- - Monday, December 9, 2013

ANALYSIS/OPINION:

The slim fiscal agreement lawmakers are expected to pass this week once again leaves unaddressed the bigger and more imperative tasks of budgeting. This continued delay, whatever its causes, invites two major hazards, neither of which can be ignored much longer.

First, the government’s fiscal outlook is hurtling toward critical territory. If left unchecked, current trends will lead to unprecedented levels of spending, deficits and debt that will smother the budget and suffocate the economy. Only a sustained commitment to spending control, exercised through a regular budget process, can divert the government from its current, disastrous course.

Second, the budgetary breakdown exacerbates the dysfunction in Congress more generally, further depleting its competence as the government’s policymaking institution. No single act would do more to revitalize Congress than the restoration of congressional budgeting.

These are the higher stakes — greater than any reshuffling of modest spending cuts — if Congress continues neglecting any semblance of a regular budget process.

Consider the fiscal problem first. Assuming a realistic course of government policies, total “programmatic” spending — excluding interest payments — will reach about 25 percent of gross domestic product (GDP) during the next 25 years, according to the Congressional Budget Office (CBO).

Whether Congress could tax enough to support such record spending — and whether taxpayers or the economy would tolerate it — is at best doubtful. In any case, it has never happened: In the past six decades, federal receipts exceeded 20 percent of GDP only once, in 2000 — and it lasted only a year. Even during World War II, tax revenue peaked at 20.9 percent of GDP. CBO’s more reasonable expectation is for revenues around 18 percent of GDP, “a little above the average during the past 40 years of 17.4 percent.”

The relentless excess of spending over revenue will generate chronic, deepening deficits. The resulting interest payments will push total spending far higher than at any time since 1945. Debt held by outside investors — formally termed “debt held by the public” — will mount, approaching twice the size of the entire economy just shortly after a child born today graduates from college.

The proxy budget procedures fabricated since 2011 have managed to produce some genuine savings, but only through the default of “sequestration” — the automatic, across-the-board spending cuts resulting from the Budget Control Act — which is not budgeting. Meanwhile, these ad hoc practices have failed to alter the government’s destabilizing fiscal pattern.

Any real solution will require several years of program reforms within a comprehensive fiscal policy. Yet without a systematic means of adopting and maintaining such reforms — a regular budget process — the government will continue plunging toward a fiscal collapse of its own making.

At the same time, Congress‘ neglect of budgeting reflects a profound failure to govern. It discards a principal means of exercising constitutional government — a crucial point of the congressional budget process created in 1974. The following are among the essential aims of budgeting:

Limiting government: The Constitution provides a framework for a limited government of delegated powers. The practice of budgeting implements that by limiting spending — one of the best measures of the size and scope of government, and of government’s burden on the economy.

Enhancing Congress‘ constitutional role: Budgeting — rooted in a distinctive vision of governing — is central to Congress‘ ability to establish national priorities and set a legislative agenda. A comprehensive budget process reinforces this fundamental role of the legislative branch by providing a mechanism for Congress to set fiscal policy and align spending with a vision of national priorities.

Restoring the balance of powers: Congress‘ failure to budget regularly and comprehensively accelerates a dangerous drift of power toward the executive. By asserting its fiscal policy through comprehensive budgeting, Congress promotes the balance of powers built into the constitutional design.

Controlling the administrative state: Failures in congressional budgeting inevitably lead to policymaking through the bureaucracy, including the so-called “independent agencies,” a growing, opaque fourth branch of government shielded from oversight. The budget process supports efforts to curtail this expansion of a domineering administrative state.

In short, regular budgeting is essential to restoring Congress as the governing body the Founders envisioned in Article 1 of the Constitution.

It is a bit too easy for lawmakers to blame their budget malpractice on a “broken” process. Still, existing procedures are indeed complex, arcane and time-consuming, and often produce unsatisfying results. The budget process does indeed need a major overhaul. Even then, however, budgeting will never be easy, especially for an enterprise that now spends more than $3.5 trillion a year.

Nevertheless, whatever it takes, Congress must restore a sustained and consistent practice of budgeting. Without it, the near- and long-term fiscal hazards facing the government will continue to worsen, becoming more difficult, if not impossible, to address.

Moreover, continued failure at budgeting will hasten the legislature’s decline as the policymaking institution of government. Beyond being merely dysfunctional, Congress could make itself irrelevant. Lawmakers would then prove the admonition “If you can’t budget, you can’t govern” — putting at risk the constitutional system itself.

Patrick Louis Knudsen is a visiting fellow at the Heritage Foundation.

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