Reforming the Appropriations Process

Andrew J. Taylor

Current Issue

Everybody knows the federal budget process is broken. Members of Congress, their staffs, executive officials, judges, policy experts, and citizens can all see it plainly. The procedures established nearly a half-century ago are technically still in place, requiring Congress to pass an annual budget resolution as well as appropriations and authorization bills for various areas of government spending. In practice, however, the process has become an artifact — frequently ignored, and rarely used as intended.

As a result, we now have government by continuing resolutions, in which Congress passes short-term funding measures designed to give lawmakers and the White House more time to negotiate appropriations. If the parties can't agree, the government shuts down. This practice results in a haphazard approach to fiscal policy, with lawmakers contriving artificial deadlines and budgeting from crisis to crisis. The chaos of contemporary budgeting was once again evident in the recent 35-day partial government shutdown from December 2018 to January 2019, the longest in modern history. The shutdown, which resulted from a dispute between President Donald Trump and congressional Democrats over billions in funding for a wall on the U.S.-Mexico border, ended when the White House and Republicans agreed to a short-term spending bill that allowed more time for deliberations; congressional negotiators later reached an agreement that funded all government operations through the end of September.

The current annual appropriations system is ill-suited to strategic budgeting and the regular deliberation of the nation's spending priorities. And it is particularly disastrous for fiscal conservatives. Lawmakers wary of shutdowns and the zeroing out of federal dollars for government operations inevitably reach rushed agreements that almost always raise government spending. As a result, discretionary spending, and thus annual deficits and the national debt, continue to rise.

Members of Congress, who often exhibit an inability to make choices and adjust priorities, certainly deserve some blame for the breakdown. And our increasingly polarized media and political environments have not made it easier to reach compromises, on spending or anything else. But the truth is that process, and institutional rules, matter. To restore transparency, regularity, strategic deliberation, and fiscal restraint to the federal budget, we need a new process and new rules that provide different incentives to lawmakers. We need a system of permanent appropriations that, by eliminating the threat of shutdowns and funding gaps, will enable the country to debate its economic future without the looming specter of crisis.

ROOTS OF BUDGETARY DYSFUNCTION

Today's federal budget process came about in 1974 with the passage of the Congressional Budget and Impoundment Control Act (CBA). The Democratic-led Congress at the time wanted to counter executive aggrandizement and overhaul the way Washington made fiscal policy. Spiraling inflation, increasing deficits, and a highly fractured and decentralized process of constructing budgets helped generate practically unanimous support for root-and-branch reform. The act created the institutions that shape our budget process today: the Congressional Budget Office (CBO), House and Senate budget committees, and the multi-stage process through which lawmakers ensure coordination of revenues and expenditures. The CBA provided the platform for the enactment of the major fiscal-policy developments of the past 45 years. There have been important formal changes throughout, but the process it established remains recognizable.

The process is meant to go something like this: After receiving the president's proposed budget, both chambers of Congress craft a blueprint by binding targets for spending outlays and authority in 19 function areas through a concurrent resolution. Unlike an ordinary bill, the budget resolution does not go to the president for his signature or veto because it merely sets taxing and spending targets for other congressional committees; it needs only a majority vote to pass and cannot be filibustered in the Senate. This is followed by the allocation of funds at the line-item level by each chamber's appropriations committee. Each of the 12 appropriations subcommittees in both houses writes a spending bill for consideration and passage by the parent chambers. The bills fund different parts of the government for the following fiscal year.

A second, later resolution guides the authorizing committees and enables revisions to programs that lie outside of the appropriations process, most notably entitlements such as Social Security and Medicare. (This second concurrent resolution was later eliminated in a 1985 reform of the budget process, establishing a single budget resolution.) Then Congress can choose whether to pass what is known as a reconciliation bill, which was originally intended as a kind of bridge between the two resolutions to tweak taxing and spending. Reconciliation bills, like the budget resolution, are considered under expedited procedures; they cannot be filibustered in the Senate and need only a simple majority to pass.

