Options to Restore More Discretion to the Federal Budget

The federal budget process increasingly fails to relate to changes in the economy, the environment, or the demands of voters—let alone to contain debt.

This failure is due largely to a phenomenon generally unknown in past budgets: the extent to which current and future budgets are set in law by the policy decisions of previous Congresses.

Improving budgetary processes and outcomes requires restoring congressional discretion over budgetary policy. Key to this is placing entitlements and tax expenditures on a more even footing with discretionary spending.

Greater discretion does not imply that government must be larger or smaller or that programs should not grow or taxes be cut. It simply means that spending and tax schedules should be aligned so that revenues are enough to pay bills. It also means that future voters and elected officials should not be locked into contracts that usurp their ability to decide among future opportunities and needs that cannot possibly be fully predicted beforehand.

More programs, including tax expenditures, should be subjected to periodic review and reauthorization, with policy decisions debated frequently and rationally, and should require Congress’s explicit vote to continue growing.

Carefully designed triggers should be employed to slow the growth of entitlements and tax expenditures, reconciliation should be limited to policy changes that reduce deficits, and the budget window should be lengthened and more informative budget displays adopted to produce a clearer view of long-run budget problems.

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