Blaming outdated systems for another off-track budget season

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April 15 – Tax Day – is also the deadline for Congress to pass a comprehensive budget plan for next year. The deadline is toothless, but there’s no hope for a holistic plan anytime this year.

The House Budget Committee struggles to reconcile potentially inconsistent requests for the budget resolution. At least they are trying, unlike the Senate Budget Committee. President Joe Biden’s belated fiscal and spending budget request is going nowhere. Meanwhile, the laws designing the programs covering most domestic spending have not been updated for years, if not decades.

This malfunction has many causes. Outdated fiscal rules contribute a lot to this. Licensing commissions have little incentive to actively review laws in their jurisdictions.

Let’s look at the federal government’s broken budgeting.

Congress does not and never has made a real budget. Many poor outcomes stem from this: exorbitant spending, inadequate oversight, systematic disregard for budgetary safeguards, uncoordinated programs, and no chance to align spending and revenue.

In the modern budget era, Congress has passed only joint budget resolutions. They do not become law but are meant to guide the credit allocation process and licensing commissions, which largely ignore them. Over the past quarter century, the budget resolution has morphed into a shell to advance budget reconciliation for partisan priorities.

Congress last passed all appropriation bills before the start of the new fiscal year in 1996 for fiscal year 1997. But the appropriations are divided into 12 bills ranging from $6 billion to $600 billion and collectively cover less than a third of expenses and no income.

Congress does not have budget goals or targets. States generally have budgetary rules for the annual balance which they are generally close to respecting. The federal government, however, has considerations that the states do not. It needs fiscal rules that ensure short-term political and economic stability while promoting long-term sustainable finances. It’s more complicated than “expenses equal income” every year, but, like in Switzerland, it can be done here too.

The debt limit is not an effective budget target, as explained by the GAO. Failure to take it seriously carries risks of default on the federal debt, a critical foundation of domestic and global financial markets and international trade. Yet the need to tackle the debt ceiling has been an important opportunity to enact fiscal correctives.

Congress never intended government shutdowns to be possible. Until the Carter administration, business continued at the status quo level without interruption until Congress passed new appropriations. The current risk of closures encourages the tightrope policy and leads to inflated credit envelopes. Most members cannot contribute, and a new omnibus only needs to be better than a stop, not better than current policies.

The federal control of the pounds is particularly rigorous. 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 job. Agencies scrambling to spend can make bad choices while wasting money and increasing debt.

Congress and presidents routinely abuse emergency authorities. Congress uses them to create loopholes in its own budget controls. Presidents are increasingly using them to distribute favors.

Finally, allocations come from budgets, but program design comes from authorizing laws.

Many programs are outdated, duplicative, give agencies too much leeway, don’t have up-to-date ownership permissions, or don’t meet current needs. Committee membership that reflects the full spectrum of party caucuses, as Chairman Kevin McCarthy (R-Calif.) has wisely pursued, promotes reaching deals in committees that are reasonably well aligned across of the institution. More carrots and sticks are needed.

Today’s poor results will not go away on their own or simply by winning more elections. Congress is dealing with broken systems.

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Congress can fix itself, but identifying problems is hard and crafting remedies is even harder. Fortunately, dedicated members, staff, and outside experts have developed real solutions over the past few years, including those mentioned here.

Upgrading the federal budget and authorizing tools can breathe new life into our democratic institutions and help Congress address other issues. With upgrades to federal systems in place, this time of year might even give taxpayers hope of getting a better deal from their government.

Kurt Couchman is a senior fiscal policy fellow at Americans for Prosperity.

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