In the four and a half decades since the CBA established this structure, Congress has increasingly employed blunt budgetary mechanisms to set its spending levels, occasionally making ad hoc adjustments to delay the pain of cuts. In practice, the federal budget process established by the CBA, in which both houses agree to an annual budget resolution that sets orderly taxing and spending targets for committees, has become a relic: frequently ignored or not used as intended, and therefore still tacitly supported but largely ineffective. Some years, the chambers cannot agree on a resolution, and in others, the Senate has failed even to pass its own resolution. The Budget Control Act of 2011 (BCA) and its sequestration caps might be seen as a kind of resolution — it creates a spending projection, for example — but the budget deals of 2013, 2015, and 2018 reveal that sequestration can be amended. In other years, even when a resolution has been agreed to, it has effectively been ignored and swept away by more immediate and critical political and policy considerations.

Moreover, Congress has barely utilized reconciliation since 2000. And when it has been deployed, some of the policies promoted have been at best tangentially related to budgetary matters: the College Cost Reduction and Access Act of 2007, for example, as well as Democratic efforts to reform and Republican efforts to repeal President Barack Obama's signature health-care law, which was originally passed without resort to reconciliation in 2010.

A HAPHAZARD PROCESS

Clearly, fiscal policymaking in today's Congress lacks the planning, coordination, routinized procedures, holistic approach, and coherent outcomes that the CBA was designed to deliver. For several reasons — the most obvious being the continued inclination of the American public to divide control of the elected branches of government between the two increasingly polarized parties — we now have a fractured, haphazard, and deadline-driven budget process. This chaotic approach to budgeting in recent decades has produced three trends: government by continuing resolution, the ever-present threat of shutdown, and acrimonious fights over the nation's debt limit.

A continuing resolution (CR) is a stop-gap and often omnibus or consolidated appropriations bill that maintains operations at, or slightly below, the previous fiscal year's spending levels for a set but generally short period (from as little as a few days to as long as several months). The goal is to buy time for Congress and the White House to agree on conventional appropriations through the remainder of the budget year. There were 109 CRs between fiscal years 1998 and 2017, with at least one every year; the last year without a CR was 1997. Since 2002, Congress has not completed the appropriations requirements until, on average, nearly four months into the fiscal year — by which time, of course, it should already be busily preparing for the next year.

Without consolidated or single appropriations bills after the start of the fiscal year, the government experiences a "shutdown": the furlough of non-essential personnel and curtailment of activities in the departments and agencies funded by the unapproved appropriations. There have been 20 of these shutdowns since the early 1970s; most of them, perhaps surprisingly, occurred prior to 1990 when the CBA was supposedly functioning moderately well. They have frequently been short and have resulted in only a partial curtailment of government operations. Many involved only a single or small number of appropriations bills covering defense, health, education, or welfare spending that became caught up in political combat between conservatives and liberals.

Adding further uncertainty to budget politics, and making Congress's general approach to fiscal policy even more haphazard, is the requirement that lawmakers extend the nation's debt limit so the federal government can borrow funds legally to continue operations. For many years, Congress routinely raised the debt ceiling and passed the authorization into law without much controversy or fanfare. Because many members feared that their votes to raise the debt ceiling would be considered fiscally irresponsible by their constituents, in 1979 the House established the "Gephardt rule" (named after Democratic representative Richard Gephardt of Missouri), which automatically increased the limit when Congress approved the budget resolution.

