Congressional Budget Process Research Articles

Potential Federal Policies to Reduce or Limit Commercial Plan Payments to Hospitals and Physicians

Summary The Congressional Budget Office (CBO) is a nonpartisan federal agency that, aligned with its mission to support the U.S. Congressional budget process, frequently analyzes policies affecting health care providers’ payment rates or their costs of providing care. Such policies can directly affect providers’ revenues by changing the administered prices for services covered by Medicare or by affecting the negotiated prices paid to providers by commercial insurers. CBO does not make policy recommendations. Rather, the agency’s role is to produce independent analyses of policy approaches and examine their implications for the federal budget and other related outcomes. Here, the authors describe a September 2022 report that was prepared on the basis of a congressional request. The agency reviewed three families of policies that are frequently mentioned as solutions for the growth in the negotiated prices paid in commercial plans: promoting competition among providers, promoting price transparency, and capping the level or growth rate of prices. The effects on prices expected within the first 10 years for each of the approaches considered would range from very small reductions if the price transparency policies were adopted (0.1%–1.0%) to small reductions if the competition policies were adopted (more than 1.0%–3.0%) and moderate (more than 3.0%–5.0%) to large (more than 5.0%) reductions if both the level and growth of prices were capped. Those estimates, although uncertain, represent CBO’s best assessments of the effects of the policies using evidence from the research literature and the most recently available data. CBO projects that, under current law, commercial insurers would pay $1.5 trillion in claims from hospitals and physicians in 2032. If hospital and physician prices fell by 1%, premiums for commercial health insurance plans could be reduced by a total of $13 billion in that year. Reductions in premiums in turn would reduce the federal budget deficit by increasing tax revenues (because the amount of premiums excluded from taxable income would be lower) and by reducing subsidies for health insurance for the self-employed and people eligible for subsidies under the Patient Protection and Affordable Care Act. As a result, the federal government’s subsidies for commercial health insurance premiums would be reduced by $4.8 billion in 2032 or 0.2% of the budget deficit projected for that year under current law. The authors did not project the effects of the policies on outcomes other than prices, premiums, and the federal budget — such as access to care, quality of care, and providers’ costs — because of limited and conflicting evidence and because the policies’ effects on prices were generally small. CBO recently issued a call for more research on the effects of policies significantly affecting providers’ revenues on other outcomes that would help the agency better analyze the effect of related policies in the future.

Senator Byrd Shepherds a Bill

Senator Byrd Shepherds a Bill Katherine A. Scott In 1974 the fifty-six-year-old senior senator from West Virginia prepared to shepherd through the Senate a bill to overhaul the congressional budget process—a project that would have long-term consequences, both for the nation and for his political future. It was a massive undertaking, and one that would require careful attention to detail and much patience. It was a challenge—that is to say, it was custom-made for Senator Robert C. Byrd. Through the late winter and early spring of 1974, as the battle among the three branches of government reached a climax in the Watergate scandal, Byrd quietly tended to the less dramatic but equally consequential work of reforming the federal budget process. He devoted months of time and energy to crafting a bipartisan solution to a problem that had plagued the legislative branch for six decades—the federal budget. Throughout the twentieth century, Congress had struggled to develop a mechanism to fund—effectively and efficiently—the exponential growth of the federal government. "I would venture to say there is no more complex, no more important legislation before this session of the Congress than [this] subject matter," Byrd remarked at a Senate hearing on January 15, 1974.1 Byrd's bill, the Budget and Impoundment Control Act of 1974, signed into law by President Richard Nixon on July 12, 1974, would help Congress to regain its position as a coequal branch of government. When Byrd embarked on this journey in late 1973, he may not have been confident that his efforts would succeed. The Senate had lost two recent battles with the executive branch over national budgets and federal spending. The first confrontation with the president came with Congress's growing opposition to America's continued involvement in the war in Vietnam. Then, as senators reluctantly acquiesced to the administration's request to raise the debt ceiling—the third such request in a calendar year—they also battled the president over his impoundment of funds. By 1974 Senator Byrd and a growing number of his colleagues had become increasingly alarmed by [End Page 37] Congress's inability to shape and implement policy through its constitutional power of the purse. Ending the War in Vietnam The first battle in this war of the budget erupted shortly after Richard Nixon became president. Though Nixon had campaigned on a pledge to end the war in Vietnam, it wasn't long before senators on the Senate Foreign Relations Committee received disturbing news. A classified Senate investigation found that while the administration was drawing down troops in Vietnam, it was expanding the war into neighboring countries—without consulting members of Congress. These developments forced some senators to take a fateful step to confront the administration. On September 16, 1969, Senator John Sherman Cooper, a moderate Kentucky Republican, offered an amendment to a military procurement authorization bill to restrict military funding the following year. "I want it clearly understood," Cooper explained when introducing his proposal, that my purpose "is to prohibit . . . the use of any funds appropriated by the Congress . . . to the Armed Forces . . . for sending our [military] into war, armed conflict, combat . . . in Laos and Thailand."2 Cooper aimed to prohibit the war's expansion by halting the flow of congressionally approved funds. He hoped his plan would force the administration to withdraw troops from the region.3 The Senate unanimously approved Cooper's amendment, 86–0, on September 17, 1969, but in conference House negotiators stripped that language from the bill. Undeterred, Cooper tried to amend another defense authorization bill a few weeks later. Joined by colleague Frank Church, a liberal Democrat from Idaho, the Cooper-Church amendment sought to limit the use of congressionally approved funds to "finance the introduction of American ground troops into Laos or Thailand."4 This amendment became law on December 29, 1969. Four months later, President Nixon announced that he had sent US ground troops into neighboring Cambodia without advising Congress. Frustrated and irate, senators denounced the action. The chairman of the Senate Foreign Relations Committee, William Fulbright, a Democrat from Arkansas, was characteristically blunt: "The Executive is conducting a constitutionally unauthorized Presidential war...

