Thank you, Maya and good morning – As an accountant, it is always nice to be surrounded by people who care about numbers as much as I do. Because as everyone in this room knows, you can lie about the numbers but the numbers never lie. And the numbers surrounding America’s taxes, spending and debt are telling an increasingly disturbing story about the nation’s fiscal situation.
OUR BUDGETS ARE BROKEN
After a decade of broken budgets, out of control spending and a surging national debt, it is time to confront one of the main sources of our country’s fiscal dysfunction: America’s broken budget process. When the fiscal year ends in twoweeks, the nation will have spent $590 billion more than it took in revenues. But Congress didn’t vote to approve this level of deficit spending in a comprehensive budget plan. America’s budget is on auto-pilot, and CBO tells us that we’re heading straight back to trillion-dollar deficits and unsustainable levels of debt.
DEFICITS LEAD TO MAMMOTH FEDERAL DEBT
America’s national debt recently climbed above $19 trillion, or “19 thousand billion.”
This is larger than the entire US economy. his level of debt will cost us $248 billion in interest payments this year, even with today’s historically low interest rates. CBO says these interest costs will grow to $712 billion per year in 2026, as interest rates rise and we pile up an additional $9 trillion in new debt.
Our next president, whoever it is, will confront a stark reality. These interest payments could soon crowd out government spending on critical areas like infrastructure, education, and national defense. And worse, decades of irresponsible overspending and skyrocketing debt will make it harder for our government to respond to national security, economic, natural disasters. Without action, our mammoth debt will prove to be an existential threat to our country.
BROKEN BUDGET PROCESS MAKES IT WORSE
America’s broken budget process has hobbled the ability of both the president and Congress to tame the nation’s out-of-control finances. Today, budgets from Congress and the President are increasingly ignored, leaving America without a long-term fiscal plan. Between 1974 and 1998, Congress never failed to pass a budget. As a result, America benefited from annual fiscal plans that were taken seriously by policymakers and set limits on how much Congress could tax and spend. But since 1998, Congress has failed to pass a budget more than half of the time, and the budgets it has passed have become increasingly meaningless and are eventually tossed aside.
It’s no big mystery how we got here. The biggest spending programs live on indefinitely outside of the annual budget process, without regular review, enforceable limits, or meaningful oversight. And the budget process has been increasingly used by both parties as a partisan exercise to force politically-difficult but meaningless votes, rather than to produce a governing document that controls future taxes and spending.
NEED A BUDGET THAT WORKS
As a result, there is little incentive for Congress to endure a politically perilous budget process each year that produces little benefit in terms of increasing fiscal discipline or good government. Instead, Congress has fallen into a regular cycle of crisis budgeting, which produces massive, budget-busting legislation that is enacted without debate under threat of government shutdown or some other manufactured emergency.
Reforming the budget process is not a cure-all for partisan gridlock in Washington or the country’s dire fiscal outlook. But process changes can reduce the number of flash points and cliffs that have relegated budget policy to a short-term, crisis-driven exercise incapable of administering an increasingly complex federal government.
BIPARTISAN IDEAS TO FIX THE BROKEN BUDGET PROCESS
The Senate Budget Committee has been working on bipartisan solutions that would improve the way Congress considers budget legislation.
Over the last year, the Committee has held a series public hearings with expert witnesses, consulted with budget practitioners from both sides of the aisle, and sought advice from its former chairmen. Members considered all ideas presented, even entertaining proposals to abolish the Budget Committee if it could be replaced by a better governance structure.
This year-long effort revealed what successful budget reform should look like. At a minimum, we need to fix budget procedures in the Senate so that the congressional budget is easier to pass and harder to ignore. Congress cannot continue to lurch from crisis to crisis without meaningful, long-term budget plans.
And new rules that encourage Congress to consider the annual appropriations measures under regular order should also be implemented. My proposal borrows an idea from the Wyoming state legislature. They set aside a certain number of months every other year to consider only budget legislation. If a member wants to consider a non-budget bill, they have to convince two-thirds of their colleagues to agree to take it up.
Procedural reforms alone will not fix our broken budget process. We need to revise the concepts and rules that determine what’s included in the budget and how the CBO and OMB estimate the cost of legislation. These outdated rules have not been comprehensively reviewed and updated since 1967, and often lead to confusing or inaccurate estimates. A new commission of experts should update our federal budget concepts for the 21st century.
Finally, the budget process should focus Congress and the President on the long-term fiscal health of our country. CBO’s long-term estimates show that estimated levels of future debt are unsustainable. But our budget process focuses attention on the short-term, annual funding crises rather than the mandatory spending that will steadily bankrupt the Treasury over the coming decades.
Congress should create long-term, enforceable fiscal targets with guideposts along the way that ensure revenues and spending are moving in the right direction. We’ll need to make some tough decisions on how to reach those fiscally-responsible targets. A BRAC-style commission, similar to what has been introduced by Senator Coats, would recommend policy options that will achieve those targets. And Congress must take up and consider those recommendations. This institution cannot continue to willfully ignore these serious threats to our country’s future prosperity. This is the major issue of our time, and substantive solutions should be considered on the floor of the House and Senate.
THE TIME TO ACT IS NOW
We must act now. The longer we wait, the bigger this problem will get. The bipartisan reforms the Senate Budget Committee is working on won’t solve all of Washington’s fiscal problems, but they represent the first step in untangling the backward budget process that continues to fail both taxpayers and lawmakers.