<DOC>
[106th Congress House Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:63105.wais]
BIENNIAL BUDGETING
=======================================================================
HEARING
before the
COMMITTEE ON RULES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
SECOND SESSION
ON
BIENNIAL BUDGETING: A TOOL FOR IMPROVING GOVERNMENT FISCAL MANAGEMENT
AND OVERSIGHT
__________
FEBRUARY 16, MARCH 10 AND 16, 2000
__________
Printed for the use of the Committee on Rules
U.S. GOVERNMENT PRINTING OFFICE
63-105 CC WASHINGTON : 2000
_______________________________________________________________________
For sale by the Superintendent of Documents, U.S. Government Printing
Office
Washington, DC 20402
COMMITTEE ON RULES
DAVID DREIER, California, Chairman
PORTER GOSS, Florida JOHN JOSEPH MOAKLEY, Massachusetts
JOHN LINDER, Georgia MARTIN FROST, Texas
DEBORAH PRYCE, Ohio TONY P. HALL, Ohio
LINCOLN DIAZ-BALART, Florida LOUISE M. SLAUGHTER, New York
DOC HASTINGS, Washington
SUE MYRICK, North Carolina
PETE SESSIONS, Texas
THOMAS REYNOLDS
Vince Randazzo, Staff Director
Eric Pelletier, Deputy Staff Director
George C. Crawford, Minority Staff Director
David Pomerantz, Deputy Minority Staff Director
Bryan H. Roth, Office and Systems Manager
Adam Jarvis, Staff Assistant
______
Subcommittee on Legislative and Budget Process
PORTER GOSS, Florida, Chairman
DEBORAH PRYCE, Ohio MARTIN FROST, Texas
DOC HASTINGS, Washington JOHN JOSEPH MOAKLEY, Massachusetts
SUE MYRICK, North Carolina
DAVID DREIER, California
Wendy Selig, Staff Director
Kristi Walseth, Minority Staff Director
______
Subcommittee on Rules and Organization of the House
JOHN LINDER, Georgia, Chairman
LINCOLN DIAZ-BALART, Florida TONY P. HALL, Ohio
PETE SESSIONS, Texas LOUISE M. SLAUGHTER, New York
THOMAS REYNOLDS, New York
DAVID DREIER, California
William Evans, Staff Director
Michael Gessel, Minority Staff Director
(ii)
C O N T E N T S
__________
Page
February 19, 2000
Opening statement of the Hon. David Dreier, chairman of the
Committee on Rules [prepared statement p.01] 01
Opening statement of the Hon. Porter J. Goss, chairman of the
Subcommittee on Legislative and Budget Process [prepared
statement p.06] 04
Opening statement of the Hon. John Joseph Moakley, ranking member
of the Committee on Rules [prepared statement p.8] 07
Opening statement of the Hon. Doc Hastings, a member of the
Committee on Rules [prepared statement p.13] 11
Opening statement of the Hon. Thomas Reynolds, a member of the
Committee on Rules [prepared statement p.15] 14
Opening Statements Submitted for the Record:
Opening statement of the Hon. Deborah Pryce, a member of the
Committee on Rules 17
Opening statement of the Hon. Pete Sessions, a member of the
Committee on Rules 29
Statement of:
Hastert, Hon. J. Dennis, Speaker of the House [prepared
statement p.24]............................................ 21
Young, Hon. C.W. Bill, a Representative in Congress from the
State of Florida [prepared statement p.34]................. 30
Obey, Hon. David, a Representative in Congress from the State
of Wisconsin [prepared statement p.43]..................... 37
Regula, Hon. Ralph, a Representative in Congress from the
State of Ohio [prepared statement p.62].................... 60
Price, Hon. David E., a Representative in Congress from the
State of North Carolina [prepared statement p.66].......... 64
Knollenberg, Hon. Joe, a Representative in Congress from the
State of Michigan [prepared statement p.70]................ 68
Bass, Hon. Charles F., a Representative in Congress from the
State of New Hampshire [prepared statement p.75]........... 74
Smith, Hon. Nick, a Representative in Congress from the State
of Michigan [prepared statement p.79]...................... 77
McCarthy, Hon. Karen, a Representative in Congress from the
State of Missouri [prepared statement p.82]................ 81
Barton, Hon. Joe, a Representative in Congress from the State
of Texas [prepared statement p.84]......................... 83
Stearns, Hon. Cliff, a Representative in Congress from the
State of Florida [prepared statement p.87]................. 85
Whitfield, Hon. Edward, a Representative in Congress from the
State of Kentucky [prepared statement p.89]................ 88
Ney, Hon. Robert W., a Representative in Congress from the
State of Ohio [prepared statement p.92].................... 90
Statements Submitted for the Record:
Castle, Hon. Michael N., a Representative in Congress from
the State of Delaware...................................... 95
Spratt, Hon. John M., a Representative in Congress from the
State of South Carolina.................................... 97
Luther, Hon. Bill, a Representative in Congress from the
State of Minnesota......................................... 99
Additional Material Submitted for the Record:
Letter from the Honorable Bob Taft, Governor of Ohio......... 19
March 10, 2000
Opening statement of the Hon. David Dreier, chairman of the
Committee on Rules [prepared statement p.103] 101
Opening statement of the Hon. John Joseph Moakley, ranking member
of the Committee on Rules [prepared statement p.106] 104
Statement of:
Lew, Hon. Jack, Director of the Office of Management and
Budget [prepared statement p.127].......................... 124
Crippen, Dan. L, Director, Congressional Budget Office
[prepared statement p.147]................................. 144
Irving, Dr. Susan J., Associate Director of Budget Issues,
General Accounting Office [prepared statement p.158]....... 153
Fisher, Lou, Senior Specialist in Seperation of Powers,
Congressional Research Service [prepared statement p.174].. 169
Additional Material Submitted for the Record:
CRS Memorandum: Estimated Hours Spent Considering
Appropriation, Budget, Reconciliation and Major Tax Bills
on the House Floor, 101st - 105th Congresses............... 108
CRS Memorandum: House Budget-Related Roll-Call Votes,
Calendar Years 1990-1999................................... 121
March 16, 2000
Opening statement of the Hon. David Dreier, chairman of the
Committee on Rules [prepared statement p.187] 185
Opening statement of the Hon. John Joseph Moakley, ranking member
of the Committee on Rules [prepared statement p.190] 188
Statement of:
Hamilton, Hon. Lee, Director, Woodrow Wilson Center [prepared
statement p.197]........................................... 185
Mann, Thompas E., W. Averell Harriman Senior Fellow in
American Governance, The Brookings Institution [prepared
statement p.265]........................................... 262
Joyce, Phillip, Associate Professor of Public Administration,
School of Business and Public Management, The George
Washington University [prepared statement p.271]........... 268
Whalen, Charles, Senior Institute Economist, Institute for
Industry Studies, Cornell University [prepared statement
p.276]..................................................... 275
Meyers, Roy T., Associate Professor, Department of Political
Science, University of Maryland, Baltimore County [prepared
statement p.283]........................................... 280
Frenzel, Hon. William, Committee for a Responsible Federal
Budget [prepared statement p.290].......................... 288
Bixby, Robert, Executive Director, Concord Coalition
[prepared statement p.295]................................. 292
Horney, James, Senior Fellow, Center on Budget and Policy
Priorities [prepared statement p.307]...................... 300
Regalia, Dr. Martin, Vice President of Economic Policy and
Chief Economist, U.S. Chamber of Commerce [prepared
statement p.313]........................................... 311
Snell, Ronald, Economic and Fiscal Division Director,
National Conference of State Legislatures [prepared
statement p.317]........................................... 315
Panetta, Hon. Leon, Director, The Panetta Institute (via
video conference) [prepared statement p.332]............... 325
Additional Material Submitted for the Record:
Letter from the Honorable Gary Locke, Governor of Washington. 192
Report by Walter J. Oleszek, Issues for the 21st Century
Congress................................................... 201
Paper by Robert Greenstein, Biennial Budgeting............... 301
Letter from the Senior Executive Association................. 340
Questions and Answers submitted for the record:
Lew, Hon. Jack............................................... 342
Crippen, Dan L............................................... 346
Irving, Susan J.............................................. 350
Fisher, Lou.................................................. 354
Hamilton, The Honorable Lee.................................. 356
Mann, Thomas E............................................... 358
Joyce, Phillip............................................... 360
Whalen, Charles.............................................. 362
Meyers, Roy T................................................ 366
Frenzel, The Honorable Bill.................................. 368
Bixby, Robert L.............................................. 369
Horney, James R.............................................. 372
Regalia, Dr. Martin.......................................... 375
Snell, Ronald................................................ 376
BIENNIAL BUDGETING: A TOOL FOR IMPROVING GOVERNMENT FISCAL MANAGEMENT
AND OVERSIGHT
----------
Wednesday, February 16, 2000
House of Representatives,
Committee on Rules,
Washington, D.C.
The committee met, pursuant to call, at 10:30 a.m. in Room
H-313, The Capitol, Hon. David Dreier [chairman of the
committee] presiding.
Present: Representatives Dreier, Goss, Pryce, Diaz-Balart,
Hastings, Sessions, Reynolds, Moakley, Frost, Hall, and
Slaughter.
The Chairman. The Rules Committee will come to order now.
We are using our new technology for the first time, and I guess
we are audio streaming this. So what I am about to say is going
out over the Web.
The purpose of today's hearing is to hear from our
colleagues about their views on biennial budgeting and to
examine various proposals for establishing a 2-year budget and
appropriations cycle. I am very pleased that in just a few
minutes we will be joined by the Speaker of the House, who will
be for the first time since he has been Speaker testifying
before a congressional commit-
tee.
We originally planned to hear member testimony over a 2-day
period, but because there will be no votes scheduled tomorrow,
we will try to complete this hearing today.
After the President's Day recess, we plan to hold at least
one more hearing to receive testimony from the executive
branch, congressional support agencies and outside experts in
an effort to develop consensus legislation that will streamline
the budget process, enhance programmatic oversight, strengthen
the management of government programs and bureaucracies and
reform the Congress.
At the very end of the last session a bipartisan group
joined with us, in fact there were a total of 245 members, in
introducing a sense of the House resolution calling for the
enactment of biennial budget process in the second session of
the 106th Congress. Well, as we all know we have begun the
second session of the 106th Congress, and we are committed to
moving forward with that effort. There is, as we know, very
strong bipartisan support in the Senate for a biennial budget
process, and President Clinton as well as the major
presidential candidates of both political parties are support-
ive of biennial budgeting, and the President specifically
mentioned in his submission of his budget for fiscal year 2001
support for this biennial process.
The issue of biennial budgeting has received considerable
attention over the past decade. Since 1977 more than 40
congressional or special committee hearings have addressed the
topic of biennial budgeting. I would like to note most often
what I consider to be the most significant recommendation which
came from a committee, which I was proud to cochair along with
Lee Hamilton and former Senator David Boren and our colleague
Senator Domenici who chairs the Budget Committee in the Senate,
in 1993 after exhaustive hearings we came forward with a
recommendation that we proceed with biennial budgeting. The
gentleman sitting right here to my left, the vice chairman of
the committee and chairman of the Subcommittee on Legislative
and Budget Process, Mr. Goss, has held several hearings on this
issue over the past 5 years in the context of comprehensive
budget process reform.
I happen to believe that enactment of a biennial budget
process could lead to the most significant governmentwide
fiscal management reforms of the last quarter century. The
enormous amount of resources expended by the executive branch
in preparing multiple annual budgets at the same time would be
diverted to long term strategic planning and improving the
performance of Federal programs. Congress, which for this
fiscal year appropriated $121 billion for programs encompassing
137 programs whose authorization had expired, would have more
time and resources to do a better job of programmatic
oversight.
For those citizens who are served by Federal programs,
biennial budgeting will provide more predictability and peace
of mind. States, localities and private organizations will
become more efficient in the long term planning and management
of their programs if Federal funding streams were more
predictable, and obviously, as has been pointed out by the
chairman of the Interior Subcommittee of Appropriations, Mr.
Regula, there can be tremendous taxpayer savings, too.
While nobody believes that biennial budgeting is in fact
the panacea for all the ailments of society or the Federal
Government, if it is done correctly I believe that such a
process can promote a more effective government and a less
chaotic and repetitive budget process at both ends of
Pennsylvania Avenue.
As I said, we are looking forward to having Speaker Hastert
join us in just a few minutes as our kickoff witness, and until
then I am going to call on members for opening statements. Mr.
Goss I know has a statement he would like to offer.
[The prepared statement of Chairman Dreier follows:]
[GRAPHIC] [TIFF OMITTED]63105.001
Mr. Goss. Thank you very much, Mr. Chairman. I want to
thank you for taking the leadership and initiative for holding
these hearings. This is a topic I think of very great interest
to a growing number of members. As you have mentioned, we spent
a very large portion of our subcommittee looking for ways to
improve our current budget process which I feel and I think
many members feel is broken and broken rather badly.
I suppose the byword how quickly we forget around here is
appropriate, but I can still remember 18 months ago when we had
a very strong reminder about just how badly broken the budget
process was. We did a little better last year, but I don't
think anybody felt we had a system that was serving us properly
or the people of the United States.
Working with our friends in the Budget Committee and
bringing in a number of members on both sides of the aisle, I
think we did develop a pretty good package last year. It was
certainly fairly comprehensive. We called it H.R. 853, and the
committee acted upon it, and I think there still is a
possibility for some floor action down the road.
That package did include a number of very significant
changes that served as a benchmark for starting a discussion on
how to change the process for the better, which is part of the
purpose of it, and at that time we said that we had not been
able to include everything in that bill. Obviously in order to
get consensus we had to leave some things out. We did want to
find a baseline consensus with committees of jurisdiction
because that is what is necessary to get legislation passed,
and I think 853 is a pretty good effort in that direction. But
we also hope to develop a vehicle that will yield positive
results if brought to a conference with the Senate, and that
added another dimension of compromise.
I remain hopeful that we are going to have a chance to
bring H.R. 853 forward or some of its component parts in some
other vehicle as part of a larger discussion about where we are
actually going with the budget process. I don't think there is
any magic in looking back 30 years and saying, well, what we
did 30 years ago suits the United States and America's Congress
today because I don't think it fits, and I am afraid the
evidence is before us.
But with regard to the topic at hand today, I look forward
to an informative series of hearings on biennial budgeting.
This is obviously going to be a very profound change in the
process, and if it lives up to its billings, and that is an if,
it should improve efficiency, reduce redundancy, boost
programmatic oversight and minimize frustration. That is a tall
order for any process change, but I am encouraged by the broad
range of Members and experts within this institution and across
the country that has concluded that it is time to give biennial
budgeting a try across the board at the Federal level.
This is not something that has not been discovered in other
areas, and the question is whether it is now appropriate at the
Federal level here.
In my view the time has come to make a change, and I did
not believe that when I started the process. This process has
been in-
structive and informative to me, and I am now convinced that it
is time to make a change. Given the totally predictable but
somehow unavoidable train wrecks, near misses, chaotic late
night sessions despite your best efforts to have us meet at
normal times and nearly total public distrust that have come to
characterize our annual budget attempts, it does appear that
winnowing the process can be a tonic for what ails us.
I would like to note for the record though, Mr. Chairman,
that I do not believe any one process change on its own
magically is going to right the system, and that is the reason
I do this.
Of course, we all know that nothing will substitute for
good judgment, plain old-fashioned hard work and an ability to
negotiate and compromise for the good of the order. That is
part of our daily work in trade here. In addition, Mr.
Chairman, lest we trade one set of problems for another in
pursuing biennial budgeting, I hope we will couple any such
change with other important process fixes, including a
revamping of the way we budget for emergencies. We have had a
lot of input on that, as you know. I think it is a very
legitimate area. I think the way we talk about strengthening
enforcement in an effort to put some teeth into making our
budget a legitimate two-step, authorize then appropriate
process work the way it was intended are areas to fix that we
need to focus on as well.
Having said all that, I congratulate you again for bringing
this slice of the loaf forward, and I look forward to some good
input.
[The prepared statement of Mr. Goss:]
[GRAPHIC] [TIFF OMITTED]63105.002
The Chairman. Thank you very much, Mr. Goss. I know that in
my remarks I mentioned the work that you and others have done
on the overall issue of budget process reform, and I do believe
that is a very important package, and as you know very well, I
have been supportive of it all the way, but I feel very
strongly about the need for us to address this question in
light of the fact that we have not been able to move 853 as
expeditiously as we would have liked.
Mr. Goss. I would agree, Mr. Chairman. These are not
mutually exclusive efforts.
The Chairman. Mr. Moakley.
Mr. Moakley. I don't have an opening statement, but I note
that 44 States had a biennial budget cycle in 1940 and now only
21 have them. The States found that by having biennial budgets
it led to more supplemental budgets and less oversight by the
legislature, and I just think that you are really going in the
wrong direction. I think if we just work the system we have and
work it diligently, we probably could accomplish a lot of
things.
