Congressional Two-Year Budgeting Cycle Is Long Overdue

Posted January 15, 2008 at 4:02pm

Congress has had trouble dealing with budgets and appropriations for decades — many decades. It has long had problems getting appropriations bills done before the fiscal year begins, a problem that predated the Budget Act in 1974. In those ancient times, the fiscal year ran from July 1 to June 30, leaving Congress just six months to get the 13 appropriations bills through both chambers and signed into law.

[IMGCAP(1)]A key component of the budget reform was to change the fiscal year to begin Oct. 1, so that Congress could have four more months to do this most basic work. Of course, that change did not solve anything — in fact, the problem got progressively worse and now is almost farcical.

The failure of that simple change reflects the larger problem with budgets and spending bills — they are more than simply budgets and spending. They reflect in the most fundamental way the priorities of government, and thus take a long time to put together. And just as important, basic priority decisions nearly always, absent an immediate crisis, find their way into endgame negotiations. Both sides wait until late in the game to put forward their positions and then try to use the shot clock to gain leverage.

If Congress is closely divided on partisan lines, sharply divided along ideological lines, or facing divided government with a president of the other party, the odds of an endgame dominating and taking even longer to work out increase. If all three of those phenomena are present, as is the case now, it gets even worse. Thus, the painful process of this past year, and the prospect for the same or worse this time around.

The costs of this delay, deadlock, uncertainty and frequent governing by continuing resolution are very high. Priority-setting loses any semblance of rational decision-making in the intense conflicts at endgame time and beyond. Administration of programs takes a big hit when agencies cannot do any advance planning and operate on tenterhooks for months each year, not knowing how much money they will get, when they will get it, and what they can and cannot do with it when they get it.

And the continuing resolutions often mean that agencies get a late infusion of cash, which they spend in a frenzied fashion so as not to end the year with anything left over that might cause their appropriations to decline the next year. Moreover, the difficulty getting individual appropriations through every stage of the process has made it more difficult for the House and Senate Appropriations committees to devote the time, attention and energy necessary to do the quality oversight for which they were once known.

Because the core problems with this process are so intertwined with basic conflict over priorities and policy, I have been skeptical in the past that any major budget process reform would work any better than the change in the fiscal year. But the worsening situation here has convinced me that it is time for a big change — time for two-year budgeting and appropriations.

I must confess that one reason I have been thinking more about this reform these days is Sen. Pete Domenici. I have known the New Mexico Republican since 1976, when he was a first-term Senator and a junior member of a select panel to reform the committee system. I worked on the committee, eventually becoming its staff director, and worked closely with Domenici, who was one of a small number who spent a lot of time on the issue (to be fair, it was a fifth or even sixth assignment for most of its 12 members.) Once, late at night, I asked the Senator why he was spending so much time on something that would be of no benefit back in New Mexico and could make him major enemies among his colleagues; he said it was a huge honor to be in the Senate, and he wanted to leave it a better place than when he came into it.

Committee reform was not the only area where Domenici threw himself into making the Senate a better place. Much of his career was spent on the Budget Committee, where he worked his heart out to make the budget process work and to build comity. All his years there convinced him that fighting these wars over budget resolutions and a series of appropriations bills every single year and all year long was both destructive and stupid, that a two-year budget would bring a slightly longer view on national priorities, and that two-year appropriations would allow some time in off years for oversight.

That was true even before the added burdens to the process that tribal conflict in the Senate and presidential-Congressional conflict in the Bush years have contributed. The potential advantages of a two-year cycle — even given that endgame politics will persist and in many cases be stretched to the full two years, and that game-playing over supplemental and emergency appropriations will expand — are real. Two-year budgeting and appropriations would not be any panacea, but would leave at least more time and energy inside Congress to do other things and to think in a broader way about priorities.

After six terms in the Senate, this year will be Domenici’s last; health problems, culminating in a debilitating degenerative illness, made it infeasible for him to run for a seventh term. Pete Domenici is a terrific person who has had a wonderful career in public service and has added so much to the Senate. It would be a fitting culmination to that career if the Senate led the way to enact the reform he has long championed.

Norman Ornstein is a resident scholar at the American Enterprise Institute.