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CBO Veterans: To Fix the Budget Process, Fix the Budgeters

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Congress should do something about reining in “mandatory” spending, but, in the end, the only way for lawmakers to improve the budgeting process is to do a better job of working together.

Alice Rivlin and Rudolph Penner, former directors of the Congressional Budget Office (CBO), came to that conclusion today during a hearing on the “broken budget process” that was organized by the House Budget Committee.

“There is no doubt that the budget process is broken,” Rivlin testified, according to a written version of her remarks posted on the committee website.

Rivlin, who directed the CBO when it started up back in 1975, said the clearest evidence of the breakdown is the existence of the Joint Select Committee on Deficit Reduction – the 12-member “Super Committee” that is supposed to find $1.2 trillion in deficit reductions by Thanksgiving.

Rivlin said she is optimistic that the Super Committee will succeed.

But, even if the Super Committee succeeds, “the budget process has failed,” Rivlin said. “Our much-vaunted democracy should not have to abandon its normal decision processes and concentrate power in the hands of an ad hoc group to solve a budget problem.”

Changes in the budgeting process could help, but “bad process is a symptom, not a cause of unwillingness to make the compromises necessary to solve hard problems,” Rivlin said. “No process will work well unless the participants in the process want it to work.”

Penner, who was the CBO director from 1983 to 1987, noted that the Senate has not passed a normal budget in 2 years and that, in 2010, the House failed to pass a budget for the first time in the history of the modern budget process.

“It is hard to think up useful rules governing the development of a budget resolution when no budget resolution passes the entire Congress,” Penner said. “It is tempting to believe that if only we could come up with some clever budget rules, fiscal prudence would follow. Unfortunately, it does not work that way. The desire for fiscal responsibility must come first.”

Rivlin and Penner agreed that one problem with the budget process is that Congress has classified Medicare and Social Security spending as “mandatory” spending and exempted it from the usual layer of budget oversight.

“Under the current process, a dwindling portion of the budget (discretionary spending) is subject to annual scrutiny and increasingly complex rules, while major mandatory programs and the tax code operate on automatic pilot,” Rivlin said. “I am not suggesting that the Medicare or Social Security laws or the tax code be reviewed in detail every year. In fact, changes in retirement programs and taxes should be made as infrequently as possible and with long lead times, so that people and businesses can plan their lives. But the Congress must bring the retirement programs and tax expenditures into a process of periodic review and decision, so that you can actually control the major drivers of the budget, the deficit and the debt.”

Penner said he likes the idea of Congress building “automatic triggers” that require the government to change programs when programs run into problems, but that, in reality, he has seen that Congress simply votes to keep the automatic triggers from fixing the problems when problems crop up.

“The Congress can create laws and change laws at any time,” Penner said.

Other federal budget coverage from National Underwriter Life & Health:


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