국가 재정관리제도 개선방안 : 국회 재정심사과정을 중심으로

국가 재정관리제도 개선방안 : 국회 재정심사과정을 중심으로

The Relative Influence of Appropriation Subcommittees: Institutional Structure and Program Performance

Unlike previous analyses that evaluate the influence of the authorization committees on government agency management, we examine the US congressional appropriation subcommittees to see how their structural characteristics affect the performance of the programs that they fund. Specifically, we look at whether the competition for resources and member workload within subcommittees affects the effectiveness and efficiency of the programs under their purview. As part of the Congressional budget process, appropriation subcommittees are annually allocated new budgets from which they must fund a set of government programs. We find that the level of resources in a subcommittee affects program performance. Greater subcommittee resources are negatively correlated with program performance. We also find that workload matters—programs in subcommittees with fewer issue areas and programs per member are more effective and efficient. A subcommittee's capacity to focus on management problems and issue areas leads to better program performance.

Budgeting during the Bush Administration

The beginning of a new administration is a particularly good time to look back at budgeting in the prior presidential administration, to make more visible the areas of continuity and change. Four themes stand out from the administration of George W. Bush: tax reductions and the growth of deficits; efforts to reform Social Security and Medicare focusing on privatization; strengthening of executive budgetary power vis-a-vis Congress; and relatively more emphasis on loyalty and political experience than competence and transparency in budgeting and financial accountability. During this same 8 years, congressional budget process deteriorated. Congress at times challenged the president’s increased budgetary powers. It generally ignored the OMB-initiated PART performance evaluations, refused to consider the president’s proposed Social Security privatization initiatives, and denied the president expedited rescission powers. Congress went along with the president when it came to the combination of tax cuts and increased spending that turned a surplus into a deficit. Congress passed tax cuts as well as increases for defense and domestic security and the new entitlement program for drug coverage. Congress also continued to give the president a blank check in emergency supplemental appropriations, which added simultaneously to the president’s budget discretion and to the deficit.

Fiscal challenges: an interdisciplinary approach to budget policy

Preface Part I. The Law and Politics of Fiscal Policy: Introduction 1. The Congressional budget process William Dauster 2. Budget gimmicks Cheryl Block 3. Transparency in the US budget process Elizabeth Garrett and Adrian Vermeule 4. European experiences with fiscal rules and institutions Jurgen von Hagen Part II. Understanding Federal Deficits and Public Debt: Introduction 5. Perspectives on federal deficits and debt Michael Boskin 6. Counting the ways: the structure of federal spending Howell Jackson 7. Starving the beast: the psychology of budget deficits Jonathan Baron and Edward McCaffery Part III. Budgeting and Fiscal Constraints at the State Level: Introduction 8. Budgetary arrangements in the 50 states: in search of model practices Juliet Musso, Elizabeth Graddy and Jennifer Grizard 9. The calculus of constraint: a critical review of state fiscal institutions Tracy Gordon 10. When does the ballot box limit the budget? Politics and spending limits in California, Colorado, Utah, and Washington Thad Kousser, Matthew McCubbins and Kaj Rozga Part IV. Intergovernmental Aspects of Budget Policy: Introduction 11. Dysfunctional or optimal institutions? State debt limitations, the structure of state and local governments, and the finance of American infrastructure Barry Weingast and John Wallis 12. Federal-state budgetary interactions David Super Part V. Judicial Powers and Budget Policy: Introduction 13. New property, entrenchment, and the fiscal constitution John Harrison 14. Courts, constitutions, and public finance: some recent experiences from the States Richard Briffault.

