Fixing the Broken Budget Process to Rein in Runaway Spending

Fixing the Broken Budget Process to Rein in Runaway Spending

Opinion Editorial by
Congressman Paul Ryan
Wednesday, March 3, 2004

Wisconsin families and businesses know the value of setting budgets and sticking to them. We know that it's wise to plan ahead for emergency expenses by setting aside money, whenever possible, for a "rainy day." And we recognize that if we spend $500 or $5,000 more than we did last year, we are spending more in both cases - not less. Washington needs to adopt these common-sense approaches to the federal government's budget.

For decades, the process that Congress and the President use to spend taxpayers' money has been broken. It includes many incentives to overspend and tricks for exceeding budget spending caps, and it doesn't provide a clear picture of the government's full debts and liabilities. Even when many lawmakers agree on the need to restrain spending, the current system makes it extremely difficult to reach this goal.

Just as private businesses must be accountable to their shareholders, the government should be accountable to taxpayers for how much it spends and how it spends. This is why I have been forming a coalition of Members of Congress dedicated to fixing the budget process.

Together with several colleagues, I have introduced legislation that would overhaul the federal government's budget process, make it easier to reduce unnecessary spending, and clean up the government's accounting practices. So far, we've gained the support of over 50 cosponsors.

This legislation (H.R. 3800) would take a critical first step by giving the budget the force of law. Today, the budget resolution that Congress votes on early in the year is non-binding and does not require the President's signature. In other words, it amounts to a guideline instead of a law. Our bill would change that, compelling Congress and the President to agree on a budget before they start spending money.

Our proposal calls for a biennial budget where spending would be set in the non-election year and Congress would dedicate the second year of each session to conducting oversight. Overall, Congress does a miserable job of overseeing how well or poorly government agencies perform. The proposal also sets up a "rainy day" fund to set money aside for the inevitable emergencies that occur.

Under our legislation, Members of Congress could no longer dodge spending restraints by designating spending as "emergencies." Real emergencies would be covered under the rainy day fund, and all spending from that fund must qualify as sudden, urgent, unforeseen and temporary (for example, tornadoes, floods, terrorist acts, etc.)
In addition, our bill would create enforceable caps to help rein in growing federal spending. With these caps in place, spending could only increase to account for inflation or, in the case of entitlement benefits, to factor in the growing population as well as inflation.

With this measure, we also hope to correct one of the most irrational aspects of the current process. Today, if a congressman or congresswoman removes wasteful spending from an appropriations bill, the savings from that action is automatically directed to other government spending - not dedicated to reducing the amount spent overall. Our legislation would create new accounts that enable Members of Congress to target overspending and redirect the savings to deficit reduction or tax relief.

Our budget process reform bill also provides useful tools for combating waste, fraud and abuse in federal programs. By planning to sunset discretionary programs and voluntary entitlement programs in several years, it would prompt a thorough review of these programs to gauge whether they are using tax dollars well or poorly and which ones deserve continued funding. (Programs such as Social Security and Medicare that provide benefits earned through time spent in the workforce would be exempt from these sunsets.) In addition, the legislation enhances the President's ability to pinpoint pork barrel spending in appropriations bills and require Congress to have a re-vote on each spending item separately.

Finally, our proposal takes key steps to improve the government's accounting practices. It would do away with "baseline budgeting," a policy that has allowed people to distort the reality of spending hikes and claim that scaled-back increases in spending are "cuts." The legislation we are pushing for would also require agencies to live up to the same standards as private-sector businesses, by requiring a full accounting of the government's share of the accruing costs of pensions, retired pay, and retiree health benefits. This would not change retirees' benefits, but it would make the federal government more accountable for the benefits it owes its employees. If corporations adopted the accounting standards now used by our government, the accountants at Enron would look like saints.

Bringing discipline to the budget process and restraining federal spending are essential steps toward eliminating the deficit and improving the health of our economy. We face major challenges in the coming years, from winning the war on terrorism to making sure Social Security and Medicare are ready for the retirement of the baby boom generation. Spending wisely is critical to strengthening the economy and helping us address these challenges. I will continue to fight for the fiscal discipline taxpayers deserve as I work to move our bill through Congress.