Time to Fix the Budget Process

By :: November 4th, 2013

Congressional negotiators are trying to craft a budget deal by mid-December. Fareed Zakaria’s Global Public Square asked twelve experts what they hoped that deal would include. My suggestion: it’s time to fix the budget process:

Odds are slim that the budget conference will deliver anything big on substance. No grand bargain, no sweeping tax reform, no big stimulus paired with long-term budget restraint. At best, conferees might replace the next round of sequester cuts with more selective spending reductions spread over the next decade.

Those dim substantive prospects create a perfect opportunity for conferees to pivot to process. In principle, Congress ought to make prudent, considered decisions about taxes and spending programs. In reality, we’ve lurched from the fiscal cliff to a government shutdown to threats of default. We make policy in the shadow of self-imposed crises without addressing our long-run budget imbalances or near-term economic challenges. Short-term spending bills keep the government open – usually –  but make it difficult for agencies to pursue multiyear goals and do little to distinguish among more and less worthy programs. And every few years, we openly discuss default as part of the political theater surrounding the debt limit.

The budget conferees should thus publicly affirm what everyone already knows: America’s budget process is broken. They should identify the myriad flaws and commit themselves to fixing them. Everything should be on the table, including repealing or replacing the debt limit, redesigning the structure of congressional committees, and rethinking the ban on earmarks.

Conferees won’t be able to resolve those issues by their December 13 deadline. But the first step to recovery is admitting you have a problem. The budget conferees should use their moment in the spotlight to do so.

P.S. Other suggestions include investing in basic research, reforming the tax system, and slashing farm programs. For all twelve, see here.

4Comments

  1. Michael Bindner  ::  2:33 am on November 5th, 2013:

    The budget process mirrors the problems in the entire political process – and lets face it – in the Republican Party. With the exception of a few pieces of legislation, Republican speakers have held to the Hastert Rule – mostly in reaction to the fact that Speaker Gingrich allowed spending and tax bills to come to the floor when it was obvious that the Democrats and a coaltion of Moderate Republicans would support President Clinton’s agenda instead. The Tea Party movement is about making sure this does not happen again and until it is annihilated at the polls by demographics, this problem will remain.

    This is not to say that process reform is not very necessary. I would pass a Joint Budget Resolution before any detailed budget estimates are allowed to be released by OMB. Then, if Congress does not act, the current services budget would be automatically enacted on the first of October. This would force Congress to get its act together like nothing else. For the Budget Control Act period, the budget would be deemed passed at the BCA spending caps. Will Congress do this? Probably not – as it would allow the President to veto his way into the current services status quo without shutting down the government.

  2. Tax Roundup, 11/5/13: IRS makes audits even more fun. And: the 400!. « Roth & Company, P.C  ::  10:11 am on November 5th, 2013:

    […] Donald Marron, Time to Fix the Budget Process (TaxVox) […]

  3. AMTbuff  ::  3:20 pm on November 5th, 2013:

    It’s hard to imagine any process change which would not give an advantage to one party or the other. Some states have attempted to set a default level of spending growing proportionately to both population and inflation, but that never seems to satisfy legislators.

    In other countries an impasse results in immediate elections whereby the public makes the decision. That’s a real solution but it would require a major Constitutional Amendment.

    When the parties give the public a choice between impossibly high spending and impossibly low taxes, the public’s votes are meaningless guides for choices between real alternatives. The public correctly feels deceived when reality strikes home and it clashes with campaign rhetoric such as “no new taxes” or “if you like your plan you can keep it”.

    On that last item, readers may not be aware that Obama was even more explicit. Responding to a question from Arizona Senator John Kyl at the Bipartisan Healthcare Summit in February 2010, when the bill was in its final form, President Obama said that even substandard insurance was included in his promise:
    “Actually, any insurance that you currently have would be grandfathered in so you could keep it. So you could decide not to get in the exchange the better plan. I could keep my Acme Insurance, just a high deductible catastrophic plan. I would not be required to get the better one.”

    The transcript is at http://www.washingtonpost.com/wp-dyn/content/article/2010/02/25/AR2010022502995.html

    President Obama’s own words completely contradict his current assertion that his promise applied only to comprehensive insurance. He and his staff should check their medical coverage for amnesia treatment.

  4. rl  ::  2:46 am on January 29th, 2014:

    Here is a smart high growth high revenue tax code. It has things both the Left and Right and Left will love and hate but it is far better than what we have imo.

    Federal:
    0% corporate tax rate
    eliminate business health insurance costs by going public single payer for catastrophic and cash/charity for everything else.
    eliminate all payroll taxes
    capital gains taxed like income
    eliminate any loopholes if possible on hiding personal income over seas

    Personal income tax rates-no deductions on net income/no joint filing:

    0-$100,000 10%
    additional income over 100,000 20%
    additional income over 1 mil 30%

    so an individual making a net income of $120,000 would pay (100,000 X .10) + (20,000 X .20)= $14,000

    additional revenue from smart utilization of taxes on negative externalities.

    Ideal state/local tax code to compliment the above federal code:

    0% income tax
    raise revenue through sales tax and property taxes