The Joint Committee heard a wide range of suggestions during its eight hearings on the budget process, which were held March 4 -- April 1, 1993. In total, there were 23 witnesses, including the Chairman and Ranking Member of the House Budget Committee, the Chairman of the House Appropriations Committee, nine other Representatives, four Senators, two former Members, and five experts, including the Director of the Congressional Budget Office. Some of these witnesses believed that the budget process was inherently complex and only required minor changes; others looked to simplify the process and suggested radical overhauls. SUMMARY OF BUDGET HEARINGS
Joint Committee Co-Chairman Representative Lee Hamilton opened this set of hearings by explaining that the budget issues, ``are highly complex. Indeed, this is one of the problems with the current budget process. Very few people can understand it . . . the budget process should allow ordinary people, to the extent possible, to discern who is responsible for budgetary policy.''16 Representative Wayne Allard later added, ``one of the major things we could do to make the budget process better is to make it simpler . . . so that it is more easily understood.''17
However, Dr. Robert D. Reischauer, Director of the Congressional Budget Office, disagreed by explaining, ``This is a complex process because it is trying to control deficits which are caused by a complex set of factors and the interaction of the Executive Branch, the Congress, the economy, the legal system, and all sorts of other elements . . . Because this body is so complex and it has so many ways of achieving a desirable political objective, all these little bits and pieces . . . have to be added onto the budget process if you are saying that the budget process has as a role [in] reducing the deficit.''18
The Joint Committee heard from both critics and defenders of the current system. Defenders included Representative Martin Sabo, Chairman of the House Budget Committee, who blamed ``lack of political agreement'' as the problem with the budget process and not the procedure itself.19 Another advocate of the current system was Dr. Reischauer, who suggested that the process only needs minor changes. He stated, ``the process we have now would look a lot better if a $300 billion deficit was not staring us in the face. But we should also keep in mind that the process is not responsible for that $300 billion deficit. In fact, I would argue that it has limited the size of that deficit.''20
In addition to these general statements of criticism or support, witnesses proposed specific modifications to the budget system. Among the most often addressed topics were 2-year budget resolutions and authorizations, 2-year appropriations, elimination of a layer in the budget process, developing a leadership committee, waiving budget rules, sunset legislation, baseline budgeting, line-item veto, and a balanced-budget constitutional amendment.
Two-Year Budget Resolutions and Authorizations
Biennial budgeting, including 2-year budget resolution and 2-year authorization, was proposed as a time-saving method by Joint Committee Co-Chairman Senator David Boren, Senator William Roth, Ranking Minority Member of the Senate Governmental Affairs Committee, and former Representative Willis Gradison, former Vice-Chairman of the Joint Committee. Supporters argued that biennial budgeting would permit the authorizing committees to spend more time on oversight, and noted that many programs or agencies are funded without annual authorization bills.
One proposed benefit of multi-year budgeting is that the authorization would be in place before the appropriations process got under way, according to both Representative William Natcher, Chairman of the House Appropriations Committee, and Representative Sabo. Speaking in support of biennial budgeting, Joint Committee Vice-Chairman Senator Pete Domenici said, ``I would suggest that we also focus a little attention on how we might avoid duplication of effort or repetition of legislative events around here . . . ''21
Although most witnesses were in favor of multi-year budgeting, some opposed the concept. As argued by Representative Bob Walker, Ranking Minority Member of the House Science, Space and Technology Committee, and Representative George Brown, Jr., Chairman of the House Science, Space and Technology Committee, multi-year budgeting would further decrease the participation of authorizers in the annual budget process, where they have already lost authority. In addition, Representative Walker pointed out that new programs would have to wait even longer to get started if they are proposed in a non-authorization year. Dr. Reischauer expressed concern about multi-year budgeting, and stated it might, ``make agreements more difficult to achieve since the stakes would be higher. Furthermore, as one who knows how uncertain budget estimates are, even for 1-year out, I shudder at the thought of budgeting for a 2-year time period, especially when the budget is in severe disequilibrium.''22
Most witnesses who favored multi-year authorizations also favored multi-year appropriations. Advocates argued that appropriations do not substantially change from one year to the next and, thus, a great deal of time is currently wasted on little result. Former Vice-President Walter Mondale remarked, ``We talked about . . . 2-year appropriations. I think that makes sense. I would bet that 85 or 90 percent of an appropriations bill does not change between Administrations, regardless of change in policy. The heart of the appropriation remains essentially the same. A President comes in and changes policy in certain ways, but you do that through an amendment and so on, and maybe [biennial appropriations will] save a lot of Congress' time.''23