As I said, the biennial budget has not led State executives
to do more performance evaluations, nor State legislatures to
do more oversight. States that have shifted from biennial
budgets, to annual budgets significantly reduce the need for
supplemental appropriations. Biennial States still perform
substantial annual reviews to balance their budgets or cede
powers to others to make budget decisions for them in off
years.
I think we are out flailing again, and I just think if we
try to work within the budget procedure, no matter what
deadline you set for the budget, we are always going to be up
against it. Nobody ever does things on time. It is always a
month after they are supposed to do it. So no matter what you
to do in this situation, Mr. Chairman, I just think it is going
to be cosmetic, and I don't think it will improve the budget
system much, and I have dissenting views for your report.
[The prepared statement of Mr. Moakley follows:]
[GRAPHIC] [TIFF OMITTED]63105.003
[GRAPHIC] [TIFF OMITTED]63105.004
[GRAPHIC] [TIFF OMITTED]63105.005
The Chairman. So I will put you down as undecided on this
issue. Mr. Diaz-Balart.
Mr. Diaz-Balart. Thank you. Thank you very much, Mr.
Chairman. This is an important issue obviously, and the
legislative process obviously fundamentally has the role or
should include the role of, in addition to legislating,
overseeing the executive. One of the reasons I am supportive of
this idea and am so pleased that the committee is going to have
an opportunity to study the issue more in depth is that the
oversight role of Congress and also the authorization role,
which is very much connected I think or should be connected to
the oversight role, is not working as well as I think it could
or it should, and I would think that it would probably be the
consensus position that the oversight and the authorization
process also, the authorization process is not working well,
and so perhaps if the authorization committees had more time,
and I think that this structure will permit the authorization
committees to have more time and devote more resources to their
function, they could probably do a better job.
So I am supportive of this concept. I believe that the
biennial budgeting would provide Congress with great
opportunities to do the kind of systematic and regular
oversight that is necessary to ensure the best possible use of
the taxpayers' dollars. So that is why, Mr. Chairman, I commend
you for moving forward on this and for holding this hearing.
The Chairman. Thank you very much. Ms. Pryce.
Ms. Pryce. Thank you, Mr. Chairman. I came in a little late
so if you want to go on to the others and circle back.
The Chairman. We will come back to you. Mr. Hastings.
Mr. Hastings. Thank you, Mr. Chairman. I also want to
commend you and Vice Chairman Goss for the work you have done
on this. I am a very strong proponent of a biennial budget. If
you look at how our process works, we come in in January or
February. The President submits his budget. We go through the
process of laying out what the broad parameters are, and then
we get towards the end of the session, and we are nitpicking
over small, little issues, it seems like, and finally we get
done in October or sometimes even in November and sometimes
even December, and we leave here totally exhausted and say, oh,
we have done our work. Then we come back in January and do the
same process all over again. It just seems to me that that is a
waste of our resources to go through that process year after
year.
A lot of us have served in our State legislatures I guess
maybe kind of cutting our teeth on this process. Washington
State, we do have a biennial budget, and it has worked really
very well. In fact, because of the rules of our legislature,
how it sets up, we have a fine period of time by which we have
to get the process done, and to be sure, in the off year, we do
have supplemental budgets just like we would have if we had a
biennial budget here, but to me it makes a great deal of sense
from an efficiency standpoint to allow the Congress which has
the oversight responsibility of our spending to have at least
another year or have a year that could be confined to more
oversight. I know you have to go through the supplemental
process.
So I think that the biennial budget is an idea frankly
whose time has come, and I am a strong proponent of that, and
once again, I want to congratulate you for the work that you
have done, and hopefully we can move that this session.
[The prepared statement of Mr. Hastings follows:]
[GRAPHIC] [TIFF OMITTED]63105.006
The Chairman. Mr. Reynolds.
Mr. Reynolds. Thank you, Mr. Chairman. I am pleased to be
part of the committee that is holding this timely hearing. As a
former legislator and legislative leader in New York, a State
which also conducts annual budgeting, I experienced a yearly
frustration with the budget process long before coming to
Congress. New York's budget process annually ties up the State
legislature for months at a time, holding all other legislation
virtually hostage. For the last 16 years New York has failed to
produce a budget on time. That was my entire 10 years within
State legislature.
That background combined with my first experience with the
Federal budget last year, as a freshman member of Congress, has
convinced me more than ever that biennial budgeting is one of
the best alternatives available to improving the Federal budget
process. A biennial budget would allow Congress to more
carefully and deliberately sort through all of the funding
priorities and obligations but to do so only once during the
Congress. That would allow a second session to focus on equally
important concerns that unfortunately because of our current
budget process often fall by the wayside, such as government
oversight, reform and management.
I look forward to the testimony of speaker Hastert and my
other colleagues in the House.
[The prepared statement of Mr. Reynolds follows:]
[GRAPHIC] [TIFF OMITTED]63105.007
Thank you, Mr. Chairman.
The Chairman. Thank you, Mr. Reynolds. Ms. Pryce.
Ms. Pryce. Thank you, Mr. Speaker.
The Chairman. I am not the Speaker, Chairman.
Ms. Pryce. Excuse me, I got mixed up because the Speaker
just came in. Mr. Chairman, you never know, some day. Some day
in the future. I am sorry. Mr. Chairman, I support--.
The Chairman. Time has expired.
Ms. Pryce. I will put my statement in the record.
[The prepared statement of Ms. Pryce follows:]
[GRAPHIC] [TIFF OMITTED]63105.008
The Chairman. We are going to read that one.
Ms. Pryce. And along with it, if you would be so kind, I
have a letter from our Governor Bob Taft. In Ohio, we have
biennial budgeting, and he supports it strongly, and I will put
that in the record as well, and I now yield back. Thank you.
[The information follows:]
[GRAPHIC] [TIFF OMITTED]63105.009
[GRAPHIC] [TIFF OMITTED]63105.010
The Chairman. Without objection, Governor Taft's letter
will appear in the record, and I would like to say that our
colleague Tony Hall also made a comment to me about the fact
that you have that in Ohio and that Governor Taft is strongly
supportive of that.
I am very pleased to recognize as our first witness for
this very important hearing Speaker Hastert. At the beginning
of the 106th Congress, Speaker Hastert and I and others sat
down and talked about the importance of programmatic and policy
oversight, and that is a very important responsibility which
the United States Congress has, and the Speaker has been very
diligent in pursuing that, and I am pleased that he joined as a
cosponsor of the resolution that we introduced last year.
Biennial budgeting clearly can do an awful lot to enhance the
oversight issue which is a priority for all of us.
We are very happy to recognize you, Mr. Speaker, and look
forward to your statement.
STATEMENT OF THE HON. J. DENNIS HASTERT, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ILLINOIS
Mr. Hastert. Thank you, Mr. Chairman. And it is an honor to
be here, Mr. Moakley, members of the Rules Committee.
First of all, I want to take just a minute and thank you
for your hard work. There are a lot of committees that do
diligent work day in and day out to make this process work, but
we ask you to do a little extra. You have weird hours from time
to time to make sure that the rules get out in a timely basis
so that we can move the bills to the floor, and many times
those hours are after everybody else's hours. So I just want to
say, first of all, we commend you for the job that you do and
the ability to move the rules out to get the job done and
appreciate that very much. I know it is sometimes above and
beyond this task that we do.
If you will excuse me, I want to read the testimony today
because I think there are some important points that I want to
make sure we are precise about in this legislation. As the
House was conclud-
ing the appropriations cycle at the end of the last year, you,
Mr. Chairman, along with Chairman Young of Florida and other
Members of the committee on a bipartisan basis, introduced a
resolution calling for the Congress to enact a biennial budget
in the second session of the 106th Congress. Mr. Chairman, I
recommend that this happen, and I commend you for initiating
this inquiry and be-
ginning a public dialogue on this subject.
The current budget process doesn't work well, and we needed
to fix it. Since I became Speaker last year, I have emphasized
the need for Congress to do its job under the Constitution, and
I have used the word over and over again, regular order. That
puts the faith in committees like yours and others to get their
jobs done and do it in the process that the Constitution and
rules of this House laid out. The public respects us when we
get our work done, when we produce a good work product and we
do it in an incredible fash-
ion.
When I came to Congress I was not sure if I would ever see
a balanced budget in this town. Matter of fact, some people
laughed at me when I talked about balancing the budget, and it
was some-
thing that didn't seem that would ever happen, but we are
fortu-
nate now to live in a time of budget surpluses. These budget
sur-
pluses have been created by hardworking Americans, people that
go to work every day, people who invest and people with good
ideas, but they are also the result of positive legislation
enacted by the Congress and by the President in recent years.
However, despite the positive budget forecasts, we continue
to do our business under antiquated budget rules and
procedures. It has become clear that we can't do our jobs with
current cumbersome budget systems in place and every year the
appropriations process consumes a great deal of our time with
numerous and lengthy debates and often repetitive votes, and
sometimes if you have been around here for a dozen years or so,
and you listen to the argument year after year after year, it
seems sometimes like the movie Groundhog's Day. It is the same
argument, it is the same debate, it is the same people.
Appropriations are obviously consumed with grinding their
bills through committee, to the floor, the Senate and seemingly
never ending conferences with the other body and all too often
these conferences in particular are consumed with nonbudget,
nonappropriations policy issues. This of course soaks up the
time of congressional leaders, executive branch, budget
experts, appropriators and of course authorizers whose laws
these amendments often affect.
A biennial budget process would free up more time on the
calendar for thorough consideration of authorizing measures.
Under House rules, appropriation bills must conform to
authorizing legislation, but all too often we dispense with
those rules because the authorization bills don't get enacted.
We need to restore the power and the purpose of the authorizing
committees.
Mr. Chairman, I served on an authorizing committee, several
of them in the House, and observed firsthand the difficulty of
moving bills through the House and getting them considered in
the Senate. Sometimes it is frustrating and hard work, and I am
sure most authorizing chairmen are used to the thing that says
get your bills done early or you are going to have to be behind
the appropriation bills as they move through the House and to
the conferences. If we have a biennial budget process, the
authorizing committees won't have to get behind the
appropriators as often as they do now.
The House, through its committee system, must also do a
better job of conducting programmatic oversight and management
of the vast accounts of the U.S. Government. One of the powers
of the Congress is the power of the purse, and we need to
ensure that we have a system in place which allows us to
carefully scrutinize the programs we fund, and I can say
probably one of the most productive experiences I have had in
my congressional career is sitting on an oversight committee
and making sure that the branches of government do the job, and
I have to say in a bipartisan basis there were a lot of good
things that we were able to put together and move through and
to make sure that this government could run better.
Biennial budgeting would give congressional committees the
ability to devote more time and resources to programmatic
oversight, and this must be a thorough and ongoing process. I
have found that it is the most successful when conducted also
in a bipartisan manner. Mr. Chairman, another area a biennial
budget process would improve upon the current system would be
in the area of budgeting for emergencies.
I am sure many of the members here remember the Mississippi
flood situation of 1993 and the difficulty of moving the
supplemental appropriations for flood relief through the
Congress. Other natural disasters occur and create pressures to
move expensive legislation quickly. Unanticipated military
operations such as our intervention last year in Kosovo also
created the need for supplemental appropriation bills during
the fiscal year. Biennial budgeting would force the Congress
and the President to plan ahead for unanticipated needs.
Mr. Chairman, the U.S. Government should allow the model of
23 States who have a biennial budget cycle to go forward. The
President's budget just 2 weeks ago recommended that the
Congress enact a biennial budget. Your sense of Congress
resolutions in support of biennial budgeting has garnered
support of almost 250 members of the House, which spans the
ideological spectrum and includes authorizers and
appropriators. I urge you to use your expertise in the rules
and the procedures of Congress to work with the House Budget
Committee and with the Senate to continue to work on a
bipartisan fashion and produce a biennial budget package for
the House to consider.
I know there are some other questions out there, the
questions of the whole idea of being able to move a tax bill in
the second year and the issues of how you deal with the Senate
rules, but I think those issues could be worked out. That is
why it is important you not only work in a bipartisan basis but
I think also on this issue in a bicameral basis.
Mr. Chairman, thank you for your opportunity to appear
before you today. I am greatly honored and thank you very much.
[The prepared statement of Speaker Hastert follows:]
[GRAPHIC] [TIFF OMITTED]63105.011
[GRAPHIC] [TIFF OMITTED]63105.012
The Chairman. Mr. Speaker, we are greatly honored. As I
said before you arrived, this is the first time since you have
been Speaker that you have testified before a congressional
committee, and I think this is a very important issue to
address because, as you stated so well, you want to proceed
with regular order and you want to make sure this budget
process works, and your support of our effort here is very much
appreciated, and I think that the commitment that you have made
to expand programmatic and policy oversight is enhanced greatly
by your testimony and your commitment to support of this
effort.
So I just want you to know how much I appreciate that
personally, and we are going to continue working on a bicameral
basis. I have been working closely with Senator Domenici on
this and also a bipartisan basis, too. We have the chairman of
the Appropriations Committee, who is going to be following you
with testimony, and many Democrats have joined in working with
us on it, too. So we appreciate that.
Mr. Goss.
Mr. Goss. Thank you, Mr. Chairman. Speaker, it is a
pleasure that you are here for us, and I very much appreciate
you putting the weight of your office behind this. This is
something I think we need to do. Those of us who have been
studying it for a number of years may be a little slower to
getting to the same position you achieved on this issue. I am
there now. I think we have a lot of bedrock testimony. We have
certainly canvassed a lot of Members. There is much discussion.
I think you have come to the right conclusion.
The only question I would have is do you feel in your role
as the Speaker of the House that you will be able to help us
bridge the gap with the other body and get the same kind of
leadership support that we are getting here? We know we have
what we call bedrock support over there, but I don't know that
we have enough at the top.
Mr. Hastert. Well, first of all, yes, I will work with
leadership on the other side of the Rotunda. I think they have
some legitimate questions about reconciliation and how you deal
with those issues in an off budget year for the situation. I
think we need to address that, find ways that are satisfactory
to both bodies, but I think there is some enthusiasm, and I
think we need to work very diligently on both sides of the
Rotunda to make sure that this thing works. It can't be
something done here and not done on the other side of the
Rotunda.
Mr. Goss. Thank you very much. I know we are going to need
your help.
The Chairman. Mr. Moakley.
Mr. Moakley. Speaker, it is nice to have you before the
committee.
Mr. Hastert. It is always an honor to appear before you,
sir.
Mr. Moakley. Couple of things that bother me, but one thing
that bothers me is Ohio is the only big 10 State that has got a
biennial budget, and since 1940 over 20 States have changed
from biennial to annual because of the influx of supplemental
budgets that keep coming up, and they don't have enough chance
for oversight. So I was wondering, you know, since the
direction seems to go in the other way, why you feel it is a
good idea to go biennial.
The Chairman. If the gentleman would yield, I think it is
important to note that Texas has biennial. It is not a big 10
State but it is a big State.
Mr. Moakley. But I said a big 10 State. Now you know what I
have to put up with here. Half truths.
The Chairman. He is surviving well.
Mr. Hastert. Let me just say that since I have been in the
Congress, since 1987, I think every year we have had a
supplemental, even when we do an annual budget. I always
believed that if you would work a little harder at the
beginning and try to set aside and have the ability to address
a rainy day fund or whatever type of way you would do that, and
I am not the budget expert, the Budget Committee working with
you can do that, but I think there are ways to anticipate that.
Plus the fact, we have supplementals every time you turn around
here as the way it is, and I think we have been able to handle
those supplementals, but so many times I know that frustration
that well, you know, if we can't get it done we will just stick
it in the supplemental.
I think this will give us the discipline to try to look
through a 2-year span of time, try to put the needs of the
government in perspective, and if there is an emergency, then
we can move forward. It doesn't prohibit us from moving a
supplemental, but you know, we have those supplementals today.
Sometimes we even see last year on both sides of the aisle,
ours including your side of the aisle, we add on to the
supplementals in ways that years ago would have made your head
spin.
Mr. Moakley. That is what I am afraid of, that a bill like
this would just add to the supplementals and you know how they
get that Christmas tree look and more things are hung up and it
provides more chaos for the legislative body.
Mr. Hastert. My reply to that is that I think probably you
are warranted in your concerns on this, but we do have a
supplemental process today. Every time we turn around, we have
two or three supplementals a year which slows down our
appropriation process to be able to get anything done. I know
it slowed it down last year, and I think if we can move this
process through with one major appropriation bill every
Congress or process every Congress and then we can have some
time to deal with the supplementals if they occur, but we need
to anticipate what the needs are ahead of time, and it will
give us the discipline to do that.
You know that is all theory. I have learned a long time ago
in this business sometimes theory and practice don't come
together. So I appreciate your concerns. I am not discounting
them. I think maybe this is a possibility to do it a better
way, and I would hope that we explore it and have the testimony
on it.
Mr. Moakley. Thank you very much.
The Chairman. Thank you, Mr. Moakley. Ms. Pryce.
Ms. Pryce. Thank you, Mr. Chairman. Let me take this
opportunity to reassure everybody that I know the difference
between our chairman and our Speaker, and they both do a fine
job on that and may they continue in those jobs years and years
and years to come.