In 2011 the House did away with the rule and adopted what the Senate had done all along — a separate, transparent vote on a measure raising the debt ceiling. Free to use the debt ceiling as leverage, House Republicans threatened not to increase it that summer as the federal government's borrowing authority was about to expire. They coupled a debt-limit extension with legislation calling for deep cuts in many programs and agencies, and their leadership emphasized the popularity of such a maneuver by introducing a "clean" authorization that merely raised the debt ceiling, which went down to heavy defeat on the floor. Finally, after steep declines in stock prices and facing a downgrade of federal debt by Standard and Poor's, congressional leaders and the administration crafted the BCA and essentially kicked the can down the road. The new House Democratic majority re-established the Gephardt rule in 2019, but because the consequences of default would be so severe, the debt ceiling continues to provide a powerful political tool. The urgency of avoiding default forces otherwise unwilling lawmakers to compromise by either raising the debt limit or suspending consideration of the ceiling.

As the recent history of continuing resolutions, shutdowns, and debt-ceiling imbroglios demonstrates, Congress has abandoned the routine process established by the CBA in favor of crisis budgeting. This procedural chaos has been particularly unsettling for fiscal hawks. There were annual deficits, some of them quite large, when CBA was working as its designers intended, but absent the discipline it provided, they have ballooned. With the exception of a few years in the early 1980s and early 1990s, CBA kept the federal budget deficit below 3% of GDP. But then the Great Recession hit in 2008 and blew a huge hole in the nation's finances. Total public debt now exceeds $21 trillion and is more than 100% of GDP. Without a functioning budget process, annual deficits have returned to somewhat manageable levels through economic growth and sequestration. But economists largely agree that our level of indebtedness is unsustainable, and the ramshackle procedures Congress now uses will not ameliorate the situation.

What is needed is a fundamental reform of federal budgeting that will not only address the concerns of fiscal conservatives, but also restore the constraints that the CBA imposed on the budget process almost a half-century ago — transparency; regularity; and discriminate, strategic budgeting.

REFORM PROPOSALS 

Almost as soon as the ink from President Richard Nixon's pen had dried on the CBA in 1974, academics and policy practitioners began circulating proposals for reform. Given the state of the budget process today, it should be no surprise that recommendations for change are legion. A balanced-budget amendment to the Constitution and the presidential line-item veto have always been popular. Both were central features of the Republicans' "Contract with America," a document that guided the party's House majority after the 1994 elections. A balanced-budget amendment ultimately failed by a single vote in the Senate: Mark Hatfield of Oregon was the only Republican who voted against the measure on substantive, rather than procedural, grounds. The line-item veto enabled the president to block sections of a bill with taxing and spending provisions, rather than accept or reject the entire measure — a power already enjoyed by 44 state governors. As a piece of ordinary legislation, and therefore facing a lower hurdle than a balanced-budget amendment, the line-item veto was passed into law. But the Supreme Court declared it unconstitutional in 1998.

Biennial budgeting has also been proposed for much of CBA's existence. At the turn of the new millennium, it seemed that there was significant momentum to establish a two-year, rather than the existing annual, budget process. During the 106th Congress (1999-2001), numerous influential voices in Washington advocated such change, including President Bill Clinton, both of the major-party presidential candidates in the 2000 election, House speaker Dennis Hastert, and Senate Budget Committee chair Pete Domenici, who introduced a well-publicized bill to establish the biennial calendar. There are already numerous models at the state level: 19 states have biennial budgets (though only North Dakota and Wyoming have true two-year processes; the others enact two annual budgets simultaneously, the second of which is often revised before it takes effect). The calls for a biennial budget do not seem quite as loud today, though during the recent 114th Congress (2015-17), Republican senator Mike Enzi of Wyoming, chair of the Budget Committee, held hearings on a two-year appropriations process. A House bill to establish such a budget cycle accrued 237 co-sponsors.

The Building a Better Budget Process Project, run by the nonprofit Convergence Center for Policy Resolution, advocates stronger congressional budget committees; greater independence and resources for CBO and the Joint Committee on Taxation; new and more meaningful periodic reports about the fiscal state of the nation and the financial footing of major programs; and alterations to the fiscal year that would bring the budget-process cycle more closely in line with the political calendar. Another popular set of proposals are referred to as "functional reform" or "portfolio budgeting." Under this framework, the budget process is conceived of as a series of major issues or policy areas, and decisions regarding aggregate spending and program priorities within them are made holistically. Fiscal policy regarding transportation, for example, would be coordinated within a single process that pulls together all related programs, many of which are scattered across committee jurisdictions. Functional reform has been popular for some time, but it suffers from various flaws — most notably its complexity, and the inevitable intramural turf wars it would unleash in the House and Senate.