Biennial appropriators might also reduce spending. Before each new fiscal year, Senator Roth explained, agencies and programs try to deplete all of their funds so it will not appear that the agency or program could handle a budget cut. As Senator Roth stated, federal agencies ``will no longer rush to spend dollars at the end of the fiscal year as the 2-year budget . . . [will allow] for carryover. This will help eliminate wasteful end-of-year practices.''24
In addition, proponents suggested that 2-year appropriations would eliminate debating the same issues year after year and allow more time to be spent on oversight. As Vice-Chairman Domenici suggested, ``I think we are charged with doing things too frequently on the same subject matter . . . I really don't think we ought to have an appropriations every year in their totality. I think there is reason to have most appropriations done in one year and have it suffice for two, and then having sessions of Congress with oversight in the second year.''25
Opponents, such as Dr. Reischauer, Representative Sabo, and Representative Natcher, warned that the multi-year appropriations process would be more lengthy and contentious the first year because the fiscal stakes would be higher. Furthermore, the second year would be spent on supplementals. In addition, they argued that the country is in difficult economic times, and the money Congress appropriates must be watched more often than once a year. Finally, Senator Robert Byrd, Chairman of the Senate Appropriations Committee, asserted that 2-year appropriations would not save any time. ``[W]e don't spend an inordinate amount of the Senate's time on the 13 appropriations bills and supplementals; we get those done expeditiously,'' stated Senator Byrd.26
Elimination of a Layer in the Budget Process
Some witnesses, including Senator Nancy Kassebaum, Ranking Minority Member of the Senate Labor and Human Resources Committee, and Representative John Kasich, Ranking Minority Member of the House Budget Committee, testified in favor of eliminating one of the three stages of the budget process by combining the authorization-appropriations process into one step. Currently, spending issues are debated several different times in the House and Senate: during consideration of (1) the budget resolution, (2) authorizations, and (3) appropriations. Senator Kassebaum, the leading proponent of deleting a step in the budget process, said that this process would eliminate repetition in the system and help the public better understand the budget process. Former Senator Henry Bellmon suggested that in any revamped ``system the House and Senate should combine authorizing committees and appropriation subcommittees. You put the two together. Authorizing committees, in my experience, have minimal spending restraint. It is often the case that the authorizing committees simply put in the language saying they authorize whatever is required. It is obvious that the authorizing committees have very little concept about what is available to spend. And by putting those together, that awareness should be enhanced.''27
Although some critics argued that a similar type of process was unsuccessfully used in the past, Senator Kassebaum responded (and Representative Walker agreed), ``times have changed, and we need to look at a committee restructuring so that we can become more effective in our work here and more accountable.''28
Opponents, including Senator Byrd and Senator Harry Reid, Chairman of the Senate Appropriations Subcommittee on the Legislative Branch, claimed that combining authorizations and appropriations would remove any important fiscal check in the legislative system. Representative Natcher advised, ``In almost every instance where these two functions have been combined, program advocacy wins out over budget control. The proof of this is our mandatory spending budget which has not been controlled as well as it should have been.''29 History shows, Senator Byrd explained, that concentrating a great deal of power in one committee may hurt the budget process and further aggravate the situation. Finally, Vice-Chairman Domenici suggested, ``that history brought the Appropriations Committee into being and we ought not be too quick to give it back to the authorizers. It came into existence because we found out we didn't want all our eggs in one basket.''30
Developing a Leadership Committee
A leadership committee was also proposed by Senator Kassebaum either as part of a two-step budget process or as a replacement for the Budget Committees. The committee would be composed of congressional leadership and the chairmen and ranking members of authorizing committees, along with additional Members who would balance the majority ratio. The intended advantage, explained Senator Kassebaum, is a more serious, up-front decision on spending and receipts. Directives of the leadership committee would then be carried out by the authorizing committees. Former Senator Bellmon also suggested that a leadership committee would ``give the process more clout.''31
Opponents claimed, however, that a leadership committee would restrict the number of participants in the budget process and concentrate too much power for a select few. While not directly opposed to the idea of a leadership committee, Representative Walker expressed concern about limiting the participants in the process. Moreover, as Representative Bob Michel, House Minority Leader, explained, the leadership has been too busy to attend the meetings of committees to which they have been appointed and would probably be unable to devote the amount of time necessary to the budget process.