Mr. Speaker, thank you for your support. This is an issue
that will affect everything we do around here. It is so
important that we examine it carefully. We in the Rules
Committee have been looking at it through the years, and I have
been working with Mr. Goss and his subcommittee, and it is
something we should proceed with carefully, but it is wonderful
to know that we have the support of your office.
I worked with you on committee projects in the oversight
area before when I first came to Congress, and I know how very
important that is to you and to us as a body, and I believe
very strongly that this will give us the opportunity to do more
of that, which is just as important as the legislative work we
do.
So thank you very much for your support. I have no
questions.
The Chairman. Mr. Diaz-Balart.
Mr. Diaz-Balart. Thank you, Mr. Chairman. Thank you, Mr.
Speaker, appreciate you coming here and honoring us and also
appreciate your support and agree with you.
The Chairman. Mr. Hastings.
Mr. Hastings. I just want to add my thanks to you, Mr.
Speaker, for being here and supporting this because this is
clearly when you look at the tradition of policy, and this is a
huge change from the past. I congratulate you for being out in
front.
The Chairman. Mr. Sessions.
Mr. Sessions. Chairman, thank you. Speaker, I also want to
thank you and say that I am delighted that through your
leadership we have another example of a bipartisan approach
solving the problems of Congress, and I appreciate your
leadership. Chairman, I would also ask unanimous consent that
my opening statement be included in the record.
[The statement of Mr. Sessions follows:]
[GRAPHIC] [TIFF OMITTED]63105.013
The Chairman. Without objection, it will appear in the
record. Mr. Reynolds.
Mr. Reynolds. No questions, Mr. Chairman.
The Chairman. Thank you very much. Mr. Speaker, thank you
very much for being here. We appreciate your support and your
thoughtful testimony and look forward to continuing to work
with you on this issue. Thank you.
Now, we are very pleased to recognize the distinguished
chairman of the Committee on Appropriations, the man who joined
with me as a lead cosponsor of the resolution introduced in the
waning days of the first session of the 106th Congress, and
Chairman Young, we are happy to have you and look forward to
your testimony.
STATEMENT OF THE HON. C. W. BILL YOUNG, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF FLORIDA
Mr. Young. Mr. Chairman, thank you very much, and I
appreciate the lead you have taken on this issue. If I could
add a personal comment to my friend, Mr. Moakley, I did not
bring my cell phone this time.
The Chairman. So Beverly will not be calling you.
Mr. Young. I don't think so. We still have a few minutes.
Mr. Chairman, I was first elected to the Congress in 1970
and came here in the 92nd Congress. We did not have a budget
resolution at that time. We did not have a Budget Committee. We
did have a lot of big spending. If a Member could convince the
Appropriations Committee to spend, we spent. But we had
continuing resolutions even back then. We had supplementals
even back then. At one point we changed the time of the fiscal
year. Rather than beginning July 1 we made it begin on October
1. That might have been a plus. Sometimes I wonder about that.
But anyway we eventually adopted a budget resolution process.
We now have a Budget Committee. We have all these safeguards
now and our national debt has gotten considerably larger since
that happened. We still continue to have continuing resolutions
and we still have supplementals. So that didn't solve the
problem. So I am happy that you are taking the lead in
considering a different approach to the budget process and
primarily the biennial budget approach.
So it is a pleasure to be here to give you my thoughts on
this biennial budgeting, and, Mr. Chairman, you and I have
discussed this many times in person so we pretty well know what
each other's ideas are. But for the benefit of the committee,
let me say the fiscal year 2001 budget is the 27th budget that
I will have worked on since I began serving on the
Appropriations Committee. During nearly every one of those
budgets my committee was either rushed for time or was late in
completing its work or both. This year we received the budget
in early February. By that time over one-third of the fiscal
year was already gone, and we now have less than 8 months to
get all the appropriations bills enacted.
We are supposed to receive the overall allocation against
which we mark up our appropriations bills by April 15th, and I
don't need to provide the history of how many times Congress
has not been able to meet that deadline for a budget
resolution. The record is
very bad. In some years we haven't even had a budget
resolution. The reason has been it is hard to do a budget
resolution given the conflicting priorities that are inherent
in the effort and the fact that we have had a divided
government for most of the recent past.
Even if we get a budget resolution completed by April 15th,
we still would have less than 5-1/2 months left to get our
appropriations work done. I have brought a poster I would like
to show to you. If you look at this chart, this shows the 12
months of the year, but instead of starting in January the
chart starts with October because that is the beginning of the
fiscal year. October is red because October is gone. November
is red, it is gone. December is red, it is gone. January is
gone. It is red. February, well, we are past the 15th now. We
were on the 15th when we colored this one up, but starting
tomorrow, the 17th, we are not going to be in session, across
here, across here. We will be in session here. We will not be
in session on these blue days. Look at the blue marks there,
the House will not be in session and committees will be
scattered and Members will be scattered.
Now, we are supposed to get this year, and I am satisfied
the leadership will do this, a budget resolution by March the
15th and that is good news for us as appropriators, but let us
say we get it March the 15th. If we get the budget resolution
March the 15th, look at how much time is gone before the
appropriators can actually begin to get their work because I
can't assign 302(b) allocations to the 13 subcommittees until I
get a 302(a) allocation from the budget resolution. So you see
what happens here, and look at all of the blue space when there
will be no sessions here. So we can't bring bills to the floor.
Now, with that limited amount of time, we have to do 13
regular bills, plus whatever supplementals we have, and then
deal with not only getting them through the House but through
the Senate and with the President.
As you can see by the calendar, that would leave only 6-1/2
months for our appropriations work. That is better but it is
not enough. I think we need more time than this to develop and
enact appropriations bills because one of the reasons that the
Appropriations Committee goes into so much depth on
appropriations is we are to provide oversight to determine if
the money is being spent properly, if there has been adequate
justification to prove that we actually need this amount of
money because we don't want to spend any more money than is
absolutely necessary.
And I believe that biennial budgeting legislation should be
developed to provide additional time for Congress to consider
appropriations bills and to give us more time to provide that
oversight. How many times have we passed appropriations bills
and then read in the newspaper a month later or 6 months later
that such and such a project was in there and no one claims to
know how it got there. Well, sometimes we don't know how it got
there, but it got there because we didn't have the time to
devote as much as we should to the oversight.
Now, the legislation you consider, is this the total
answer, do we have the final plan? Probably not but we have to
start somewhere, and whether this means shoving the date for
budget submissions back earlier, shortening the time for
development of a budget resolution or moving the beginning of
the fiscal year ahead as was done in the '70s or a combination
of all of these, it is something we need to consider in order
to make the proper decision. But we need more time for the
appropriations process so that we don't get to the end of the
fiscal year, negotiating with the President, whoever that
President might be, leaving Congress in a real bind, not having
adequate time to negotiate because the fiscal year is running
out and the threat of closing down the government is hanging
over our head.
While doing this might seem like we are taking more time on
appropriations rather than less, which is one of the assumed
goals of biennial budgeting, we would really be freeing up
legislative time. This is because even though we need more time
during the year for appropriations, we would only have a major
appropriations effort every other year. The off years would be
devoted to oversight and authorizing work plus fine tuning of
the appropriations bills passed the year before.
While my main reason for looking at biennial budgeting is
to get more time for the appropriations process, one of the
stated reasons of others I have heard has been to give more
time for oversight activities by our authorizers because
oftentimes appropriations are ahead of the authorizers, which
is not what our system intended. One of the reasons
appropriations takes so much time is because so many programs
are not authorized at the time we consider their
appropriations. So then we get hit with the controversial
legislative issues that are inappropriately included in
appropriations bills rather than authorizing bills where they
should be.
I strongly believe that any biennial budgeting legislation
should not only address the budget schedule of the Congress but
also the authorizing process. If all that biennial budgeting
achieves is a 2-year appropriations cycle, we will be as bad
off with the 2-year bills as we are with the 1-year bills. We
need multiyear authorizations and we need them in advance of
the consideration of appropriations bills in order for biennial
appropriations to work. While biennial budgeting will give
additional time for oversight by authorizing committees, they
must develop and enact authorizing legislation with this extra
time so that appropriations bills do not become the vehicles
for every controversial issue before the Congress.
I want this committee to know that the Appropriations
Committee also does a lot of oversight. We will continue to do
a lot under a biennial budgeting calendar. I think it would be
good for authorizing committees to do more as well. They need
to use the information they learn to review and modify the
permanent legislation that is on the books and to pass
authorizations to appropriate. Requirements to bring this about
should be included in any biennial budgeting legislation.
I have also heard that biennial budgeting legislation might
become the vehicle for other budget process reform. I want to
make sure this committee understands that we need reform that
will serve the American taxpayer better. I would urge you to be
very careful not to load up any biennial budgeting legislation
with other controversial budget process legislation. Support
for and success of any biennial legislation may well be
contingent on what else, if anything, might be included in this
legislation.
For the reasons I have outlined, I believe that now is a
good time to look at implementing biennial budget legislation.
I urge the committee to hear from a broad range of experts on
the matter, listen to their concerns and see if we can improve
the budget and Appropriations process.
I thank you very much for your generosity with your time,
Mr. Chairman. I have completed my statement.
[The prepared statement of Mr. Young follows:]
[GRAPHIC] [TIFF OMITTED]63105.014
[GRAPHIC] [TIFF OMITTED]63105.015
The Chairman. Well, Mr. Chairman, it is just the two of us
at this point.
Mr. Young. I noticed.
The Chairman. The reason is we have got a vote going on
downstairs. We have about five minutes left on the vote
downstairs. We are going to try and continue the hearing
process here, but let me just raise the one issue that you
brought that I think is very important. It is the question of
supplementals.
Now, we in the past quarter century, since passage of the
'74 Budget Act, have seen on average three supplementals per
year, and what would you anticipate if we were to move to the
biennial process?
Mr. Young. Mr. Chairman, I would anticipate that we would
still continue to have supplementals, for this reason, that
supplementals supposedly are just to deal with emergencies, and
we never know when there is going to be a real emergency,
whether it is here at home or whether it is abroad with one of
our allies, one of our friends. So I don't think we can rule
out the use of supplementals. We have one before us now that we
will be bringing to the House as soon as we reconvene from next
week's District home work period, and that supplemental is
dealing with Kosovo. Whether you support that or not, it has to
be paid for because the money is already being spent. It also
deals with the antidrug programs in Colombia specifically and
other areas in that part of the world, but that is becoming a
very serious emergency and does need to be dealt with. There
are floods, there are hurricanes, there are earthquakes and we
don't know when they might come.
So I think that there still will be calls for supplementals
but I think this will give us an opportunity to focus on
supplementals and try to make sure that they only come up when
we deal with real emergencies rather than just someone's idea
to spend more money.
The Chairman. I would like to just raise one other question
before we go downstairs to vote on the rule of the bill that we
are going to be considering, and that is, I particularly
congratulate you because there has been this view from members
of both the Budget Committee and the Appropriations Committee
that this step would somehow undermine their authority, their
power, their opportunity to participate in the process. Do you
have any thoughts on that at all?
Mr. Young. I do, and without going into a lot of detail, I
actually believe this would help us create an environment where
we would have a better working relationship with the agencies
in the executive branch that we deal with. It would also give
them an opportunity for their suppliers, people they buy goods
from, for the military to buy spare parts or to buy parts for
an ongoing weapons system, that they could plan ahead and buy
in quantity lots rather than jumping at one buy at a time, 1
year at a time. Quantity purchases have proven to be very cost
effective.
The Chairman. Thank you very much. I appreciate that. We
are going to continue the hearing. Mr. Goss is going to take
over. You and I are going to go downstairs. We can proceed with
Mr. Obey.
Mr. Goss. [Presiding.] Thank you, Mr. Chairman. Mr. Obey,
we welcome you to the committee. We are prepared to accept
without objection your prepared remarks and your guidance on
this matter before us.
STATEMENT OF THE HON. DAVID R. OBEY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF WISCONSIN
Mr. Obey. Well, Mr. Chairman, let me say first of all that
when I hear discussions about this, I am reminded of my old
friend Archie the cockroach. Archie said once, he said did you
ever notice that when a politician gets an idea he gets it all
wrong, and with due respect to those who have testified, I
think what is being contemplated would be a horrendous mistake,
and I would like to make a couple points.
I do not come here testifying in my capacity as ranking
member on the Appropriations Committee. I detest dung hill
politics. I detest chicken blank jurisdictional debates. They
belong in the ash can. But I have been here for 31 years, and I
think I have learned a little something about this place, and I
think I have seen many a process change which produce
unintended and unforeseen consequences, and I am testifying
here on a matter that I regard to have absolutely no
partisanship. This is an institutional question. This
institution that we are all privileged to be Members of is a
very precious national resource, and we had better be very
careful before we make dramatic changes that will weaken it in
any way, and I think this will weaken it in the most profound
possible way.
I would note in listening to the testimony so far that we
have heard that the current process is a mess. I absolutely,
totally agree, and I think it needs major changes, and I will
be happy to discuss with you what changes I think those ought
to be. I am concerned from having heard the initial statements
that we are essentially talking to a closed jury here because
it appears people already have their positions pretty well
firmed up. I regret that. I hoped that I could help change some
minds.
I want to say that I understand the existing process has
severe problems, but in legislation, as in medicine, the remedy
should not make matters worse, and I profoundly believe that
this will.
Secondly, I have heard that appropriations consume too much
time. I believe that a 2-year budget process will lengthen, not
shorten the time that we take to deal with our budgets each
year, and I will explain why later.
Third, I have heard that people want to make a change
because they are tired of all of these nonbudgetary,
nonappropriation riders being added to the bills. So am I, but
this will create a situation where there will be more because
if we have a 2-year appropriation, the stakes will be much
higher. People will have only one kick at the cat, and so you
can count on them to load them up and then you can count on
those who missed to be doubly alert to their opportunities to
do so on supplementals, and I will explain how that
disadvantages the House.
It has been alleged that this will create more opportunity
for oversight. It will do nothing of the kind.
It has also been asserted that this will help us to deal
with emergency issues on a more effective and regularized
basis. I would suggest that logic suggests if you set your
appropriations in stone for 2 years, it is very much more
difficult to anticipate 2 years down the road than 1 year down
the road, and so I think you will have an even more chaotic
consideration of emergency or so-called emergencies than we
have right now.
I will do something that I very rarely do in this or any
other committee. I want to stick fairly close to the text of my
testimony because, like the Speaker, I think this is perhaps
the most serious issue about which I have ever testified before
this committee, and of all committees, this committee needs to
be more concerned about the role of this institution than any
other committee.
I believe that is what is before you today will seriously
undermine the Constitutional responsibilities of the
legislative branch of this government. I think it will give the
executive branch more leverage than it has today. It will
create more chaos rather than less because there will be a
constant stream of supplementals going through this place, and
because so much can change in the economy over a 6-month
period, not to mention 2 years, we will find ourselves locked
into policy decisions that new circumstances will dictate
changing, and Members will use that as an opportunity to
Christmas tree every vehicle that goes through here with I
think disastrous results to our reputation.
If you look around the world, as Members of Congress, we
are unique among legislators. We have far greater individual
power, we have far greater responsibilities than our
counterparts in any legislative body on the face of the globe.
We didn't make it that way. Our Founding Fathers made Congress
the first branch of government, and they conferred on it also
the power of the purse to enforce that. And they insisted that
it keep the executive branch on a very short leash. And it is
the length of that leash that determines the balance of power
in this town and in this government. This proposal will
substantially lengthen that leash. It will expand the power of
career employees in the government who feel that they are
largely responsive to no one.
The one argument we hear in favor of biennial budgets is
that States do it so we should too. Mr. Moakley has already
pointed out that that argument is, in my view, deeply flawed.
It is one thing to come from a State of four million or five
million people or even Texas. Texas doesn't have to deal with
170 countries around the world. They don't have to deal with
international economic crises. They don't have to deal with all
of the broad, national issues we have to deal with.
Most of the States that practice biennial budgeting have
populations smaller than the four million people currently on
the payroll of the Federal Government, and as Joe has
mentioned, at the State level we moved from having 44 States in
1940 who had biennial budgets to 21 today. I think it is fine
for some of them. I think it is not fine for someone with our
responsibilities.
Proponents of this legislation don't appear to understand
that there are numerous agencies that are not responsive to
their own appointed leadership within those agencies. They are
even less responsive to departmental management at the White
House, and they are certainly even less responsive to the
Congress, and this proposition will make that worse.
The healthiest thing that happens in this town occurs each
year in the annual budget review. That is the one moment in
time when senior program managers are confronted by the
possibility that they were not ordained by God to set
government policies on their own without benefit of election.
And removing that requirement for annual review will affect not
only our ability to ensure that the laws be fully executed, but
it will do some other things as well. I would like to describe
to you the calendar that we will have if this process works the
way its proponents say it will work.