Temporary Legislation and Fiscal Restraint

The proper duration of legislation has become highly controversial as a result of the enactment of many temporary tax laws during the George W. Bush Administration. The prevailing view is that inclusion of an expiration date or sunset feature in legislation permits the cost of the legislation to be misrepresented and allows its proponents to escape the discipline intended by the congressional budget process. Under this view, fiscal discipline is preserved through enactment of so-called legislation.This Article challenges that view and shows that, barring estimation error, the legislative process accounts completely for the costs of legislation but not permanent legislation. Consequently, enactment of temporary-effect rather than permanent legislation would promote political accountability and may result in greater fiscal restraint. In addition, when temporary-effect legislation expires, the cost of any extension is fully taken into account in the legislative process. Extension of such legislation, therefore, competes with, and potentially displaces, adoption of other legislation. By contrast, the cost of continuing permanent programs largely disappears in the legislative process and therefore continuation of such programs produces little or no crowding-out effect. This Article also addresses whether other features of the legislative process can overcome the problems associated with the budget accounting of permanent legislation, and responds to criticisms of temporary-effect legislation.

Congressional Budgeting at Age 30: Is It Worth Saving?

The congressional budget process is now 30 years old. We review this history to describe why the process was adopted, how it has evolved, and what it has produced. In the early years, the process institutionalized but did not prevent the creation of a significant deficit. During the 1990s, the process was improved and the deficit was converted to a surplus. Since 1999, both the budget process and budget discipline have greatly eroded. We propose some technical and organizational changes that might improve the process, but in the end, what is most needed are leaders who will promote fiscal responsibility for the federal government.

The Congressional budget process, aggregate spending, and statutory budget rules

This paper compares the Congressional budget process (instituted in 1974) and the piecemeal appropriations process that preceded it. Previous theoretical analysis using spatial models of legislator preferences finds no systematic difference in relative spending levels under the two regimes. This paper instead uses a model of interest group lobbying. A legislature determines spending on a national public good and on subsidies to sector-specific interest groups. In the “appropriations process,” the Appropriations Committee proposes a budget that, because of interest group influence, involves overspending on subsidies. In the “budget process,” the Budget Committee proposes an aggregate level of spending (the budget resolution); then, the Appropriations Committee proposes a budget. A free rider problem among the interest groups inhibits the lobbying of the Budget Committee to increase the aggregate budget. If each group is sufficiently small, it takes the budget resolution as given, and lobbies the Appropriations Committee. Aggregate spending is lower and social welfare is higher under the budget process; however, provision of the national public good is suboptimal. The paper also analyzes statutory budget rules that limit spending levels, but can be revised by a simple majority vote. Here, the free rider problem prevents the groups from securing the required changes to budget rules.

The Congressional Budget Process, Aggregate Spending, and Statutory Budget Rules

This paper compares the Congressional budget process (instituted in 1974) and the piecemeal appropriations process that preceded it. Previous theoretical analysis using spatial models of legislator preferences finds no systematic difference in relative spending levels under the two regimes. This paper instead uses a model of interest group lobbying. A legislature determines spending on a national public good and on subsidies to sector-specific interest groups. In the appropriations process, the Appropriations Committee proposes a budget that, because of interest group influence, involves overspending on subsidies. In the budget process, the Budget Committee proposes an aggregate level of spending (the budget resolution); then, the Appropriations Committee proposes a budget. A free rider problem among the interest groups inhibits the lobbying of the Budget Committee to increase the aggregate budget. If each group is sufficiently small, it takes the budget resolution as given, and lobbies the Appropriations Committee. Aggregate spending is lower and social welfare is higher under the budget process; however, provision of the national public good is suboptimal. The paper also analyzes statutory budget rules that limit spending levels, but can be revised by a simple majority vote. Here, the free rider problem prevents the groups from securing the required changes to budget rules.

