Facing tide of red ink, lawmakers mull possible changes to budget process

Lawmakers are looking to change the budget process now that congressional leaders have again failed to produce an annual budget resolution and are facing a tide of red ink.

For the fifth time in the past seven election years, Congress won’t approve a final budget resolution, a main requirement for lawmakers under the Congressional Budget Act of 1974. This year, Democratic House leaders have taken the unprecedented step of forgoing a traditional budget resolution altogether because they’re wary of forcing their members to vote on a document showing deficits averaging about $1 trillion in coming years.

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With Congress unable to produce a plan to deal with deficits, members of the bipartisan fiscal commission created by the White House, along with budget experts, are pushing for ways to change the budget rules.

“This process cannot handle the major decisions that have to be made,” said William Hoagland, a former Senate Republican budget aide.

Republicans have been the most vocal when it comes to calling for changes to budget procedure.

The debt reduction plan pushed by Rep. Paul Ryan (R-Wis.) and other GOP members of the House Budget Committee calls for two-year budgets, enforceable limits on deficits and caps on both discretionary and mandatory spending. The current budget act calls for a budget fight each year and includes caps on discretionary spending but not entitlements.

Rep. Jeb Hensarling (R-Texas), a member of both the fiscal commission and the House Budget Committee, said the current rules are biased toward spending, not saving, and allow for “budgeting that would make Bernie Madoff blush.”

“It’s so easy to insert things that’s not paid for,” he said.

Though Democrats this year enacted a pay-as-you-go law that requires new tax cuts or mandatory spending to be offset with spending cuts or tax hikes, the measure allows for “emergency” deficit spending, a clause used in the Senate to pass more than $200 billion in deficit spending. Much of that money was for jobless aid, which Democrats argued was necessary when the unemployment rate remained near 10 percent.

Any budget reforms would make it tougher to use the “emergency” loophole, Republican fiscal commission members said.

“It just comes down again to making these requirements ‘unwaivable’ or putting in some kind of remedy,” said Sen. Mike Crapo (R-Idaho), a member of the fiscal commission.

Democrats said they’re open to fixes to the process, but stressed the focus needs to be on finding savings that can rein in the growth of the $13 trillion debt.

House Budget Committee Chairman John Spratt (D-S.C.) said that “everything is on the table” for the budget rules, which is the mantra commission members and President Barack Obama have used for their approach to tackling tax, spending and entitlement policy.

“I think we have to go back and look at the budget process that worked in the ’90s,” Spratt said.

That’s the last time the pay-go law was in effect — and the last time the government turned deficits into surpluses. Spratt is also working with the administration on a proposal to give the president a power like a line-item veto to single out spending provisions for cuts. He also said lawmakers could consider multiyear budgets.

Other possible procedural fixes could include requiring party leaders and senior members of the tax-writing and appropriations committees to serve on the Budget Committee, and requiring the annual budget resolution to account for tax breaks that cost billions and are automatically renewed every year, said Hoagland.

But both parties caution that tweaking the rules will only do so much when the debt will grow by nearly $1 trillion annually for the next decade, according to Congressional Budget Office projections.

“We’re not going to find the types of savings we need and a new fiscal policy we need in the process,” said Rep. Xavier Becerra (D-Calif.), a member of the House Budget Committee and part of the leadership. “We will find it if we look at the substance.”