One of the most often heard complaints was how often budget rules are waived. Waivers tend to blur, for instance, the distinctions between authorizations and appropriations. According to the rules of both the House and Senate, the authorization committees legislate, while the appropriations committees recommend funding, in that sequence. However, as explained by Representative Walker, appropriations bills are often passed before or without any authorization; appropriators may also include authorizing legislation. Walker was particularly concerned about the actions of appropriators. He pointed out that ``there are Members in the House who supposedly have jurisdiction in an area and have not passed authorization bills for years, and years, and years, because that has been wrenched away from them in the appropriations process.''32
While some witnesses stated there are too many exceptions to the House and Senate Rules, others noted that budget waivers are indispensable. In the House, waiving the rules is accomplished through the House Rules Committee. Minority Leader Michel stated, ``It has gotten to the point that the House Rules Committee provides blanket waivers and doesn't bother to specify which points of order are being violated.''33 However, other witnesses stressed the importance of waivers in the functioning of the government. Representative Sabo explained, ``many times we have started . . . appropriation bills in the House consistent with the House budget resolution, but before [the authorization] conference report has been adopted, so you need waivers to proceed.''34 In addition, Senator Ted Stevens, Ranking Minority Member of the Senate Rules Committee, noted, ``If they want to create a point of order against nonauthorized appropriations, it would bring the Government to a halt very quickly with the delays that occur in the legislative process.''35
Certain authorizers, including Representative Brown, expressed concern about the Senate Appropriations Committee. As Representative Brown explained, Senate Appropriations does not have an exclusive membership as does the House Appropriations Committee; some Senators chair both an authorizing committee and its relevant appropriations subcommittee. Since it is less complicated to legislate in appropriations bills because Members can avoid amendments and debate, and need not work closely with the President, legislation often appears in the Senate appropriations bills, said Representative Brown. This practice not only excludes the authorizers in both the House and the Senate from the policymaking process, it also causes problems when Members go to conference. As Representative Thomas Foley, Speaker of the House, explained, ``there is a great deal of concern on the House side, particularly among those who serve on authorizing committees, that the character of conference jurisdiction between the House and Senate often presents some problems . . . it is difficult sometimes to . . . [move authorizations through] the Senate because of the tendency of the Senate to move these questions through the appropriations process.''36
Appropriators, such as Representative Natcher, are concerned about the authorizing committees. As Representative Natcher described the situation, and Co-Chairman Boren agreed, authorizing committee chairmen often look to appropriations chairmen to include legislation in appropriations bills because the authorizers could not win enactment of their measures. While it is an appropriator's prerogative to decline such requests of the authorizers, it is more difficult to do so when there might be a tight vote on the appropriations bill and the authorization amendment would guarantee votes.
There were proposals for restoring the distinction between authorization and appropriations. Upholding the budget rules was a common recommendation. As Co-Chairman Boren stated, ``If we were to really return to a rule and enforced a rule . . . without exception, unless there was some emergency suspension of the rules for an authorizing committee that has failed to function, . . . would that then not be a system that might work in a way that would provide even greater budgetary constraint than we have now . . . ''37 For the House, Representative Jim Kolbe suggested that there be a requirement of three-fifths to waive the rules, in order to show the same ``fiscal discipline'' as in the Senate.38 Representative Brown proposed that waivers be permitted ``only in extraordinary circumstances and only with the concurrence of the authorizing committee.''39 Representative Natcher testified that no change is necessary as legislation in appropriations will naturally be reduced because Congress and the President are currently of the same party and, thus, authorization bills are more likely to be passed by Congress and signed into law by the President.