The Congressional Budget Process in an Era of Surpluses

How the federal government's fiscal health has improved! As recently as 1992, the United States experienced its largest ever current-dollar annual unified budget deficit of 124 billion. More significantly, the Congressional Budget Office (CBO) has projected healthy on—budget surpluses—that is, no money will have to be taken out of the Social Security trust fund and revenues will still exceed expenditures—well into the second decade of the new century.The causes of this turnaround are well understood. The record-long economic expansion of the 1990s has boosted revenues dramatically, the end of the Cold War lowered the demand for defense spending, and the budget legislation of 1990, 1993, and 1997 generally cut spending and raised taxes (Parks 2000; Schick 2000).What Washington does with the extra money depends greatly on electoral outcomes over the coming years. Congressional Republicans—along with their party's presidential candidate, Texas Governor George W. Bush—have promised tax cuts, while Democrats have called for higher levels of domestic discretionary spending. But there are areas of agreement. Both parties wish to protect the Social Security trust fund in a so-called “lock box” and both have expressed their commitment to pay off the publicly-held debt. It is likely, therefore, that future incarnations of divided government might protect the surplus by producing a default fiscal policy based primarily on these two proposals.

The Congressional Budget Process in an Era of Surpluses

How the federal government's fiscal health has improved! As recently as 1992, the United States experienced its largest ever current-dollar annual unified budget deficit of $290 billion. At the close of its last fiscal year, on September 30 1999, the nation's government recorded a budget surplus of $124 billion. More significantly, the Congressional Budget Office (CBO) has projected healthy on—budget surpluses—that is, no money will have to be taken out of the Social Security trust fund and revenues will still exceed expenditures—well into the second decade of the new century.The causes of this turnaround are well understood. The record-long economic expansion of the 1990s has boosted revenues dramatically, the end of the Cold War lowered the demand for defense spending, and the budget legislation of 1990, 1993, and 1997 generally cut spending and raised taxes (Parks 2000; Schick 2000).What Washington does with the extra money depends greatly on electoral outcomes over the coming years. Congressional Republicans—along with their party's presidential candidate, Texas Governor George W. Bush—have promised tax cuts, while Democrats have called for higher levels of domestic discretionary spending. But there are areas of agreement. Both parties wish to protect the Social Security trust fund in a so-called “lock box” and both have expressed their commitment to pay off the publicly-held debt. It is likely, therefore, that future incarnations of divided government might protect the surplus by producing a default fiscal policy based primarily on these two proposals.

The Congressional Budget Process: Strengthening the Party-in-Government

The Congressional Budget Process: Strengthening the Party-in-Government

CMA's focus on Capitol Hill pays off

The Chemical Manufacturers Association took steps this year to involve itself more in the congressional budget process, and now reports some success in getting chemical industry concerns addressed. I feel good about these results because they are a result of the restructuring CMA put in place in January, CMA President Frederick L. Webber told reporters last week. trade associations don't go near the appropriations process, but we really wanted to engage in the process. We think the changes will save money and enhance environmental protection as well. Most of CMA's attention was devoted to the fiscal 2000 Veteran Affairs, Housing & Urban Development & Independent Agencies appropriations bill, recently signed by President Clinton. This bill funds several agencies that support research, including the National Science Foundation, the National Aeronautics & Space Administration, and the Environmental Protection Agency (see page 17). CMA specifically targeted several EPA-related items. The association ...

Federal Fiscal Policy: Past, Present and Future (or, Be Careful What You Wish For, It May Come Back to Haunt You)

Public Budgeting & FinanceVolume 19, Issue 3 p. 88-96 Federal Fiscal Policy: Past, Present and Future (or, Be Careful What You Wish For, It May Come Back to Haunt You) G. William Hoagland, G. William Hoagland Staff Director, Senate Committee on the Budget, Washington, D.C. 20510-6100 Website address: http://www.senate.gov/committee/budget.html E-mail address: Bill_Hoagland@Budget.Senate.Gov.Search for more papers by this author G. William Hoagland, G. William Hoagland Staff Director, Senate Committee on the Budget, Washington, D.C. 20510-6100 Website address: http://www.senate.gov/committee/budget.html E-mail address: Bill_Hoagland@Budget.Senate.Gov.Search for more papers by this author First published: 03 November 2003 https://doi.org/10.1046/j.0275-1100.1999.01173.xAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinked InRedditWechat Volume19, Issue3September 1999Pages 88-96 This article also appears in:Virtual Issue: Congressional Budget Process Reform RelatedInformation

The Prominence of Partisanship in the Congressional Budget Process

Partisanship in Congress plays an extremely important role in the construction of the national budget. The congressional budget process has increasingly found itself polarized along partisan lines in recent years. Districts represented by Democratic members of Congress are significantly different demographically and politically from those represented by Republicans. This dynamic has the potential to dramatically influence the manner in which Congress attempts to budget. Given the checks and balances of the American political system, compromise is a necessary element of the congressional budget process. Partisanship is thereby a necessary component in the congressional budget process, but a component that must conduct itself within the boundaries of the American political system.

