF THE HON. HAL ROGERS, A REPRESENTATIVE IN CONGRESS
                       FROM THE STATE OF KENTUCKY

        Representative Rogers. Mr. Chairman, Mrs. Lowey.
        Co-Chair Womack. Make sure that mike is on, and the floor
    is yours.
        Representative Rogers. Thank you for the opportunity to
    testify this afternoon. I have been in this body for 38 years,
    35 of which has been on the Appropriations Committee. So, I
    have a little bit of a unique perspective on the process,
    because of that long period of time.
        Congress, of course, has the power of the purse and we are
    obligated to exercise that power, thoughtfully, responsibly,
    but also regularly. During my tenure as Chairman of the full
    Committee, my top priority, as was that of Mrs. Lowey, my
    ranking member, was returning to regular order, so that Members
    on both sides of the aisle had an opportunity to express the
    priorities of their congressional districts. Regular order
    means moving 12 bills through an open and transparent Committee
    process and then taking the bills to the House floor for
    discussion and debate in an open atmosphere.
        In the 6 years that I was privileged to lead the Committee,
    as a result of that openness, we drafted strong bipartisan
    bills. I was proud to work with Ranking Member Mrs. Lowey and
    her predecessor, Norm Dicks, to bring 138 bills to the House
    floor, 69 of which were ultimately enacted into law.
        Together, we debated over 2,100 amendments in the course of
    more than 550 hours on the House floor. The Committee held over
    650 budget and oversight hearings, to ensure our tax dollars
    were being spent wisely. I am pleased and grateful that
    Chairman Frelinghuysen has continued these important efforts,
    maintaining a spirit of hard work and collegiality on the
    Committee.
        The primary message, Mr. Chairman, Mrs. Lowey, the primary
    message I would like to convey to you today is that this
    important task, as time-consuming and politically difficult as
    it may be, needs to remain an annual exercise for two primary
    reasons: First, Congress has a responsibility to hold Federal
    agencies accountable to the American people through the
    appropriations process.
        Second, in the dynamic world we live in today, Federal
    agencies need to be nimble and responsive. Their appropriations
    should reflect changing priorities and needs, and they need to
    be able to move expeditiously through reprogramming requests
    and the like. And that means a constant contact with the
    appropriators all during the year, not just every other year,
    not just every year, but every day.
        On the first point, no matter which party sits in the White
    House, in our system of checks and balances, the Congress has a
    duty to ensure the executive branch is responsibly spending
    Federal resources according to Federal law.
        And I believe that moving toward a 2-year budget resolution
    as we have been doing, frankly, the last few years, is a good
    thing. It gives the Appropriations Committee and the Congress
    advance notice about what the targets are going to be 2 years
    from now so that we can plan for that.
        So, I think a 2-year budget resolution will go a long way
    to promote regular order and stability, provided it also
    includes annual appropriations, to give you, as a Member of
    Congress, the chance to question agency heads and the like
    frequently, not just once a year but lots of times a year.
        So, I am grateful for the work all of you are doing on this
    Select Committee, and I hope your recommendations will move our
    esteemed body forward.
        I have noticed, Mr. Chairman, too that since the Senate has
    been unwilling or unable to take up and pass the appropriations
    bills that we send over to them, the agencies picked up on that
    really quickly. When the agency head would come before our
    appropriating House Committee, they knew that we could not pass
    through the Congress the bill appropriating for their agency.
    So, they were very unresponsive to the House appropriators,
    because they knew we didn't have the whip to crack. And that is
    true even today.
        So hopefully, our esteemed colleagues on the other side of
    the Capitol will come to their senses and allow a majority vote
    on going to proceed. If they want to filibuster the bill once
    it gets on the floor, fine and dandy, but moving to proceed on
    appropriations bills ought to be a majority vote. Neither body
    should have the authority and power to shut down the
    government. That is why we are here.
        So, when the agencies that come before us to try to explain
    why they want an X amount of dollars and how they are going to
    use it, we need to be able to scare them, if you will, with the
    ability to pass these bills through House and Senate and make
    it law so that they can be responsible to us, as
    representatives of a lot of people.
        So, Mr. Chairman, I thank you for convening this meeting.
    Thank you for letting me have a chance to say a word or two. I
    will be happy to answer questions if you----
        [The prepared statement of Hal Rogers follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. I appreciate your testimony. Mr. Rogers, I
    am going to yield to my distinguished co-chair, Mrs. Lowey. I
    know she has some comments she would like to make.
        Co-Chair Lowey. Well first of all, it has been an honor for
    me to work with you for many years on the Appropriations
    Committee, and I appreciate your testimony and I feel strongly
    that appropriations have to be dealt with every year. And
    certainly, the Foreign Ops subcommittee is a perfect example of
    changing conditions in the world.
        On an optimistic note, it is my understanding that in the
    Senate, they are working together in a bipartisan way and are
    moving rather quickly and getting the appropriation bills
    through the process. So, I am always cautiously optimistic that
    together in a conference we can work together in a bipartisan
    way and somehow make all those poison pills disappear.
        So, I want to thank you very much. It has been an honor for
    me to work with you, and thank you for presenting your views,
    with which I agree. Thank you.
        Representative Rogers. Thank you, Madam Chair----
        Co-Chair Womack. I know our next witness, Dan Webster, is
    waiting in the wings. I just wanted to throw out one thing on
    the table for my friend from Kentucky, and that is, when the
    Speaker led this morning, his thesis statement was questioning
    whether or not anybody believed that the Senate was ever going
    to be able to manage and pass 12 appropriation bills in any
    given year through the Senate. And so that becomes a basis for
    a debate and a discussion about that.
        Now, the good news is when our Joint Select Committee first
    convened, we were careful not to make it a pick-on-the-Senate
    program, because half of our members are from the Senate, and
    they self-ID'd at the time that they were, indeed, part of the
    problem, that being able to manage 12 appropriation bills and
    because of Senate rules, there were problems there.
        Do you think a biennial budget with 12 titles of
    appropriations every year is doable, given the fact that the
    Joint Select Committee is not going to have the power
    necessarily to impose a change. We can only advocate through
    legislative text some changes, but do you think that getting
    maybe to the motion to proceed under a simple majority would be
    the elixir that fixes that side of the problem?
        Representative Rogers. I think so. I met yesterday and had
    a good long talk with the Senate Appropriations Chairman, who,
    as you know, the Senate now has passed a minibus of three
    bills, which we will be able to conference one of these days,
    hopefully. But I think the motion to proceed in the Senate
    should be a majority vote, just to bring it up and get it on
    the floor, appropriations bills, I would prefer. If they want
    to do all, that is fine, but especially appropriations bills,
    which are a different animal.
        And it is the existentialism. It is whether or not we
    survive as a government. But I think the motion to proceed
    should be a majority vote. Let that bill come to the floor; and
    if they want to filibuster it, hey, make my day. Speak all
    night, the way it used to be.
        But I've been here a little while, and the first 25 years
    on this Committee it worked, not like a clock, but it worked.
    We passed 12 bills. We went to conference on 12 bills with the
    Senate. There was give and take. By nature, we had to
    compromise to polish up a bill to be able to pass with a
    majority vote. So, I have seen it work, and it works fine until
    the Senate comes up with that rule that is a monkey wrench in
    the cogs of government. So, I would hope that that would
    change.
        I met yesterday with the President and the cardinals on the
    House and the Senate Appropriations Committee. And this was one
    of the main points of conversation that we had. And the
    President was very strong. That is not even the word for it. He
    was really strong to the Senators about changing that rule, but
    we found no sympathy on that side at this point in time.
        But I think the pressure should build and is building on
    the Senate to change an archaic rule that is preventing the
    government from operating. And I don't get too excited about
    things, but I am excited about this.
        Co-Chair Womack. That and Kentucky basketball.
        Representative Rogers. Yes.
        Co-Chair Womack. Thank you for your testimony.
        Representative Rogers. Thank you, Mr. Chairman, and Madam,
    thank all of you for doing this hard chore. And it is good to
    see my friend from Louisville, Kentucky, who claims to have a
    good basketball team over there at U of L.
        Co-Chair Womack. Thank you, Mr. Chairman. Appreciate your
    testimony.
        Our next witness is Dan Webster from Florida. The Joint
    Select Committee Members' Day group here this morning does
    appreciate the time you are spending with us. We look forward
    to your testimony. The floor is yours, sir.

       STATEMENT OF THE HON. DANIEL WEBSTER, A REPRESENTATIVE IN
                   CONGRESS FROM THE STATE OF FLORIDA

        Representative Webster. Well, thank you, Mr. Chair, and
    others who are putting forth their time to listen to this hours
    of testimony, I am sure.
        I came to talk about maybe appearance of the process more
    than just the minute details of the process. I believe that
    there is mission creep between the Budget Committee, the
    Appropriation Committee, and in the end the substantive
    Committees, the authorizers. And if you look at it closely, you
    will see that the appropriators in many cases do substantive
    law. They do riders. They do other things, including approving
    appropriations for nonexistent authorizations which have
    expired.
        On the other hand, the Budget Committee bleeds over into
    substantive law by making assumptions of things that aren't in
    law right now. And not only that, they also talk about the
    funding of those, which is the appropriation processes. That is
    their job, the appropriators. And if you just see, it all kind
    of bleeds together.
        And then in the end, the authorizers in many cases set
    forth numbers, and that is not their prerogative, at least in a
    peer system. That is the appropriators. The appropriators take
    whatever is existing in current law, which is policy, and to
    whatever degree they determine they fund that policy--it could
    be zero, it could be $10, it could be a billion dollars--as
    opposed to the authorizers inserting numbers and basically
    making the appropriators follow suit.
        So that is what I would like to talk about today. I think
    the easiest way to get started on the revamp is to get rid of
    the Budget Committee. That way, at least one of those bleeding
    over into the others would go away. I think it is redundant in
    a lot of ways. It is not nearly followed. Some years when we
    don't do it, we go out and promote the fact we are not doing it
    because it is really not needed. And other years when we need
    it, we do it. And it is like it either comes and goes,
    depending on what is the circumstance, and that is both parties
    have done that.
        So, if you got rid of that, then the appropriators would
    only appropriate. They would appropriate on existing policy,
    whatever that policy is, and they would do it to the degree
    they determine and to the amount they determine or don't
    determine. And then on the other hand, the authorizers would
    not get to spend money. They could authorize something in let's
    say a bridge and right of way area and that you can spend money
    on bridges and right of way, but you don't necessarily put the
    amount down that you are going to spend. That is the
    appropriators' job.
        And so, with that, the reason I would say that is I believe
    that if we can purify each of those areas--and the easiest one
    is to just get rid of one, that certainly purifies their
    motives and other things--I think you end up with a process at
    least where you are going to be able to participate at whatever
    level you want to, but what you know you are not going to be
    able to put money into a program that doesn't exist in the
    appropriation bill. Nor, by amendment, could you be able to put
    that--I mean into--you can't put authorized policy in an
    appropriation bill, nor could you put an appropriation bill--
    the appropriators cannot put policy in their particular bill.
        That is a summation. There are all kinds of details it
    would have to go through. How do you get what the overall
    spending levels are? How do you allocate to each of the subs
    and all that? I didn't go into that. I do have some ideas about
    that, but I just said if we start by setting it.
        The other is, I guess maybe the last thing, just we have
    too many lines on a sheet of paper, all of which claim to be
    the starting line for the budget or appropriation. And so, the
    baseline should be one, one baseline only. That way, the
    Members and public, everyone understands.
        Appropriators appropriate, the authorizers authorize, and
    there is one line that you start with. That is what I would is
    say is the way to simplify the whole process.
        [The prepared statement of Daniel Webster follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. Thank you very much for your testimony
    this morning. The Joint Select Committee appreciates your
    input.
        Representative Webster. Thank you.
        Co-Chair Womack. We have one remaining witness, and he is
    the gentleman from South Carolina five, Representative Ralph
    Norman. Sir, we again appreciate the chance to hear your
    comments this morning. We are going to give you 5 minutes, and
    the floor is yours.

        STATEMENT OF THE HON. RALPH NORMAN, A REPRESENTATIVE IN
               CONGRESS FROM THE STATE OF SOUTH CAROLINA

        Representative Norman. Thank you, Colonel Womack. I
    appreciate the time with the Committee. I haven't been here as
    long as Hal Rogers or Dan Webster or Rob or a lot of you, but I
    just preface my prepared remarks with I don't think I have yet
    any--there is no topic that is of more concern to the people in
    my district than the budget, the deficit, the way we
    appropriate money, since I have been elected and even before
    then.
        So, I would just preface my remarks, this is on the minds
    of the people. It is on the minds of the people that put us in
    office. And I am a business guy. I run a development company.
    But I appreciate you taking the time, and I won't need the 5
    minutes.
        I think we all agree our budget process is broken. The 1974
    Congressional Budget Act laid out what our role was and the
    timeline for passing annual budgets and the 12 annual
    appropriation bills. The last time Congress passed all 12
    appropriation bills was 1997. That is 21 years ago.
        For six straight years, between fiscal years 2011 and 2016,
    not one single appropriations bill was passed on time. This
    isn't a Republican issue. This isn't a Democratic issue. As a
    business owner, as a developer, if I had not had a budget for 6
    years, I would be broke. I would not be up here where I am
    today, because you would not have the dollars. The company
    would not have the dollars to exist. So not having a budget
    process, from a practical sense, does not make sense.
        I firmly believe our Nation cannot and will not remain
    solvent if we keep passing trillion-dollar omnibuses and
    continuing resolutions. My constituents will not allow me to
    vote for something like that. This is a regular order and we
    must follow it.
        And what is amazing is the appropriation bills only cover a
    third of our Federal spending. I would ask that we try to find
    solutions, those of you who are on this Committee and those of
    us as we serve in Congress.
        The entitlement spending is the biggest driver of our
    spending problems. And I found pretty quickly up here everybody
    wants to cut until their ox is gored. And the current budget
    process does not force lawmakers to confront fiscal and
    economic reality.
        Would a biennial budget and appropriations process work
    better? Would strictly voting on monetary values with no policy
    riders in appropriations bills alleviate the problem? Last
    year, we passed all 12 appropriation bills in regular order
    with amendments, and the Senate did not do anything.
        I guess I would ask, what can we do to ensure the Senate
    acts? Would implementing language force them to act better? I
    don't know. All I would say is it is time for us, those of us
    elected officials to start making the tough decisions with
    spending, entitlement reform programs. We have got to start
    addressing these in a timely manner and go back to basics,
    which, as a business owner and business owners all across this
    country I think would agree with.
        Thank you, Colonel, for your Chairmanship, and thank the
    Committee with the steps they take that will hopefully solve
    this problem.
        [The prepared statement of Ralph Norman follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. I thank the gentleman from South Carolina
    for his testimony this morning.
        I will yield to the distinguished co-chair for any last-
    minute comments.
        Co-Chair Lowey. Well, I just want to thank my co-chair. It
    has been a pleasure working with you. I appreciate all those
    who have submitted testimony and those who were here today. And
    I look forward to reviewing the information and then coming to
    some conclusions, which may or may not be implemented. But
    thank you so much.
        Co-Chair Womack. I thank the gentlelady.
        That completes the Committee's business for today. I would
    like to thank all the Members who shared their views before the
    Committee.
        As was stated in the opening remarks, written comments
    already submitted will be made part of the official record. And
    in consultation with the co-chair, I seek unanimous consent to
    allow other members who may wish to input this process that
    were unable to be here today to have until the close of
    business on Monday, July 2, for such purposes.
        Without objection, so ordered.
        [The prepared statement of Rob Bishop follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        [The prepared statement of John Carter follows:]

