A new bipartisan budget reform proposal is out. My representative sent this most recent bill to my email labelled as a plan to fix the budget process. Representatives Daniel Webster (R-FL), Jim Rennaci (R-OH), John Carney (D-DE), Larry Buschon (R-IN), Jim Himes (D-CT), Bill Owens (D-NY), and Kurt Schrader (D-OR) came up with this proposal some time over the past week or so. I’ve listed the condensced version of their bill below with some commentary. Overall, the reform wants to add more foresight in the budget process. Whether that will effectively be done with these measures is another story. Most of these measures would simply make the estimates much larger and uncertain. However, there could be some benefit from trying to get a more long-term vision of the nation’s budget.
Requires thorough analysis of the 20-year impact on our deficit when determining the cost of proposed legislation.
I’m not sure this would significantly help the budget process, at least not strictly speaking. Concurrent resolutions are already required to issue deficit estimates for a 5-year period and often include a 10-year estimate. The problem is these estimates aren’t very accurate. There is so much uncertainty even year to year that trying to accurately estimate budget deficits is really difficult. Extending this window another decade makes the statistician’s job that much harder. Trying to predict what will happen in 5 years is hard enough. Trying to predict it in 20 is (definitely) impossible. Short of Miss Cleo’s tarot cards, nobody can predict the future in that kind of uncertainty. This is obviously politically motivated. Today, a 20 year deficit estimate would be somewhere around 30+ trillion dollars. That could give leverage to politicians trying to push tax hikes or spending cuts.
Requires the Office of Management and Budget (OMB) to issue an annual report examining the true extent of our debt burden (such as the costs of Fannie and Freddie, which are currently excluded from the annual budget).
This is not my forte so I won’t say much about this. But, if I’m reading it correctly, this would mean that all federal mortgage-backed loans would be added to the national debt report. It would be an understatement to say this would significantly “add” to our national “debt.”
Requires the Congressional Budget Office to issue a report projecting revenues over the next decade.
Similar to the suggestion above, this again extends CBO estimates. Currently, the CBO is required to project revenues for at least the next five years. This would simply extend that requirement to a 10-year window, which is often done already. As with the first measure, this would give a long term estimate at the cost of accuracy and certainty. In sum: bigger numbers with much less certainty about whether they are accurate estimates or not.
Requires performance reviews of each tax exemption, deduction, or credit at least once every four years to establish effective oversight of these tax expenditures.
In my opinion this is a very helpful suggestion. If nothing else, it starts a much needed conversation in American politics. Exemptions, deductions, and credits are often the hidden link between private business and the government. In many ways, it’s like anti-spending. By giving subsidies to specific industries, businesses, or corporations the government incentivizes how policies and programs operate and are financed. These types of regulations and subsidies account for more than one-third of social welfare expenditures in America as opposed to one-tenth in other industrialized nations (see Hacker’s Divided Welfare State. Required reading for those wanting to understand retirement and health benefits in America). Put simply, there isn’t enough discussion about this side of politics.
Makes Congress accountable for producing a two-year budget for federal agencies.
Again, depending on the agency this is already done to some extent. Authorizations are annual, multiyear, or permanent. Requiring a 2-year plan falls in line with this plan’s general goal: give more insight into the budgetary future. An argument could be made that this would help stem spending. If law makers see their 2 year commitment every year, they may be less likely to issue authorize or appropriate what is recommended. Whether that actually comes to fruition, however, is debatable.