The Committee for a Responsible Federal Budget (CRFB) recently rolled out a proposal that has numerous supporters on Capitol Hill; Republican senator David Perdue of Georgia has made perhaps the most serious push to enact it into law. CRFB's reform provisions include elevating the budget resolution to the status of law by making it joint rather than concurrent; it would then require the president's signature or a congressional override of his veto to become law. CRFB would also have the budget resolution include the debt limit and items currently outside of the appropriations process, such as the massive Social Security program. Leon Panetta, the organization's co-chair, has described the current budget process as eight months of posturing followed by one month of hard deals; CRFB's reforms aim to avoid this deadline-driven budgeting. James Capretta has proposed a similar set of ideas in these pages, suggesting a joint budget resolution would "force the two branches to begin coordinating early in the process by reconciling the differing estimates from CBO and OMB in order to come up with an agreeable joint plan."

Another proposal that has gained popularity among members of Congress is known as the automatic CR (ACR). The Government Accountability Office (formerly called the General Accounting Office) completed a detailed analysis of various types of ACRs in the mid-1980s, and there have been about a dozen ACR measures introduced in Congress since the early 1990s, usually with names like "The Government Shutdown Prevention Act." Several have received committee attention and floor action. The most energetic proponent of the ACR today is Republican senator Rob Portman of Ohio, the former OMB director for President George W. Bush; he has introduced a version in every Congress of which he has been a member since his election in 2010. With 10 co-sponsors, mostly Republicans, he introduced the "End Government Shutdowns Act" in the 115th Congress (2017-2019). If any appropriations bill or continuing resolution has not been passed by October 1, Portman's bill provides for a 120-day CR at previous fiscal-year levels. Additional ACRs would be attached at 90-day intervals, and with each extension, spending would be reduced by 1%.

A related proposal, known as capping and pegging (CP), would cap aggregate spending by pegging it to revenues or an estimate of GDP. Like ACR, CP strategies have an important virtue: fiscal and procedural discipline. Glenn Hubbard, chair of the Council of Economic Advisers under George W. Bush, and Tim Kane, a fellow at the Hoover Institution, have outlined a reform in these pages and elsewhere that would replace the appropriations process and limit aggregate spending to a number calculated from recent revenue amounts. Congress could still increase expenditures at any time and by any amount, but only if a supermajority of legislators approved. The most recent iteration of the Maximizing America's Prosperity (MAP) Act — introduced in 2015 by Republican representative Kevin Brady of Texas, then the House Ways and Means Committee chair — would restrict non-interest federal spending to between 16% and 19% of "potential" or "full employment" GDP. To constrain spending further, the president would have to prioritize programs. Congress could then expedite consideration of line-item rescissions that the president would offer.

Many of the proposals above would entail sweeping and convoluted changes, requiring everything from constitutional amendments to tackling the debt limit to reforming entitlement programs (the main contributor to federal deficits and national debt). But I would suggest that effective reforms to the budget should have a narrower focus, concentrating more intently on the appropriations process and discretionary spending. Discretionary spending, after all, constitutes 30% of the annual $4.4 trillion budget, and as the disintegration of the CBA illustrates, our fiscal problems are as much about process as they are policy.

Perhaps more important, these proposals neglect to address one of the most troubling aspects of the current appropriations process: the constant threat that government operations will run out of funds completely if spending bills aren't passed into law. It is this feature that, after a series of rushed negotiations and artificial deadlines, compels lawmakers to agree to increase federal spending by significant amounts — thwarting the efforts of fiscal conservatives to rein in government spending and reduce the debt. An effective alternative to the current budget system, therefore, must create a new reversion point and a new status quo.

