One year after a debilitating government shutdown—the longest in U.S. history—Congress is on the verge of passing a federal budget through October 1, 2020. With only days to go until government funding runs out, Congress is once again down to the wire to pass all 12 spending bills that fund important government programs. Sadly, this uncertainty has become the norm, resulting in three government shutdowns in the last six years alone. How do we put an end to these needless impediments?
One step would be by improving the budget and appropriations process. Before getting into that, it’s worth looking at what the current budget process entails. It is important to understand that there are three large categories of spending to the overall federal budget. The first is known as mandatory spending. This entails direct spending for a variety of important federal programs that many will recognize – Social Security, Medicare, and Medicaid. It also covers unemployment insurance, student loans, and more. The second category is called discretionary spending which is also known as annual appropriations. A third element to the federal budget is the interest that is paid out on the federal debt.
Here are some general numbers to provide some context for the current state of the federal budget:
While there are a lot of important issues related to the different aspects of the federal budget, the one portion that requires the approval of Congress annually is the discretionary budget or appropriations. When the president submits his budget request every year, Congress is required to examine, debate and pass the annual appropriations requests he has made. Congress has a constitutional responsibility to review and approve the annual federal funding, otherwise known in the Constitution as the power of the purse. This is 30% of the budget explained above.
The Senate and House each have a standing committee dedicated solely to this purpose – overseeing the discretionary budget – which is called the Appropriations Committee. This committee is broken down into 12 different subcommittees that consider different agencies and programs within the discretionary budget. Most people will be familiar with funding for the Defense Department, FBI, National Parks Service, Veterans Affairs, and State Department. These are important agencies, but this category of funding covers hundreds of departments, independent agencies, commissions, and more. It is the appropriations investments that pay for these different missions. The Appropriations Committee is also charged with approving emergency funding when there are natural disasters or other emergency needs during a year.
The current budget framework, which was written in the 1970s, requires, in the same calendar year, the president to submit his budget and for Congress to review, modify, and vote on a budget by October 1st — which is the start of the new fiscal year. It has now become common that this deadline is missed and a temporary ‘continuing resolution’ or CR is passed to ensure that funds are in place until new appropriations are established. If Congress or the president do not agree on an extension before that new funding is approved, then the agencies and programs that fall under the discretionary part of the federal budget are required to shut down. This has happened most recently a year ago as well as in January 2018 and October 2013.
More and more, Congress and the president have struggled to find agreement for passing the annual appropriations budget. Clearly, the process needs to be brought into the 21st century to accommodate the dynamics of the current political environment. Congress must reexamine these procedures and adopt some targeted reforms that could better meet the needs of the American people.
Here’s what a reformed budget process could look like:
With partisanship in overdrive, it’s difficult for Congress to enact 12 separate appropriations bills annually. It’s time for Congress to take these steps to reform the budget and appropriations process to better fulfill its constitutional responsibility and meet the needs of the American people.