Representative Natcher stated that mandatory or entitlement spending accounts for more than one half of the budget and is rapidly growing. These funds include, among others, Social Security, Medicaid, and Medicare. As Representative John Spratt, Chairman of the House Governmental Operations Subcommittee on Commerce, Consumer, and Monetary Affairs, explained, these programs are more costly when the country is in difficult economic times. As Dr. Reischauer remarked, ``The nature of entitlements, remember, is to provide the beneficiaries with some sort of assurance that they can count on the benefits that we're talking about, whether that is for retired individuals, or for individuals who are planting their crops, or low income people, or people who might become low income. These programs are entitlements because as a matter of public policy you don't want to jerk around retirees' benefits greatly from year to year when they have no ability to respond.''40
Although mandatory spending continues to increase faster than discretionary spending, Representative Natcher contended that many mandatory spending programs are no longer necessary but are they untouchable because of their special status. Joint Committee Vice-Chairman Representative David Dreier cautioned that addressing mandatory spending ``could be interpreted by some who are beneficiaries of these entitlements as an attack on those entitlements;'' however, it must be done in order to reduce the $4 trillion national debt.41
Most witnesses who testified in favor of greater control of mandatory spending suggested that these programs be reviewed every few years. If the programs are still deemed worthwhile, proponents argued, they will be renewed. Vice-Chairman Drier, Dr. Reischauer, and others argued that Congress needs more opportunities for spending choices, particularly in times of economic recession, given that much of government spending is tied up in mandatory programs. In the opinion of Representative Charles Stenholm, Chairman of the House Agriculture Subcommittee on Department Operations and Nutrition, sunsetting entitlements ``would go far in helping us to understand what our choices are.''42 Senator Kassebaum added, ``We all recognize that entitlements . . . [have] sapped our ability to provide, I think, the appropriate monitoring and oversight of programs that need to continually be reviewed.''43
Other proposals were suggested to require periodic reviews of entitlements. Representative Stenholm suggested, ``that every program have a definite target date . . . [or it should] cease to be, instead of the process we now have in which everything goes on unless we find the courage to end it.''44 In addition, Co-Chairman Boren recommended that mandatory programs be addressed ``in the budget resolution [with the stipulation] that they not grow faster than the population growth or the cost of living without us looking at it and making some exception.''45 Former Senator Bellmon suggested, ``Only interest should be exempt from expenditure limits and sequestration. Expenditure limits should be adjusted annually for changes in unemployment, inflation, and case loads.''46
A ``baseline'' is a projection of future expenditures determined by expected inflation and mandated workload changes. These baseline projections are then used for the preparation of budget resolutions. Several witnesses, including Senator Richard Lugar, Ranking Minority Member on the Senate Agriculture, Nutrition, and Forestry Committee, Representative Stenholm and Representative Kasich, considered this process to be very deceiving to the public; citizens read about financial reductions in programs when, in reality, the ``cuts'' are from the projected baseline increase rather than from the previous year's spending level.
In addition, opponents of baseline budgeting, including Representative Stenholm, argued that these projections cause a larger escalation in spending than is necessary. If the committees begin with the previous year's budget total, opponents believe there is less likely to be an unnecessary increase in program expenditures.
Representative Sabo pointed out that entitlements also automatically receive cost of living increases. However, there is already a substantial difference between the automatic increase given to entitlements and that figured in for discretionary spending. Omitting baseline budgeting for discretionary spending, Representative Sabo stated, ``would skew the whole process even more towards the entitlements if . . . [we] could not measure any discretionary baselines by inflation adjustments. They would look frozen in place, and all the entitlements -- the baseline would constantly be moving.''47
The line-item veto was proposed as a method of eliminating wasteful spending by many who testified before the Joint Committee. For example, former Senator Bellmon advised, ``The President should not be forced to choose between vetoing massive appropriations bills, providing funding for whole departments and agencies . . . or signing into law appropriations projects he considers to be wasteful.''48 Proponents also argued that the President does not have the narrow constituency that a Representative or Senator has; thus, as Senator Lugar suggested, the President would be more objective on which items only serve a small portion of the public and are wasteful spending.
Dr. Reischauer, however, warned that the line-item veto might violate the separation of powers; it would give the President too much power over Congress and do little to reduce spending. Likewise, Representative Bill Orton stated, ``I think we cannot pass a line item veto which gives the President the ability to veto . . . item-by-item . . . [and then] we have to come back and override with [a] two-thirds vote. It gives him the power of the purse. And I legitimately am concerned about giving the President that much power. We can barely get 218 votes on many of these things. If you have got to get two-thirds, you can't do it. So the President would control the purse. I think that is improper no matter who the President, no matter what the party.''49
Senator Stevens expressed concern over Congress' inability to respond to emergencies if there was a line-item veto. Former Representative Gradison suggested that the line-item veto would substantially alter the process; he warned that spending might even increase. As Representative David Obey, Chairman of the House Appropriations Subcommittee on Foreign Operations, Export Financing, and Related Programs, explained, `` . . . I would ask people if they can tell me what is the most that any Congress since 1948 has ever changed any President's budget? The answer is 3 percent. I think that 3 percent is the difference between having a President and a king.''50
It was argued that under a line-item veto, Congress would not make tough spending decisions, deferring to the president to cut popular programs. Congress has been able to check itself through the rescission process in the past, Representative Natcher said, and there is no need for the executive branch to get involved. Senator Reid added, ``the line item veto is just, in effect, a way for us to try to not solve some of the more difficult problems that face us like we're spending more money than we bring in.''51
Representative Stenholm suggested a modified line-item veto, which would allow the President, after signing an appropriations bill, to give Congress a proposed rescission list. Congress then would vote by a simple majority on whether or not to approve the entire rescission list. A modified version of the line-item veto would avoid any constitutionality questions involving the separation of powers, Stenholm testified.