Political explanations for the difficulties in congressional budgeting

Why does the congressional budget process seem so flawed? The difficulties Congress has budgeting are a direct result of the nature of a representative democracy. The American public wants contradictory budgetary actions from its representatives in Congress. Congress is a responsive body on budgetary matters, as can be seen by the strong correlations between demographics and congressional budget votes. Being responsive, however, does not make it accountable. The problems Congress faces when budgeting are in part a result of the inconsistencies of what the public says it wants. Thus, unless the contradictory desires of the American public are modified, congressional budgeting is destined to be viewed as flawed and inadequate.

Senate's proposed budget increases disappoint NSF and NASA

washington The US space agency NASA, and the National Science Foundation have been approved modest budget increases by a Senate committee in the first stage of the annual congressional budget process.

Toward a Transparent Federal S&T Budget

Everyone recognizes that advances in science and technology are required to fuel future U.S. economic growth. It is for that reason that the federal government for nearly 50 years has been the steward of American science and technology (S&T), funding the education and training of scientists and engineers as well as the development of our scientific and technical knowledge base. Yet what exactly does the federal government spend each year in support of science and technology? How does each federal agency contribute to that support? Good answers to such questions are difficult to find. One reason is that there is no comprehensive presentation, much less examination, of the federal S&T budget at any stage of the congressional budget process. Indeed, the annual federal budget treats this key contribution to the U.S. economy as an afterthought. It's time to make it easier to take a closer look at what the federal government is investing in S&T each year. Fortunately, a mechanism for doing so already exists. Right now, when the President sends his budget request to Congress, he prepares a crosscutting analysis of federal expenditures that shows what we are spending in key categories—like national defense and natural resources and the environment. These categories don't change the way individual agencies are funded. They just provide a bird's-eye view of funding across areas so Congress can debate the larger themes in the budget and identify specific agency contributions to such themes. One category, called “General Science, Space, and Technology,” details the annual budgets for the National Science Foundation, NASA, and several programs at the Department of Energy. But this is far from a comprehensive picture of our investment. Expanding the category to include the $20 billion of civilian S&T support currently hidden in other agency budgets would provide a clearer view of what is being spent for S&T programs in the context of overall federal spending. In the annual budget resolution recently passed by the Senate, we successfully proposed such a change, which, if accepted by the administration, would take effect next year. This change in the way federal S&T programs are labeled would not change the funding or placement of those programs within federal agencies, the way they are authorized in legislation, or the way they receive their annual appropriations. What would change is that Congress and the public would have a global view, using bona fide numbers, of all federal civilian S&T. This change, combined with what we already know about defense S&T spending, would be like a new pair of glasses, bringing our total S&T investment into focus for the first time. Congress and the public would at last be able to look at the entire federal S&T portfolio and ask intelligent questions about its balance, coverage, and emphasis. Such a “big picture” review could flag potential problems for all science if one particular agency abandoned its support for a key research area. The resulting review would also fulfill a key recommendation of the National Academy of Sciences, National Academy of Engineering, and Institute of Medicine in their 1995 report, Allocating Federal Funds for Science and Technology . These groups recommended that the federal S&T budget “be presented as a comprehensive whole in the President's budget and similarly considered as a whole at the beginning of the congressional budget process.” [*][1] Providing a means to examine all civilian S&T funding at the various federal agencies in one glance would also reflect the reality that all federal research and development (R&D) is interrelated. As cosponsors of legislation to double all federal civilian S&T spending (S.1305, the National Research Investment Act of 1998), we believe that we cannot speak meaningfully about the health of American S&T if we focus only on the activities of one or two federal agencies. Our dependence on advances in S&T for economic growth will only increase in the future. We need a vigorous debate on how to craft the future federal investment in S&T if we want to maintain U.S. scientific and technical leadership into the 21st century. Having a clear accounting of today's federal S&T investment and of where the president and Congress propose to take that investment is a prerequisite for that debate. [1]: #fn-1

Congressional Budget Reform: Impact on the Appropriations Committees

The congressional budget process has undergone several major reforms in the last twenty years: the Congressional Budget and Impoundment Control Act of 1974, the Balanced Budget and Emergency Deficit Control Act of 1985 and 1987 (Gramm‐Rudman‐Hollings I and II) and the Budget Enforcement Act of 1990 (BEA) that have had a direct impact on the Appropriations Committees and the appropriations process. This article evaluates that impact on the decision‐making capacity and power of the Appropriations Committees.