{"id":16892,"date":"2025-06-18T22:39:17","date_gmt":"2025-06-18T22:39:17","guid":{"rendered":"https:\/\/finderica.com\/?p=16892"},"modified":"2025-06-18T22:39:17","modified_gmt":"2025-06-18T22:39:17","slug":"its-time-to-repeal-congress-budget-rules-and-start-over","status":"publish","type":"post","link":"https:\/\/finderica.com\/?p=16892","title":{"rendered":"It\u2019s Time To Repeal Congress\u2019 Budget Rules And Start Over"},"content":{"rendered":"\n
\n
\n
\"US<\/div>
<\/p>\n

WASHINGTON, DC – NOVEMBER 16: The Senate and the Dome of the U.S. Capitol Building is seen on … More<\/span> Wednesday, Nov. 16, 2023 in Washington, DC. (Kent Nishimura \/ Los Angeles Times via Getty Images)<\/span><\/p>\n

<\/fbs-accordion>Los Angeles Times via Getty Images<\/small><\/figcaption><\/figure>\n

It is time to repeal the half-century old Budget and Impoundment Control Act, which structures the way Congress writes its fiscal plans.<\/p>\n

Some elements of the \u201974 Act are worth preserving. The Congressional Budget Office was an essential invention, despite the criticism it currently faces.<\/a> And Congress needs a mechanism to maintain a balance of fiscal power with the executive branch, even if it has been ceding much of that authority recently.<\/p>\n

But the \u201974 law not only has failed to slow spending and tax cuts, it has enabled them. Because Congress has so distorted the law, deficits likely are vastly worse than they would have been without it.<\/p>\n

The 1974 act was written to accomplish two goals: Centralizing the process of budget-making and curbing the ability of the president to impound, or refuse to spend, money that Congress appropriates. The overall idea was to give Capitol Hill the tools it needed to be fiscally responsible and help Congress retake control of the federal purse strings.<\/p>\n

Unfortunately, in recent years, the budget act has failed spectacularly.<\/p>\n

The Track Record<\/h2>\n

In 1974, the federal deficit was less than a rounding error today<\/a>, about $6 billion or 0.4% of gross domestic product. The public debt was about $344 billion, or 23% of the economy.<\/p>\n

By 2024, the annual deficit had ballooned to $1.8 trillion, or 6.4% of GDP. And the public debt exploded to $28 trillion, equal to nearly 100% of GDP.<\/p>\n

<\/p>\n

Federal debt as a share of the economy<\/p>\n

<\/fbs-accordion>Tax Policy Center<\/small><\/figcaption><\/figure>\n

Of course, the law didn\u2019t do this. Congress did. But it is fair to say it would not have happened without the \u201974 law \u2014 largely because lawmakers, often responding to their voters, gradually turned the act on its head.<\/p>\n

The law was intended to create a strict legislative process<\/a> to approve tax cuts and most spending. It established budget committees to set overall tax and spending targets and enforce fiscal discipline, and it created the Congressional Budget Office to not only track the fiscal consequences of legislation but make them transparent.<\/p>\n

In what has become the most significant change, Congress adopted the complex process known as reconciliation<\/a> that made it possible for the Senate to pass budgets with a simple majority rather than the 60 votes that has become standard.<\/p>\n

Turning The Process Inside-Out<\/h2>\n

But almost none of it has worked out as expected.<\/p>\n

The budget committees have become increasingly passive and controlled by party leadership, and it has been years since they\u2019ve spoken out against fiscal irresponsibility. The anti-impoundment language is routinely ignored by President Donald Trump, the overall spending targets are months late or never agreed to at all, and the lawmakers often pass fiscal bills without even waiting for a CBO score.<\/p>\n

Worst of all, Congress has turned the reconciliation process inside-out. What was designed to make it easier for the Senate to cut spending and raise taxes instead has become a vehicle to do exactly the opposite. And it has further entrenched the bitter partisanship that not only has infected Washington but led to bigger and bigger deficits.<\/p>\n

The Results<\/h2>\n

Budget-busting bills like President George W. Bush\u2019s 2001 and 2003 tax cuts, which ended a brief era of fiscal surplus; the 2017 Tax Cuts and Jobs Act; the 2023 American Rescue Plan Act; the 2023 Inflation Reduction Act, and other big, highly partisan fiscal measures never would have become law without the reconciliation process created by the \u201974 Act. None of those bills received the 60 votes ordinarily needed to pass the Senate and only one received more than 51.<\/p>\n

And soon a huge 2025 budget bill will add trillions of dollars more to deficits<\/a> in the same way, aided by a law that was supposed to limit the flow of red ink.<\/p>\n

Congress had better luck using the \u201974 Act to block presidents from refusing to spend money it approved \u2014 until this year when Trump repeatedly challenged Congress\u2019 power of the purse by abolishing or restructuring entire agencies and by withholding funds for legislated initiatives throughout government.<\/p>\n

The biggest change to the law was passage of the Byrd Rule<\/a> in 1985, which, among other things, limited lawmakers\u2019 ability to add to deficits after a decade.<\/p>\n

Unfortunately, that only encouraged Congress to use more gimmicks aimed at making budgets look like they don\u2019t increase future deficits, when in fact they do. For instance, the House\u2019s just-passed budget bill phases out tax cuts on paper, even though lawmakers are widely expected to extend them.<\/p>\n

A Matter Of Will, Not Process<\/h2>\n

Thirty-five years ago, Rudy Penner, a former CBO director and my former colleague at TPC, warned the Budget Act and subsequent changes <\/a>created \u201ca process that appears orderly on paper [but] has now led to extremely disorderly and dishonest results.\u201d<\/p>\n

In 2015, Lou Fisher, a long-time congressional staffer<\/a> who helped write both the 1974 law and many efforts to fix it, wrote, \u201cAccountability of elected officials, instead of being strengthened, declined.\u201d<\/p>\n

Fortunately, there are alternatives. Brookings Institution scholar Phillip Joyce has some good suggestions here<\/a>. If Congress ever works up the courage to tackle the deficit, reforms such as these may be helpful. But the lesson of the \u201974 Act is clear: Absent congressional will, lawmakers inevitably will find ways to manipulate their own rules to make deficits even worse.<\/p>\n<\/div>\n

Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

WASHINGTON, DC – NOVEMBER 16: The Senate and the Dome of the U.S. Capitol Building is seen on … More Wednesday, Nov. 16, 2023 in Washington, DC. (Kent Nishimura \/ Los Angeles Times via Getty Images) Los Angeles Times via Getty Images It is time to repeal the half-century old Budget and Impoundment Control Act,<\/p>\n","protected":false},"author":1,"featured_media":16893,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[196],"tags":[459,2228,3705,548,410,205],"class_list":{"0":"post-16892","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-finance-news","8":"tag-budget","9":"tag-congress","10":"tag-repeal","11":"tag-rules","12":"tag-start","13":"tag-time"},"_links":{"self":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/16892","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16892"}],"version-history":[{"count":0,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/posts\/16892\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=\/wp\/v2\/media\/16893"}],"wp:attachment":[{"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16892"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16892"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/finderica.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16892"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}