April 15 — Tax Day — is also the due date for Congress to adopt an overall budget plan for the next year. The deadline is toothless, but there’s no hope for a holistic plan any time this year.
The House Budget Committee is struggling to reconcile possibly inconsistent demands for the budget resolution. At least they’re trying, unlike the Senate Budget Committee. President Joe Biden’s late, tax-and-spend budget request is going nowhere. Meanwhile, the laws designing programs covering most domestic spending haven’t been updated in years or even decades.
This dysfunction has many causes. Outdated budget rules contribute a lot. Authorizing committees have weak incentives to actively review laws in their jurisdictions.
Let’s look at the federal government’s broken budgeting.
Congress doesn’t do and has never done a real budget. Many poor results spring from here: blowout spending, inadequate oversight, routine disregard of budget guardrails, uncoordinated programs, and no chance of aligning expenditures and revenues.
In the modern budget era, Congress has only adopted joint budget resolutions. They don’t become law but are supposed to guide the appropriations process and authorizing committees, which largely ignore them. Over the last quarter century, the budget resolution has devolved into a shell for advancing budget reconciliation for partisan priorities.
Congress last passed all appropriations bills before the start of the new fiscal year in 1996 for Fiscal Year 1997. But appropriations are divided into 12 bills that range from $6 billion to $600 billion and collectively cover less than one-third of spending and no revenue.
Congress has no budget goals or targets. States generally have budget rules for annual balance that they usually come close to meeting. The federal government, however, has considerations that states don’t. It needs budget rules that provide policy and economic stability in the short run while promoting sustainable finances in the long run. That’s more complicated than “spending equals revenue” every year, but, as in Switzerland, it can be done here too.
The debt limit isn’t an effective budget goal, as GAO has explained. Not taking it seriously carries risks of defaulting on federal debt, a key foundation of domestic and global financial markets and international trade. Yet the need to address the debt limit has been an important opportunity to adopt budget fixes.
Congress never meant for government shutdowns to be possible. Until the Carter administration, activities carried on at status quo levels without interruption until Congress passed new appropriations. Today’s risk of shutdowns encourages brinkmanship and leads to bloated appropriations packages. Most members don’t get to contribute, and a new omnibus only needs to be better than a shutdown, not better than current policies.
Federal impoundment control is uniquely stringent. The Impoundment Control Act requires agencies to spend all funds provided by Congress, even if they don’t need all the money to do their jobs. Agencies scrambling to spend can make bad choices while wasting money and growing the debt.
Congress and presidents routinely abuse emergency authorities. Congress uses them to create loopholes from its own budget controls. Presidents increasingly use them to hand out favors.
Finally, allocations come through budgets, but program design comes from authorizing laws.
Many programs are out of date, are duplicative, give agencies too much discretion, lack a current authorization for appropriation, or are otherwise out of step with today’s needs. Committee membership that reflects party caucuses overall, as Speaker Kevin McCarthy (R-Calif.) has wisely pursued, promotes dealmaking within committees that’s reasonably well-aligned with the overall institution. More carrots and sticks are needed.
Today’s bad outcomes won’t go away on their own or just by winning more elections. Congress is dealing with broken systems.
Congress can fix itself, but identifying problems is difficult, and crafting remedies is even more challenging. Fortunately, dedicated members, staff, and outside experts have developed real solutions in recent years, including those mentioned here.
Upgrading federal budget and authorizing tools can breathe new life into our democratic institutions and help Congress solve other problems. With upgrades to federal systems in place, this time of the year could even give taxpayers the hope of getting a better deal from their government.
Kurt Couchman is senior fellow in fiscal policy at Americans for Prosperity.