         [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. And, with that, the Committee stands
    adjourned.
        [Whereupon, at 12:22 p.m., the Committee was adjourned.]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

              OPPORTUNITIES TO IMPROVE THE APPROPRIATIONS PROCESS

                                  ----------

                            THURSDAY, JULY 12, 2018

                              House of Representatives,
                          Joint Select Committee on Budget and
                                 Appropriations Process Reform,
                                                       Washington, D.C.
        The committee met, pursuant to call, at 10:07 a.m., in room
    1334, Longworth House Office Building, Hon. Steve Womack and
    Hon. Nita M. Lowey [co-chairs of the committee] presiding.
        Present: Representatives Womack, Woodall, Arrington, Lowey,
    Yarmuth, Roybal-Allard, and Kilmer.
        Senators Blunt, Perdue, Lankford, Ernst, and Bennet.
        Co-Chair Womack. Good morning, ladies and gentlemen. The
    Joint Select Committee on Budget Process Reform will come to
    order. I want to welcome you to the fifth public hearing of the
    Joint Select Committee on Budget and Appropriations Process
    Reform.
        The most important role given to Congress under Article I
    of the Constitution is the power of the purse. Our panel is
    charged with ensuring we have a working process in order to
    fulfill this essential duty.
        During our hearings so far we have identified some of the
    recurring challenges that need addressing. Those have been
    extremely productive discussions. I was especially pleased to
    see the level of engagement from and hear the ideas of Members
    during our Members Day meeting.
        While we have discussed the annual budget resolution at
    length during a previous hearing, today we are going to focus
    on what is supposed to happen next, and that is the
    consideration of appropriations bills.
        Especially in a reform-focused committee like ours we
    certainly need to be mindful of past processes and let
    history's successes--and their failures--guide our decisions.
    And the fact of the matter is that the current process needs
    improvement. I think both sides of the aisle agree on that.
        We on this panel are charged with designing a neutral
    process for the future, one in which Congress can move forward
    with its budgetary agenda no matter which party holds the
    majority. Budgetary priorities, outcomes, and results should
    come from elections. Thus, a properly functioning budget and
    appropriations process should be neutral to specific outcomes.
        That being said, as we engage in conversation today I urge
    members to think about designing a process for the future. I
    believe we can do that by considering what the modern Congress
    can handle right now and anticipating the issues future
    Congresses might need endure.
        Without question I have tremendous respect for the decades
    of experience that will come before us today, but I want to
    challenge us all to think about how that experience can be
    applied to what future officeholders will face as they try to
    fund the government on time.
        To help us think through the current appropriations
    process, including its link to the annual budget resolution, we
    are pleased to welcome two incredibly distinguished and
    experienced witnesses. While both served on the same side of
    the aisle, their perspectives demonstrate that the issues we
    are trying to fix transcend party lines.
        In fact, as I was thinking through the potential witnesses
    one name quickly stood out in my mind: Leon Panetta. This is an
    individual whose seasoned career encompasses many positions
    that are relevant to our deliberations. He served as a
    congressional staffer, executive branch official, adviser to
    the mayor of New York, chairman of the House Budget Committee--
    his painting hangs in these chambers--White House Chief of
    Staff, Director of the Office of Management and Budget,
    Director of the CIA, and finally, Secretary of Defense.
        Given his tremendous background, I knew his presence at
    this hearing today was vital.
        Secretary Panetta, it is an honor to have you. Thank you
    for being here.
        We are also pleased to welcome David Obey, who served for
    decades as part of the Wisconsin delegation in Congress. During
    his tenure he led as both ranking member and chairman of the
    House Appropriations Committee.
        Chairman Obey, as an appropriator, I also appreciate you
    being here today to give us your valuable insight.
        And with that, I want to yield to my co-chair, Mrs. Lowey,
    for her brief opening remarks.
        Mrs. Lowey.
        [The prepared statement of Steve Womack follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Lowey. Thank you.
        And welcome to the Joint Select Committee's fifth hearing.
    Today we have two witnesses with many, many years of experience
    with the budget and appropriations process and a wealth of
    knowledge on that subject. Both are good friends.
        So I am looking forward to hearing your direct, honest
    testimony.
        One is David Obey, who served in the House for 42 years as
    a Representative from Wisconsin. He was a longstanding member
    of the House Appropriations Committee, served as chairman or
    ranking minority member of that committee for almost two
    decades. He has also been involved in many past debates about
    budget process reform.
        And our other witness, with whom I also had the privilege
    of serving, is Leon Panetta, who is another former Member of
    the House, past chairman of the House Budget Committee. In
    addition, he has extensive experience at very senior levels of
    the executive branch, including service as Director of OMB,
    White House Chief of Staff, Director of the CIA, Secretary of
    Defense.
        So today I am delighted that we will hear from them about
    what could be done to make our budget and appropriations
    processes work better.
        In addition to talking about procedural changes that might
    help, I hope we will get the benefit of their long-term
    perspective on the polarization and partisanship that is now
    the fundamental cause of many of our difficulties.
        I think I will read that sentence again because I really
    feel that is the cause.
        So I hope we will get the benefit of their long-term
    perspective on the polarization and partisanship that is now,
    in my judgment, the fundamental cause of many of our
    difficulties.
        So I look forward to the testimony. I should also mention
    that, unfortunately, I will need to leave part way through the
    hearing to attend the first House-Senate conference committee
    meeting on 2019 appropriation bills. I wish I could stay for
    all of what should be a very interesting session.
        And, frankly, just to throw some information into the mix,
    what is very interesting about this appropriations season is
    the Senate is operating in a bipartisan way. Every bill they
    have completed is bipartisan, where last night we completed
    Labor-HHS with about 50 amendments.
        So we are operating very differently, and that could be an
    interesting discussion in itself as to process.
        Thank you, my co-chair.
        [The prepared statement of Nita M. Lowey follows:]
        [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. I thank the distinguished co-chair, the
    gentlelady from New York.
        Now I would like to welcome our distinguished witnesses.
    First, and as I told him when he came in, I didn't know whether
    to call him chairman, chief, director, Mr. Secretary, so I
    think I will just say Jimmy's daddy is here to be a witness
    before this committee.
        So, Secretary Panetta, thank you so much for being here. It
    is an honor to have you.
        And for both gentlemen, your official statements are being
    made as part of the official record of this proceeding, and we
    are going to give you 10 minutes each to present your testimony
    at your pleasure.
        Sir, the floor is yours.

      STATEMENTS OF THE HONORABLE LEON PANETTA; AND THE HONORABLE
                               DAVID OBEY

                       STATEMENT OF LEON PANETTA

        Mr. Panetta. Thank you very much, Mr. Chairman. I
    appreciate the opportunity to be able to be here and share my
    experiences and thoughts with you on the tough task that is in
    front of you to try to implement important budget reforms that
    can hopefully improve that process.
        I am also honored to be here with a dear friend and former
    colleague of mine, Dave Obey. Dave and I together served on the
    Budget Committee, but more importantly, in all the other
    positions I held I had to deal with David when he was chairman
    of the Appropriations Committee and always found him to be
    someone who was fully committed to trying to do the right thing
    for the country.
        So I am honored to have this opportunity.
        And I think, you know, both of us obviously will give you a
    sense of the history that we experienced and what made the
    process work at the time.
        In the 50 years of public life that I have had, I have seen
    Washington at its best and I have seen Washington at its worst.
        The good news is I have seen Washington work. And I have
    seen Democrats and Republicans with a willingness to work
    together on issues. We have always had our political
    differences. In my first experience in Washington, I was a
    legislative assistant to Tom Kuchel, who was a Republican from
    California, minority whip. I served under Everett Dirksen.
        And at the time there were a lot of Republicans, both
    conservative and progressive, but they viewed their
    responsibility in the Senate as working with Democrats, people
    like Jackson and Magnuson and Dick Russell, Sam Ervin, and a
    number of others, Fulbright. They worked together on
    fundamental issues.
        When I got elected to the Congress, Tip O'Neill was the
    Speaker, the Democrat's Democrat, but he worked very closely
    with Bob Michel who was the minority leader. And that was the
    legacy that I came into as a freshman Member, which was that
    you work with your ranking members, you work with the other
    party on the legislation that you have to deal with.
        And so one of the fundamental messages that I have to
    stress is the importance of bipartisanship to making this
    process work. This is a tough process. Budget process is tough.
    Getting the appropriations bills done is tough. And it is
    difficult to do even when you are working together. It is
    almost impossible to do when you try to shove this stuff
    through the process on your own as one party.
        The history of the budget process in the period when it
    worked is the history of bipartisanship. The Budget Act was
    passed on a bipartisan basis. David and I worked with chairmen
    of the Budget Committee who worked with their ranking members,
    Bob Giaimo, Del Latta; on the Senate side, Pete Domenici,
    Muskie, a number of others, worked together.
        When I was chairman of the Budget Committee I had the honor
    of working with Bill Gradison and then with Bill Frenzel, and
    we worked together. And the result was that we made some
    significant progress.
        It was not easy. It was a tough time. Deficits were going
    up for a lot of reasons. But there were three important steps
    that were taken that I think ultimately led to a balanced
    budget.
        One was the 1990 budget agreement in which we assembled
    both Republicans and Democrats and representatives of the
    administration to negotiate an approach to deficit reduction.
    And we met, we negotiated, we finally went out to Andrews Air
    Force Base and spent close to 3 or 4 weeks negotiating out
    there.
        The agreement at the time was that if the Democrats would
    come forward with $250 billion in spending savings that the
    Republicans would be willing to put $250 billion in tax
    increases on the table.
        And so we spent a lot of time. It was tough. None of these
    decisions are easy. But we put together a $500 billion deficit
    reduction package, a close to $500 billion deficit reduction
    package.
        And we had to push it through. It was not easy. But we
    ultimately pushed it through in a bipartisan vote, an omnibus
    package. It included a budget resolution, it included
    reconciliation, and it included appropriations bills. But it
    was passed, and we did it on a bipartisan basis.
        The next effort that I think was important, I was OMB
    Director and worked for Bill Clinton in putting that budget
    together, and again, $500 billion in deficit reduction.
    Unfortunately, that wasn't done on a bipartisan basis, and it
    was tough. It only passed by one vote in the House and in the
    Senate.
        And then lastly, the bipartisan effort to put together a
    balanced budget in 1997.
        All of that contributed to a balanced budget and a surplus.
    And then it was the breakdown, I think, in bipartisanship that
    ultimately turned that all around.
        The process is broken. It is broken because obviously
    bipartisanship has broken down. Regular order has broken down.
    There is a lack of enforcement. There is a lack of the ability
    to work together and to have to wait for crisis in order to
    drive the process.
        I often say democracy is a process that we do through
    leadership or crisis. The problem in this place is that crisis
    becomes the driver now more than leadership. And when you
    operate by crisis you have to wait for something terrible to
    happen in order to do the right thing, and what you usually
    wind up doing is kicking the can down the road.
        And lastly, there has been a misuse of the reconciliation
    process and the misuse, I think, of the general budget process,
    which has lost a lot of respect.
        What are the recommendations to try to fix it? I lay it out
    in the testimony. I think the idea of a biennial budget is
    worth looking at. It is not easy. There are problems that you
    have to work through. But I think the more you can provide
    additional time to do it and additional time for oversight on
    ongoing programs, I think that is something to seriously
    consider.
        I think a joint budget resolution may make sense, as well,
    to bring the President into the process. The way this game
    works is the President presents his budget and then Congress
    decides to go its own way. There is little communication until
    you do the appropriations part of it. You really ought to
    engage in the overall budget discussion with the President
    early on. So that is worth thinking about.
        I think you ought to change to a calendar basis just to
    give yourself more time instead of the fiscal year approach. It
    is not a cure-all, but at least the additional time would help
    you.
        I think you have to show a price to be paid for failure to
    pass a budget resolution, so that legislation that has a fiscal
    impact, frankly, should not move unless you have passed a
    budget. You need to provide a process to increase the debt
    ceiling so we don't have this crisis. We had the Gephardt Rule,
    which tied to the budget resolution. I think that is worth
    looking at.
        Budget gimmicks, you have to get rid of budget gimmicks,
    the whole idea of rosy scenarios and magic asterisks, the kind
    of games that are played. And I have been a part of some of
    that. I know what those games are. You have got to be able to
    discipline people so they don't use it.
        Paygo is a very important enforcement tool. We would not
    have balanced the budget without paygo in which we said if you
    are going to come up with spending, if you are going to come up
    with tax cuts, you have got to pay for them and not increase
    the deficit. You have got to get back to that.
        You should do a common baseline between CBO and OMB.
    Instead of fighting over growth numbers, frankly, you ought to
    operate on the same consensus numbers from both of them.
        I think you need some control of emergency funding. It has
    got out of hand. You need to set up an emergency fund and
    better controls over how that operates.
        And I will tell you, even from the OCO perspective on
    defense, the fact is when you have been in war for a long
    period of time I don't see why you have to keep going to OCO.
    It ought to be part of the budget, frankly, for the defense
    budget.
        Lastly, some check on mandatory spending. Two-thirds of the
    budget is mandatory spending. We don't pay enough attention to
    mandatory programs. And then a 10-year budget projection.
        I think the most important guidance I can give you is that
    the best way to pass budget reforms is to do a budget deal and
    to do a comprehensive budget deal. If you can put those pieces
    together, then you can pass the reforms as part of that. We did
    that in the 1990 budget agreement.
        If you can't do that, and that is probably the case, then
    this joint committee ought to try on a bipartisan basis then to
    make recommendations with regards to some key changes. You
    don't have to do it all, but at least do a few changes to show
    that this place can operate on a bipartisan basis when it comes
    to the budget.
        This is not a game. This is about the fiscal health of this
    Nation. We are facing a fiscal crisis; 78 percent of GDP is now
    debt. We are looking at it going to 152 percent of GDP,
    according to CBO. That is trouble for our economy. It is
    trouble for resources. It is trouble for the American people
    and for all of the things we care about.
        So that is what is at stake here. I know that this
    committee is given the responsibility to do reforms. I think
    you have the leadership capability to try to move something
    that sends a signal to the American people that this place can
    operate the way it should, with Republicans and Democrats
    agreeing on tough decisions to be able to govern. That is what
    democracy should be all about.
        Thank you.
        [The prepared statement of Leon Panetta follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. I thank the gentleman.
        Mr. Obey.

