Federal Budget Process Reform: Analysis of Five Reform Issues

Publication Date: July 2002

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Banking and finance

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Abstract:

This report examines several budget process reform options that have received prominent congressional consideration in recent years: an extension of the Budget Enforcement Act; a joint budget resolution; an emergency reserve fund; an automatic continuing resolution; and biennial budgeting. For each reform option, the analysis includes a summary of the procedural issues related to the reform option, the arguments that have been raised for and against the proposal, and the legislative history of past proposals.

First, key enforcement procedures under the Budget Enforcement Act (BEA) of 1990 expire at the end of FY2002 (i.e., September 30, 2002). These include the statutory caps on discretionary spending and the “pay-as-you-go” (PAYGO) requirement for direct spending and revenue legislation. Possible considerations related to an extension of these budget enforcement procedures include the time frame covered, possible categories for caps on discretionary spending, the types of automatic or permissible adjustments to the caps, and the application of the PAYGO requirement.

Second, a joint budget resolution would require the President’s signature, thereby formally and directly involving the President in congressional deliberations on the budget early in the process. Under the existing budget process, there is a concurrent resolution on the budget that represents an agreement between the House and Senate concerning overall budget policy. It is not presented to the President for his signature, and thus does not become law.

Third, proposals for an emergency reserve fund are intended to change the way Congress and the President budget for emergencies and other unanticipated situations. Instead of appropriating funds for such situations as the need arises, emergency reserve fund proposals would require Congress and the President to set aside money for such purposes in the budget, with the appropriation of such funds tied to meeting specific criteria of what constitutes an emergency.

Fourth, an automatic continuing resolution would provide an automatic source of funding for discretionary activities in the event one or more regular appropriations acts are not enacted by the start of a new fiscal year. This reform proposal is intended to prevent a shutdown of the federal government due to the expiration of funding.

Finally, biennial budgeting proposals would change the budget cycle to 2 years from one year. This reform has been discussed as a way of promoting better management of both Congress’s and the administration’s budgetary workload. Biennial budgeting proposals could involve multiyear authorizations, 2-year budget resolutions, 2-year appropriations, or some combination of the three.

This report will be updated to reflect changes in congressional concerns or actions.