Hearing of the House Budget Committee - First Principles of Congressional Budgeting

Hearing

Good morning, everyone. Thank you for being here.

We called today's hearing to discuss the Congressional budget process. I'd venture a guess that the American people are probably not all too familiar with the specifics of this issue. That's understandable. But I believe -- and this hearing will hopefully show -- that the manner by which, and the rules under which, Congress puts together a budget are incredibly important to not only the fiscal health of our nation but the health and vitality of our Constitutional system.

The Congressional budget process is broken. It is outdated. It has been 40 years since the rules were written. Suffice to say, our world has changed dramatically. What has not changed, unfortunately, is the habit in Washington of spending beyond its means.

The current budget process is not only ill-equipped to help policymakers be more fiscally responsible -- it reinforces bad spending habits. The default is always to spend more when we know that more money is not always or often the right solution.

The current budget process is also not particularly good at forcing Congress to do its job. This year was the first time since 2001 that the House and Senate had passed a joint 10-year balanced budget agreement. When Congress ignores its budget responsibilities, it is forfeiting the power of the purse -- which we all know is not just about dollars and cents.

The Constitution gave Congress this authority so that the people's elected representatives could hold government accountable -- to ensure robust and legitimate oversight of the bureaucracy and, when necessary, eliminate ineffective and inefficient policies and programs. As Madison wrote: "this power of the purse may, in fact, be regarded as the most complete and effectual weapon with which any constitution can arm the immediate representatives of the people, for obtaining a redress of every grievance, and for carrying into effect every just and salutary measure."

No one would argue that creating a budget is a simple task, especially when Washington spends three-and-a-half trillion dollars per year. We can make small changes here and there that will help enhance Congress' authority in this area. But when dealing with a process that was created before a lot of the people in this room were even born, it's time to start thinking about starting over. As former CBO Director Alice Rivlin said a few years ago: "The time for incremental reforms in the budget process is over. The Congress should blow it up and start over from first principles."

What might those principles look like?

First, we should be exercising constitutional control. The Founding Fathers explicitly gave Congress the power of the purse and we need to have a better sense of respect for that duty when it comes to taxing and spending. This in turn will help correct the shift in balance of powers and help pull back the overreach of the Executive Branch -- both Republican and Democrat.

Second, is promoting fiscal responsibility. As I mentioned at the beginning, the current process reinforces a bias toward higher spending without sufficient rules or guidelines in place to align spending with anything resembling a sustainable outlook. A smarter process would incentivize more responsible fiscal choices.

Third, we must increase our oversight. Waste, fraud and abuse exist all throughout the federal government. And too much spending is simply set on auto-pilot. We need to regularly review our spending habits so we can fix mistakes and make improvements where needed.

Fourth, and finally, we need a better understanding of how much programs cost. We need to continue to strengthen our non-partisan fiscal analysis to gain stronger insight into how policies affect the economy and the federal budget. With more information, Congress should be able to make better decisions.

A better budget process is achievable, and by adhering to common sense principles such as these, we can begin to spend tax dollars more effectively and efficiently.

That's why it's so important we are having this conversation today and I'm pleased to welcome our witnesses.

We have Paul Posner, the director of the graduate public administration program at George Mason University. David Primo, an associate professor at the University of Rochester and a senior scholar at the Mercatus Center at George Washington University. Phillip Joyce is a professor of public policy and senior associate dean at the University of Maryland's school of public policy. And Carmel Martin, the executive vice president for policy at the Center for American Progress.

I want to thank you all for taking time out of your busy schedules to be here today. I look forward to an enlightening conversation about how we fix our congressional budget process and ensure hard-earned taxpayer dollars are spent in a more responsible and accountable manner.

Thank you.

I'm pleased to yield to the ranking member, Mr. van Hollen.

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