A NEW APPROPRIATIONS REGIME

For most legislation, defeat in Congress simply means the status quo is maintained. But if one of the 12 annual discretionary-spending or appropriations measures fails to pass prior to the beginning of the fiscal year, government expenditures on the covered operations go to zero. The reversion point — the outcome should nothing happen — is not the status quo. And a reversion to zero constitutes what a majority of members of Congress would just about always consider bad policy and bad politics. Few lawmakers want to do away with federal functions entirely or receive the blame for bringing them to a halt, however temporarily. The threat of government shutdown is therefore unattractive to most practical conservatives and strategic budget-cutters.

The regular appropriations process is truly stacked against fiscal hawks. Those who desire to constrain spending do not enjoy the leverage generally conferred on coalitions built to protect the status quo — coalitions that benefit from procedures like bicameralism, the presidential veto, and the Senate filibuster. Those who want cuts are further disadvantaged by informal federal budget norms, which conform to Aaron Wildavsky's view that "[t]he largest determining factor of the size and content of this year's budget is last year's budget." Members desiring cuts, a group with naturally diverse views and motivations, must forge a coalition around a single manufactured position and push against this inertia; their proposals will face numerous competitors. And because spending bills are subject to the kind of logrolling essential to secure passage in the House and Senate, members are likely to withhold support from these plans unless they also protect and possibly increase expenditures on their favorite line items — thereby diluting any budget-cutting effects.

Ultimately, the zero-dollar reversion point for appropriations bills directs spending upward. Everyone knows it will be invoked if nothing is done, pressuring members to back any deal that avoids it. But because it is so undesirable, this reversion point cannot credibly discipline lawmakers' proclivity to secure increased spending on their pet projects, or those of their colleagues to whom they owe favors. There often emerges no viable alternative to government shutdown but a compromise that raises spending.

It is somewhat surprising then that, in March 2013, Congress actually enacted billions in cuts through sequestration. Although the procedure is blunt, and the caps it established have been raised repeatedly, the six years of experience we have with sequestration are instructive for conservatives. Sizeable spending cuts occurred because sequestration is practically the inverse of the annual appropriations process. Its reversion point, at least for fiscal year 2013, was a substantial trimming, but it was also economically appealing and politically tolerable. As the default outcome of inaction, the spending reductions enjoyed all the procedural and political advantages of a status-quo position. As the "no" vote against any legislation to squelch it, sequestration constituted the baseline spending agenda. The procedure's numerous but disparate opponents found themselves in the position usually occupied by conservatives: They had barely any opportunity to propose, force onto the floor, construct a winning coalition for, and pass a substitute in one chamber, let alone both.

An appealing alternative appropriations regime incorporates these lessons from sequestration. I propose that Congress pass a law permitting appropriations to last many years, even into perpetuity, an approach called permanent appropriations. Under permanent appropriations (or PA), each program and agency would be directed to plan for annual expenditures of a certain amount. The Treasury would replenish the annual allotment for each appropriation at the beginning of the next fiscal year, and repeatedly thereafter, until legislation alters it. This procedure would dramatically change the reversion point for federal spending. If lawmakers fail to pass an appropriations bill, the consequence would not be zero dollars but the continuance of current levels. Advocates of additional spending, a position at neither the reversion nor status-quo points, would have to construct legislative coalitions large and cohesive enough to set the agenda and mobilize support behind a proposal that could be enacted into law.

While the length of the appropriations process would change, the rest of the current budget architecture could remain in place. Efforts to change spending levels could use the existing appropriations bills as legislative vehicles, and House and Senate committee structures could still generate them. A budget resolution might recommend revisions to coordinate spending levels across government, but, unlike now, appropriations bills reflecting those recommendations need not become law.