                        STATEMENT OF DAVID OBEY

        Mr. Obey. First, let me apologize for my voice this
    morning. If some of you can't hear what I am saying don't worry
    about it, you are not going to miss a hell of a lot.
        I am happy to be here today with Leon Panetta.
        Co-Chair Womack. Let's make sure that microphone is on.
        Mr. Obey. That is a little better.
        Leon is a good friend. He is truly a great American. All
    you have to do is read his resume to understand that. And if
    you know him, you know even more so that that is true.
        We have gone through many battles together, but one
    difference that separates the two of us is that I am from the
    Pre-Cambrian Era and Leon is not. He was elected in 1976 after
    the Budget Act of 1974 was in place, so that is the only
    process he has ever known. I was elected in 1969 before there
    was a budget committee. In that time the appropriations process
    worked reasonably well. We just didn't realize it at the time.
        At that time the President's budget meant something. There
    was no talk about it being dead on arrival. The way it worked
    was fairly simple. The President sent down the budget. The
    Appropriations Committee held its hearings and produced its
    bills. The Ways and Means Committee was on a separate track and
    took whatever actions they thought was appropriate.
        There was no formal arithmetic discipline. Discipline came
    from the recognition by the committee and by the party leaders
    that if the year's work was irresponsible there would be a
    price to pay in public opinion and at the ballot box.
        Under that system, from 1960 through 1974, and please
    remember this, from 1960 through 1974 deficits averaged a
    little less than 1 percent of GDP. In the worst year the
    deficit was 2.8 percent. By comparison, in the years after the
    Budget Reform Act, from 1974 through 2010, the year I retired,
    deficits averaged 2.9 percent of GDP, three times as high, and
    in 1 year it hit 9.8 percent.
        From 1974 on Congress has searched for a magical provision
    to rein in the deficit, a process provision. Ever since, the
    budget process has been as chaotic as it has been super
    complicated.
        Why? Much of the blame has been dumped by some on the
    Appropriations Committee. That is the wrong target. The main
    procedural problem is that the committee with the
    responsibility to pass the bills that actually determine
    specific spending decisions has nothing to do with the budget
    blueprint under which they are required to operate.
        When you get right down to it, the main job of the Budget
    Committee is to agree on three macroeconomic numbers: total
    spending, total revenues, and the level of the deficit.
        In contrast, the committee that has the responsibility to
    broker the thousands of program compromises necessary to
    implement that budget is the Appropriations Committee.
        So the Budget Committee can fly at 30,000 feet, but the
    Appropriations Committee and the Ways and Means Committee have
    to slug it out on the ground level in hand-to-hand combat. That
    means that if the Budget Committee targets are too optimistic,
    ideological, or unrealistic the Appropriations Committee cannot
    get the votes on the floor to implement their product.
        When I retired in 2010 I was succeeded by Hal Rogers as
    Appropriations chairman. I watched what happened to him. Each
    year the Budget Committee would push a highly aggressive budget
    resolution through the House, but when Hal tried to implement
    that resolution with actual program-by-program cuts.
        Members who had voted for the budget resolution would see
    what the resolution in macroterms actually required in
    microprogram terms, and Members who had voted for the
    resolution initially would then say, ``What? You want me to cut
    what? Are you crazy? Hell, no.'' And the system stalled.
        So what would I do to change things? That depends on
    whether you want to do major surgery or a patch job. For
    instance, 2-year appropriations is a wonderful idea if you want
    to erode congressional power or weaken Congress' ability to
    deal with the bureaucracy and bury the Congress in
    supplementals. Outside of that, it is a terrific idea.
        If you want to do fundamental change, I would do four
    things. One is procedural. I would abolish the Budget Committee
    and return to the practice of using old-fashioned informal
    political sanctions to impose fiscal responsibility. That would
    give you more time to focus on the bills that actually spend
    the money.
        The Budget Act simply adds one more hurdle that Congress
    must overcome without adding 3 months more to the calendar. All
    the budget resolution really is, is an institutional press
    release if it is not followed up by something else.
        People will say, ``Oh, my God, you can't do that or the
    deficit will balloon again.'' I would simply say that the
    numbers I previously cited demonstrate that the empirical
    evidence for that view is nonexistent. Deficits are larger now
    as a percentage of the economy than they were before the Budget
    Committee was created to prevent it.
        Second, recognize what history tells us on revenues.
    Recognize that in the last 50 years the budget has never
    approached balance when revenues as a percentage of GDP have
    not neared 20 percent.
        Third, recognize that we are not just in danger of passing
    on an uncontrolled budget deficit to our children, we are also
    in danger of leaving them with an infrastructure deficit, a
    skilled worker deficit, a science and tech deficit.
        Recognize that over the past 50 years nondefense
    appropriations spending has never been less than 3.1 percent of
    GDP. The budget resolution passed by the House last year called
    for shrinking that to 1.7 percent of GDP by the end of 10
    years. I invite you to decide whether that is either achievable
    or desirable.
        The fourth thing I would do is recognize that the main
    problem is not procedural, it is political. My favorite
    philosopher is Archy the Cockroach, who said once that what
    matters is not so much what system you have, what matters is
    what you do with whatever system you happen to have.
        I would ask you to learn a lesson from 1994 when I chaired
    Appropriations the first time. I became chairman midway through
    the session after Bill Natcher died. In spite of that fact, we
    finished all appropriation bills before the start of the next
    fiscal year.
        That didn't happen because I was such a hotshot chairman.
    It happened because the very first thing I did when I became
    chairman was to go to my ranking Republican, Joe McDade. I told
    Joe that I knew we would never agree on the details of
    appropriations, but I asked him how he would feel about the
    committee reporting a bipartisan 302(b) budget allocation. He
    jumped at the chance.
        For the first and only time in the history of the Budget
    Act, that is what we did. It meant that we had agreed on how
    much money each Appropriation subcommittee would allocate, or
    would be allocated, but left the details to the subcommittees.
        Unfortunately, it will be almost impossible to resurrect
    any degree of bipartisanship because of the way you all are
    elected. Too many of you come from hugely safe districts. The
    way your districts are drawn produces little incentive to
    compromise.
        That problem is beyond the reach of this committee to
    correct. But please at least recognize that your basic problem
    is not the budget process. The budget process is simply one
    example of how our political system has crippled the
    legislative system.
        Meanwhile, if all you really want to do is to put a patch
    or two on the process, I would recommend one procedural change.
    Right now the Budget Committee chair and Appropriations
    Committee chair live in two different political worlds.
        If you want to make the process more realistic, do one
    thing. Either make the chairmen of the Appropriations and Ways
    and Means co-chairmen of the Budget Committee or make the
    Budget Committee chair rotate between the two. That way the
    people who are expected to deliver the goods are the people who
    are actually manufacturing them.
        [The prepared statement of David Obey follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Co-Chair Womack. I thank the gentleman for his testimony.
        We will move straight into questions, and I will begin.
        To both of you, but particularly Secretary Panetta, two
    things that in reading between the lines of your testimony,
    there are two things that come to mind to me. One is the word
    ``discipline,'' having the discipline to do what the process is
    outlined to produce, and the other one was ``bipartisanship.''
    And as Mr. Obey has just testified, that is beyond kind of the
    control of the Joint Select Committee.
        But is it possible to get to a solution to the challenges
    that face the modern day Congress without a discipline to deal
    with the process the way it has been given to you and without
    some spirit of bipartisanship, which seems to be very elusive
    across the spectrum of issues facing the Congress?
        Mr. Panetta. Well, Mr. Chairman, as stressed by both of our
    comments, you can't do one without the other. I mean, that is
    the problem.
        I think the reality is that bipartisanship and the ability
    to work together is the key to implementing discipline. If one
    party alone tries to implement that discipline and doesn't have
    support across the aisle then it is going to be stopped and
    blocked and basically will be pushed to a point where it
    doesn't serve the process that it was designed to implement.
        Look, there is no question, I mean, your fundamental
    problem right now is the lack of a willingness to enforce what
    the Budget Act is all about. And admittedly, the Budget Act and
    the budget process has never been an easy one to implement
    because it does represent discipline.
        As chairman of the Budget Committee, you are never popular
    because you are establishing priorities. But the nature of the
    budget process is to establish priorities. It is not about
    numbers. This is not about just moving numbers around. It is,
    what are the priorities of this country? That is what is
    reflected in any budget.
        And we are not going to achieve any of our priorities if we
    don't manage our budget, because it is going to eat away at our
    ability to provide the resources necessary.
        And, look, the reality is--David touched on this--but the
    reality is that the budget you are dealing with is now less
    than a third discretionary and two-thirds mandatory. There is
    no way you are going to deal with a $20 trillion debt and not
    be willing to confront the mandatory issue.
        Now, I understand the politics of that, and I know how
    tough it is, but if you are being honest with the American
    people about the need to deal with the deficit, you are not
    going to deal with the deficit on the discretionary side alone,
    that is a joke, especially when you are increasing defense.
        So if you are serious about doing this you have got to deal
    with all of those areas. That requires discipline. It requires
    a willingness to take risks. Leadership is about taking risks.
    And if that willingness to do it, if that courage to do the
    tough decisions is not there, you can frankly implement all the
    budget reforms you want, nothing is going to happen in terms of
    the major problem.
        So discipline is the key, but you have really got to have
    bipartisanship and a willingness to work together to make the
    tough decisions necessary to deal with spending, discretionary,
    defense, entitlements, and what David talked about, revenues.
    All of that has to be part of the package.
        The only successful packages I was a part of in terms of
    budget agreements included all those elements. If you want to
    deal with the budget deficit, you have got to deal with all of
    those elements. But to deal with that, it needs to be
    bipartisan, and you damn well need to have the cover of the
    leadership. If the leadership isn't willing to back you up on
    those kinds of tough decisions, you are not going anywhere.
        Co-Chair Womack. Mr. Obey, a quick thought?
        Mr. Obey. Yes, Mr. Chairman.
        The father of the Budget Act in the House was Dick Bolling
    from Missouri, who was my mentor. And I talked to him the night
    before the Budget Act was scheduled on the floor, because we
    had a lot of controversy with it. And I remember him saying
    that unless the leadership of both parties played the numbers
    straight in the budget process so that people had confidence in
    the integrity of the process, that you could never expect
    anybody to support the results.
        And that is what has happened, in my view. You have had all
    kinds of gimmicks. I mean, my God, when you take a look at the
    assumptions that were made.
        I remember one year good old Ed Muskie, we were in
    conference. We were $400 million away from reaching the target
    number we needed on the deficit. And so Muskie wanted to take
    it out of agriculture.
        And so in the end if you took it out of grain, you
    antagonize the grain farmers; if you took it out of dairy you
    antagonize dairy. And so what the committee did was to tell the
    dairy guys they were going to take it out of grain, they told
    the grain guys they were going to take it out of dairy, and
    they passed it by subterfuge.
        You have got to play straight with the numbers or you are
    never going to get anybody to support it.
        Second thing is your substance has to be seen as fair and
    just for the people you represent. Otis Pike from New York said
    this during debate: You will never be held in high regard or
    deemed ethical while you say you can't balance a budget unless
    a constitutional amendment makes you; while you accept
    gloriously optimistic economic projections rather than deal
    with real ones; while you write a Gramm-Rudman bill and then
    spend days finding ways to get around it; while you let one man
    make $500 million a year while thousands sleep on the streets.
        And then the last thing I would note is a statement that
    Bolling put in the record just prior to the debate on the
    Budget Act, when he said this: The objective of budget reform
    should be to make Congress informed about and responsible for
    its budget actions, not to take away its power to act.
        Co-Chair Womack. I thank the gentleman.
        Mrs. Lowey.
        Co-Chair Lowey. Thank you again for your thoughtful
    testimony.
        First of all, to Mr. Obey. Two weeks ago we heard testimony
    from Speaker Ryan in which he endorsed the idea of biennial
    appropriations, putting funding bills on a 2-year cycle. You
    note that you oppose this proposal, as do I. So number one,
    could you elaborate on why you think switching to biennial
    appropriations would be a bad idea?
        And, secondly, for either of you. One of the problems we
    have been having recently is getting appropriations done,
    because there is a tendency to drag in all sorts of unrelated
    legislative issues into the appropriations process.
        It is hard enough just reaching agreement on funding
    levels, but when we become the authorizing committee, because
    the authorizing committees can't do their work, and we try and
    resolve issues of banking regulation or environmental law or
    healthcare policy, I just wonder whether all these riders--and
    I mentioned before that we were in till about 11:30 last night
    on Labor-HHS, because there were 50 amendments, all kinds of
    legislative issues.
        Maybe you can tell me, Chairman Obey, how are these riders
    handled? I am not even getting into Mr. Panetta's in-depth
    discussion. But how did you deal with riders in the past? We
    are becoming the authorizing committee, because the authorizing
    committee can't do their work, and then we get into all kinds
    of policy arguments and amendments like the 50 last night.
        Mr. Obey.
        Mr. Obey. Well, first of all, with respect to 2-year
    appropriations, I believe that the Congress is not in any
    position to give away any of its powers. It has given away far
    too many through the years.
        And if you take a look at what happens, if you have a 2-
    year appropriation, understand, once you pass that
    appropriation bill the bureaucracy doesn't need you for the
    rest of that cycle.
        Under a 1-year appropriation you have always got something
    that they want. It is called money. And it makes it tough to
    get away from the Congress if the Congress is going to have you
    right back up again next year. It is hard on the Congress to
    have to go through it twice, but it is the way you preserve
    your power vis-a-vis the bureaucracy, in my view.
        Secondly, this idea that somehow if you appropriate 1 year
    you will have all of this time in the second year to do
    oversight--bull gravy. The fact is that if you do that what
    happens is that you lose the leverage, you lose the leverage
    that you have with a 1-year budget.
        Thirdly, supplementals. Congress already does too much by
    way of supplementals. We funded the longest war in the history
    of the country on a supplemental. I mean, it is absurd to even
    think about adding a process that will make it much more likely
    that Congress will have to wrestle with supplementals.
        And then the fourth problem is that if you then add to it
    the inclination of Members to grab what must be a must-pass
    bill and attach their favorite authorizing project to it, then
    you have got a prescription for chaos.
        So I would say first do no harm. Don't give up the power
    that the Congress has. Especially in these days, this democracy
    requires that you hang on to it.
        Co-Chair Lowey. Well, I thank you very much.
        Do you have a comment on that, my friend?
        Mr. Panetta. Just a short comment on it.
        I think part of the problem is the breakdown in the regular
    order process that took place. When I was first elected--and
    David obviously before that--but when I was first elected, the
    committees meant something. The subcommittees meant something.
        And, look, we had very diverse Members in the Congress. On
    the Democratic side we had everybody from Sonny Montgomery to
    Ron Dellums and a lot of others. And yet, what we did was we
    operated within the committee process. We had a chance in
    subcommittee to do hearings, to make amendments, to vote on
    that legislation. We had a chance in full committee to do
    hearings and vote on legislation.
        And the leadership backed up that process. The leadership
    basically said: We are not going to take up bills unless they
    go through the regular order process.
        And you felt as a Member that you had a role to play in
    terms of legislation. It wasn't being done by the leadership.
    It wasn't being done by the Rules Committee. It wasn't being
    done by a group in a dark office someplace. It was done by you.
    You were part of the process.
        That is shut down. And so, yes, you are going to get a hell
    of a lot more riders. Why? Because the authorizing committees
    aren't doing anything. So they are going to basically put the
    riders on appropriations bills because they know appropriations
    bills ultimately have to move. So you are going to get a lot
    more riders with a breakdown in regular order.
        And, look, the process right now, appropriations operates
    on CRs. I mean, I know the work is done in committees. You try
    to work through these bills. But ultimately everybody knows
    that we are going to face a cliff out there, and you are going
    to wait until you face the cliff to basically have to do
    anything.
        And so everybody plays the CR game. And that breaks down
    the process that David talks about where the committees are
    working on this stuff, doing oversight, doing all the things
    they have to do.
        Because you know what is going to happen. You know the game
    that is going to be played. You wait until the cliff happens.
    You wait until you have to raise the debt ceiling to push you.
    And the leadership is going to get together and try to cut a
    deal in order to make sure the government doesn't collapse.
        That is the way you operate now. That is a lousy way to
    govern.
        Co-Chair Lowey. Just, Mr. Chairman, if I may just----
        Co-Chair Womack. Please.
        Co-Chair Lowey.----repeat a couple of facts before, so we
    don't get too depressed here.
        We sometimes have to take the long route to get things done
    to satisfy everyone's political base. I am not saying whose.
    But in 2018, for example--obviously we are dealing now with
    2019--we ended up with a really good bipartisan omnibus, a
    really good appropriations bill. I know because I was on the
    phone every night. We got rid of 169 riders. You could ask, how
    did those riders get in, in the first place? But that is
    another story.
        And then that takes us to last night, where we are here
    with 50 amendments on the House. Senator Shelby is working in a
    bipartisan way with Senator Leahy. They are bringing bills to
    the floor. At some place the charade in the House may be
    completed, and I have a feeling it is going to end up in a
    positive bipartisan bill, because it has to.
        So sometimes you have to go through the machinations,
    because the authorizers aren't doing their work and they had to
    bring them into appropriations. And I am not saying, and I
    welcome, the reason we wanted this hearing, to hear maybe how
    we could shortcut this.
        But in the end after everyone has done their press release
    and we deal with all the poisoned pills, we ended up with a
    pretty good process. And on each of the subcommittees of which
    I am a visitor and a part, there really was some good
    bipartisan discussion.
        So I won't throw the whole thing out, but it is an
    interesting process the way it is working now, and it may be a
    longer, longer process.
        Co-Chair Womack. I thank the gentlelady.
        Senator Lankford.
        Senator Lankford. Thank you, Mr. Chairman.