We will get elected in November. We will come here and
ideally they tell us by the middle of the first year we will
have our appropriation process done. If that is the case, then
"ain't nobody" in any of those agencies who is going to need a
single Member of the House of Representatives for anything for
the next year and a half, and that will make them far less
responsive to the demands and needs of your constituents than
they are today.
And I would point out that the only ones who will have a
continuing interest in what we feel are the agencies that are
affected by supplemental requests. And the problem with
supplementals is that they are always focused on program
increases to meet concerns that we have, but frankly, those
program managers are a hell of a lot more interested in their
own bureaucratic budgets and their own administrative budgets
than they are in whether you actually get an increase or a
decrease in their programmatic budget. And so supplementals
will not give you the leverage on agencies that the annual
review of their operating budgets will give you.
Now, some proponents say that that will give us an
opportunity for more oversight. I don't believe that is true
either. The principal job of oversight in this institution is
done by the 16 committees in the House who have jurisdiction.
They are not the Appropriations Committee. They are the
authorizing committees. The Appropriations Committee does a lot
of oversight, but it is a different kind of oversight. We
oversee to see how they are spending Federal money and whether
they do what we like or not, but often the Appropriations
Committee is at variance with the authorizing committees in
terms of how they want to see these laws develop. So the
Appropriations Committee doesn't do oversight that benefits
authorizing committees. In enforcing, authorizing committees
demand that agencies follow the law the way they are written,
and these programs are not supposed to be designed by
appropriations. They are supposed to be designed by authorizing
committees.
Secondly, when authorizing committees and appropriations
committees do agree, the appropriations process has been the
primary vehicle by which agencies have been disciplined to make
certain that they do follow the intent of the authorizing law,
and when you lose your annual opportunity to get at them, you
lose your ability to really discipline those agencies.
We also have the question of whether authorizing committees
will have more time for oversight if we pass this. I would
point out that right now we have a terrible time getting
authorization bills to the floor. Authorizing committees will
tell the leadership it is because we don't have votes here to
keep committees going so Members go home. And the leadership
will say "Well, my God, we don't have votes because you guys
aren't producing your legislation." And the fact is the only
time when we have a sustained period of votes on the floor is
when we are going through the appropriations process, and with
all of the interruptions and inconveniences that that causes,
that is when your authorizing committees have the best
opportunity to actually get their quorums to move legislation.
I agree with Bill Young we need more long term
authorizations. That is one of the changes I favor rather than
this, but I ask you to remember these hard facts when you look,
not at the surface of the oversight issue, but when you
actually get down to the nitty-gritty about how it operates.
Our problem right now is that we can't even get to annual
budgets, much less biennial budgets, and let me give you an
example. Last summer the Speaker and some of the members of the
Foreign Affairs Committee decided we ought to spend more money
fighting drugs and the insurgent guerrillas in Colombia. So
they and the administration began putting together a plan for
$1 billion in additional spending. They began discussions with
General McCaffrey, the drug czar. Reports were leaked to the
press about what they were talking about, and then it was
decided that the fiscal 2000 budget was getting too dicey, it
was already too hard to pass it. So rather than including that
extra billion dollars in the regular budget, both the
Republican leadership and the Congress and the White House
agreed to hold off and handle it in a supplement. So in other
words, while both sides, while both the White House and the
House leadership are talking about we need to go to biennial
budgets, they are not even committed to making an annual budget
stick. And so what we wind up with is that now we have a
package which is going to be about $4 billion, and it is going
to be handled outside the regular appropriations process. That
is going to jack up spending, not reduce it.
Now, I am not arguing for or against the substance. I am
simply saying that when you consider these items outside of the
normal overall budget, annual budget, the costs will go up
rather than down because it is easy then to shift money out of
this year around into the previous year or the following year,
and you get away with it, and that is not a credit to the U.S.
Congress.
I also want to point out that what happens is that when
supplementals move through this place, and this will greatly
increase the number of supplementals, because if you are stuck
over a 2-year period, every agency will be looking for a
supplemental every day of the week, and you will be stuck here
until the cows come home dealing with them, and what will
happen is that there is a difference between the way the House
handles supplementals and the Senate.
The House has a tight rule of germaneness. That means when
you have a supplemental come before the House, we won't be able
to Christmas tree it with other items that are not germane
because you have the Rules Committee to stop that. "Ain't got
no" Rules Committee that functions that way in the Senate. So
what happens? They see a must pass bill. The administration
wouldn't have asked for it unless they really wanted it badly.
So they know the administration is willing to give damn near
anything to get it. So what do they do, they load it up on the
Senate side, and after the initial appropriations, the House
will lose its traditional power to initiate appropriations, and
you will have the Senate Christmas treeing these bills to
death. We will be reacting to them, and we will have lost our
constitutionally determined preeminence in originating
appropriation items, and I do not see why Members of the House
would do that.
Also, there are numerous opportunities every year to save
money out of operating accounts for a number of agencies, and
those will disappear with the biennial budget process. Every
appropriations subcommittee finds in the course of its regular
hearings that agencies haven't been able to expend certain
amounts of money, and so we take that into account in the
program levels we provide for next year, but if once an agency
has its money, it can sit there for 2 years before they have to
spend it, you aren't going to have Congress being as aggressive
on the rescissions as they will be on supplementals, and so
money which you would ordinarily recoup to reduce the cost of
next year's appropriation will sit in those agency coffers and
it will be lost, and that will also elevate the cost of
government.
There is another aspect that I find troubling. People say
this is going to shorten the time we spend on appropriations.
My eye. Right now, the only reason that we are able to finish
our work in a calendar year most of the years is because we all
know that we want to get the hell out of here by the time the
holidays come. Now by God, if you wind up with a 2-year budget,
all of those arguments are going to slop over the holidays,
they are going to slop into the next calendar year, and we will
have year and a half fights and 2-year fights before we finally
get these resolved, and all of the time in the House will be
consumed by appropriation processes, and frankly, I don't have
that much energy. I have a lot of energy, but by God we log
more time on the House floor than any other committee now. I
certainly don't want to increase that, and I deeply believe
that it will.
I just want to say I fully understand the frustration with
the existing process, but very often human beings duck
responsibility, and we look for ways to blame the institution
rather than looking at the way we ourselves deal with the
problems that we face. And if you look at why it is a mess, I
think there are a number of very good reasons.
First of all, the budget process, you saw that red part on
Bill's calendar. The budget process starts all too often with
unrealistic assumptions coming out of the Budget Committee and
the administration. All the administration has to do to produce
a budget is to produce a document which they say meets the
targets, and if they do that, they get a bye from the press.
Then the Budget Committee comes up and they don't have to
answer the question: "Is this a wise budget?" All they have to
answer is: "Does this meet the targets." So they invent all
kinds of assumptions. My high school history teacher told me.
"Above all else in life, Dave, question assumptions." My God,
if you look at what has happened, we have had a succession of
appropriation fights that have been dragged out because very
frankly what has happened is because the initial resolutions
were so unrealistic the clock had to run until people were
forced on both sides of the aisle to recognize what was real,
and I think there is a way to fix that.
We are the only institution I know that places
responsibility for planning a budget in the hands of those that
are different from those that are charged with executing it.
With all due respect to the Budget Committee, once they pass
their overall plan, they don't have to deliver on the results.
If the people who craft this overall plan for a budget have
no responsibility for its execution, then you can expect that
it is quite likely to simply support a plan that they would
personally like to see rather than one that might actually work
and might actually pass. I think that is one fix we ought to
make.
Secondly, we have got to have a more rational way of
dealing with emergencies, and it is not more rational to double
the time because then you will have more emergencies, it will
be an even more irregular process.
I think the Federal Government plays too large a role in
dealing with natural disasters, for instance. I think that we
need to have a system by which States can buy into an insurance
program underwritten by the Feds on an experience rated basis,
so that if they have natural disasters, they have already paid
into an account. I don't see why Uncle Sam ought to shell out
dollars every time somebody has a tornado or a flood or some
other problem. We ought to help but the primary responsibility
ought to be your State and local governments, and we ought to
be able to structure an emergency process that deals with that.
But the biggest problem by far in the appropriations
process does not exist in the House. It exists in the other
body, and the problem is that the Senate has permitted far too
much latitude to its Members to inject any issue they want into
any legislative vehicle. And what that means is that when
authorization after authorization gets tied up, the only thing
that they can do to get their input is to attach a rider to an
appropriation bill, and that is what in my view has killed the
ability of the appropriations process to function effectively.
The rules in the Senate are such that you can't proceed
under normal circumstances unless every single Senator agrees,
and routine decisions about a budget have to be made by 60
percent. To me the way to resolve this problem is for the
Senate to adopt new rules. It makes no sense to allow them to
continue to do what they do.
But I urge you to remember, if you move to a world of
constant supplementals, which this will create, the House will
lose its traditional preeminence. The Senate will be in the
driver's seat. It is the Senators who will determine what the
add-ons are going to be to appropriations bills, and all we
will be doing is reacting to Senate initiatives and that is not
something that we, with our congressional responsibilities,
ought to blithely hand over to them.
[The prepared statement of Mr. Obey follows:]
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The Chairman. [Presiding.] Thank you very much, Mr. Obey.
As you know, back in 1993 we served together on that Joint
Committee on the Organization of Congress. We went through a
debate at that point on this issue, and I would like to totally
agree with the argument that you provided on the issue of
disasters. I think that not only should the people be looking,
instead of the Federal Government, State and local governments,
but we also have been working on trying to encourage private
insurance as ways to deal with disasters. So I totally agree
with you on that question.
On the issue of biennial budgeting itself, let me say that
obviously we don't have a final plan put in place, and I very
much want to take your concerns into the mix. That is one of
the reasons I raised the question of supplementals with Mr.
Young when he was here, because that is a question that is out
there, and I think it is a very valid one because there are
disparate views on that. But I would simply like to welcome
your input, to say that as we do proceed with crafting
something to address what you say obviously is a system that
does need to be fixed, we do very much want to take your
thoughts into consideration.
Mr. Hastings.
Mr. Hastings. David, I appreciate very much your testimony.
You have a reputation of being one who wants to guard the
institution, and I do respect that very much. Obviously on this
we have a difference of agreement because I am in favor of
biennial budgets.
One area you focused a lot of your testimony on, the
supplementals, in my opening statement I suggest that
supplementals are part of the process, but what has not been
said, which you do not say and I haven't heard anybody else say
it, regardless of their view, is that supplementals just
because they are submitted don't have to pass. In other words,
the hard part of the biennial process is the first year. You
pointed out some problems that we are going to have to overcome
because I agree that the process could be extended, no question
about it. One way to resolve that is for a concurrent
resolution where the House and Senate agrees at every Congress
on deadlines to take these things up. It demands self-
discipline on both sides.
But once you get a biennial budget in place, once you get
the biennial budget in place, the supplementals become more of
a political issue rather than a policy issue. Let me describe
them. The second year of any Congress is probably more
political than the first year. I think that is obvious. The
sitting Congress in the first year will really find out what
the bar is as to what you can do in the next year of the
Congress. We recognize that you know where you can go.
If the theory is that we can get a biennial budget in
place, then we have set the spending limits for that Congress.
If there is a supplemental that is being driven mainly by
politics, one of the options is not to pass that supplemental
budget, and yet the Congress will continue and we won't have a
government shutdown like we had in 1995. I have had two
experiences with that when I was in the legislature where
precisely that happened and the government ironically went on
very well until the next year. So while you have
concerns about that, those are valid concerns. Just because you
have a supplemental budget does not suggest you have to pass
it.
So I would like your comments.
Mr. Obey. Yeah. I would say--let me put it in crass
political terms. Let me assume you maintain control of this
place. Terrible assumption.
Mr. Moakley. I agree with the teacher, question those
assumptions.
Mr. Obey. Don't you understand how you can be set up by a
White House on this?
Mr. Hastings. Well, sure.
Mr. Obey. I mean, if you guys are tired of shooting
yourselves in the foot and want to shoot yourselves in the head
instead, there isn't a whale of a lot I can do about that. But
the fact is that if you have a 2-year budget and if I am the
President, I will tell you what the devil I would do. I would
do what the administration does with something like NIH, for
instance. They ask for $1 billion increase and I would let the
Congress work its will on that and other items, and I would
hold in reserve for an election year all kinds of stuff that I
want to put you right on the spot on, and come that time I
would lay out those supplementals and I would dare you not to
pass them. And what you have done in that instance is you have
used the regular process to get through the nuts and bolts that
don't have any political--the stuff that has to run the
government, and then the supplementals become a holy picture
war on popular issues.
It destroys the legislative process. It makes the process
even more gimmick ridden than it is now, and it puts you at one
whale of a disadvantage vis-a-vis the White House. And I might
like that from a partisan standpoint, but from an institutional
standpoint, we need to strengthen the ability of Congress to
deal with the budgets, not weaken it, and I just think when you
move to a supplemental, you strengthen not just the White
House's hand but you immeasurably strengthen the bureaucrat's
hand.
There is no agency in government that has driven me more
crazy than the FAA except maybe for the Immigration Service.
How would you like to have to deal with them if they don't have
to deal with you for a year and a half? I mean the problems
with these agency people now, they say, "Oh, well, if the
Congress doesn't like something we do and they direct us to do
something, we can outlive them, we can outlast them."
You are going to make it a lot easier if they don't have to
come up here on an annual basis and testify, not just on their
program requests, which are largely political coming out of the
policy makers in the administration, but what those guys care
about is their administrative budget, they care about their
operating budget. That is what they live or die on, and you
have freed them from any worries about that for a year and a
half, if this works the way you say it is supposed to work. And
if it doesn't work the way you say it is supposed to work, then
there isn't any reason to pass it.
Mr. Hastings. Well, I would suggest that everything you
describe we live under right now in annual budgets because the
supplemental budgets last year, the farm bill, and I assume we
will have some supplemental budget come down, that is the
nature of the piece. I don't think that changes anyway. One way
you have to guard against that and obviously the party in power
whether it is you or whether it is us, I prefer the latter
rather than the former, that is a political decision we are
going to have to make, and that is, you don't have to pass the
supplemental budgets.
As far as not having agencies for an 18-month period, part
of the process has to be a time when they spend their dollars
and those things have to be worked out. That has to be part of
the budget process, also, but I do respect what you say. You
bring up some points I think that are valid, and I am certainly
not one that suggests that this is the end-all that will end
all of our problems, but everything I have heard thus far
exists so far under annual process.
Mr. Obey. But there is a difference. Right now, you have to
on an annual basis produce budgets which can at least pass the
laugh test with the press. If you have a biennial budget, the
White House will get the mundane stuff tied down the first
year, and then the second year they will bring in those
supplementals with the most powerful sexy political pieces they
can think of, and if you don't pass them, they will be happy to
talk about it.
Mr. Hastings. The only way I can respond to that is that is
a political decision which, as I said in the first part of my
question to you, is the first year you are having a policy year
of Congress, second year is a political year, and I would
suggest we are going through that same process this year.
Mr. Obey. Well, except that this year in the end the
administration has to get its basic stuff passed, and so in the
end both sides have to come from their political positions to a
more real position in the middle. I mean of course the second
year is going to be more political. What I want to make sure is
that the second year doesn't do immeasurable damage to the
institutional requirement that we keep a tight reign on the
power of the purse, and I think with this proposition you are
giving it away forever, and it is like privacy, it is like
liberty. We take it for granted but once you give up power,
even inadvertently it is hard as hell to get it back.
Mr. Hastings. And I think that argument does have some
weight. I would suggest that some of the executive orders
probably would be a way to counteract, but that is another
argument. That doesn't deal with the appropriation process.
Well, I would say, Mr. Chairman, and I would say, Dave,
that this is something that there is going to be a lot of
discussion on, and I think there are some real differences
obviously, but at the end I think what we need to remember is
that our responsibility here going through the authorization
and appropriation process, especially appropriation process, is
to protect the taxpayer. We shouldn't ever lose sight of the
fact that taxpayer is the one who keeps us giving the means by
which we spend dollars, and I think this is one protection for
taxpayer.
Mr. Obey. I look at it just the opposite, the more
expensive, the less control.
The Chairman. As I prepare to call on Mr. Moakley, let me
just do two things. First, we are very pleased to have the
mayor of one of our Nation's great cities. The City of Pasadena
is represented here. Mayor Bogaard has joined us and we are
happy to have you.
And the second thing to do before I call on Mr. Moakley is
simply ask you, David, what role do you see our authorizing
colleagues playing in the budget process itself?
Mr. Obey. I think the authorizing committees are jammed by
two problems. First of all, because budget resolutions--and
this has happened under both parties--initial budget
resolutions have been unrealistic. And so the leadership has to
put so much energy into getting people to vote for a budget
resolution that doesn't even have the force of the law, and so
you get it phonied up.
Let me give you an example, in '81, the last fight that was
made in the Budget Committee to get the votes to pass a
resolution, was in agriculture. They were $400 million as I
recall above where they needed to be in order to get under the
ceiling. So the Budget Committee simply told the dairy guys
that it was going to come out of feed grains. They told the
feed guys it was going to come out of dairy. They used the
money twice. They had an unrealistic assumption, and it tied up
the appropriation process forever afterward. I think you simply
have to have a more realistic budget resolution to begin with.