There is no constitutional prohibition against making appropriations permanent: Under the Constitution, Congress is simply required to appropriate money that the Treasury spends. Article I, Section 8 forbids an appropriation of money "[t]o raise and support Armies" for more than two years, but the Constitution says nothing about annualized spending or at what intervals money is to be allocated to domestic, defense, or foreign operations.

Since 1789 and the very first Congress, the tendency has been to do this every year; this created the assumption that, absent an annual appropriation, a particular function of government would be unfunded. A succession of statutes and rule changes in the post-Civil War era formalized this rhythm. Both congressional bodies established their committees on appropriations in the mid-1860s, separating appropriations from the process of raising revenues. In 1876, the House established the Holman rule, named after Democratic representative William Holman of Indiana, with the goal of permitting the appropriations committee to reduce expenditures (and thereby increase the authority of the committee) by decoupling actual spending from its authorization. As a result, while many federal programs and agencies are authorized for many years at a time, most discretionary-spending amounts are appropriated annually.

There are some multi-year and even permanent appropriations today. The federal government spends more than 60% of its $4 trillion annual budget on entitlements: social-welfare programs — particularly Social Security, Medicare, and Medicaid — that are considered "mandatory" and are funded "automatically" by rules that define the qualifications of beneficiaries. Entitlements are generally not considered appropriations, but they are permitted by congressional action and paid for by the U.S. Treasury. In fact, although appropriations bills do not affect the amount paid to individuals — these allocations are directed by established formulas and regulations that describe eligibility criteria — spending bills do formally provide for about 35% to 40% of current entitlement spending. Occasionally, the appropriation is just a technicality rather than a substantively important measure. The state-grant component of Medicaid, the Supplemental Nutrition Assistance Program, and some veterans' programs, for example, are paid for by annual appropriations that merely rubber-stamp an amount that Congress has already authorized for a multi-year period. Congress, however, also ensures full payments to individuals with annual appropriations, such as for beneficiaries of the Children's Health Insurance Program. Entitlement programs require appropriated funds for their administration.

The courts have repeatedly favored congressional supremacy in cases that challenge Congress's "power of the purse" and how it makes appropriations. In Train v. City of New York (1975), the U.S. Supreme Court ruled that the Environmental Protection Agency's impoundment of appropriated funds for municipal water treatment and sewage plants was unconstitutional. The case, which had begun with a presidential directive to the EPA in November 1972, provided much of the impetus for the CBA. In May 2016, U.S. District Court judge Rosemary Collyer ruled that the Affordable Care Act's cost-sharing subsidies to insurers, as well as tax credits to low-income Americans purchasing coverage on the Obamacare exchanges, were unconstitutional because Congress had not appropriated them. (The Trump administration voluntarily withdrew the cost-sharing approach in 2017, settling House v. Burwell.) Notwithstanding President Trump's defiant reassignment of congressionally appropriated funds to build a wall under the guise of a national emergency, the case law is unambiguous. If congressional appropriations regulate the federal government's spending, the manner in which Congress makes these appropriations is surely a matter only it can determine.

BENEFITS OF PERMANENCE 

While my proposal for permanent appropriations is certainly informed by the automatic CR and cap-and-peg strategies mentioned above, the permanent-appropriations approach exhibits three additional characteristics that make it superior.

The first is that the status quo presents itself as a more legitimate alternative. As noted earlier, reversion is not just a fallback position in PA; it maintains current spending levels without any dramatic zero-dollar threats. Any changes to annual spending must go through the full legislative process and meet the constitutional requirements of bicameralism (approval by a majority of each congressional house) and presentment (presentation to the president for his signature or veto). This requires proponents to build the coalitions necessary to win House and Senate passage and presidential approval — or at least the votes necessary to override a veto. Members would have to take floor votes that are mostly recorded these days, registering preferences transparent to their colleagues and constituents. And unlike with CP, there is no arbitrary and intuitively unfair requirement that spending changes receive supermajority approval.