        Gentlemen, thank you being here very much.
        Mr. Panetta, let me start with you on this. Thanks for the
    very detailed recommendations that you put in place. I want to
    continue what Nita was talking about as well on the 2-year
    cycle.
        You make a pretty strong case for having a 2-year budget
    process. Would you have that same case for a 2-year
    appropriations process, especially with an insight on
    contracting, CRs, which you mentioned before, lost months when
    you can actually do contracting?
        You have been on both sides of this. It gives you a unique
    perspective. So help me understand where you are coming from on
    a 2-year budgeting process, 2-year appropriation process.
        Mr. Panetta. Look, the reality right now is that most of
    the agreements that are being made are made over a 2-year
    period to try to give you some relief so you don't have to
    fight the same wars the second year.
        Look, the biggest problem--and I have seen it from both
    sides, obviously from the Hill perspective, but also from being
    in the administration, particularly as Secretary of Defense--
    the worst problem in terms of defense is uncertainty and not
    knowing what the numbers are going to be and not knowing
    exactly what is going to be available.
        And you have weapon systems that are out there that have to
    be funded. You have troops that have to be paid. You have all
    kinds of requirements that have to be dealt with. And you are
    not sure what exactly you are going to get.
        And particularly when sequestration happened, you had this
    process of then slashing funding across the board. And at the
    time I said it is really going to impact on our ability to do
    maintenance and all the other things that have to be done.
        So it is the uncertainty in the process. And I think a 2-
    year process, since in many ways it is now incorporated in the
    dealmaking that goes through it, I think a 2-year process that
    lays it out for 2 years--look, on the appropriations side I
    think Mike Enzi has a good idea of perhaps running six bills
    one year and six bills the next and allowing some degree of
    oversight in the offyear.
        But the fact that you can lay out some degree of certainty
    with regards to where you are going so that you can do the
    planning and you can do the kind of decisions that have to be
    done, I think that is an important thing to consider in this
    process.
        Senator Lankford. The connection between reprogramming
    dollars with appropriations committees and for agencies having
    to be able to come back for reprogramming authority, is that a
    sufficient hook to be able to push agency back to
    appropriators?
        Mr. Panetta. Yeah. No, it always is. I think that is right.
        Senator Lankford. Let me ask you, you had an extensive set
    of paragraphs on budget gimmicks, with a full confession that I
    occasionally used a couple when I was sitting in the other
    chair. So talk to me about a little bit of how that actually
    fixes the process.
        You talked about ChIMPS, you talked about timing shifts,
    you talked about the magic asterisk. Are there any of those
    that are in particular that you say this is a big issue, or it
    is just deal with all of them?
        Mr. Panetta. I think you have to deal with all of them,
    because, look, the nature of the way you do this process is
    that it requires difficult decisions. And every time that you
    have to make cuts, every time you have to deal with spending
    programs it is, instead of going directly at it, if you can
    find a way around it that is what happens. That is the way we
    operate. And as I said, I have been part of that.
        And so I can remember once as OMB Director I had
    recommended as OMB Director that--it was about $8 billion, and
    I recommended that on the transportation bill, instead of
    allowing for people to add new projects to the appropriations
    bill, that they would have to be authorized by the
    Transportation Committee.
        Well, it was somebody named Bob Byrd on the Senate side who
    did not like that because he was able to pave a lot of West
    Virginia based on the appropriations bill. And so Bob Byrd
    called, called the President, and said, ``You know, Mr.
    President, I am not going to be able to support your budget if
    you include that provision.''
        So the President called me and suddenly I was $8 billion in
    the hole. And so I told the people at OMB, ``Where can we go to
    come up with $8 billion?'' And we found some additional savings
    in different places. But I still got down to I think it was
    about $3 billion to $4 billion.
        And finally I looked at my economist and I said, ``Look at
    that growth number and figure out if maybe a half percent on
    growth might be added.'' And that took care of the problem.
        So, yeah, you are in a box, you turn to those gimmicks. The
    problem is it erodes the system. It erodes the honesty of the
    process. Sometimes you get to a date, and it is the end of
    September, and if you can move that payment to the 1st of
    October you can save money in that year. It is phony, but it is
    the game that is played.
        So I think if you are serious, I would look at each of
    those gimmicks to try to make sure that they are not being used
    because it is dishonest. It is dishonest.
        Mr. Obey. If I could just make a point on that, backing up
    what Leon says about dishonesty.
        Jim Jones' portrait is hanging here on the wall. He is from
    the same State that you are and that I was born in, Okmulgee.
    And he had a big confrontation with President Reagan on the
    budget in 1981. And when the time was approaching to vote on
    the budget, at that point Jim Jones thought he had it won
    because his budget resolution produced a smaller deficit than
    Ronald Reagan's.
        So what happened was that over a 10-day period the Reagan
    administration simply decided that they were going to change
    some of their economic assumptions.
        And so then when we returned to town, lo and behold, all of
    a sudden the low dollar man in terms of the deficit was Ronald
    Reagan, not Jim Jones, and that is why Jim Jones lost the vote
    that turned control of the floor and the Congress over to the
    minority.
        My point being, that is my basic objection to the Budget
    Act as it stands. It forces Members of Congress to focus so
    much on details and gimmicks rather than determining what their
    basic values are and how they are going to deal with them. And
    sometimes we function a whole lot better on an informal basis
    than we do if we have to meet artificial targets that require
    us to do artificial things.
        And I would just show you one thing. I have got an old
    chart which I held up on the House floor during that 1981
    debate, and what it showed was the projection.
        The deficits under Gramm-Rudman I for fiscal year 1985 to
    1990, the deficits were projected to go from $172 billion to
    zero in 1990.
        Instead, they went from $212 billion to $220 billion. Most
    of that was simply due to games that were played on economic
    estimates and assumptions.
        Co-Chair Womack. Mr. Yarmuth.
        Representative Yarmuth. Thank you, Mr. Chairman.
        And thanks to both of you for sharing your experience and
    wisdom with us.
        Mr. Obey, I remember well during my first two terms here
    when you were chairman of Appropriations, and you were during
    certain seasons the most popular person in the House, because
    everybody was trying to get their congressionally directed
    investments, also known as earmarks, approved.
        We haven't really had much discussion in this joint
    committee about earmarks. Would you both discuss what impact
    you think restoring earmarks might have in resolving some of
    the polarization, the conflicts that we have in the process
    now?
        Mr. Obey. Well, I am yes and no on it, because I have been
    in the middle of that fight for so long.
        The problem is that Congress ought to have the right to
    determine where money goes on a district-by-district basis to
    at least some degree. They shouldn't be able to decide it all,
    but if I represented my district for 42 years I think I had a
    hell of a lot better idea of what was needed for different
    communities than the OMB Director did.
        The problem is that that is true for 90 percent of the
    Members, but then you have always got 1 or 2 percent who foul
    the nest by getting greedy, by getting slippery, or sometimes
    even sleazy, and it gives the institution a bad name.
        So I guess what I would say is, in theory, I would like to
    see earmarks restored because that represents one manifestation
    of congressional power. But when I see what it does to the
    institution it is very hard for me to recommend that they
    restore those, if you can find some way.
        The other problem you have is when you start to explode the
    number of earmarks. The Labor-H bill went from zero earmarks to
    over 4,000 earmarks within a 4- or 5-year period. That eats up
    an enormous amount of staff time just checking out the project
    to make sure that somebody isn't pulling a fast one.
        And so it is a prerogative that the Congress ought to have,
    but I would rather look elsewhere for preserving the Congress'
    constitutional authority.
        Mr. Panetta. I am a supporter of allowing Members to do
    this, because I think Members are elected to represent their
    constituents. And if there is a need that your constituency
    faces, you ought to be able to have the opportunity to go to
    the key chairman and members of a committee and justify
    providing funding for that particular effort. I think that is
    part and parcel of your responsibility as a representative of
    the people.
        There are ways to try to check this. I think the reason
    earmarks became such a target is because they got out of
    control. Huge numbers were added to certain bills. I think they
    created real problems. Some of those earmarks were unjustified.
    That created real problems.
        But I think if you have a limited number and you have
    greater transparency in what is included in earmarks so the
    public knows what is a part of it, I think there is a way to do
    this.
        And I have to tell you. From the approach of running this
    place, from the approach of being in the administration as
    chief of staff trying to be able to get things done up here,
    the ability to be able to focus on what somebody needs is a
    very important incentive to trying to urge that individual to
    do the right vote.
        And I think having given that up has really hurt both the
    leadership and it has hurt the ability of administrations to be
    able to work their will on the Hill.
        Representative Yarmuth. I appreciate that.
        Mr. Obey. I agree with that, too. Let me just one point.
    One of our problems is we know so many things that ain't so.
    And the number one project that got Congress into trouble on
    earmarks was the Bridge to Nowhere.
        But guess what? Number one, that was not done by the
    Appropriations Committee, it was done by the authorizing
    committee. Number two, the money that went to that bridge came
    out of Alaska's share, it didn't come out of anybody else's. So
    the Congress took a real beating for stuff that wasn't so.
        Representative Yarmuth. Thank you very much.
        Co-Chair Womack. Senator Blunt.
        Senator Blunt. I am no expert on the Bridge to Nowhere, but
    I think number three is it actually went somewhere, under the
    circumstances you mentioned.
        Not much good said about the Senate. The Senate is designed
    to be a disappointing institution, and we fulfill that.
        But I appreciate Co-Chairman Lowey's comments that we have
    tried this year. We got all of our bills out of the committee
    by the end of June, moving those bills in packages. We don't
    have a lot of history here in recent years. Somebody could walk
    off the field at any moment.
        But not allowing the appropriations process to become the
    authorizing process is important. There are times when
    authorizers and appropriators and everybody else agrees this is
    a moving vehicle, this is something that needs to be done, this
    is the moment to do it.
        And then the other comment that Congresswoman Lowey made is
    she is leaving here to go to a conference committee.
        Co-Chair Lowey. It cancelled.
        Senator Blunt. Now this is a much more unique thing than it
    would have been a decade ago, the idea of going to a conference
    committee.
        And to go back to my other comment, anybody could walk off
    the field at any moment. And Congresswoman Lowey said the
    committee meeting was just canceled. But we both voted to go to
    conference, and we are ready to go to conference. And maybe
    some experience.
        Part of the problem is we haven't had a real number since
    the Budget Control Act. And I think both of you have addressed
    that in different ways. You have to have some agreed-to number
    to know how you are starting.
        So one reason this year might work better than last year is
    last year we weren't shooting with real bullets until about
    November, when there is an agreement, okay, here is the real
    number we are going to use.
        The whole process, the budget process, the spending
    process, the entire process is based on we know so much that
    isn't so, like Congressman Obey just said, we know this is not
    going to work out this way, makes it really hard to get in and
    do the work that we need to do.
        A couple of thoughts. One, I don't think it is coincidental
    that the real breakdown in the process ended about the same
    time Members didn't have anything to go home and specifically
    talk about.
        What about the idea that Senator Byrd objected to that you
    can only appropriate things that were authorized, with the
    transportation caveat? But would that be a way back to where
    Members had more reasons to talk about what they had voted for
    than we currently give them?
        Mr. Panetta. I think it is important. I did it as OMB
    Director, frankly, I did it as chairman of the Budget
    Committee, was to really stress the importance of the
    authorizers to do their job in authorizing particular spending,
    rather than having the Appropriations Committee have to totally
    carry that ball and have to deal with unauthorized projects of
    one kind or another.
        You know, the problem I see now is, as I said, when I was
    here every one of these committee rooms was working. There were
    subcommittees meeting, there were full committees meeting. You
    know, the committees I served on were having hearings. They
    were doing markup. They were in business.
        And, frankly, the chairmen of those committees and the
    ranking members would not have it any other way. The chairmen
    of the authorizing committees said: You damn well are not going
    to move this through appropriation because it is my
    jurisdiction.
        That is the way it used to operate, and that has broken
    down, and I think it has made the problem that much worse.
        Senator Blunt. I want to get to calendar year. One of your
    recommendations was we would have more time if we worked on the
    calendar year rather than the current fiscal year. I would like
    both of you to comment on that.
        That is your recommendation. So, Congressman Obey, do you
    want to start? Would that make this process work any better
    than where we currently are?
        Mr. Obey. I don't really care. What I care about is whether
    or not you can get your work done.
        Senator Blunt. Right.
        Mr. Obey. And I just think that if you eliminated the
    budget, the necessity to pass the budget resolution, if you
    went back to the old system of simply informal agreements
    between the leadership and the committees about how much ought
    to be spent on this, that in that area, you would have a lot
    more time to deal with appropriations. I think that would be a
    bigger change.
        Senator Blunt. So you would buy that extra 3 months by just
    eliminating the budget process.
        Mr. Obey. Yeah. And if you want to do it, if you want to do
    the additional, or if you want to move the date, as well, I
    don't care. I don't know if it would help or hurt. But I do
    know that right now we are spending a hell of a lot of time on
    an institutional press release that doesn't spend a dime.
        Senator Blunt. Secretary Panetta.
        Mr. Panetta. You know, I mean, I understand David's point.
    And, frankly, at that time Appropriations, Ways and Means, I
    think there was a process that they abided by.
        But the reality is that you are now operating in a
    situation where you are facing trillion-dollar deficits. You
    have got a $20 trillion debt that is going to explode in the
    outyears, all of the projections say what is going to happen.
        And I don't think you can do this just simply by
    Appropriations and Ways and Means because of the tough
    decisions that are going to be necessary in order to put this
    back on the right track. That is the problem.
        Appropriations is not going to do that on their own. They
    don't deal with mandatory. And Ways and Means is not going to
    do what they have to do without some kind of mandate from the
    budget process in terms of reconciliation the way it is
    supposed to work.
        So I think the reason you have got to put a better process
    in place in terms of the budget is to try to deal with the
    challenges we are facing as a country in terms of trying to
    ultimately put this country on a better fiscal track over the
    next 5 to 10 years. You are going to need that kind of budget.
        I know how appropriations operates on a year-to-year basis.
    I know how Ways and Means operates on a year-to-year basis. But
    the bottom line is you are not going to deal with the elements
    of the budget that have to be dealt with in order to improve
    our fiscal situation without having at least a committee that
    looks at the whole picture.
        Co-Chair Womack. Senator Bennet.
        Senator Bennet. I guess I would like to start where you
    ended.
        First of all, I wonder whether either of you would be
    willing to run for Congress again, based on your testimony? And
    while you are considering your answer to that let me ask this
    question.
        After 10 years of budget press releases and cliffs and
    wasting money for the Defense Department and shutting the
    government down, all in the name of fiscal responsibility, we
    find ourselves in a place where next year, I guess, we are
    going to collect about just under 17 percent of our GDP in
    revenue and we are going to spend almost 21 percent spending as
    a percentage of GDP.
        That will provoke, create the largest deficit that we have
    had as a percentage of GDP in the Nation's history outside of a
    war or recession.
        And, Secretary Panetta, you mentioned earlier that the way
    you see it, it is either management by crisis or by leadership.
    Leadership is better than crisis. But there is not a lot of
    leadership around here, and I am really worried about a crisis.
        And I wonder whether you could both sort of help us
    understand what the conditions are, the political conditions,
    you are both politicians, what they need to be for us to
    actually address this issue, grapple with this issue in a
    meaningful and responsible way, what the process, Leon, looks
    like that you are talking about really. I mean, if you were
    here, what would it look like to drive a budget agreement that
    dealt not just with discretionary but mandatory spending, as
    well?
        And then finally, if you could each just say a word about
    what it would mean for Members to actually take back some
    responsibility from leadership. There are a lot of us that have
    worked here throughout a time when there has not been any
    opportunity for Members to make decisions about the kind of
    things you are talking about.
        So any perspective on any of that I would appreciate.
        Mr. Panetta. Well, that is the issue that I really struggle
    with, which is, how can this place get back to governing? And
    in many ways that is the bottom line. You are elected to
    govern. You are not elected to come back here and pound your
    shoe on the table and simply play politics. You are elected to
    come back here to govern. And governing involves some tough
    decisions.
        And the issue is, how can we get back to that? Because I am
    not so sure, frankly.
        When I was here, governing was good politics. It made sense
    for me to come back here and work, even if it was a Republican
    administration, a Republican President or a Democratic
    President.
        If we governed and did what we thought was necessary, found
    the right consensus, found compromise, got things done, even
    though my constituents might not always agree with my
    positions, they knew we were governing and running the country.
        I am not so sure right now that governing is considered
    good politics as opposed to stopping the other side from doing
    what they want to do.
        You guys are engaged in trench warfare up here. You are in
    your trenches, and you are fighting this war, and you are
    throwing grenades at one another, and every once in a while you
    come out of there. You are worried about somebody shooting you
    in the back if you try to negotiate something. And so nobody
    wants to go into no man's land, so you stay in the trenches.
        How do you get break that? How do you get back to
    governing? That really requires tough leadership that is going
    to have to take risks.
        Look, when David and I were here it was not only the
    leadership. I mean, look, Tip O'Neill and Bob Michel used to
    kick the hell out of us if we didn't get the budget resolution
    done. They backed us up on tough enforcement. Tip used to
    constantly say, ``When are you getting the budget resolution
    done? We need it done.'' And they were pushing, they were
    pushing, and backed it up.
        And so you need to have that leadership at all levels. We
    had chairmen, strong chairmen at the time, people like
