Congressional Budget Reform: The Unanticipated Implications for Federal Policy Making

Abstract

The Congressional Budget and Impoundment Control Act of 1974, the landmark piece of legislation that created the congressional process, is now more than 20 years old. The process has undergone substantial revisions since its inception, largely the result of a change in the focus of the process from priority setting to controlling the size of the federal and federal deficits. Many of these changes have had consequences (some of them unanticipated) that have fundamentally changed federal policy making. In this article, I review the original purposes of the Budget Act and discuss how intentional and unintentional changes have affected its role in the policy-making system. I concentrate on three aspects of these changes - the unanticipated importance of reconciliation as a device for centralizing authority in the Congress and promoting major policy shifts, the change from a norm of budgetary neutrality to one of policy bias, and the increasing use of information for enforcement purposes - what I call the ascendancy of scorekeeping - sometimes contributing to distorted policy outcomes. The Congressional Budget Process - Original and Subsequent Aims The process of developing a was relatively uncoordinated in both the legislative and executive branches before 1921, when the Budget and Accounting Act made the President a central player in the process by requiring that he submit a unified to the Congress. This gave the executive branch the responsibility for defining the structure and the details of the federal budget. Prior to the passage of the Congressional Budget Act of 1974 (c)urious and uncoordinated legislative procedures hid the implicit tradeoffs involved in fiscal legislation from both the Congress and the public, and there was a chronic failure to consider revenues and expenditures in relation to each (Stith, 1988; 515). Early each year, the President proposed a budget, which was considered by the Congress, primarily through the fragmented or uncoordinated committee process. The congressional budget was the cumulative (and somewhat accidental) result of legislation affecting annual discretionary appropriations, mandatory programs, and revenues. The Congress never examined or voted on overall spending or revenues or the appropriate stance of fiscal policy. Many members of Congress and observers of congressional budgeting were concerned that this failure to consider the whole was leading to irresponsible results, particularly given the increase in the proportion of the financed outside of the appropriations process - so-called backdoor spending. Irresponsible or not, however, members of Congress generally agreed that this piecemeal approach to the constrained Congress's ability to make comprehensive policy. At the same time, Congress was faced with a fundamental challenge to its spending priorities when President Nixon refused to spend funds appropriated by Congress for programs with which he did not agree. These concerns prompted Congress in 1973 to create the Joint Study Committee on Budget Control. This process ultimately resulted in the enactment of the Congressional Budget and Impoundment Control Act of 1974. The act created a process by which decisions could made comprehensively and could protected from the normal parliamentary hurdles faced by other legislation. The process was neutral as to outcomes but could be deployed in favor of higher or lower spending, bigger or smaller deficits (Schick, 1980; 73). Although some members of Congress voted for the subsequent Congressional Budget Act because they believed that it would control spending or the deficit (some subsequent evaluations [Fisher, 1985] have deemed it a failure because it has not), the act itself contained no provisions which biased it one way or the other. It would have been biased, for example, if it had required supermajorities (such as two-thirds of the members in each house) to enact a tax increase. …