Second thing is I think we really need to ask authorizing
committees to do multiyear authorizations. I think that what an
authorizing committee ought to do is spend the first year
getting their authorizations tied down, and then after they
have got their authorization shaped, then they can do more
effective oversight to make certain that the laws are being
handled the way they were intended to be handled and
interpreted the way they were intended to be interpreted.
I don't think the appropriations process has much to do
with whether the authorizing committees move or not. I think
the Budget Committee with its unrealistic assumptions force the
Appropriations Committee, the Ways and Means Committee and a
lot of the authorizing committees who also have access to
direct spending responsibilities under the Budget Act, they
have to react to an unreal budget and they have to spend a lot
of time on that. I think that gets into their ability to do it.
To me, and this is a different subject, and I probably will
cause myself trouble doing this, but I believe that there was a
choice to be made when the Budget Committee was established,
and the question was: "What should the composition of that
committee be?" And they decided there were two choices, either
you could take the chairs and the ranking members of the
committees with direct spending responsibility and put them on
that committee, so you have got the committee leaders who
handles food stamps, Ag, I guess, Ways and Means that handled
some of them, Commerce, that handle some of them. You could put
them on the committee or you could put members appointed by the
leadership on the committee, and they decided to do the latter.
I think the system would be more realistic if they would
have done the former. If the same people who put together the
budget resolution then had to put together the actual
legislation to implement it, you would end the baloney
assumptions that go into building any budget resolution. The
majority party, the minority party, all people would be much
more likely to put together an initial resolution which
reflected a real center of gravity in this place rather than
just somebody's idea of what might be nice if they didn't have
to deal with reality.
The Chairman. Mr. Moakley.
Mr. Moakley. David, I agree with all of what you said
except when you talk about the authorizations becoming
multiyear. Doesn't that automatically stir up a lot of
supplemental budget requests because the authorizations are
operating in a multiyear and the appropriation is in a single
year?
Mr. Obey. I don't think so. I think most of what the
authorizing committees do is to draft long term legislation. I
mean, the problem we have now is that we wind up having to
carry so much authorization legislation because authorizing
committees want to authorize every year, and so they can't get
it done in time. And to me, if you had say 3 or 4-year
authorizations as the rule, then the authorizing committees
would have the time to do the digging on oversight to make
certain that the authorization is being followed by the
bureaucracy, and they would also have time to then deal with
new supplemental requests they had to authorize before we could
move on it, but they ought to be designing things for the long
haul. When they don't, then we get people whispering behind
their hands on the authorizing committees that we aren't
including--.
Mr. Moakley. Well, you get all those amendments, those
legislative amendments to the appropriation bills.
Mr. Obey. Let me give you one example. When I chaired the
Foreign Operations Subcommittee, the authorizing committee had
not passed their authorizing bill in 10 years, and so one of
the subcommittee chairmen, Steve Solarz, came to me and said,
"Dave, we can't get our bill moving, would you put our section
on Latin America in your bill, would you carry our
authorization in the bill?" I made the dumb assumption that he
was speaking for the committee, not just the subcommittee, and
I said, "If that is what you want, let me check it out." It
seemed reasonable. So we did. Three weeks later I walked into
this room and here's Dante Fascell testifying against what I
did. And who is at the table with him? Steve Solarz! There were
three subcommittee chairmen who had asked me to do the same
thing, and all three of those subcommittee chairmen who had
asked me to do it then came to the table with their chairmen
and raised hell with me for doing what they had asked me to do.
Now, I mean when you have got a committee that can't
produce a piece of legislation in 10 years, does it make sense
to blame the Appropriations Committee for that? What happened
was very simple. You had an ideological fight between the
liberal Democrats in the House and the conservative Republicans
in the Senate, like Jessie Helms, when the Republicans were
then running the Senate, and so rather than compromising, the
administration said, "Ha, let them stew in their own
incompetence and then we will get a better deal out of the
Appropriations Committee." So that is what the Reagan
administration did, that is what the Bush administration did,
and they were smart to do that. But that didn't help the
Congress meet its responsibilities. So that is why I favor
longer authorization.
Mr. Moakley. Do you know of any democratic country that has
a biennial budget?
Mr. Obey. Do I know of what?
Mr. Moakley. I said are there any Nations that you know of
that have a biennial budget, a democratic type nation?
Mr. Obey. I don't really know. All I know is that if you
are the governor of Florida, if you are the governor of
Wisconsin, I mean do we really want to imitate States? In my
State my governor has had a veto so strong he could eliminate
digits in numbers to create different levels of appropriation
than the legislature required. He could until the legislature
changed it a couple of years ago. He could eliminate words to
form entirely new sentences to create law that the legislature
had never passed. Now, I mean in most States governors like 2-
year budgets because they deal with a weak legislature, they
get them out of town in a few months, and then they run their
States like kings. We don't want that out here.
Mr. Moakley. But they are usually small States.
Mr. Obey. Yeah, usually.
Mr. Moakley. The major States, with the exception of Ohio,
have annual budgets.
Mr. Obey. The States don't deal with the economy, they
don't deal with foreign policy, but my God, things change more
dramatically at the national level. You could have a Kosovo
intervene. You could have a Middle East war intervene. You
could have the economy go to hell in a hand basket, require a
totally different--I mean, go back and look at Gerald Ford.
Gerald Ford came out here pushing "Whip Inflation Now," and
three months later the economy changed and he is fighting
against unemployment. Jimmy Carter, the same thing. So I mean,
with all due respect to our people who draw State parallels,
they don't have nearly the complicated set of realities to deal
with that we do.
Mr. Moakley. Do you know why, if you know, why States
changed from biennial to annual budgets?
Mr. Obey. I don't really know.
Mr. Moakley. I thought it might have been the overload of
supplemental appropriation bills.
Mr. Obey. I would assume that it was in part because of
supplementals. I mean, Wisconsin has a biennial budget, and I
can tell you we have a Board on Government Operations, at least
we did when I was there. And we were meeting every doggone week
adjusting the budget and much less systematic oversight. We
passed legislation creating a whole new system of technical
schools. The administration had put in their language for the
bill. We had totally rewritten it. We wanted a different kind
of governing board. After we passed that bill, the governor on
his own just administered the bill as though it was the
originally submitted bill.
Now, the only leverage we had on them for the remainder of
the biennium was leverage on additional money they had asked
for a few programs, but we didn't have a chance to get at their
personnel levels in the agency, we didn't have a chance to get
at their salaries, we didn't have a chance to get at their
operating budgets. So we had no real leverage to make them
follow the intent of the legislature, and I don't want to see
Congress become a State legislature. I mean, we are the premier
legislative body in the world with all of our warts, and I
would like us to stay that way.
Mr. Moakley. Thank you very much.
The Chairman. Mr. Goss.
Mr. Goss. No, thank you.
The Chairman. Mr. Hall.
Mr. Hall. Thank you, Mr. Chairman. As Dave knows, I figure
we have worked together on a lot of issues. There is nobody who
knows more about process and who loves this House of
Representatives more than him. I disagree with him on this. I
am from a big State that has biennial budgets. Almost everybody
I know from Ohio who has served in the State legislature likes
biennial budgets. The reason why I like it so much is that I
think that the second year is such an important year for doing
oversight. I know that this sounds redundant and trite, but the
fact is everybody keeps talking about oversight, but we always
did a lot of oversight our second year. There are so many
things that we ought to be investigating, ought to be
targeting, ought to be having hearings about. I myself have
asked for hearings, and the answer I always get is we are too
busy, we are trying to get our budget out.
And we spend all year trying to get our 13 appropriation
bills out, and then after we get them out we adjourn. That is
normally October, November, and we don't do oversight on many
of these programs. Only on the glaring issues do we have
oversight. We don't have the slightest idea what some of these
agencies are doing, whether they are good, bad or mediocre. I
think Congress ought to have a lot more control of these
programs. The only way we are going to get control is to know
about them. But the push is all year. It is all year, get our
13 bills out. When we get them out, it is over, we go home.
What are we doing?
Mr. Obey. But there is nothing whatsoever in this proposal
that increases oversight in any way, absolutely nothing. As I
said earlier, there are two kinds of oversight. One is to make
certain that agencies are administering the laws in the way
they were created by the authorizing committee. And the
authorizing committees have a right to expect that the laws are
going to be followed the way they want, not the way the
Appropriations Committee wants. As appropriators, we may
finance them but we don't design them and we shouldn't because
we don't know as much about them as the authorizing committee.
This doesn't give authorizing committees any additional
time to do oversight. All this does is change the process of
the Appropriations Committee. Show me one thing in any of these
bills that gives any authorizing committee one second more
oversight.
Mr. Hall. Sure, it does. It does it in the same way as the
biennial budget in Ohio. It doesn't give any more time or spell
out the time that we are going to have oversight, but that is
what they do the second year.
Mr. Obey. How? Authorization committees don't bring
appropriation bills to the floor.
Mr. Hall. Dave, if we pass a budget every 2 years we will
have a lot of time here now to look at some of the things we
did. It makes sense that we are going to have oversight.
Mr. Obey. If you don't have appropriation bills on the
floor on a regular basis, you aren't going to have quorums in
authorizing committees. You aren't going to get those
committees to move because if you don't have business on the
floor, this place isn't in session. You know that as well as I
do.
Mr. Hall. Well, then maybe we shouldn't be in session.
Maybe the committees that have jurisdiction ought to be back
and meeting.
Mr. Obey. The committee chairman will tell the leadership
time after time under Republicans and Democrats. "If you don't
have votes on the floor, we can't get quorums." You talk to
anybody in the leadership they get that complaint every day in
this week, and this will make that worse, not better.
Mr. Hall. I think if a congressman is going to stay home,
meeting constituents, he is going to have to say, well, I was
back home taking care of the bridge when I know I should have
been in Congress because that is where I belong. No way.
Mr. Obey. All I am telling you is committees won't get
quorums if you are not in session. Ask your committee chairman.
Mr. Hall. Then that responsibility not only belongs to the
chairman, but it belongs to the individual, and each person has
to stand for himself.
Mr. Obey. That is correct.
Mr. Hall. They have to stand up and say I have to be
accountable.
Mr. Obey. All I am saying is that to say that this creates
more opportunity for oversight is I think a phenomenal
misjudgment in terms of what will happen.
Mr. Hall. It happens in every State that has biennial
budgets.
Mr. Obey. If we are in session, the more we are in session,
the more time authorization committees will have an opportunity
to do their work, but this has become a Tuesday through
Thursday club, and right now it has become a Tuesday usually at
6:00PM until Thursday at 2:00 club. That is the problem. If
legislators wanted to spend more time at home than they do here
and then blame the appropriations process for that, frankly I
think that misses the mark.
Mr. Hall. Nobody is blaming the appropriation process. What
they are saying is that we can have a better government, I
think we can have a more efficient government. I would like to
know what some of these agencies are doing, and if they are
mediocre, we ought to get rid of them.
Mr. Obey. So would I, but that is an ad hominem argument.
You are defining a good goal and then saying this will
accomplish it. I just don't believe that that will do.
Mr. Hall. Good goals have to be done by good people, and
you can have the greatest law in the world. If you don't have
good people, nothing is going to happen.
Mr. Obey. But good or bad people doesn't have anything to
do with one or 2-year budgets.
Mr. Hall. What are you talking about then? You can't make
an argument with you, you are going to say this is not going to
provide more time for oversight. In fact it will. You are
saying it doesn't work. In fact it does work in big States. You
are going to say we are not going to have more oversight
because it doesn't say it. Now, it doesn't say it in the Ohio
budget either. We do oversight the second year.
Mr. Obey. I don't know what the separation of power is
between your budget committee and your authorizing committees.
All I know is that in here the oversight is done by your
authorizing committees. Your authorizing committees don't put
together the appropriation bills. There is nothing that
prevents authorizing committees from meeting every day on
oversight while the Appropriations Committee is considering
appropriation bills, nothing.
In reality, the complaint that comes from committee
chairmen is they can never get a quorum when this place is not
in session, and if you have the appropriations right now, at
least until May when the committee--we are hung up until the
Budget Committee produces a budget resolution. We are not
supposed to bring bills to the floor until they do. That is our
major problem because so long as the Budget Committee isn't
producing something on the floor, you don't have much going on.
Look at the schedules that have been cancelled this week. Look
how light the schedule is. You have to invent things to do to
keep people here. If I were the leadership I would go nuts
trying to do this, and if you are saying that the most intense
legislative period when appropriations is on the floor is only
going to occur every other year, then that is going to reduce
the number of days when you must have legislation on the floor,
and members are going to say to their chairmen, "Sorry, you can
schedule that hearing, but I "ain't" going to be here", and you
are going to have less time for oversight rather than more. I
want more oversight, but this is not the way to get it.
Mr. Hall. If I were chairman that would not be a problem
because I am going to be there. I am going to be there. Members
don't want to show up, I am going to investigate. I am going to
have oversight.
Mr. Obey. You are going to have a quorum to hold a hearing
but not to move any legislation.
Mr. Hall. Would you agree that we disagree on this? We
disagree vehemently and I have great respect for you, and we
work together on a lot of issues, but I think you are very
wrong about this. You talk about losing control. I say we do
not have very good control now.
Mr. Obey. All I can tell you is if you move to biennial
budgets, we will have supplementals running through here every
day. Because we have a tight germaneness rule, if we have got
an Interior appropriation bill up and you want something that
is done in HUD, you won't be able to offer that amendment
because it "ain't" going to be germane, but when it gets to our
dear friends in the Senate, they have no germaneness rules.
They will be able to add everything but the kitchen sink. If
you think you are ever going to get credit at home for a single
project, kiss it good-bye, baby, because your Senators are
going to get credit for all of that stuff. If you think you are
ever going to be able to create an initiative outside of the
jurisdiction of a supplemental in the House you are not because
the rules won't let you. But the Senate will add Christmas tree
after Christmas tree to the supplementals.
Mr. Hall. That doesn't mean you can't put your own
amendment in there. You don't have to have a supplemental. We
don't have to have supplementals that go beyond a year, period.
Mr. Obey. If you want to be out of business for 18 months
while your Senators are in business 365 days a year for 2 years
be my guest. If I were a Member of the House I wouldn't want to
do that.
Mr. Hall. They can't do anything without us. They can't do
anything without us.
Mr. Obey. Well, with all due respect, the House, if it
loses the ability to deal on the same terms with issues that
the Senate deals with, we will lose not only our power relative
to the executive branch, we will lose our power relative to the
Senate, and I don't think that is what we ought to be doing.
Mr. Hall. I don't believe that for a minute.
Mr. Obey. Attend a couple of appropriation conferences and
you will change your mind in a nanosecond. Every Senate
authorizing chairman bypasses House authorizing chairmen right
now, and they try to add their authorizations to regular
appropriation bills. We can usually knock that off because you
can say, look, if I do this for you, then you are going to have
to do it for other committee chairmen, and you can back them
off, but if you have got only selected agencies for which you
have supplemental requests going through, the authorizing
chairmen for those committees, the Interior Committee for
instance, if you have got an Interior supp going, they will be
able to add whole authorizations without impunity, and they
will get away with it far more than they do now because those
will be must pass items, and they will be much more visible
than general appropriations are.
And so there is going to be much more pressure from the
administration to swallow that stuff and for the House to buy
into it, and I think that makes us spend more money and makes
us be less disciplined and certainly doesn't give the House an
equal shot at deciding whether it ought to be in their final
product.
Mr. Hall. Dave, you are so busy now and so are all Members
of Congress, whatever committees they serve on. It is almost
the tyranny of the urgent that creates many of their own
problems, and one of the problems I see is because you are so
busy you don't have time, because I request hearings, you can't
do them. I am not talking about you. You can't do them because
you don't have time, you can't do hearings.
Mr. Obey. Can't do hearings? Look at our schedule.
Mr. Hall. I have requested hearings on things relative to
the Pentagon, on foreign affairs, et cetera, and you don't have
time to do them.
Mr. Obey. Do you think we are really going to have time to
do them if we are spending a year and a half to pass the
regular appropriation bill rather than 9 months? If you have 2-
year budgets, do you really believe we are going to settle all
these issues by October or November of the first year? Not on
your life. They will drift over into the second year. We won't
have any time to do anything except negotiate.
Mr. Hall. There is a funny thing, it works in other States.
Why wouldn't it work here?
Mr. Obey. I don't think there is any point in my chewing
the cud again and again. I just think there are different--I
see different institutional dynamics than you do, and I see
them from the perspective of having been on this committee for
30 years. I recall when authorizing committees like George
Miller and George Brown and John Dingell came in raising hell
about the fact that Senate chairmen were adding whole
authorizations to their bills, and I guarantee you if we move
to a supplemental world we will be much more vulnerable to that
than we are now, and the Senate will reign supreme on that
because of the difference in germaneness rule.