Balanced-Budget Constitutional Amendment
In a time when balancing the budget is a main priority for the public, a balanced-budget amendment was endorsed by many witnesses, including Representative Bill Emerson, Ranking Minority Member of the House Agriculture Subcommittee on General Farm Commodities, and Representative Stenholm. Advocates argued that amending the Constitution to require a balanced-budget amendment would make it impossible for Congress to procrastinate on reducing the deficit. In the opinion of Representative Stenholm, ``the best starting place for budget reform is a constitutional amendment requiring a balanced-budget. Over the years, we have experienced a changing cast of characters, new statutes, summit agreements, and all sorts of remedies. In each case, we have failed to offer anything but false hopes. Given this long-term trend, a constitutional solution beyond procedural tinkering is required.''52
Nevertheless, other witnesses, including Dr. Reischauer, testified that Congress needs greater budget flexibility for situations such as the cold war or the Gulf War. Dr. Reischauer said, ``budget procedures are much better at enforcing compliance with previous decisions than at forcing predetermined goals.''53 A predetermined goal set by a balanced-budget amendment, stated Dr. Reischauer, would not have the flexibility to allow for economic emergencies, such as a recession or natural disaster.
FOOTNOTES16 Joint Committee on the Organization of Congress. Budget Process, Hearing. March 4, 1993. p. 1.
17 Ibid. March 4, 1993. p. 14.
18 Ibid. March 4, 1993. pp. 14-15.
19 Ibid. March 25, 1993. p. 2.
20 Ibid. March 4, 1993. p. 6.
21 Joint Committee. Committee Structure, Hearing. April 20, 1993. p. 30.
22 Joint Committee. Budget Process, Hearing. March 4, 1993. p. 5.
23 Joint Committee. Testimony of Honorable Walter F. Mondale, Hearing. July 1, 1993. pp. 24-25.
24 Joint Committee. Budget Process, Hearing. March 16, 1993. p. 33.
25 Joint Committee. Operations of the Congress, Hearing. February 2, 1993. p. 25.
26 Ibid. February 2, 1993. p. 26.
27 Joint Committee. Budget Process, Hearing. March 30, 1993. p. 22.
28 Ibid. March 16, 1993. p. 2.
29 Ibid. March 11, 1993. p. 4.
30 Joint Committee. Operations of the Congress, Hearing. January 26, 1993. p. 78.
31 Joint Committee. Budget Process, Hearing. March 30, 1993. p. 22.
32 Ibid. March 16, 1993. p. 17.
33 Ibid. March 30, 1993. p. 3.
34 Ibid. March 25, 1993. p. 5.
35 Ibid. March 11, 1993. p. 15.
36 Joint Committee. Operations of the Congress, Hearing. January 26, 1993. p. 12.
37 Joint Committee. Budget Process, Hearing. March 16, 1993. p. 19.
38 Ibid. March 18, 1993. p. 28.
39 Ibid. March 16, 1993. p. 25.
40 Ibid. March 4, 1993. pp. 11-12.
41 Ibid. March 11, 1993. pp. 8-9.
42 Ibid. March 18, 1993. pp. 2-3.
43 Ibid. March 16, 1993. p. 3.
44 Ibid. March 18, 1993. p. 3.
45 Ibid. March 11, 1993. p. 12.
46 Ibid. March 30, 1993. p. 23.
47 Ibid. March 25, 1993. p. 8.
48 Ibid. March 30, 1993. p. 22.
49 Ibid. March 18, 1993. p. 50.
50 Ibid. March 11, 1993. pp. 20-21.
51 Ibid. March 11, 1993. p. 18.
52 Ibid. March 18, 1993. p. 2.
53 Ibid. March 4, 1993. p. 3.