    Rostenkowski, people like John Dingell.
        And let me tell you something, these were not chairman who
    just kind of sat back and waited to see what the hell the
    budget was going to give them. They basically used to come to
    me and say, ``What the hell are you up to? What are you
    doing?''
        And I had to visit every chairman. When I was budget
    chairman, I visited every chairman to try to make sure that
    they were informed of what was going to happen, because
    otherwise that chairman had the power to throw the whole damn
    thing off track.
        So because there was leadership at those key levels and all
    of them wanted--I mean, they thought--it was abhorrent if we
    didn't pass a budget resolution. I mean, Tip O'Neill, Tom
    Foley, everybody was on my butt in order to make sure we got
    it. They cared about that.
        If that is not there, if that pressure is not there, if
    everybody sees that you can take shortcuts in the process, it
    is not going to happen under any circumstance.
        The other thing, very frankly, is you need a President of
    the United States who cares about this stuff. I mean, if a
    President of the United States really cares about this stuff
    and is willing to convene bipartisan leadership to focus on the
    tough choices that need to be made and is there to back it up,
    let me tell you something, then you will see things happen.
        George Bush made the pledge, ``Read my lips, no new
    taxes.'' And I remember as Budget chair he asked me to come up
    and talk to him after he soon got elected. And I said, ``You
    know, Mr. President, let me tell you something. You are not
    going to be able to stick by that, because the deficits are
    going up, and you are going to have to confront that.''
        And he said to me, ``Frankly, look, I can't back away from
    that now, but there will be a point at which we will have to
    sit down and negotiate an approach.''
        And to his credit, it was tough for him. I understand the
    politics of this stuff. It was tough. But he was willing to go
    ahead and negotiate, Republicans, Democrats, and that is what
    led us to the 1990 budget agreement.
        It took courage. It took courage. You know, he may well
    have paid a price for that. But you guys are elected to
    exercise leadership. And I think, unless you bring those
    ingredients to bear, Members on their own are not going to
    touch this stuff because it is volatile.
        You are not going to deal with entitlements. You are not
    going to deal with raising taxes. You are not going to deal
    with all of the issues you have to deal with, because it is
    trouble. Doing that on your own, it would be nuts.
        But if you knew you had the cover of leadership, and you
    knew that there were people that were going to protect you in
    making these tough decisions, then there are Members that are
    willing to walk that line. But if that is not there, this is
    tough to do.
        Co-Chair Womack. Senator Ernst.
        Mr. Obey. If I could just comment on something Leon said.
        My problem with all of this is that we are all talking
    about what we do on the process and in order to solve a
    political problem. The problem the country is facing is not
    process, it is political. It is political. It is political. And
    everything else is just avoidance. You can't deal with the real
    problem on this committee.
        Start with districting. I was elected for 42 years from a
    52 percent Democratic district. That meant that I had plenty of
    incentives to try to find independent votes and some Republican
    votes on a good day, and that is what it took to get elected in
    a district like that.
        Today we have got too damn many 72 percent districts rather
    than 52 percent districts. And as a result there are no
    incentives to legislate. There are no incentives to compromise.
        Do you think Joe McDade could do today what he did with me
    when I got him to agree to a bipartisan 302(b) allocation out
    of Appropriations? Do you think Joe McDade could do that today
    without having his head handed to him? Like hell. No way on
    God's green earth that he could do that.
        Do you think that I proposing a joint 302(b) allocation
    back in those days in 1994, do you think I could do that under
    this atmosphere today? I sincerely doubt it. So you have got
    the districting problem.
        And then you have got campaign finance. The major reason I
    retired--I love this place--but the major reason I retired is
    that I knew in a 52 percent district I was going to have to
    spend all of my time being a glorified telemarketer raising
    dollars, and that is the last damned thing in the world I
    wanted to do when I came here.
        And so it is what the political system is doing to
    everything else. We are not attacking the Medicare. We are not
    attacking healthcare in a constructive way. Parties are looking
    for a way to one-up everybody else. And you have got to have
    some incentives built into the system or it is just a bunch of
    high-minded talk that isn't going to get us anywhere.
        So you have got to look beyond the process issues, and then
    if you could somehow change the political atmosphere process
    will take care of itself, because Archy the Cockroach is right.
    What counts is not what system you have, what counts is what
    you do with whatever kind of system you happen to have.
        Co-Chair Womack. Senator Ernst.
        Senator Ernst. Thank you to our witnesses today. It has
    been really good to hear from both of you.
        And I appreciate, Secretary, your words on leadership and
    courage and assuming that risk. And the issue that faces this
    committee, though, is what do you do in the absence of
    leadership?
        So we are tasked with coming up with a plan that will move
    our Congress forward. And so a number of different discussions
    have gone on here. You both have laid out different ideas on
    how we could reform the process if the process is to be
    reformed.
        Mr. Obey, you mentioned the incentives. Sometimes those
    motivating factors can be punitive, as well. And one of the
    things that we have talked about as far as incentives for
    Congress to get their work done is to perhaps withhold Members'
    pay, their recess, travel, until we get a budget in place.
        Because no matter what process we have in place, I don't
    care what it is, I am going tell you, and you know this,
    Members of Congress are always going to find a way around that
    system. And we will end up with CRs, we will end up with other
    gimmicks.
        What do you think about those ideas, no budget, no pay, no
    budget no recess? Could you both maybe talk a little bit about
    those ideas?
        Mr. Obey. What do I think of those ideas? Not much.
        Senator Ernst. Can you expound?
        Mr. Obey. I don't really think I need to. I mean, if you
    are a freshman legislator in the House of Representatives and
    you come in here, and the institution fails and doesn't produce
    a product, why should that individual Member pay the price for
    the idiocy of the institution? I don't think they should.
        Senator Ernst. Secretary.
        Mr. Panetta. I know all the thoughts about trying to force
    doing what is right. This is a cycle we always go through. I
    remember when I was on the Budget Committee that same kind of
    politics as now. Republicans didn't want to raise taxes.
    Democrats didn't want to cut entitlements or spending.
        And so if people weren't willing to confront those issues,
    then everybody was thinking: What is the shortcut here? How can
    we do this without having to really face those tough decisions?
        And so people were coming up, obviously, with a balanced
    budget amendment for the Constitution. I mean, Gramm-Rudman was
    basically the shortcut. I mean, Gramm-Rudman basically said
    let's just set this path and cut the hell out of everything in
    order to stick to that path. Well, it is one way to do it, but
    the problem is Congress never stuck to it. And so we always
    found a way around it.
        I think, frankly, the greater key is to, if you come to a
    decision on this joint committee to establish some changes or
    reforms, then I think it is absolutely essential for the
    leadership to require that you abide by those changes. And I
    think they are the ones that are going to have to push Members
    to then take the steps necessary to get it done.
        That is the best way it works, is to have them lean on the
    people that have to do the right job. And they have ways to
    basically be able to twist arms. They have to do it every day.
        And there has to be, I think, peer pressure that basically
    comes at play here so that everybody is pushing to adhere to
    it.
        I think if you establish penalties of one kind or another
    the problem is that not only will Members feel that that really
    is overstepping the line in terms of hurting them, but more
    importantly, what will happen is they will find other shortcuts
    to trying to get the job done, because then their pay or
    whatever will be on the line so they will find another
    shortcut.
        I think what you want to do is find a way to make sure they
    stick by the process.
        Mr. Obey. Let me just say, there is an assumption here, I
    think, that the leadership is always going to do well.
    Sometimes the leadership is incredibly ignorant on specific
    problems facing committees. I will tell you one story.
        Bill Young, when Bill was chairman of the House
    Appropriations Committee and I was ranking member, Bill and I
    were very close. I really loved him.
        And he came up to me one day, he said, ``I just got to talk
    to somebody. You have no idea what just happened to me.''
        I said, ``What is that?''
        He said, ``I was in my office, and the phone rang, and it
    was Speaker Hastert. And he said, 'Bill, we have got a
    rebellion on our hands and I need to talk to you about it
    quick. We need you to come right down here to my office.'"
        So Bill went down, he walked into the Speaker's office, and
    the Speaker said, ``Bill, we have got a number of our junior
    Members here and they are upset with no progress, and they are
    demanding that we move appropriation bills. How soon can you
    start moving those damn appropriation bills?''
        And Bill looked at him and said, ``Well, Mr. Speaker, first
    I have to have an allocation.''
        And the Speaker said, ``What is an allocation?''
        The way this place needs to work, political parties have a
    very legitimate role to play. But the kind of politics I was
    taught was that the leaders of both parties would decide the
    direction they wanted to take their caucuses and their parties
    nationally. They would decide what direction they wanted to
    take, and they would put together their ideas on how to do it.
        Then you bring it into the Congress. And then what the
    committees are supposed to do is to leaven that product with
    the knowledge that individual committee members have picked up
    through years of working to understand this stuff.
        And there is an advantage if you have got somebody who has
    been on Labor-H for 12 years and knows, really knows how NIH
    works. Committees are supposed to be able to know enough to
    persuade the leadership to modify their product so that it will
    stand the test of political reality when it hits the newspapers
    and when it hits the floor.
        And so you need a balance. You need a balance between
    strong leadership also needs to be informed leadership, and
    then also super informed committee members who know enough
    about these individual programs to know what is a good idea and
    what isn't. And maybe you ought to modify the Speaker's pet
    project in order to make it saleable.
        I am proud of the fact that in the years I was chairman
    Nancy Pelosi never ordered me to do anything. If she wanted me
    to do something she would come in and she would be mighty
    persuasive.
        But in the end if I said, ``Nancy, I am sorry, but here is
    why I can't do this,'' she would listen. She might not like it
    and she might raise hell with me and ask me to change my mind,
    but she respected my knowledge and I respected her obligations
    and her knowledge.
        Senator Ernst. And I appreciate the input. If I could just
    wrap that up, I do believe that we will find a way around any
    process if there isn't something that is forcing us because of
    all the things that you outlined with partisanship and so
    forth.
        So I do support having measures in place to force us to do
    our jobs because, unfortunately, with the dynamic we have right
    now we are not doing our jobs and we don't have the leadership
    that compels us to do our jobs.
        Thank you.
        Mr. Panetta. I think as long as you are thinking about
    that, I mean, I think, rather than kind of going after pay or
    what have you, I think trying to clearly set an approach that
    says legislation that does have a fiscal impact will go nowhere
    without a budget being approved. I think you need to turn to
    the process and what needs to be done, and then the price you
    pay is that you can't just simply find ways around it, avoiding
    the necessity for some kind of budget.
        Senator Ernst. Thank you, Mr. Chair.
        Co-Chair Womack. Thank you, Senator.
        Mr. Kilmer.
        Representative Kilmer. Thanks, Chairman.
        Thanks for being with us.
        Maybe, Mr. Panetta, I will start with you. I am struck that
    process changes and enforcement mechanisms only really work
    when they are implementing and enforcing policies for which
    there is a bipartisan political consensus, and when there is
    not that political consensus they break down.
        So at one of our prior hearings Maya MacGuineas was here
    and talked about ways you could increase the transparency and
    awareness of some of the fiscal challenges that you have spoken
    so eloquently to.
        One of the suggestions that she spoke to was having some
    sort of a fiscal State of the Nation address where the GAO or
    the Comptroller General would come in and actually lay out some
    of our long-term fiscal challenges. I wanted to get your
    impression of that.
        Mr. Panetta. Well, I think those are all good ideas. I
    think having some kind of summary or some kind of report or
    message with regards to our fiscal health is important.
        But, frankly, that is the responsibility of the President
    of the United States. And we have not really in recent years
    had Presidents address this country on the fiscal crisis that
    we are facing, largely because Presidents are like everybody
    else, that would interrupt their ability to get the money that
    they want to get for the spending that they want to do.
        And so there are very few Presidents in recent years who
    have really spoken clearly to the American people about the
    kind of crisis we are confronting. And I think the result is
    that everybody then thinks you can tiptoe past the graveyard,
    and nobody pays attention to the level of crisis that we are
    confronting.
        And one of the reasons we were able to pass the 1990 budget
    agreement and the 1993 budget agreement was because Ross Perot
    in his campaign made this an issue. You need to have at a
    national level somebody who is willing to address the crisis we
    are confronting.
        Representative Kilmer. Mr. Obey, I enjoyed reading your
    testimony and the references to Archy the Cockroach made me go
    on Amazon and buy ``Raising Hell for Justice.''
        So I had already read ``Worthy Fights,'' for what it is
    worth, Mr. Secretary.
        I wanted to echo the observations of Chairman Lowey. You
    have seen this interesting dynamic this year where the Senate
    has committed to a bipartisan process, agree on 302(b)'s, not
    having the partisan riders, a very different process than the
    House. I got an opportunity to think a lot about process reform
    during our 13th hour of markup last night.
        I am struck that the Senate hasn't been more successful in
    finding success because of rules or process, but because they
    have made a commitment to a bipartisan and consensus bill
    process.
        Now, having said that, in your testimony you made reference
    to reconstituting the Budget Committee so that it more
    accurately reflects sort of the realities of what is coming out
    of Ways and Means and of what is coming out of approps. I was
    hoping you could just speak a bit more about why you think that
    would improve the budget process.
        This is for you, Mr. Obey.
        Mr. Obey. Well, I think there is a very good reason why the
    Senate appears to be working in a more bipartisan way than the
    House is on this stuff, and it is called districting. It is the
    way the lines are drawn.
        If you are in the Senate you represent the whole mixture of
    pressures and counterpressures in a State. If you are in a
    House, and if your legislature has drafted it so that Democrats
    and the Republicans are super safe, then they don't have any
    pressure to compromise.
        In fact, the pressure is just the opposite. If you pull a
    Joe McDade and try to work out a compromise with Dave Obey, you
    are going to get skinned by your hard right. And if you are
    Obey trying to work out a compromise with McDade, the same
    thing might happen.
        So, I mean, we can talk all we want about these little
    issues. They are all around the edge issues as far as I am
    concerned. What counts in the end is what kind of incentives
    you have in the system besides human nature. What kind of
    system do you have built into the system to pressure people to
    do what is for the good of the order. And the only way you get
    that is to change, redistricting. I think you also need to
    counterweight the incredible role of money in this place.
        And, thirdly, you have got to have a party leadership who
    is going to pull the main single issue groups in your umbrella
    into your office and tell them to go to hell, that you are
    going to do what is right and you need their help to do what is
    right, and if they want to hit you with their priorities after
    A, B, and C are done, fine, but until then to hell with you.
        I mean, until you get that kind of approach from our
    leaders, until they mean it, and until the involved citizens of
    this country decide that it is more important to get something
    done than to have me win all the time, we are just going to be
    going nowhere.
        This is a crisis. Yes, the debt and the deficit is a
    serious problem, but it is not the crisis that we have with the
    crisis of confidence in the political system right now. That is
    the real crisis. And I don't see much real work being done on
    that.
        Representative Kilmer. Thanks, Chairman. I yield back.
        Co-Chair Womack. Senator Perdue.
        Senator Perdue. Thank you, Mr. Chairman.
        I would like to thank both the co-chairs for these
    outstanding witnesses today. And I so respect their
    contributions, their careers.
        And I thank you both for being here today. It has been very
    fascinating.
        I have only been in the Senate 3 years. I am on the Budget
    Committee. I come from a business world where this conversation
    is alien to me. I mean, we fund things. We do budgets like
    breathing. You have to.
        Biennial? I don't know any corporations that do biennial. I
    know a couple States do.
        The last 3 years we have been looking at best practices of
    other countries, States, and companies, and I can't find
    anybody that has a budget resolution that is not a law, leads
    to an authorization that really hasn't been done in two
    decades, and then an appropriation process.
        I believe, frankly, after looking at this in depth--and I
    want to get your opinion on two questions very quickly, and I
    will get to it very quickly--I think this whole process was
    doomed the day the 1974 Budget Act was enacted. It has never
    worked. It can't work. It will never work. It has only funded
    the government on time four times in 44 years.
        And, Secretary, I think 2 of those years were on your watch
    in the nineties. There were 2 years in the seventies right
    after it was enacted. Other than that, we have always used
    continuing resolutions. As matter of fact, we used 177
    continuing resolutions in those 44 years.
        And actually, and we don't write about this much, but
    Congress has actually shut the government down 20 times during
    that period of time.
        Now, you talk about breeding confidence with the
    electorate. I am sorry, but that just doesn't do it.
        So my question is twofold. I think there are two levels of
    issues here. One is, how do we fund the government on time
    without all this drama without the use of CRs? That is the
    primary focus of this committee.
        But you both bring up the second dimension of this, and
    that is dealing with this debt crisis. I thank you so much for
    calling it a crisis because sometimes up here we just kind of
    skip past the graveyard here on this thing.
        How do you ever get at the spending issue if you don't
    really consider all of your expenses? Let me be a little more
    direct. And I would like, Chairman, you, and, Secretary, both
    address this, if you will. We spent $4.3 trillion this year in
    total expenses. About 1.3 of that is discretion. The balance of
    that is mandatory.
        By definition, in the Senate the Finance Committee is in
    charge of Social Security and Medicare, and so in theory you
    think, well, okay they are in charge of mandatory expenses. But
    they never really get looked at by the definition of mandatory.
        So the question is, how in the world should we be thinking
    about--I don't know any other budget process in the world that
    doesn't budget its full expenses. And it forces you then to
    look at the withholding equation on the revenue side, on Social
    Security, the same thing on the Medicare side.
        We are told the Medicare trust fund goes to zero now in 8
    years. I don't know any other better definition of a crisis
    than that.
        Help me understand how we are going to ever solve this if
    the budget authorization and funding process, appropriation