You want to give us more time, get the Senate off our backs
with all of these blasted nongermane riders, get the Senate to
change their rules, so that they don't have to beg on bended
knee to get all hundred senators to agree on how to proceed
every day. I mean that is the problem. The Rules Committee is
the salvation of our House because it creates order. The
disorder you have in the Senate is I think the fundamental
problem we have in getting budgets, along with the fact that
budget resolutions are essentially press releases from each
political party, and they are unattached to reality in most
cases.
Mr. Goss. Thank you. Mr. Sessions of Texas.
Mr. Sessions. Chairman, thank you. I really should rest our
case after Mr. Hall's comments. However, I would like to take
just a second and talk about your testimony on page two, quote,
the one argument that we hear repeatedly in favor of biennial
budgeting is that the States do it so we should, too. I would
observe that this is not a State government and any argument to
that effect is deeply flawed.
Mr. Obey. I agree with that.
Mr. Sessions. Well, you wrote it.
Mr. Obey. No, no. I am talking about the arguments made by
the proponents of it.
Mr. Sessions. All I am suggesting, sir, is that these are
your words so I would expect you to agree with it. I was
reading from your testimony. I don't expect to be any more
successful than Mr. Hall in changing your mind, so this is just
for the sake of going through this, to present one argument,
that the move to annual budging from biennial budgeting stopped
in 1987 when all but 19 States practiced annual budgets, and
that since that time they have begun to shift back to biennial
budgeting, and now there are 23. I know I think you said 20,
but 23 States to my information operate under the same type and
three more States as of now, California, Michigan and New
Jersey, are currently considering moving to biennial budgeting.
States largely shifted from biennial budgeting after World
War II as Federal and State programs became more complicated.
Biennial budgeting at the Federal level would increase
efficiency. The arguments that you employed in your comments I
believe are similar to arguments about why we should do or not
do away with proxy voting.
The power of the institution, the power of those insiders,
those committee chairmen, those people, and I believe it is a
matter of efficiency, not power, and that this institution
should continue to evolve and recognize as we look in the
mirror and see ourself, not only that we straighten our collar
and do those things that look good, but we have a tremendous
responsibility to government and State governments for an
efficiency ratio and efficiency model, and that if we are able
to do the things since I was in college 20 years ago and gave a
speech for a rotary club on--a speech contest about the
efficiency of government and way back then the Pentagon and the
Labor Department argued about their ability to handle multiyear
projects and to sign contracts that would more carefully
resemble efficiency, not power, not arrogance, not their
institution, but rather the efficiency for the taxpayers that
they felt like that the savings, the cost savings from that
money that had been appropriated would in fact increase. It
would do those things in efficiency of the government.
I am just going to give one example. I am sure there are
lots of holes that anybody, including you, could inflict upon
this example, but I know as a Member of Congress I am not
allowed to sign any contract or do anything that would be
outside the extension of a section which I was elected for, and
I agreed with that. I am not arguing against it. But I also
know that in instances of signing contracts, and I will just
give probably the most egregious, that you may have a Member
who wins election year after year after year, but they rent a
vehicle for the official use in their district, they sign a 2-
year lease and the 2-year lease costs in some instances three
and four times the amount of money that it would if you signed
just a 3 or 4-year lease.
I am not arguing that we should extend what we have today.
What I am arguing is that the marketplace and an efficiency
model and ratio for the States for their ability to be in tune
with what we have done, for them to know that when we have put
our model in place they can then do the same, it would be more
efficient and I think better for the taxpayer. That would be my
sole argument to you today. I did not ask that you have to
agree with that. I do ask for simply that you understand that I
believe Mr. Hall and I do believe this.
Mr. Obey. But in fairness, you shouldn't be voting for this
proposition. First of all, with respect to proxy voting, I have
never favored proxy voting. We have never used it in the
Appropriations Committee. I think if members want to vote
there, they ought to get off their duffs and be there. I have
always felt that way. I have heard a number of authorizing
committee chairmen since the proxy voting has been abandoned
who have said, "Boy, my job in getting a quorum is almost
impossible these days," and so I would suggest I am not
qualified to discuss the proxy voting.
Mr. Sessions. I am just saying, sir, those same arguments
were utilized in the same way for a different institution.
Mr. Obey. I have been a raging reformer ever since the day
I arrived here. I almost got thrown out of my own committee
caucus for that reason. And we have had books written about
people who had minimum high regard for reform. So I pushed this
place on financial disclosure and all the rest.
All I would say is your argument about multiple year
procurement has nothing to do with this. We already provide
multiyear procurement. The Appropriations Committee right now
provides multiyear procurement. I am not against a multiyear
procurement.
Mr. Sessions. I completely disagree, as Mr. Hall did, with
that argument because things happen all the time where a plug
is pulled the next year.
Mr. Obey. Well, all I can tell you, you said the government
agencies ought to be able to sign multiyear contracts.
Mr. Sessions. What I am suggesting is that the
appropriations process, not the contracts, will drive those
things, and I believe that they will be more efficient.
Mr. Obey. With all due respect, that is a very different
issue. It is a very different question whether--you said that
agencies like the Pentagon would be able to save taxpayers
money if they engaged in more multiyear contracts.
Mr. Sessions. Sir, you know what I'm suggesting, and I
think this is not fair for you to try and twist that. What I
said is that the appropriations of that money on a 2-year basis
would allow them to more carefully run through those contracts.
Mr. Obey. We don't just appropriate for a 2-year basis. We
allow them to proceed with multiyear contracts.
Mr. Sessions. Yes, we do that, but what I am suggesting to
you, and you know people change their mind next year and wipe
out a program.
Mr. Obey. Well, Congress can always change its mind.
Mr. Sessions. I agree.
Mr. Obey. I don't think you want to say that if we
appropriate money to an agency and we find out that there has
been the egregious management or faulty development of the
program--.
Mr. Sessions. Then what I will say is I believe we will
become more efficient.
Mr. Obey. Well, again, all I will simply say is that you
don't need 2-year appropriation budgets to promote what you are
talking about. You obviously think we do, so we have a
difference of opinion on that, but that is a very different
situation. I would simply point out if you think it is more
efficient to have a 2-year budget rather than a 1-year budget,
I would simply point out that the estimates 2 years ago for
this fiscal year were that we would have a $70 billion deficit.
We have now got $170 billion surplus instead. I would say the
world has changed a little bit--.
Mr. Sessions. Thank goodness.
Mr. Obey. --in 2 years and I don't think that having to
make our budget estimates and our revenue estimates 2 years out
makes any sense, given how fluid the nature of the economy is
and how fluid the nature of the income and outflow is of the
government. I don't call that efficiency.
Mr. Sessions. I thank the gentleman for his indulgence.
Thank you, Mr. Chairman.
Mr. Hastings. [Presiding.] Mr. Reynolds.
Mr. Reynolds. No questions.
Mr. Hastings. We will now start the second round of
questioning for Mr. Obey. Just kidding.
Mr. Obey. Give me a martini.
Mr. Hastings. Mr. Obey, thank you very much for your
testimony, and obviously the give and take was spirited in some
cases, and there are some differences of opinion, but I
appreciate very much your taking the time to come before the
committee, and you can be excused.
Mr. Obey. Thank you.
Mr. Hastings. Next we will however call up a panel of the
Committee on Appropriations, Mr. Regula from Ohio; Mr.
Knollenberg from Michigan and Mr. Price from North Carolina. If
you would come forward, we will be pleased to take your
testimony. Your full statements will appear in the record, and
if you choose to summarize, that would be appreciated.
Mr. Regula, we will start with you since you are a
subcommittee chairman, and Mr. Price will go after that and
then Mr. Knollenberg.
STATEMENT OF THE HON. RALPH REGULA, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF OHIO
Mr. Regula. Thank you, Mr. Chairman. I ask unanimous
consent that my full statement be made a part of the record.
Mr. Hastings. It will and all of your statements will be
part of the record.
Mr. Regula. In the interest of time, I simply want to say
that 2-year budgeting is a management tool. I had an oversight
hearing yesterday in my subcommittee and another one today.
It is clear that one of the challenges that confronts the
appropriators and in fact confronts the Congress is how can we
manage the resources more efficiently. The 2-year budget in my
judgment would allow us to do that. The first year we would
appropriate funds. The second year we would do oversight and
plan for the next budget cycle.
So from the standpoint of management on the part of the
Congress, I believe that the 2-year cycle would be much more
efficient. As we are confronted with growing needs and less
resources in the absence of tax increases, which we want to
avoid, the challenges are to manage our existing resources most
efficiently. It is clear in the oversight hearings yesterday
and today held by the Interior Subcommittee that there is an
opportunity to expolore management reforms. Along with that, I
believe that the agencies could be more effective because it
would allow program managers and agency heads to do their
planning on a 2-year cycle.
They could just, as a practical matter, contract for
supplies for a 2-year period instead of one. They wouldn't have
to spend as much time in developing annual budgets, and they
could, therefore, focus on their responsibilities as managers,
whether it be a national park or a national forest or a defense
system.
Certainly in the private sector I don't believe program
managers would be told you have 1 year to budget on a program
that has a long term impact. And so it seems to me that the 2-
year budget cycle would make a lot of sense in terms of our
responsibility as managers, directors, if you will, of the
largest enterprise in the United States; namely, the U.S.
Government.
I think historically we have not looked on government as a
management challenge. We have looked on it as a provider of
services, but with today's world, with increasing populations
and increasing needs, it seems to me that approaching this in a
businesslike way to say how can we deliver the services to the
people in the most efficient way, a 2-year budget offers that
opportunity. My statement enlarges on this, but in the interest
of time I will hold it to that.
[The prepared statement of Mr. Regula follows:]
[GRAPHIC] [TIFF OMITTED]63105.020
[GRAPHIC] [TIFF OMITTED]63105.021
Mr. Hastings. Thank you, Mr. Regula. Mr. Price.
STATEMENT OF THE HON. DAVID E. PRICE, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NORTH CAROLINA
Mr. Price. Thank you, Mr. Chairman. I appreciate the chance
to testify here today on this question of biennial budgeting
and appropriating, and to urge this committee to resist the
siren call of this so-called reform. I believe it does have
some very real dangers.
Many goals and values have been discussed here today:
consistency, continuity in policy, efficiency, both to guard
our current surplus and evaluate future claims on resources
very carefully, budget with some flexibility responsive to
changing needs and conditions, and to preserve Congress' power
of the purse and to enhance our oversight. These are goals in
some tension with one another. They call for a mix of both long
term and short term strategy. My main argument here today is
that annual appropriations are an important part of that mix.
We have made a good deal of progress in increasing our time
horizons and adding some predictability, a multiyear time frame
to the process. We work with multiyear authorizations in most
areas, and I fully agree with those here today who have said we
need to have multiyear authorizations in all of our areas. We
have adopted multiyear budget plans in 1990, 1993, and 1997.
Those were important instruments for long term planning and
fiscal discipline, but as useful as these long term plans are,
they shouldn't be confused with multiyear budget and
appropriations cycle.
I believe that to argue that we should go down that path is
to draw the wrong conclusions from our recent experience.
Instead, I propose to you that annual budget resolutions on
appropriations are a needed complement to multiyear budget
plans. They provide flexibility. They help us achieve savings
and fine-tune our investment strategy, and they enable Congress
to be a full partner with the executive in setting national
priorities.
We have heard today, and ironically I think, advocates of
biennial appropriating who claim that it would actually give
Congress more time and strengthen our incentives to oversee the
executive. I say ironically, because surely the most careful
oversight Congress gives the executive branch is through the
annual appropriations process, the kind of work that Mr.
Regula's subcommittee and others do every year. Agency budgets
and performance and needs are gone over line by line, program
by program. Without the need to produce an annual
appropriations bill, this extensive oversight, far from being
enhanced, would likely be lessened.
At the very least the political potency of oversight would
be less, for oversight without the power to increase or reduce
appropriations is toothless oversight. Oversight will be less
engaging for Members and certainly less compelling for the
executive branch.
We know congressional decisions aren't written in stone.
Appropriations decisions are no exception. As many people have
said here today, we already enact supplemental appropriations
bills, but do we really want to increase the number of those
bills? Former CBO Director Robert Reischauer once noted that
even in the cur-
rent annual process, forecasters are required to project
changes in
the economy and the budget 21 months before the end of the
fiscal year; a biennial resolution would increase this period
to 33 months for the second fiscal year of the biennium.
Pressures on Congress would increase to respond to changing
economic or social circumstances, agency failures or
deficiencies in the law. The only available vehicles would
often be omnibus or multiple supplemental appropriations bills
in the off years, and we would have replaced the deliberative,
well-ordered process of annual appropriations with sporadic,
ill-considered supplementals. Biennial budgeting, while
promising increased predictability and increased efficiency,
might well produce the opposites.
I understand the frustration that has led many Members to
turn to biennial budget as an antidote to our problems with the
budget process in the last 2-years and the partisan and
ideological conflict that, uncharacteristically I might say,
has come to infect the appropriations process.
Chairman Dreier has suggested that biennial budgeting would
reduce the number of "train wrecks" at the end of the year and
the level of gamesmanship. Surely these fights would occur only
half as often, we can't argue with that, if we were budgeting
biennially. But would the abuses of the process be fixed? Not
likely. Would the same problems crop out if supplemental
appropriations were proposed and emergencies declared? Yes, in
all likelihood, but in the meantime, we would have greatly
weakened Congress' hand in shaping national policy and holding
the executive accountable.
I am well aware that President Clinton has expressed his
support for biennial budgeting, as did Presidents Reagan and
Bush before him. If this suggests that biennial budgeting is
not a partisan issue, it ought also to warn us it is indeed an
institutional issue. We are dealing here with the executive-
legislative balance of power, and we obviously need to consider
this kind of institutional change totally apart from which
party currently holds the White House.
It is sometimes said that opponents of biennial budgeting
are merely defending Appropriations or Budget Committee turf.
We have heard that. I have heard it. As a member of both
committees I am sensitive to that charge, but the fact is, we
want to protect the legislative powers of the entire Congress.
That is what this is about. The issue is not devolution of
power from the Appropriations Committee to the rest of the
Congress. It is a devolution of power from Congress to the
executive branch.
So, Mr. Chairman and other members of the committee, I urge
you not to allow recent budget disagreements and frustrations
to lure us toward a supposed remedy that would make the
appropriations process less systematic, less flexible, less
potent. We must increase and enhance Congress' power and
performance in both budgeting and oversight, but for the
reasons that I have given and that are developed more fully in
my statement, I believe that moving to a biennial budget or
appropriations cycle would take us in precisely the opposite
direction.
I thank you for your attention.
[The prepared statement of Mr. Price follows:]
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[GRAPHIC] [TIFF OMITTED]63105.023
Mr. Hastings. Thank you, Mr. Price. Mr. Knollenberg.
STATEMENT OF THE HON. JOE KNOLLENBERG, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MICHIGAN
Mr. Knollenberg. Thank you, Mr. Chairman, and I thank those
members of the Rules Committee that are still here to hear us,
but I appreciate having you hold this hearing because I think
it is important that we do bring forth our reservations, and I
do have some about the move to bring about biennial budgeting.
I am concerned that in our haste to push forward this
legislation we are overlooking many consequences that will
drastically affect our budget process. I want to pose some
concerns that I have. They are not new, but they are certainly
ones on my mind, and having the benefit as I do of sitting on
both the Budget Committee and the Appropriations Committee, I
think I can see it from both ends. I am not an authority on
this issue, and I certainly want to hear from everybody in
terms of their suggestions as to what we should do.
I know the appropriations process here is tough. However,
we shouldn't let the frustrations of these past few years push
us to pass a bill that may not work. Clearly, much of the
current dissatisfaction with the budget process is the result
of divided control of Congress and the executive branch that
has been talked about, and it is unlikely that a shift to
biennial budgeting would make any difference. We must sit back
and ask ourselves what are we trying to accomplish here and if
this is the most effective way to accomplish that goal. I truly
believe then that biennial budgeting is not a clear answer. I
recognize the frustration. I have it, too. I share it both on
the Budget Committee and the Appropriations Committee.
The uncertainty of budget projections, biennial budgeting
could jeopardize the very thing that many in Congress hold most
dear; that is, preserving the surplus for debt reduction, for
tax cuts and for other pressing needs. Despite today's
projections of huge surpluses, these numbers will invariably
rise and fall with the economic cycle, with emergencies, those
have been talked about, and other factors that are really
outside of Congress' immediate control. For example, I have
been told that over the last 4 years CBO incorrectly estimated
the deficit, or surplus for the upcoming fiscal year by an
average of $99.5 billion. Given these inevitable fluctuations
of economy and Federal revenues, Congress needs every tool at
its disposal to ensure that there are sufficient surpluses each
year to meet its target for tax cuts and for debt reduction.
The budget resolution provides the framework to make a
year-by-year change or changes in entitlement programs, in tax
policy, and in discretionary spending level. Only through
actually passing appropriations bills can discretionary levels
be changed. In the case of entitlement reforms, the budget
resolution can protect these measures from a filibuster.
