Attachment – The Budget and Appropriations Process

The federal budget process is broken. It must be replaced with a new budget process that allows for agreement on broad issues and a continuation of government while the details and controversies at the programmatic level are worked out. The solution must include incentives to keep the process moving.  To achieve compromise earlier, we recommend that a permanent Joint Budget Committee draft the Joint Budget Resolution (JBR) to be enacted by a date certain to avoid reverting to the budget caps. This will provide both expedited process and likely early involvement of the White House, who would release detailed appropriation requests only after the JBR is passed. A two-year budget process is suggested to assure the process is completed on time.

The JBR would trigger automatic appropriations at the beginning of the fiscal year, with detailed appropriation marks at the same proportionate levels as the current services budget. If no JBR is passed, then the marks in the Budget Control Act of 2011 would have the same force, allowing automatic appropriations in the same manner. This tie to the BCA is not meant to be used and it should not be if the Congress operates bipartisanly under effective leadership. If that leadership breaks down, however, the government absolutely must have a backup procedure.

As the Committee knows, the BCA marks were devised to avoid a self-inflicted debt limit crisis and to conform to baseline requirements to fund making the tax cuts in the Economic Growth and Tax Relief Reconciliation Act of 2001 and the Jobs and Growth Tax Relief Reconciliation Act of 2003 permanent for all but the richest 2% of households. There was no appetite for making detailed tax and spending fixes that would raise revenue from wealthier taxpayers. A quirk in baseline calculations allowed the prior tax cuts to expire and be reinstated for the bottom 98% under the American Taxpayer Relief Act of 2012. In 2017, the Tax Cut and Jobs Act was passed with no concern for long term balance, which was reinforced by the Balanced Budget Act of 2018.  The TCJA expires, in part, in 2025. BBA 2018 expires at the end of FY 2019.

JSC Co-Chairman Lowery commented in her opening statement on November 15th that the Budget Control Act of 2011 marks are too low and that this leads to the inability to pass appropriations bills. Automatic appropriations would end this difficulty and spur action by both parties. Because BCA levels are too low, the marks in the Act could be increased by the legislation amending the process itself. These marks should be realistic rather than punitive. Part of any reform must include new caps be set through 2030 so that budget passage is assured through the next presidential term.