NCPA - National Center for Policy Analysis

Joint Economic Committee Study: Budget Process Encourages Spending

May 1, 1997

The complexity of the federal budget process has encouraged the growth of government by reducing the accountability of individual policy makers, concludes a recent Joint Economic Committee (JEC) report.

The 1974 Congressional Budget and Impoundment Control Act was intended to gain "control" of the budget by creating a Budget Committee in each House of Congress to act as a focal point for setting spending targets in broad functional categories.

But the Budget Act and subsequent amendments have made it difficult to identify responsible individuals, key votes or actual policy directions at the program or committee level, says the JEC.

  • Spending policy is now made in three distinct phases -- budget, authorization and appropriation -- each requiring a separate set of hearings, reports, procedures and votes.
  • Thus members of Congress can vote to control spending in the budget phase and later vote for increased appropriations.
  • Since the 15 spending committees in the House and 16 in the Senate have no responsibility for overall budget levels, they tend to focus on funding programs for their individual constituencies.

Bias in favor of spending has also been increased by the requirement that "current policy" baselines be used as the starting point for each new budget.

  • Current policy includes increases for program growth from inflation, increased numbers of program beneficiaries and increased use of services by current beneficiaries.
  • Thus any proposed spending levels below current policy are perceived as program reductions, allowing some policymakers to claim savings while permitting others to claim increases.

In addition, the Budget Enforcement Act of 1990 -- in force through fiscal year 1998 -- limits options with respect to reducing taxes because it precludes using spending cuts in discretionary programs to offset tax cuts. Thus there is a built-in bias in favor of higher levels of spending and taxation in the current budget process.

Source: Hayden G. Bryan, "Budget Process Reform," Joint Economic Committee Report, May 1997.

 

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