Welfare reform might never have reached the President's desk
had it been considered in the second session of the 104th
Congress under biennial budgeting. It did pass the Senate, as
you know, in 1995 by a mere 52 to 47.
On the subject of oversight, one of the supposed advantages
of biennial budgeting is allowing additional time to focus on
oversight. The irony is that most experts think that biennial
budgeting would actually reduce oversight because most
practical oversight is accomplished through the appropriations
process when the agencies are dependent on Congress for more
funding in the near term. While the Appropriations Committee
would continue to hold oversight hearings during the second
session, they would lack the threat of an appropriation
reduction for agencies that fail to adhere to the authorizing
statutes or to consult with Congress on agency operations or to
meet other performance goals.
Further, with no regular appropriations bills in the second
session, Congress would be forced to consider massive
supplemental bills or correction bills to take care of changing
priorities or unanticipated events and emergencies.
Supplementals tend to be more directly under the control of the
leadership, which means less Member input and oversight.
On the subject of cutting taxes, not only do I think that
the biennial budgeting process makes it tough to keep the
budget in balance, it can also eliminate any hope for tax cuts
in election years. If the budget resolution includes an
instruction to the Ways and Means and Finance Committees to
report a tax bill, it is protected in the Senate from a
filibuster. Any tax bill that is not reconciled by the budget
resolution from the previous year will effectively need 60
votes to pass the Senate. This is a high hurdle for those who
came to Congress with the mandate to provide tax relief for
American families. For example, the marriage penalty relief
bill could not have been possible under biennial
budgeting.Leadership did not predict this piecemeal tax
approach last year, and if it was not included in the budget
resolution, Senate Democrats would have been able to filibuster
the bill in the Senate.
I will close here shortly. I am aware that several of my
colleagues have had positive experiences, as you have, Mr.
Chairman, with biennial budgeting in your State legislatures,
and you are aware of the current trend amongst States in
shifting towards annual budgeting, even though there is talk of
my State, Michigan, reconsidering that. I don't believe that is
going to happen in the near term at all.
Currently 30 States budget on an annual basis with 26
States dropping biennial budgeting in favor of annual budgeting
over the last 40 years. According to GAO, the States tend to
switch as you know to biennial budgeting when their
legislatures move from a biennial to an annual session of
Congress.
Mr. Chairman, I conclude with those remarks, and I just
again want to thank you, thank the committee for the
consideration of bringing hearings to our attention so that we
could provide our thoughts about the consequences of any act
that we move forward on, and my concern is that the first thing
we should do is do no harm to the system we have. We certainly
don't want a lot of unintended consequences to make things
worse than they are now.
[The prepared statement of Mr. Knollenberg follows:]
[GRAPHIC] [TIFF OMITTED]63105.024
[GRAPHIC] [TIFF OMITTED]63105.025
Mr. Hastings. I thank you very much for your testimony. It
has been raised several times, Mr. Obey mentioned it and, Mr.
Knollenberg, you mentioned it, about--my words--the problems we
have with the Senate. Our Founding Fathers were pretty wise.
They developed a system like this so we would have problems.
This of course ultimately protects the people, but I would just
make this observation as far as the reconciliation process that
you mentioned.
We have within our rules right now to have multiple
reconciliations to take that issue away if we had, and I
certainly wouldn't suggest that the biennial budget is the only
reform, but the one thing I wanted to ask Mr. Regula because he
is the subcommittee chairman here, and in your testimony you
briefly alluded to the fact that you have more oversight, and
then testimony of the others said that that probably wouldn't
be as good as is suggested, and I would like you to elaborate
from your perspective of having the more time for oversight in
the second year of a biennial budget.
Mr. Regula. Well, I think it includes not only having
hearings, but it also includes visiting sites. So we simply
don't have time to go to park sites. I know that what limited
amount I have been able to travel to sites has always been very
productive in terms of getting ideas. There is no question we
make policy with the checkbook here because in the final
analysis how we allocate the Nation's resources really
establishes a lot of our policies.
I think Mr. Price mentioned the fact that the authorizing
committees will authorize for 2, 3, 5 years, sometimes
indefinitely, but in a sense I think that supports the
contention that we can operate on a 2-year budget cycle. I
believe that the executive branch recognizes that management;
that is, actually putting programs into action in the ground,
basically needs more than 1 year in terms of the resources
available and in terms of the direction that is articulated
through the appropriations process.
I know Ohio uses a 2-year budget, and it works very well
and we are a large State with a very substantial budget.
Mr. Hastings. One other observation that I made earlier and
I want to make it again because it was alluded to in the
testimony that while, yes, there will be supplementals, we have
supplementals right now, one of the beauties of a biennial
budget is that if the Congress chooses not to pass the
supplemental, the world doesn't end, and I think that is in
fact, I think that is a positive tool, and as I mentioned I
experienced that at least twice in the recent memory in
Washington State in our legislature where if you had annual
budgets in both those cases you probably would have had a train
wreck, but the fact they had a biennial budget and a
supplemental wasn't passed, the world went on, and I think that
argument needs to be made because it is a tool that works the
other way.
You are not going to get rid of the supplementals, just
like we don't in the annual process. So you will have to make
those judgments when you go through the Senate. If anybody has
a comment on that. Otherwise, if not, Mr. Price.
Mr. Price. Mr. Chairman, the purpose of a supplemental, of
course, whether it is on a 1 year cycle or 2-year cycle, is to
fill gaps that were left by the regular process and to take
care of emer-
gencies and to make fine-tuning adjustments, and that need is
going to be there whether we are on a 1 or 2-year cycle. I
think my point is that this will be far more common and far
more problematic under a 2-year cycle because I think the
frequency of these supplemental requests will surely increase.
The sporadic nature of supplemental appropriating worries us
all, and that would be increased, and I think our ability to
respond to changing conditions would face a very high hurdle,
whereas now it is done as a matter of course with the 1-year
process.
So the need is going to be there for the responsible use of
supplementals, no matter what kind of cycle we have, but I
think a much greater institutional burden is placed on us with
a 2-year cycle, plus all the other problems of deferring so
much authority. I think we would be put in a position of
seeking the sufferance of executive agencies or trying to get
these supplementals jimmied up. Members would have that
pressure on them far, far more than they do now where we have
that regular process, that regular annual process that we
simply plug into and that we plug into in the annual
appropriations cycle.
Mr. Knollenberg. Just a quick add-on to that, Mr. Chairman.
I think that there is a tendency here to compare the States
with the Federal Government, and one thing that the Federal
Government has to consider and we do it periodically sitting,
as I do, on the Foreign Operations Subcommittee, there are
world events that change very quickly, producing the need to
use the machinery, the vehicle of a supplemental to bring about
funding that will get into those areas very quickly. It has
been perhaps tame in terms of the fact we haven't had a war
situation, not confrontational war, which was the case during
the Cold War.
I can tell you this, there are more instances where that
will be the vehicle sought for to use to bring about that
funding, and when it takes place, then you have the interested
parties from all over who go through the business of the
Christmas tree which does begin to get bigger and bigger and
bigger. I think that is something that is uniquely Federal,
that the States don't have to deal with in quite the same way.
As I mentioned previously, there are some 170, I think maybe
200, countries worldwide that we have an interest in. That is a
problem I think that biennial budgeting really does not get a
close look at.
Mr. Hastings. Well, I want to thank you for your testimony
and for your indulgence of waiting, especially, Mr. Price and
Mr. Knollenberg, for testimony prior to yours. So thank you
very much for your testimony.
Next we have Mr. Bass of New Hampshire.
Mr. Bass. You want to have all the other guys come up at
once so we get it over with a little quicker?
Mr. Hastings. I have no objection if you don't have any
objection. We will recognize Mr. Stearns and Mr. Barton, but we
will lead off with--there is Mr. Smith from the Budget
Committee. You may as well join everybody else. We will lead
off with Mr. Bass.
STATEMENT OF THE HON. CHARLES F. BASS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NEW HAMPSHIRE
Mr. Bass. Mr. Chairman, I appreciate the opportunity to be
here today, and I know that this has been a long hearing.
Mr. Hastings. I will say that without objection your full
statements will appear in the record, and you are welcome to
summarize your statements, but your full statement will appear
in the record. Mr. Bass.
Mr. Bass. Thank you, Mr. Chairman, and I know that this has
been a long day. There has been a lot of testimony. I have a
hearing in the Intelligence Committee in approximately 4
minutes. That is why Mr. Goss isn't here to beg your indulgence
to allow me to be excused when I complete my testimony, which
will be mercifully short.
I want to thank you and all the members of the Rules
Committee for holding this hearing and hopefully more as we
move this issue further forward. I believe that now the stars
are almost in line to move forward on something that should
have been done a long, long time ago, and that is implement
biennial budgets and appropriations in the House and in the
Senate.
I am not going to go through point and counterpoint on the
arguments for or against biennial budgets and appropriations.
You have heard them all by now. I would only say that there are
Members, there are appropriators and there are budgeteers who
are concerned about the concept of change, but every single one
of the arguments that they give, no tax cuts in off years, no
ability to conclude oversight in an appropriate fashion,
incompatibility with the balanced budget, all of these
arguments are refutable on exactly the same grounds that they
give for the arguments in the first place. Clearly, if you plan
a budget appropriately you can have tax cuts in the second
year. Clearly, if you say that the CBO predictions are not good
for long periods of time, if you use that argument you ought to
have a budget every week, you ought to have a new budget every
week or month or 6 months, but the fact is Congress meets as a
Congress for every 2 years. It is good for the States and it is
good for our institution to put together a plan for a 2-year
period that we can adjust during that 2-year process, make this
body work more efficiently.
And I know there are folks that love to spend a lot of time
down here dealing in a reactive fashion with all the issues
year after year after year. Congress needs to make policy. We
need to be proactive. We need to take the President's budget on
a 2-year basis, develop a plan, amend it during the 2-year
process as necessary so we can pay more attention to other
issues that Americans want us to address during a 2-year cycle
in Congress.
I know that I have submitted my full testimony for the
record, and with that I would like to thank you for holding
this hearing and hope we can move forward with this important
legislative proposal.
[The prepared statement of Mr. Bass follows:]
[GRAPHIC] [TIFF OMITTED]63105.026
[GRAPHIC] [TIFF OMITTED]63105.027
Mr. Hastings. Mr. Bass, thank you very much. We will go to
another member of the Budget Committee, Mr. Smith.
STATEMENT OF THE HON. NICK SMITH, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF MICHIGAN
Mr. Smith. Mr. Chairman, thank you very much. I will
present the other side of the story. In addition to David Obey,
the Congressional Research Service, the National Association of
State Budget Directors, and GAO have testified that 2-year
budgets will transfer power away from the legislative branch to
the executive branch. We already have an imperial presidency.
So I think we need to rethink support for a budget process
where the executive is going to tend to insist that the second
year of a 2-year budget increase at least with inflation.
If we had had inflation increases in discretionary spending
over the last 10 years, we would not have a budget surplus
today. So one consideration is that transfer of spending power
to the presidency.
Another serious consideration is asking the budgeteers to
come up with projections that are 2 years into the future.
If you look at this chart on budget projections you will
see the significant discrepancy between one year projections
and what has actually happened. The top of the chart, if we get
above zero that means we have a surplus. You can see the far
right top blue line, we are starting to move into the surplus.
The red area represents the projection of deficits. The larger
spaces in '92 and in '97 are a hundred billion dollars plus,
and that is only a 1 year or 12 month projection. If you do a
2-year projection, the accuracy declines even further. Two
years ago CBO projected that there would be a $70 billion
unified budget deficit in fiscal year 2000. Of course we know
that reality is quite the contrary. It is a $170 billion
surplus that has happened.
So will we take up like the State of Ohio a Budget
Adjustment Act? Ohio is the only large industrial State left in
the Nation that has a 2-year budget. Twenty-six States have
changed from a biennial budget to an annual budge since 1940
for one reason or another. In most cases, as I have talked to
state legislators, the reason was increased power of the purse
strings.
An argument for a biennial budget is that it will somehow
give us more time to oversee the different agencies. I worked
in the Nixon administration for 5 years, and we hopped to and
did everything we could to become genial to Congress at budget
time. I see a danger of losing that pressure in those off
years.
In those off years we are not going to have as much
influence and, Mr. Dreier, the other thing I would like to
suggest is that the Budget Committee should also have
jurisdiction over this proposal. I hope we would have the
hearings in both places.
The Chairman. [Presiding.] That is your prerogative.
Mr. Smith. Mr. Chairman, what this chart says, just lays
out how far off we have been in terms of our deficit
projections, and that is with 1-year projections. A 2-year
projection has been 200 billion or more off. Two years ago the
Budget Committee was projecting a $70 billion deficit. Now we
have $170 billion surplus. Huge problems in that kind of
projection, which leads me to the next chart.
I understand that we very well might again pass a balanced
budget amendment to the United States Constitution. We know
what it says, outlays for any fiscal year shall not exceed
total receipts for that fiscal year unless. With the problem of
projections, with an administration that tends to want to
spend, insisting that it be at least discretionary spending
plus inflation, with the history of supplementals, 25 billion
each over the last 2 years, I don't think it is going to fix
the problem of reducing spending. This country for 220 plus
years has had an annual budget. The problem that we faced in
the last dozen years with increased spending isn't because we
have had an annual budget rather than a biennial budget.
Thank you.
[The prepared statement of Mr. Smith follows:]
[GRAPHIC] [TIFF OMITTED]63105.028
[GRAPHIC] [TIFF OMITTED]63105.029
The Chairman. Good. Thank you very much. How are we going
here? Ms. McCarthy.
STATEMENT OF THE HON. KAREN McCARTHY, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF MISSOURI
Ms. McCarthy. Actually, Mr. Chairman, I thank you. I have
the least seniority of this group.
The Chairman. Karen, you are recognized.
Ms. McCarthy. Thank you, Mr. Chairman. I am going to just
make three points, and I have submitted my entire testimony.
The Chairman. Without objection it will appear in the
record. Appreciate that.
Ms. McCarthy. Missouri is one of 23 States that has
benefited from a biennial budget, and I served for 12 years on
the Appropriations Committee in the Missouri House. So I know
firsthand the benefits that can be gained when you move to this
particular 2-year program. We use it mainly in Missouri, as
with most States, to work on capital improvements and to be
able to make major plans for capital investments and to improve
program oversight.
So at the Federal level that means the Defense Department
will be able to budget more effectively, and that will save
dollars. We are finding savings at the State level and that is
why so many States, 23, are using this.
You still are able to fine-tune the budget each year but
you have taken some of those major initiatives and allowed them
to go forward and plan properly. That will be, I think a
benefit to all of us.
I am here in support of the measure, Mr. Chairman. I hope
this is the year that it is possible to make it become law.
[The prepared statement of Ms. McCarthy follows:]
[GRAPHIC] [TIFF OMITTED]63105.030
The Chairman. Thank you very much. We have got Republican,
now Democrat, we have three other Republicans, and all three of
those Members were very involved in encouraging us to proceed
with this effort, Mr. Barton, Mr. Stearns and Mr. Whitfield,
and I would like to recognize them.
Mr. Barton. Thank you, Mr. Chairman. I would ask unanimous
consent that my written statement appear in the record.
The Chairman. Without objection your entire statement will
appear in the record.
STATEMENT OF THE HON. JOE BARTON, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF TEXAS
Mr. Barton. I will be very brief. I would just like to say
that what Congressman Smith said totally misses the mark. We
have the most inefficient, ineffective, anachronistic, ill
thought out budget process of any major institution in the
United States.
The Chairman. So you think we ought to tweak it a bit then?
Mr. Barton. I think we should junk it and start over. I
would love for this committee to move to the floor the major
budget process reform bill that I have put in 10 or 15 times,
but if we can't be comprehensive, we can at least start in the
right direction, and here your biennial budgeting bill is a
really good first step.
To say that we can't put a 2-year budget cycle in when the
House is elected for 2 years is inane. We could do it. We can
monitor it. The State of Texas, which last time I looked had a
little industrial production, has a biennial budget.
The Chairman. Not a big 10 State I found out this morning.
Mr. Barton. They have had balanced budgets for over a
hundred years. They hit the mark. They have got good estimates.
They have got an appropriation committee on the House and the
Senate that does a good job. I think we could do an equally
good job, if not better.
So suffice it to say that I am a strong supporter of your
bill. I am an original cosponsor. I think it would send a great
signal to the American taxpayer to see that the Congress this
year does one thing that makes sense in terms of budget
efficiency, and I quite frankly think if you will put the bill
on the floor you are going to get an overwhelming vote, and
with Senator Domenici in the Senate, with his position on the
Budget Committee over there as chairman, if the House takes the
lead, I think the Senate will follow, and we will set the tone
to do more comprehensive reform, if not later this year, in the
first session of the next Congress.