ACR and CP are also blunt instruments. They constitute an effort to convert all government-spending decisions into matters of economic philosophy and, as a result, would likely pull Congress into partisan squabbles over broad fiscal policy in order to alter expenditures on individual programs and agencies — relatively minor actions that are better disposed of in a pragmatic and consensual manner. With permanent appropriations, the country can debate its economic future without artificial deadlines. Members can agree across the aisle on individual spending items without their decisions affecting other more fundamental fiscal- and economic-policy matters. No longer afraid of incurring the wrath of their party's ideological enforcers and base voters, lawmakers would feel empowered to reach discrete compromises.

The second reason permanent appropriations are superior is that, because ACR and CP exert explicit downward pressure on government expenditures, they have more extreme reversion points than PA. ACR and CP would thus likely permit spending to rise more over the long term, just as the zero-dollar reversion point in our current budget system leads to last-minute deals that increase spending. ACRs generally call for rapidly accelerating cuts to expenditures absent annual appropriations. Representative Brady's MAP Act puts in place a permanent CR at 90% of previous spending levels if Congress does not pass these bills. To be sure, a Congress and president in a big-spending mood could increase expenditures more easily under PA (and ACR) than CP, although the victorious coalition would still have to meet the constitutional hurdles of bicameralism and presentment. But the broadly unattractive reversion point in CP, even with supermajority requirements, creates significant pressure on members to agree upon an alternative. Given coalition-building dynamics in Congress — and depending on the level of the cap or peg — these deals might well contain meaningful spending increases.

Empirical research on lengthening appropriations cycles suggests that PA would result in decreased spending, regardless of its effect on reversion points. Although this research is somewhat dated and equivocal, states with annual appropriations tend to spend more than those with a biennial budget. The theory here is not clear, but without any requirement to pass legislation to keep the government operating at the end of the first year of the biennium, there is less need for the kind of "pork" often necessary to build winning legislative coalitions.

The third and final reason to favor permanent appropriations is that they are flexible and make it easier for lawmakers to practice strategic budgeting. Supporters of the current system of annual appropriations tend to emphasize its capacity to enhance the planning that executive departments and agencies inevitably undertake. But it is also true that, in practice, the existing system greatly impedes strategic budgeting within executive units. As the budget watchdog group Open the Books has reported, federal agencies spend sizeable portions of their budgets — $50 billion in fiscal year 2017 — in the last week of the fiscal year to close out their accounts in a "use it or lose it" spending spree.

Not only would PA enable Congress to enact appropriations bills at any time — with little or no consideration of the fiscal calendar — but it could also permit departments and agencies to hold money across fiscal years, as happens in many other advanced industrialized democracies. Sequestration, multiple CRs, supplemental appropriations, and rescissions force agencies to continually accelerate and decelerate expenditures within fiscal years as they sometimes receive unanticipated windfalls and cuts. As a practical matter, agency heads today cannot plan their budgets with much confidence.

PA would also give more certainty than annual appropriations to the multi-year contracts that are increasingly a feature of the federal procurement system, which is no longer based upon tangible goods but the acquisition of staffing and large, technologically sophisticated systems. More important, it would permit greater coordination between the authorizations and appropriations processes. Until the 1950s, Congress authorized most programs on a permanent basis; the appropriations schedule thus did not matter much to the agencies that administered them. Today, however, the authorization process is incredibly complex as different programs are authorized for different durations. Many programs have experienced authorizations for various annual and multi-year terms over the course of their existence — the National Science Foundation and the National Aeronautics and Space Administration being prime examples. Others became the subjects of routine annual authorizations in the Vietnam War era, including most notably the Department of Defense, Department of State, and Department of Justice.