    process, only deals with 25, 30 percent of what we spend. And
    how would you recommend we think about that, Secretary?
        Mr. Panetta. Well, you can't do it. You can't do it. You
    are not going to solve the problem facing this country unless
    you deal with all aspects of the budget. That is the reality.
    And people have tried to avoid dealing with certain aspects of
    it. And so the result is that it distorts the process.
        I mean, the idea that you can--you increase defense, leave
    mandatories alone, and simply go at it through the
    discretionary accounts, you know, you are kidding yourself in
    terms of whether or not that is going to deal with the larger
    crisis that you are confronting.
        So it seems to me that if--I mean, if the budget process is
    going to count for anything, the only justification for the
    budget process is that it looks at that bigger picture.
        And that should be the responsibility of the Budget
    Committee, to look at that bigger picture and where we are
    headed and then to deal with each of those elements. What are
    we doing on discretionary spending? What are we doing on
    defense spending? What are we doing on mandatory spending?
        I mean, I think mandatories, frankly, ought to be part of
    the budget process, and looking at the different mandatory
    programs. How they are being spent? What kind of trouble are
    they in? How effective are they? Because a lot of this stuff on
    autopilot has been going on for years without taking the time
    to really look at the elements of it. So that ought to be part
    of it.
        And, very frankly, revenues have to be part of that, as
    well. There is a revenue part of the budget that is extremely
    important to the entire picture.
        You have to look at all of that. And the only way you are
    going to be able to address the level of crisis that we are now
    confronting, and it is like a business, you can't run a
    business and not look at every aspect of your costs in that
    business.
        And if you do that you can get the costs down. Tough
    decisions. You may have to fire people. You may have to do
    things that cost you money. They are tough decisions. But that
    is what running a business is all about.
        Well, the same thing is true here. You want to run the
    country, you are going to have to make some tough decisions on
    these issues.
        And it is the process of avoiding those tough decisions
    over these last 12 or 15 years that has gotten us into deeper
    trouble. It is easy to spend money in this place. It is easy to
    cut taxes in this place. But when you have to pay the piper,
    when you have got to say what are we doing to the deficit, what
    are we doing to the taxpayers in this country, then people try
    to find a way around that responsibility, that accountability.
        And somehow, unless we get back to that larger process of
    looking at the larger picture, we are going to continue to try
    to find ways to get around the responsibilities that we have.
        Mr. Obey. I guess what I would say is that we need to
    remember that there is no requirement in a democracy for a
    happy ending. There just isn't. And we aren't going to have a
    happy ending unless we recognize that some fundamental things
    have to change. And I go right back to redistricting.
        I think it is modestly possible for the Senate in the end
    to tackle these issues. I think it is highly unlikely that the
    House will be able to successfully attack these issues so long
    as you have the same people coming here time after time.
        It used to be fun to solve problems. I mean, when I chaired
    the Foreign Operations Subcommittee, and Nita was a member of
    the subcommittee then, when we went to conference the Senate
    chair was Bob Kasten from my own State. And before we sat down
    in conference I sat down with my staff, and the very first
    question I always asked was, ``What does Bob have to have in
    the end in order to sign up?'' And we would work from that
    point.
        When I became chairman I was naive enough to think, ``Aha,
    now that I have got the gavel I can do things my way.'' No way.
    I mean, I discovered that the job of a chairman is to find that
    point at which you get 218 votes. That is the job of a
    chairman. And then secondarily, if he can also in the process
    push his values and his favored programs, that is a bonus. But
    first you have to get things done.
        And so until we change the basics I don't see how we get
    there. I wish I did. I know that political consultants will say
    never leave them with a downer. I am sorry, I see the downers
    right now, and I wish I didn't.
        Senator Perdue. Thank you.
        Co-Chair Womack. Representative Woodall.
        Representative Woodall. Thank you, Mr. Chairman.
        And thank you all both for being here. I was a young
    staffer during both of your tenures here.
        I remember just as much color from you, Chairman Obey, on
    the floor then as you are giving us today. I thank you for
    that.
        I stare at your picture, Mr. Secretary, day in and day out
    on this committee.
        I appreciate in your opening that you said we actually have
    a responsibility as a joint committee, not just an opportunity.
    I have always thought of it as an opportunity, but the truth is
    we do have a responsibility to get something done.
        The biggest disappointment of my short congressional career
    was the supercommittee that had an opportunity to look at every
    single dollar of government spending, take it directly to the
    floor to avoid the politics that you all have both talked
    about, and they couldn't find a single dollar on which they
    agreed.
        I wanted to focus on that just for a moment, coming from a
    regular order appropriations process. Coming from both an
    Article I and an Article II spot as you do, Mr. Secretary, what
    do you think about that supercommittee process, where you say
    we are going to try to bring together some thought leaders and
    we are going to bypass the regular committee process and send
    some tough decisions directly to the floor if the authorizers
    are failing to handle it on their own?
        Mr. Panetta. Look, I always thought as Budget chairman that
    it was our responsibility to make those tough decisions. And
    the fortunate thing is at the time I had the broad support of
    leadership, the President, and others, to be able to take those
    steps.
        I also understand that that may be impossible right now,
    particularly as far as the House is concerned. I don't think it
    is impossible in terms of the Senate, but I think it is
    impossible in terms of the House.
        And for that reason I was a little bit--I was concerned
    that when Simpson-Bowles made their recommendations--and the
    President asked me about that. And I said, ``You ought to
    endorse what Simpson-Bowles did.'' Because, very frankly, it is
    bipartisan. Tough decisions were made. I think you might not
    agree with all the recommendations in it.
        But I think it is important to endorse the process. And he
    was concerned about some of the particular recommendations. I
    understand that.
        But I think you may have reached the point where you may
    need to have a Simpson-Bowles-type commission, be able to make
    recommendations that deal with each of the areas I just talked
    about, because I don't see that happening otherwise. And, very
    frankly, unless you have those decisions in place, I am not
    sure that process alone is going to get you there.
        Representative Woodall. I look around at particularly the
    newer Members who are here. They came because of the sense of
    urgency that you all both describe. And I see lots of Members
    that would be pleased to cast that deciding vote. If all they
    had to trade for the future security of the country was the job
    that they have today, they would happily trade it away.
        I have always said the happiest folks on Capitol Hill were
    the Democrats who lost their job over the Affordable Care Act.
    What a small price to pay for doing something that you thought
    was going to move the country in the right direction.
        But thinking about doing big things, 1983 Social Security
    amendments. No one was poor-mouthing those changes. Raised
    taxes, reduced benefits, raised ages, did all the tough things,
    but everybody was on board collectively, and so we all were
    touting our successes as a body and as a Nation instead of bad-
    mouthing them.
        You mentioned, Mr. Secretary, what Ross Perot did to allow
    the 1993 Reconciliation Act, but as I remember that act, there
    was not one Republican vote for that on the House side, it was
    strictly a partisan bill.
        I go back and look at the budgets that you were able to
    move through the House. Time and time again not a single
    Republican vote on the floor of the House.
        We sometimes talk about the good old days as if they were
    really pretty good, and the fact is this partisanship has been
    going on a long time.
        I value the three-step process, a budget where people can
    stake out a political vision, an authorizing process where
    perhaps I am going to overpromise because I don't actually have
    to come up with the dollars, and an appropriations process that
    now the rubber meets the road. It lets some political steam off
    the pot.
        In the name of process reform we have talked about reducing
    those steps. Chairman Obey recommended abolishing the Budget
    Committee in his opening comments. Tell me about how that
    lets--the potential for letting steam off the pot in a three-
    step process versus the burning of time that could be used more
    productively elsewhere.
        Mr. Obey. Well, I don't see much to recommend the existing
    system. I mean, the problem you have, just look at Hal Rogers'
    problem when he took over for me as chairman of the committee.
    And take a look at the transportation bill which he tried to
    bring to the floor.
        I mean, that transportation bill contained the reductions
    that were necessary in order to meet the targets of the budget
    resolution or the assumptions of the budget resolution. And
    what happened to him? He got chewed up alive. I mean, because
    in my view the Budget Committee overreached.
        It is easy to do that. If you come up with a bright idea,
    it is easy if somebody else has to implement it, because you
    can only squawk about the imperfections of the latter guy's
    style that were to blame. That is not what the problem is.
        In my view, the Budget Committee in recent years has
    overreached because they thought it was more possible--or it
    was possible to do more than, in fact, was possible.
        I don't like supercommittees because the whole idea of
    committees in the first place is to take the people who know
    the most about a subject and put them to work on it. And
    usually with supercommittees you have got people who, as I said
    earlier, they can fly at 30,000 feet, but they don't have to
    then explain to granny in a nursing home why you are going to
    have your benefits shaved back this year.
        So to me what is most important first is to understand. We
    need a sense of balance. Yes, we have a budget deficit, and
    that is a serious problem. We also have an infrastructure
    deficit. We also have an education deficit, if you want to talk
    about education.
        I mean, the problem with the Bowles committee is that
    expectations around here before it was established, people
    would say, ``Oh, domestic discretionary, they are not the
    problem. They have already been cut.'' And then each time
    recommendations came up they cut further in domestic
    discretionary.
        So I just don't trust wise ones at the top who don't have
    to implement whatever reductions you are talking about. To me,
    I don't like the product that the Ways and Means Committee
    produced in this Congress, but at least they had a level of
    knowledge about it that is higher than a lot of people who
    would have been likely to be appointed to any commission to
    look at the same problems.
        Representative Woodall. Mr. Chairman, can I just ask, I
    know Mr. Obey is speaking with heart as an Article I servant.
    Could I just ask the Secretary whether or not he is giving us
    advice today on behalf of Article II or on behalf of Article I?
        Where does your heart sit, Mr. Secretary, having served at
    both ends of Pennsylvania Avenue?
        Mr. Panetta. You know, my view is that Article I and
    Article II both have to work together in order to govern the
    country. And if the President of the United States thinks that
    he is going to be able to get this done without a partnership
    with the Congress and the ability to get it done, then he is
    wrong, it ain't gonna happen. And if Congress thinks that
    somehow they can make this process work without the executive
    branch and working with him, I think that is also a mistake.
        I think what is missing in particular with these last few
    years, I mean, look, with Republican administrations that I
    worked with at the time that I was here, we had a very strong
    working relationship. I worked very closely with Dick Darman
    when he was OMB Director. I worked very closely with Jim Baker
    when he was operating out of the White House. And they would
    come up and we would sit down and we worked through these
    issues.
        And the ability to have that kind of partnership, the
    ability to have that kind of consultation is what makes our
    democracy run. And the inability to have that when you try to
    basically force your way through in a particular way, that is
    what undermines, I think, the effectiveness of our democracy.
        So you can make this process work if there is trust. I
    mean, the biggest problem right now is there is a lack of trust
    between the branches and between Members and between the people
    and this institution. There is a lack of trust. And, very
    frankly, if you don't have trust in our democracy it is not
    going to work.
        And somehow we have got to find a way to restore that
    trust. And the way you do that is by talking to one another,
    talking with people in authority, respecting who they are,
    listening to them, and then trying to figure out a way for both
    of you to be able to get it done. That is the way our
    Forefathers designed it, and that is the way it is supposed to
    be.
        Co-Chair Womack. Mr. Arrington.
        Representative Arrington. Thank you, Mr. Chairman and Madam
    Chairwoman.
        I agree with Senator Perdue, our panelists have been
    outstanding. And the thought that reoccurs to me is with the
    wisdom and intellect and experience of all the folks that we
    have had come before this committee, if we can't at a minimum
    improve the process we are in deeper trouble than I even
    thought as a new Member.
        And by the way, Mr. Secretary, I really thoroughly enjoy
    working with your son Jimmy. He is one of those American first
    guys. He is a dad first. He is a Panetta first. Way before you
    get to being a Democrat.
        And I have to say as a new Member, I am encouraged with my
    cohorts who came to not just move the deck chairs around, but
    to fundamentally change the game up here for the American
    people.
        And so with that, it seems to me that whether you are
    trying to do what Senator Perdue articulated as our sort of
    first goal and get predictability and certainty in getting a
    budget out and funding the government or you are trying to have
    budget outcomes that somehow improve the position fiscally of
    this country and chip away at the deficit and debt.
        Either way, you have to acknowledge, as Chairman Obey
    mentioned earlier, that we don't have the political will
    collectively. I would like to think I do. I think everybody
    would like to raise their hand and say, ``Well, I do.'' But
    collectively, we know that we don't. Republicans don't.
    Democrats don't.
        So can we just start with that assumption, that we don't
    have the political will? And then and only then can you really
    get at solving both the process issue and the outcome issue. At
    least you have an opportunity to.
        Now, I think you first have to acknowledge, and I agree
    with Chairman Obey, there are structural issues with campaign
    finance, gerrymandering, I hate it. We can all kick around
    ideas how to change that. I would actually think, because we
    haven't fixed gerrymandering, I am a term limit guy, as well.
        There are lots of structural reforms to consider that I
    think would improve the behavior. I think most States, like the
    great State of Texas, work on a balanced budget because they
    have a forcing mechanism, the Balanced Budget Amendment to the
    Constitution.
        Now absent that, we have to come up with what Senator Ernst
    suggested in her discussion with you, and that is a forcing
    mechanism. It is the only way to do it. Let's just acknowledge
    the nature of the beast is what it is.
        I am trying to figure out how you can't be so squirrely in
    the process that whatever enforcement mechanism you put in
    place that you don't have some rule in the 11th hour where
    everybody can vote on it, nobody is accountable for it, the
    American people don't understand what happens, and we just keep
    on going down that path of destruction, sleepwalking, as they
    say, off this cliff.
        I would go back to her question. And you said something,
    and I am hopeful, because you had at least--something resonated
    with you in the way of an enforcement. No budget, no pay, no
    budget, no recess, I don't know if those will work, I am
    willing to try all of them.
        But no budget, no spend, no budget, no pass, no
    legislation, no spend, that has a fiscal impact. So you think
    that that might work. So we have got an issue, an item on the
    table for consideration. Would you expound on that?
        Mr. Panetta. Well, the way it operated was that in order
    for the authorizing committees to move spending legislation, in
    order for Appropriations to move their bills, there had to be a
    budget.
        And what happened was that as the Budget Committee failed
    to pass budget resolutions, then they came up with this trigger
    mechanism to basically assign levels to the Appropriations
    Committee to operate without a budget, and that bypassed the
    process.
        I think it is important to stick to the basic discipline of
    the process, which is pass a budget, and pass it by a certain
    date. And if it doesn't pass you are not going to move any
    legislation that has some kind of fiscal impact. And, frankly,
    appropriations committees ought not to move forward.
        Now, I understand the politics, if you are suddenly stuck
    and you can't do anything, then you find waivers, you find ways
    around it. I mean, that is the way we govern. But it really
    does require some degree of discipline. If you are going to
    establish any process, you have got to have the ability to try
    to stick to that discipline.
        And, look, the biggest problem here is none of these
    decisions that we are talking about are easy, and there isn't a
    process way to make them easy. They are very tough decisions.
        And the problem right now is I think most people in this
    institution would like to be able to somehow move the process
    without pissing off people. It doesn't work that way. You are
    going to have to offend people, with the decisions in the
    budget, with the decisions on discipline, you are going to have
    to do that. People don't like to take political risk.
        But I have never seen a leader in this institution--or,
    frankly, in the Presidency--I have never seen leader who has
    been able to lead and not take risks. And that is what you are
    going have to--that is probably the first principle that is
    going to have to apply here.
        Representative Arrington. Thank you, Mr. Chairman. I yield
    back.
        Co-Chair Womack. I thank the gentleman.
        Thank you, Secretary Panetta, Chairman Obey, for appearing
    before us today.
        I want to advise members that they can submit written
    questions to be answered later in writing. They will be made
    part of the formal hearing. Any members wishing to submit
    questions or extraneous material may do so within 7 days.
        Now, this concludes our fifth public hearing and fulfills
    the Bipartisan Budget Act statutory requirement for this select
    complete to conduct at least five such hearings by November 30.
    While our requirement has been fulfilled, I believe there is
    value in exploring topics for additional hearings in the
    future.
        Looking back, I believe our hearings have been insightful.
    With each discussion I have been encouraged by the involvement
    and participation of our members and impressed by and grateful
    for the advice and testimony brought by the many outside
    witnesses, including the 25 of our colleagues who participated
    in Members Day.
        I am happy to report that bipartisan, bicameral consensus
    is steadily growing with our group of 16. In fact, a number of
    our members have already submitted their reform ideas for
    improving the budget and appropriations process, and I am
    encouraging all members to submit any ideas in writing to the
    co-chairs.
        While the statutory deadline for reporting our
    recommendations is the 30th of November, I have said from the
    beginning that the work drafting a proposal should begin sooner
    rather than later, and that time is now.
        With that said, starting this month the co-chair and I will
    begin working informal working sessions. All members are
    welcome and encouraged to attend. I am hopeful all members
    will. The mission of this panel is too important not to
    succeed, and your ideas and feedback garnered through our
    months of collective work are essential to that goal. So our
    staffs will be in touch regarding the pending schedule of these
    informal meetings.
        Once again to our witnesses this morning, Secretary
    Panetta, Chairman Obey, thank you so much for your insightful
    testimony here today.
        And with that, this hearing stands adjourned.
        [Whereupon, at 12:11 a.m., the committee was adjourned.]

