NCPA - National Center for Policy Analysis

USING BUDGET TRIGGERS TO CONSTRAIN GROWTH

February 27, 2006

To constrain growth in mandatory programs, Congress should consider incorporating budget triggers -- predetermined spending or revenue thresholds -- that would signal the need for action, says the United States Government Accountability Office (GAO).

Opponents worry that the effectiveness of the triggers will be either circumvented or ignored, but proponents argue that mandatory spending is currently unconstrained and a mechanism that causes decision makers to at least periodically reevaluate spending is better than allowing spending to rise unchecked, says GAO:

  • A trigger could result in a "hard" or automatic response, unless Congress and the President acted to override or alter it.
  • Alternatively, reaching a trigger could require a "soft" response, such as a report on the causes of the overage, development of a plan to address it or an explicit and formal decision to accept or reject a proposed action or increase.
  • By identifying significant increases in the spending path of a mandatory program relatively early and acting to constrain it, Congress may avert larger financial challenges in the future.

However, both in establishing triggers and in designing the subsequent responses, the integrity of program goals needs to be preserved. In addition, tax expenditures also operate like mandatory programs but do not compete in the annual appropriations process, says GAO.

To understand growth in mandatory spending, GAO examined seven case study accounts. They categorized the reasons provided by agencies for differences between estimated and actual outlays during a five-year period as the result of legislative, economic or technical changes. Out of the 40 differences, subsequent economic changes were the primary reason for seven, technical changes for 13 and legislation changes for 19; triggers would help reduce these figures, says GAO.

Source: Susan J. Irving, "Using Budget Triggers to Constrain Growth," Government Accountability Office, GAO-06-276, January 2006.

For text:

http://www.gao.gov/new.items/d06276.pdf

 

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