For most if not all programs, PA could be adapted to dovetail with the existing authorizations regime. The existing incompatibility of appropriations and authorizations inevitably results in unauthorized spending, and what many observers believe is largely unchecked power for congressional appropriators and the standing committees on which they sit. These "zombie" authorizations — including for agencies and programs like the Department of Veterans Affairs, Head Start, the National Institutes of Health, the Low Income Home Energy Assistance Program, and a number of housing-assistance programs — weaken congressional oversight of government spending. The oversight that does occur tends to be dramatic and uneven, driven by media sensationalism and attention-hungry members of Congress focused on re-election. Routinized authorizations would bring about more comprehensive, measured, and efficient oversight because agencies would receive instructions in statutory form at regular intervals. Such authorizations would allow Congress to provide necessary structural and substantive updates to programs that account for political, economic, and technological changes. And they would assist the White House and agency heads as officials construct budget forecasts and approve expenditures. They would also likely reduce waste and fraud.

Ultimately, PA would make it practical to re-empower authorizers so they can provide an additional check on augmented spending. This would be done without the kind of radical overhaul of the relationship between authorizers and appropriators that was proposed by Republican representative Cathy McMorris-Rodgers of Washington, former chair of the House Republican Conference, in her Unauthorized Spending Accountability Acts of 2016 and 2017. The ultimately unsuccessful bills would have subjected all programs to a three-year authorization cycle, and would have effectively sunset and sequestered the funds of those unable to secure reauthorization.

PA would not solve all of the country's fiscal problems. Given the Constitution's directive against the funding of standing armies, it would be difficult to apply to some, if not most, of the Department of Defense's spending — an amount that has now reached about $600 billion annually. PA doesn't address mandatory spending for entitlement programs or interest payments to service the national accumulated debt, though there is nothing to prevent every dime of federal spending from being formally appropriated, whether it's permanent or not. The CRFB proposal mentioned above, for example, requires the budget resolution to incorporate spending on Social Security. But at the very least, PA would place an effective brake on discretionary spending.

PROCESS MATTERS 

Improvements to the budget process established by the CBA will continue to feature in legislative proposals and public debate. The February 2018 budget bill, for example, established a bipartisan Joint Select Committee on Budget and Appropriations Process Reform, and members of Congress as well as fiscal-policy practitioners seem to be coming to a consensus that change is desirable. The joint select committee has held a few hearings and attracted some media attention but, for the time being at least, has appropriately general and modest goals.

These developments are encouraging to budget hawks because, as Washington has demonstrated repeatedly, political will alone cannot curb the growth of federal spending. Although discretionary items accounted for only 6.3% of GDP and 30% of all federal outlays in 2017 — declines of about 50% over the past half-century — they have risen by more than 25% in constant dollars since 2000. Much of the increase occurred during the Republican unified government presided over by President George W. Bush from 2001 to 2006.

Even though Republican congressional majorities claim they want to shrink the size of government, they do not seem capable of preventing increased spending. A self-imposed moratorium on earmarks is now largely ignored. In fall 2017, President Trump collaborated with Democratic House and Senate leaders to pass a legislative package containing a continuing resolution, debt-ceiling raise, and relief for hurricane victims — despite opposition from Senate majority leader Mitch McConnell and House speaker Paul Ryan. A year or so later, supported now by Republicans in Congress, President Trump forced a partial government shutdown because he wanted more money for his border-wall project.

Reflecting on the CBA's failures 40 years after its passage, former ranking member of the House Budget Committee Bill Frenzel, a Republican from Minnesota, put the blame solely on the makers of policy, not the process: "The real culprit is the Congress's inability to make choices, or, stated another way, to adjust priorities." But this is not quite right. The process matters. Institutional rules can force members of Congress to make choices and adjust their priorities. Though they would not be easy to establish, permanent appropriations would make any proposal to increase or reduce discretionary spending pass through the legislative process and win the support of a majority of legislators — or a supermajority in response to a presidential veto or filibuster. By eliminating the backstop of a disastrous, zero-dollar reversion point, this would finally lead to the creation of fiscal policy in Congress that is deliberate, transparent, stable, and restrained.

Andrew J. Taylor is professor of political science in the School of Public and International Affairs at North Carolina State University.


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