                      Congressional Budget Office Briefing

                           Materials prepared for the

                             Joint Select Committee

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                                   H.R. 7191

                                  ----------

    115th CONGRESS
      2d Session
                                    H. R. 7191

     To implement reforms to the budget and appropriations process in the
                           House of Representatives.

    _______________________________________________________________________

                        IN THE HOUSE OF REPRESENTATIVES

                               November 29, 2018

    Mr. Womack (for himself and Mr. Yarmuth) introduced the following bill;
     which was referred to the Committee on the Budget, and in addition to
     the Committee on Rules, for a period to be subsequently determined by
    the Speaker, in each case for consideration of such provisions as fall
               within the jurisdiction of the committee concerned

    _______________________________________________________________________

                                     A BILL

     To implement reforms to the budget and appropriations process in the
                           House of Representatives.

        Be it enacted by the Senate and House of Representatives of the
    United States of America in Congress assembled,

    SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

        (a) Short Title.--This Act may be cited as the ``Bipartisan Budget
    and Appropriations Reform Act of 2018''.
        (b) Table of Contents.--The table of contents for this Act is as
    follows:

    Sec. 1. Short title; table of contents.
                      TITLE I--BIENNIAL BUDGET RESOLUTIONS

    Sec. 101. Purposes.
    Sec. 102. Definitions.
    Sec. 103. Revision of timetable.
    Sec. 104. Biennial concurrent resolutions on the budget.
    Sec. 105. Committee allocations.
    Sec. 106. Revision of biennial budget.
    Sec. 107. Additional amendments to the Congressional Budget Act of 1974
                                to effectuate biennial budgeting.
    Sec. 108. Reconciliation process.
    Sec. 109. Amendments to the Rules of the House of Representatives to
                                effectuate biennial budgeting.
    Sec. 110. Membership of the Committee on the Budget.
    Sec. 111. Rulemaking authority.
    Sec. 112. Effective date.
                            TITLE II--OTHER MATTERS

    Sec. 201. Views and estimates of committees.
    Sec. 202. Annual supplemental budget submission by the President.
    Sec. 203. Hearing on the fiscal state of the Nation.

                      TITLE I--BIENNIAL BUDGET RESOLUTIONS

    SEC. 101. PURPOSES.

        Paragraph (2) of section 2 of the Congressional Budget and
    Impoundment Control Act of 1974 is amended to read as follows:
                ``(2) to facilitate the determination biennially of the
            appropriate level of Federal revenues and expenditures by the
            Congress;''.

    SEC. 102. DEFINITIONS.

        Section 3 of the Congressional Budget and Impoundment Control Act
    of 1974 (2 U.S.C. 622) is amended--
                (1) in paragraph (4), by striking ``for a fiscal year''
            each place it appears and inserting ``for a biennium''; and
                (2) by adding at the end the following new paragraphs:
                ``(12) The term `direct spending' has the meaning given to
            such term in section 250(c)(8) of the Balanced Budget and
            Emergency Deficit Control Act of 1985.
                ``(13) The term `biennium' means any period of 2
            consecutive fiscal years beginning with an even-numbered fiscal
            year.
                ``(14) The term `budget year' has the meaning given that
            term in section 250(c)(12) of the Balanced Budget and Emergency
            Control Act of 1985.''.

    SEC. 103. REVISION OF TIMETABLE.

