Keep your expectations in check when it comes to budget reform

Keep your expectations in check when it comes to budget reform
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The initial public product of the Joint Select Committee on Budget and Appropriations Process Reform appears to have underwhelmed observers and, by the look of it, its own members. This largely reflects the modest scale of the mark and subsequent amendments of the chairs. If judged against the deplorable state of our national finances, then surely the committee will disappoint, but that is the wrong metric for success. It still holds some promise for improvements in how Congress approaches the budget process. This is a low bar, but any other standard puts too much stock in the promise of changes to ameliorate the fiscal outlook.

A survey of budget process efforts that sought to produce better budgetary outcomes over the last decade is a somewhat disappointing undertaking. The Simpson Bowles commission of 2010 and the “super committee” of 2012, which were ambitious bipartisan efforts to force Congress to make tough fiscal choices, both fizzled. The failure of the “super committee” ensured that the legacy of the Budget Control Act of 2011, which similarly was a bipartisan agreement to control federal spending that created the current sequester, was to take a bite out of discretionary spending. Of course, discretionary spending is both the easiest to change and least consequential element of the federal purse.

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Many fiscal policy observers often look to changes to the budget process to get better outcomes when it comes to the deficit, but that is a mistake. The Congressional Budget Act of 1974 set up the modern budget process, but those decades old rules have done little to constrain the appetite of politicians to deliver on campaign promises. No candidate seems to run on raising taxes and cutting entitlements.

Where lawmakers have addressed entitlement programs or the tax code, those efforts have spilled more red ink. The Obama administration championed the creation of new health entitlements, for example, while the Trump administration pursued a major tax cut. These policy changes were largely to the satisfaction of political promises, so as long as there was a critical mass of support, no rule was going to prevent them.

Instead, the current process reform effort in Congress, as reflected in the work of the Joint Select Committee on Budget and Appropriations Process Reform, should be modest in its ambitions and evaluated accordingly. Lawmakers should form process solutions to fix process problems. Fundamentally, those problems are the routine abandonment of the legislative resolution as a budget, the failure to enact standard full year appropriations, and regular tomfoolery with respect to the debt limit.

The most conspicuous change proposed by the committee chairs, which is a budget every two years, essentially enshrines the current practice, but it is a worthwhile formalization. This change provides greater certainty over discretionary spending levels and permanently embeds a process that should improve the likelihood of timelier full year appropriations. If the budget process is embraced as an actual budget process, rather than a messaging opportunity between elections, that is even better. Those would be significant improvements to two major budget process flaws.

These process solutions are modest wins. Congress should accept them as such. The votes for anything more ambitious are just not there yet.

Gordon Gray is director of fiscal policy at the American Action Forum.