        Section 300 of the Congressional Budget Act of 1974 (2 U.S.C. 631)
    is amended to read as follows:

                                  ``timetable

        ``Sec. 300. The timetable with respect to the congressional budget
    process for any Congress is as follows:

                                                     ``First Session
    On or before:                             Action to be completed:
    First Monday in February................  President submits budget.
    February 15.............................  Congressional Budget Office submits report to Budget Committees.
     March 1................................  Committees submit views and estimates to Budget Committees.
    April 1.................................  Senate Budget Committee reports biennial budget.
    May 1...................................  Congress completes action on the biennial budget.
    May 15..................................  Appropriation bills may be considered in the House of Representatives.
    June 10.................................  House Appropriations Committee reports last annual appropriation bill.
    October 1...............................  First fiscal year of the biennium begins.

                                                    ``Second Session
    On or before:                             Action to be completed:
    First Monday in February................  President submits budget.
    February 15.............................  Congressional Budget Office submits report to Budget Committees.
    June 10.................................  House Appropriations Committee reports last annual appropriation bill.
    October 1...............................  Second fiscal year of the biennium begins.''.

    SEC. 104. BIENNIAL CONCURRENT RESOLUTIONS ON THE BUDGET.

        (a) Contents of Resolution.--
                (1) In general.--Section 301(a) of the Congressional Budget
            Act of 1974 (2 U.S.C. 632(a)) is amended--
                        (A) by striking ``On or before April 15'' and all
                    that follows through ``the following:'' and inserting
                    the following: ``On or before May 1 of each odd-
                    numbered calendar year, the Congress shall complete
                    action on a concurrent resolution on the budget for the
                    biennium beginning on October 1 of that calendar year.
                    The concurrent resolution shall set forth appropriate
                    levels for each fiscal year in the biennium and for at
                    least each fiscal year in the next 2 bienniums for the
                    following--'';
                        (B) in paragraph (6)--
                                (i) by striking ``for the fiscal year'' and
                            inserting ``for each fiscal year in the
                            biennium''; and
                                (ii) by striking ``and'' at the end;
                        (C) in paragraph (7)--
                                (i) by striking ``for the fiscal year'' and
                            inserting ``for each fiscal year in the
                            biennium''; and
                                (ii) by striking the period at the end and
                            inserting ``; and'';
                        (D) by adding after paragraph (7) the following:
                ``(8) subtotals of new budget authority and outlays for
            nondefense discretionary spending; defense discretionary
            spending; direct spending; and net interest.''; and
                        (E) by adding at the end of the matter following
                    paragraph (8) (as added by subparagraph (D)) the
                    following: ``The concurrent resolution on the budget
                    for a biennium shall include procedures for adjusting
                    spending and revenue levels, committee allocations, and
                    other amounts in the resolution during the second
                    session of a Congress to reflect an updated baseline
                    that will be used for scoring purposes.''.
        (b) Additional Matters in Concurrent Resolution.--Section 301(b) of
    the Congressional Budget Act of 1974 (2 U.S.C. 632(b)) is amended--
                (1) in paragraph (3), by striking ``for such fiscal year''
            and inserting ``for either fiscal year in such biennium'';
                (2) in paragraph (8), by striking ``and'' at the end;
                (3) in paragraph (9), by striking the period at the end and
            inserting ``; and''; and
                (4) by adding at the end the following:
                ``(10) include total combined outlays and revenues for tax
            expenditures.''.
        (c) Hearings and Report.--Section 301(e)(1) of the Congressional
    Budget Act of 1974 (2 U.S.C. 632(e)) is amended by striking ``fiscal
    year'' and inserting ``biennium''.
        (d) Goals for Reducing Unemployment.--Section 301(f) of the
    Congressional Budget Act of 1974 (2 U.S.C. 632(f)) is amended by
    striking ``fiscal year'' each place it appears and inserting
    ``biennium''.
        (e) Economic Assumptions.--Section 301(g)(1) of the Congressional
    Budget Act of 1974 (2 U.S.C. 632(g)(1)) is amended by striking ``for a
    fiscal year'' and inserting ``for a biennium''.
        (f) Section Heading.--The section heading of section 301 of the
    Congressional Budget Act of 1974 (2 U.S.C. 632) is amended by striking
    ``annual adoption of'' and inserting ``adoption of biennial''.

    SEC. 105. COMMITTEE ALLOCATIONS.

        Section 302 of the Congressional Budget Act of 1974 (2 U.S.C. 633)
    is amended--
                (1) in subsection (a)(1)--
                        (A) by striking ``for that period of fiscal years''
                    and inserting ``for all fiscal years covered by the
                    resolution''; and
                        (B) by striking ``only for the fiscal year of that
                    resolution'' and inserting ``only for each fiscal year
                    of the biennium'';
                (2) in subsection (c)--
                        (A) by striking ``subsection (a)'' and inserting
                    ``subsection (a)(1)'';
                        (B) by striking ``for a fiscal year'' and inserting
                    ``for a budget year''; and
                        (C) by striking ``for that fiscal year'' and
                    inserting ``for that budget year'';
                (3) in subsection (f)(1)--
                        (A) by striking ``for a fiscal year''; and
                        (B) by striking ``the first fiscal year'' and
                    inserting ``either fiscal year of the biennium of that
                    resolution''; and
                (4) in subsection (f)(2)(A), by--
                        (A) striking ``the first fiscal year'' and
                    inserting ``either fiscal year of the biennium of that
                    resolution''; and
                        (B) striking ``the total of fiscal years'' and
                    inserting ``the total of all fiscal years covered by
                    the resolution''.

    SEC. 106. REVISION OF BIENNIAL BUDGET.

        Section 304 of the Congressional Budget Act of 1974 (2 U.S.C. 635)
    is amended to read as follows:

        ``permissible revisions of concurrent resolutions on the budget

        ``Sec. 304. At any time after the concurrent resolution on the
    budget has been agreed to pursuant to section 301 and before the end of
    the biennium, the two Houses may adopt a concurrent resolution that
    revises or reaffirms the most recently agreed to concurrent resolution
    on the budget. Any concurrent resolution that revises or reaffirms the
    most recently agreed to concurrent resolution on the budget shall be
    considered under the procedures set forth in section 305.''.

    SEC. 107. ADDITIONAL AMENDMENTS TO THE CONGRESSIONAL BUDGET ACT OF 1974
                  TO EFFECTUATE BIENNIAL BUDGETING.

        (a) Enforcement of Section 303.--Section 303 of the Congressional
    Budget Act of 1974 (2 U.S.C. 634) is amended--
                (1) in subsection (a)--
                        (A) by striking ``for a fiscal year'' and inserting
                    ``for a biennium''; and
                        (B) by striking ``the first fiscal year covered by
                    that resolution'' and inserting ``either fiscal year of
                    that biennium'';
                (2) in subsection (b)(1)(B), by striking ``the fiscal
            year'' and inserting ``the biennium''; and
                (3) in subsection (c)--
                        (A) in paragraph (1)--
                                (i) by striking ``for a fiscal year'' and
                            inserting ``for a biennium''; and
                                (ii) by striking ``for that year'' each
                            place it appears and inserting ``for each year
                            of that biennium''; and
                        (B) in paragraph (2), by striking ``after the year
                    the allocation referred to in that paragraph is made''
                    and inserting ``after the years the allocations
                    referred to in that paragraph are made''.
        (b) Section 305.--Subsections (a)(3) and (b)(3) of section 305 of
    the Congressional Budget Act of 1974 (2 U.S.C. 636) are amended by
    striking ``for a fiscal year''.
        (c) Section 311 Point of Order.--
                (1) In the house of representatives.--Section 311(a)(1) of
            the Congressional Budget Act of 1974 (2 U.S.C. 642(a)) is
            amended--
                        (A) by striking ``for a fiscal year'';
                        (B) by striking ``the first fiscal year'' each
                    place it appears and inserting ``either of the first
                    two fiscal years covered by such resolution''; and
                        (C) by striking ``that first fiscal year'' and
                    inserting ``either of the first two fiscal years''.
                (2) In the senate.--Section 311(a)(2) of the Congressional
            Budget Act of 1974 (2 U.S.C. 642(a)(2)) is amended--
                        (A) in subparagraph (A), by striking ``for the
                    first fiscal year'' and inserting ``for either of the
                    first two fiscal years''; and
                        (B) in subparagraph (B)--
                                (i) by striking ``that first fiscal year''
                            the first place it appears and inserting
                            ``either of the first two fiscal years''; and
                                (ii) by striking ``that first fiscal year
                            and the ensuing fiscal years'' and inserting
                            ``all fiscal years''.
                (3) Social security levels.--Section 311(a)(3) of the
            Congressional Budget Act of 1974 (2 U.S.C. 642(a)(2)) is
            amended by--
                        (A) striking ``for the first fiscal year'' and
                    inserting ``for either of the first two fiscal years'';
                    and
                        (B) striking ``that fiscal year and the ensuing
                    fiscal years'' and inserting ``all fiscal years''.

    SEC. 108. RECONCILIATION PROCESS.

        Section 310(a) of the Congressional Budget Act of 1974 (2 U.S.C.
    641(a)) is amended--
                (1) in the matter before paragraph (1), by striking ``A
            concurrent'' and all that follows through ``shall'' and
            inserting ``A concurrent resolution on the budget for a
            biennium shall, for each fiscal year of the biennium'';
                (2) in paragraph (1)(A), by striking ``for such fiscal
            year'' and inserting ``for each fiscal year of the biennium'';
                (3) in paragraph (1)(C), by striking ``such fiscal year''
            and inserting ``each fiscal year of the biennium''; and
                (4) in paragraph (1)(D), by striking ``such fiscal year''
            and inserting ``each fiscal year of the biennium''.

    SEC. 109. AMENDMENTS TO THE RULES OF THE HOUSE OF REPRESENTATIVES TO
                  EFFECTUATE BIENNIAL BUDGETING.

        (a) Clause 4(a)(4) of rule X of the Rules of the House of
    Representatives is amended by striking ``any allocations'' and
    inserting ``its allocations for the budget year'' and by striking
    ``fiscal year'' and inserting ``biennium''.
        (b) Clause 4(b)(2) of rule X of the Rules of the House of
    Representatives is amended by striking ``for each fiscal year''.
        (c) Clause 4(b) of rule X is amended by striking ``and'' at the end
    of subparagraph (5), by striking the period and inserting ``; and'' at
    the end of subparagraph (6), and by adding at the end the following new
    subparagraph:
                ``(7) use the second session of each Congress to study
            issues with long-term budgetary and economic implications.''.
        (d) Clause 4(f) of rule X is amended--
                (1) by striking ``fiscal year'' the first place it appears
            and inserting ``biennium'';
                (2) by striking ``that fiscal year'' and inserting ``each
            fiscal year in such ensuing biennium''; and
                (3) in subparagraph (1) by striking ``six weeks after the
            submission of the budget by the President'' and inserting
            ``March 1''.
        (e) Clause 3(d)(1)(A) of rule XIII is amended by striking ``five''
    both places it appears and inserting ``six''.

    SEC. 110. MEMBERSHIP OF THE COMMITTEE ON THE BUDGET.

        (a) Clause 5(a)(2) of rule X of the Rules of the House of
    Representatives is amended--
                (1) by striking subdivisions (B) and (C); and
                (2) in subdivision (A), by striking ``(A)'' and by
            redesignating items (i), (ii), and (iii) as subdivisions (A),
            (B), and (C), respectively.
        (b) The amendment made by subsection (a) shall take effect
    immediately before noon, January 3, 2019.

    SEC. 111. RULEMAKING AUTHORITY.

        Sections 109 and 110 are enacted by the Congress--
                (1) as an exercise of the rulemaking power of the House of
            Representatives, and as such they shall be considered as part
            of the rules of the House and such rules shall supersede other
            rules only to the extent that they are inconsistent therewith;
            and
                (2) with full recognition of the constitutional right of
            the House to change such rules at any time, in the same manner,
            and to the same extent as in the case of any other rule of the
            House.

    SEC. 112. EFFECTIVE DATE.

        This title and the amendments made by this title shall take effect
    immediately before noon January 3, 2019.

                            TITLE II--OTHER MATTERS

    SEC. 201. VIEWS AND ESTIMATES OF COMMITTEES.

        Section 301(d) of the Congressional Budget and Impoundment Control
    Act of 1974 (2 U.S.C. 632(d)) is amended to read as follows:
        ``(d) Views and Estimates of Other Committees.--
                ``(1) In general.--Not later than March 1 of the first
            session of a Congress, or upon the request of the Committee on
            the Budget of the House of Representatives or the Senate, each
            committee of the House of Representatives and the Senate having
            legislative jurisdiction shall submit to its respective
            Committee on the Budget its views and estimates (as determined
            by the committee making such submission) with respect to the
            following:
                        ``(A) Any legislation to be considered during that
                    Congress that is a priority for the committee.
                        ``(B) Any legislation within the jurisdiction of
                    the committee that would establish, amend, or
                    reauthorize any Federal program and likely have a
                    significant budgetary impact.
                ``(2) Additional matters.--Any committee of the House of
            Representatives or the Senate and any joint committee of the
            Congress may submit to the appropriate Committees on the Budget
            its views and estimates with respect to all matters set forth
            in subsections (a) and (b) which relate to matters within its
            jurisdiction.
                ``(3) Joint economic committee.--The Joint Economic
            Committee shall submit to the Committees on the Budget of both
            Houses its recommendations as to the fiscal policy appropriate
            to the goals of the Employment Act of 1946.''.

    SEC. 202. ANNUAL SUPPLEMENTAL BUDGET SUBMISSION BY THE PRESIDENT.

        Section 1106 of title 31, United States Code, is amended by adding
    at the end the following:
        ``(d) On or before December 1 of each calendar year, the President
    shall submit to Congress an administrative budget for the fiscal year
    beginning in the ensuing calendar year, which shall include up-to-date
    estimates for current year and prior year data and credit reestimates
    for the current year (as included in the Federal credit supplement of
    such budget).''.

    SEC. 203. HEARING ON THE FISCAL STATE OF THE NATION.

        (a) In General.--Not later than 45 days (excluding Saturdays,
    Sundays, and holidays) after the date on which the Secretary of the
    Treasury submits to Congress the audited financial statement required
    under paragraph (1) of section 331(e) of title 31, United States Code,
    on a date agreed upon by the chairs of the Committees on the Budget of
    the House of Representatives and the Senate and the Comptroller General
    of the United States, the chairs shall conduct a hearing to receive a
    presentation from the Comptroller General reviewing the findings of the
    audit required under paragraph (2) of such section and providing, with
    respect to the information included by the Secretary in the report
    accompanying such audited financial statement, an analysis of the
    financial position and condition of the Federal Government, including
    financial measures (such as the net operating cost, income, budget
    deficits, or budget surpluses) and sustainability measures (such as the
    long-term fiscal projection or social insurance projection) described
    in such report.
        (b) Effective Date.--The requirement under subsection (a) shall
    apply with respect to any audited financial statement submitted on or
    after the date of the enactment of this Act.

                         Press Release Accompanying the

                           Introduction of H.R. 7191

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