[The prepared statement of Mr. Barton follows:]
[GRAPHIC] [TIFF OMITTED]63105.031
The Chairman. Thank you very much. Joe, I appreciate your
support. As you and Cliff and Ed know very well, Pete Domenici
and I go back to 1993, when we started on this process. We had
that Joint Committee on the Organization of Congress. In the
past 7 years we have had many different proposals that have
been introduced for aspects of biennial budgeting, but all sort
of focused on that same issue that we spent a great deal of
time on in the early part of the last decade, and I think it
has taken a while to get to where we are, but to have the
chairman of the Appropriations Committee, to have what was a
very strong statement that came here from the Speaker of the
House as our lead off witness this morning, I just want you all
to know it is a very, very encouraging sign, and obviously
there is still opposition to it by some, but I think that we
have some very valid arguments to respond.
Mr. Barton. Mr. Chairman, do you have an indication of when
this might come to the floor?
The Chairman. Not yet. We still want to try and address
concerns that have been raised, but as you know, the resolution
which we introduced, as the Speaker said today, nearly 250
cosponsors, and it simply calls for in this second session of
the 106th Congress for us to move ahead with biennial
budgeting, and you know to put a time frame on it will be tough
at this juncture, and also, we want the Budget Committee to
work its will, and there are some Members who are for it, some
against it. I just had a conversation with the chairman of the
Budget Committee 10 minutes ago about this issue and other
concerns raised.
We have authors of two bills dealing with this here. Cliff
Stearns and Ed Whitfield have each introduced legislation. We
are happy to recognize you, Mr. Stearns.
STATEMENT OF THE HON. CLIFF STEARNS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF FLORIDA
Mr. Stearns. Thank you, Mr. Chairman. I have made my
statement part of the record.
The Chairman. Without objection it will appear in the
record.
Mr. Stearns. I think you have heard all the arguments.
Listening to Nick Smith, there are two points I would make. One
is that if CBO is not accurate, we should try to work harder to
make CBO more accurate instead of saying that the CBO is not
accurate as an argument for not having a biennial budget.
In my home State of Florida they passed a biennial budget
and then they rescinded it. As I understand, there are 21
States now that have a biennial budget. I think for us to win
this argument we are going to have to take those States like
Florida where they did not succeed and were not happy with the
biennial budget, we have got to identify why, and make sure
that when we get on the House floor and we pass this
legislation, that we fully explain all the reasons why this
will work and why a lot of the States that implemented it and
then rescinded it found that it did not work.
So we have got a challenge here because like many pieces of
leg-
islation, some States will implement it, other States will pass
it, and eventually the majority will sustain a version of the
legisla-
tion. Here we have States passing a biennial budget, and lo and
behold, then some are rescinding it.
So the rescinding of these pieces of legislation dealing
with the biennial budget didn't occur in a vacuum. I talked to
our speaker of the Florida House about it. He has a myriad of
reasons why the biennial budget will not work. So I think, Mr.
Chairman, when we go further on this we have to probably do
hearings to determine why it didn't work in the States and
preclude those arguments in the House.
So I urge you when we bring this to the floor that we have
a hearing to bring speakers from the States forward like
Speaker Thrasher from the State of Florida, to say why it did
not work and why did you rescind a biennial budget, and hear
all that before we get on the floor because we want to make our
piece of legislation foolproof. We want to learn from what
happened in the past, and I, like many Members, support this
but I do want to understand all the problems in the past.
[The prepared statement of Mr. Stearns follows:]
[GRAPHIC] [TIFF OMITTED]63105.032
The Chairman. Thank you very much, Clifford. Again, thank
you for being so diligent in pursuing this issue vigorously,
and I look forward to meeting Speaker Thrasher.
Mr. Stearns. He will be glad to come.
The Chairman. I would like to have his thoughts on this
issue, too. I am happy to recognize my very dear friend, a man
who is so intelligent he married a Californian, a lovely
Californian at that, as are most Californian women, all
Californian women, and Ed Whitfield is again, as I said at the
outset, one of those who provided me with a great deal of
encouragement to charge ahead with this issue, and having
worked on it for so many years, the encouragement that you
provided really helped get us going again. I am happy to
recognize you again.
STATEMENT OF THE HON. EDWARD WHITFIELD, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF KENTUCKY
Mr. Whitfield. Mr. Chairman, thank you very much. I am sure
I am not going to say anything this afternoon that has not been
said by many Members before, but I wanted to come over here,
and I broke away from a meeting with some constituents, which I
infrequently do, because I do not think there is a more
important reform that we can adopt to help Congress as an
institution than this reform.
While I support controlling spending, I am not supporting
this legislation primarily because I think that it will help
control spending necessarily. I think that this type of
legislation will help us stop being a reactive Congress and
give us the time to look at substantive policy to help solve
problems like Medicare, health care and education, and give us
more time to come up with substantive solutions instead of
Band-aid approaches.
In addition to that, Congress needs more time for oversight
to determine which programs are working and not working. Right
now I believe everything is driven by the appropriations
process, and even in discussions that I have had with people in
the executive branch, at the Defense Department, at the
Treasury, at Education, while it may not be their official
position, unofficially everyone that I have talked to thinks it
would be a tremendous benefit to go to a 2-year budget in an
appropriation cycle.
So I am here simply to lend my support to do anything I can
do to adopt this reform because I think it is essential for the
American people. Thank you for your leadership.
[The prepared statement of Mr. Whitfield follows:]
[GRAPHIC] [TIFF OMITTED]63105.033
The Chairman. Thank you. Ed, as I said, you have done it.
You have been very, very encouraging and helpful in this
process all along, and I appreciate the thoughtful remarks that
you have made, not only here, but through the deliberations. I
know we have had a colleague Walter Jones who has joined with
us in our first meeting that we had, and again, in response to
Joe Barton's question, we don't have an absolute time line put
into place, but we are hoping that we will be able to do this
this year.
Mr. Whitfield. Thank you, Mr. Chairman.
The Chairman. And our next witness is the gentleman from
Ohio, Mr. Ney, and we welcome you. If you have prepared
remarks, they will appear in the record in their entirety, and
we would enjoy hearing a summary from you.
STATEMENT OF THE HON. BOB NEY, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF OHIO
Mr. Ney. Thank you, Mr. Chairman. This is important. I came
away from a meeting with constituents to be here, too, and so
important, if I was with contributors, I would also be here and
break away from that meeting, anything to get here.
Let me just say on a serious note, it is an issue that its
time has come for a vote, and I would also personally from my
point of view just say we ought to vote the thing, and I like
your resolution. We ought to just vote. We are going to have a
2-year budget or not. Having hearings and having the States'
input on what worked and didn't work is fine. We I think feel
internally, know what they feel about the biennial budget, and
they should cast their votes in due direction.
I was chairman of Senate Appropriations Committee in Ohio.
Twenty years ago I was elected to the Ohio House and was the
first freshman in 32 years to serve on Approps at that time in
the Ohio House, went on to chair Senate Appropriations
Committee. So I have been in the throes of biennial budgets all
those years. Ohio has no intention to overturn ours.
I know you know all the arguments. I just want to make a
couple points, and I used to be a bureaucrat. So I can say
this. I worked for the State of Ohio on a couple of occasions
as a bureaucrat, and we have got a lot of good Federal and
State workers. However, they are not dumb, and a lot of people
run over here and tell Members of Congress, wow, you wouldn't
believe how we fear you during a budget cycle, if you went to a
2-year budget we would get away with a lot of stuff, and that
is kind of a lot of nonsense when they feed that to Members.
You know as a Member of Congress and I know these
schedules. They are far more intense than when I was in the
State legislature, and your staff schedules are intense. So you
spend the entire year spinning your wheels, you do it the next
time, and it just consumes all of your time. Now, if you make
the argument, well, in the second year, you know, they can do
what they want, that is not true. You have got better budgeting
and all of these arguments. In the second year you have the
power of the gavel. If there is some-
thing going wrong, it is called a budget corrections bill. If
you want
to really stir them up and correct anything, you can do it in
the second year.
The other point I wanted to make I guess, too, the biennial
budget has nothing to do with whether we spend more money or
less. Creating a biennial budget I will tell you doesn't mean
necessarily we can tell you we will spend more or less money.
That is a decision of the Members of Congress, and it is a
vote, and there are a lot of factors that come into play.
I think for the good of the institution, to free up true
oversight, to really dig in the next year into the bowels of
the government to find out how it works and to have the time,
that is the key issue, not the time to relax, the time to do
our job and really dig into the government in a constructive
way, not necessarily always a negative way, and see how the
agencies can work better. It gives them more time and us more
time.
So I fully support any efforts. I think it is good for our
country and good for the institution.
[The prepared statement of Mr. Ney follows:]
[GRAPHIC] [TIFF OMITTED]63105.034
The Chairman. Well, thank you very much, Bob. I appreciate
that and appreciate your Ohio experience coming here.
The only thing I will say on your issue of just going right
to the floor with a vote, there were some issues and concerns
raised by a number of people who have been opponents. I want to
do everything that we can to address those concerns if
possible, and there may be some modifications that could be
made in legislation that we would bring forward that could
again assuage some of those issues that have been raised by
them, and that is part of the deliberative nature of this
institution. We don't plan to immediately go to the floor for a
vote.
What we plan to do is--and we have spent years on this,
that is basically what we are here to do. We are supposed to
spend time thinking about these things and plan to get as much
input as possible, but the resolution to which you referred,
which you joined as a cosponsor of, and again, the Speaker, had
we 250 cosponsors, I am happy to say, called for us to act in
the second session of the 106th Congress, which means in
calendar year 2000, and it is my hope we will be able to act
within this calendar year on this issue.
So we appreciate your thoughts and your time and input.
Mr. Ney. Mr. Chairman, I would note if I could that your
approach is the better approach and the correct approach by the
way. It is just that you are much more patient than I am.
The Chairman. Well, it has taken me a while to get patient.
I will tell you one little story. There are often times that I
get to be impatient and frustrated, and I live behind the
Supreme Court, and when I walk across the East Front coming in
here, I look up at the Capitol dome getting ready to damn a
colleague in the other body or maybe even one who serves in the
House, although not as often as those in the other body, and I
get--.
Mr. Ney. Never a staffer of course.
The Chairman. No, no, they are damning me is the way that
works, but the thing that I think of when I look at the dome is
that this is exactly what James Madison, the father of the
Constitution and the first branch of government, this
institution, envisaged for us, and he wanted it to be a process
which was very, very tough. Fleeing the tyranny of King George,
as we all know, was in part to make sure that no single person
got total power, and so that is why it is working, and that is
what has made me a little more patient. Thank you very much.
I don't see any more witnesses here. I have a statement,
there is nobody here to object to my putting in Ms. Pryce's
statement in the record, and I have got two very important
charts here which talk about supplemental appropriations and
continuing resolutions. Without objection, I would like both of
those to appear in the record, and our plan is to proceed after
the Presidents Day recess with another hearing, which will
consist of representatives from the executive branch and
several others, and we might even entertain some other Members
of Congress then at that hearing, too.
So anything else? Oh yes, and I am to state that the record
is to remain open for colleagues of ours who might want to
enter something into the record, and with that, since I have
been informed votes will end by 3:00 o'clock today, virtually
everyone is going to leave town. So have a wonderful Presidents
Day break, and the committee stands adjourned.
[Statements submitted for the record:]
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[Whereupon, at 1:25 p.m., the committee was adjourned.
BIENNIAL BUDGETING: A TOOL FOR IMPROVING GOVERNMENT FISCAL MANAGEMENT
AND OVERSIGHT
----------
Friday, March 10, 2000
House of Representatives,
Committee on Rules,
Washington, D.C.
The committee met, pursuant to call, at 9:30 a.m. in Room
H-313, The Capitol, Hon. David Dreier [chairman of the
committee] presiding.
Present: Representatives Dreier, Goss, Linder, Sessions,
and Moakley.
The Chairman. The hearing will come to order.
This is the second of three hearings being held by the
Rules Committee to examine various proposals for establishing a
2-year budget and appropriations cycle. On February 16th we
heard from 16 of our colleagues. It was a long day in the
House. We began with the Speaker of the House, Mr. Hastert, and
the chairmen and ranking minority members of the Appropriations
Committee.
This morning we will be hearing the perspectives of the
executive branch and congressional support agencies.
Our final hearing, which is going to be next Thursday, the
committee will receive testimony from our former colleague Mr.
Hamilton, from the former--your predecessor, Mr. Lew, Leon
Panetta, and our former colleague, members of academia and
representatives of budget reform organizations, State
legislatures, and the U.S. Chamber of Commerce. Sounds like
another lengthy hearing.
The prepared statements of our witnesses, along with the
transcripts of the hearing can be found on the Rules Committee
Web site at www.house.gov/rules. This hearing can also be heard
live--you want to hear the Web site again?
Mr. Moakley. I will be looking at it.
The Chairman. Good. This hearing can also be heard live on
the Internet by going to our Web site.
Anyone who follows budget process issues is aware of the
fact that at the end of the last session of Congress a
bipartisan group of 245 House Members joined in introducing a
resolution calling for the enactment of a biennial budget
process in the second session of the 106th Congress. As we move
forward with this process, our goal is to gather all of the
technical expertise possible to develop consensus legislation
that will be successful in streamlining the budget process,
enhancing programmatic oversight and strengthening the
management of government programs and bureaucracies.
As I mentioned, in our first hearing on February 16, we
heard from Speaker Hastert, who called on us to work with the
House Budget Committee and with the Senate in a bipartisan
fashion to produce a biennial budget package for the House to
consider this year. Appropriations Committee Chairman Bill
Young said this was a good time to look at implementing a
biennial budget process, but urged us not to load up any
legislation with other controversial budget process proposals.
We also heard from a number of opponents of biennial
budgeting, such as our colleague, David Obey. He raised
concerns that biennial budgeting will undermine Congress'
congressional responsibilities, increase the size and number of
supplemental appropriations and lock Congress into policy
decisions that will need to be changed as a result of changing
circumstances.
I happen to believe the case for biennial budgeting is
overwhelming. While not a panacea, I believe it will enhance
government's fiscal management, programmatic oversight, budget
stability and predictability, and government cost-
effectiveness.
To get a perspective from the executive branch and
congressional support agencies, I am pleased to welcome OMB
Director Jack Lew. We are going to be hearing from
Congressional Budget Office Director Dan Crippen; General
Accounting Office Associate Director Sue Irving; and CRS
Specialist Lou Fisher.
So we are very pleased to welcome you, Mr. Lew. This is, I
guess, your first appearance before the Rules Committee, and it
is very rare that we have anyone other than our colleagues
testify before the Rules Committee, but we do occasionally have
hearings. The subcommittee holds hearings. We are pleased to
welcome you here, and I would like to call on Mr. Moakley.
[The prepared statement of Chairman Dreier follows:]
[GRAPHIC] [TIFF OMITTED]63105.040
Mr. Moakley. Oh, thank you.
The Chairman. I was getting ready to call on you.
Mr. Moakley. You have overlooked me so many times.
The Chairman. I have never overlooked you, Mr. Moakley. It
is impossible. So before I call on you, Mr. Lew, I am going to
call on Mr. Moakley in case you were wondering.
Mr. Moakley. Mr. Chairman, I really want to thank you for
continuing these hearings on the biennial budgeting.
Although I certainly like the idea of spending less time on
the budget, I am skeptical it would actually happen. I believe
we would spend a great deal of time in the off year revising
the budget resolution and passing more supplementals than we
do. But, for the sake of argument, let us suppose we would
spend only half as much time on budget-related legislation. Is
that really a good thing?
It appeals to Members because agreeing on a budget and
working out the appropriation bills are among the hardest and
most contentious work we do each year. Each of us has a
different set of priorities, which is why agreeing on a budget
always involves making very painful choices. The only way these
measures get passed at all is by everybody making compromises.
In the end, no one is completely satisfied with the final
result. It has been that way every year since the first
Congress met back in 1789.
So it is very tempting to think we might be able to skip a
year of making these hard choices, but it is our constitutional
responsibility to make these hard choices. We are paid to make
decisions about taxing, about spending; and we cannot, at least
we should not, delegate our duties in the off year to a control
board, as Ohio or some other biennial States do, nor should we
expect other unelected executive branch bureaucrats to set
fiscal policy for the Nation every other year just for the
convenience of our avoiding hard work.
I have not heard any Member actually make the case for a
biennial budget based on the possibility of avoiding hard work,
but I sincerely believe this is what makes the idea initially
appealing.
The argument that we hear is based on the amount of time
devoted to the budget. We are told that the Congress spends so
much time on budget-related measures year after year, it crowds
out the opportunity to conduct oversight hearings and enact
authorization bills.
Mr. Chairman, that absolutely is not true.
I asked the Congressional Research Service, Mr. Chairman,
just what proportion of floor time is devoted to budget-related
legislation. They counted all the hours spent on all the budget
resolutions, all the appropriation bills, reconciliation and
tax measures, conference reports and all other related rules
and motions. They looked at each session from 1991 through
1998. In most years--5 out of the 8--we spent less than one-
fifth of our time on budget-related measures. The most
contentious year, 1995, the year of the shutdown, we still
spent less than one-third of our time on the budget.
If four-fifths of the time we nominally are in session is
not enough time to do other legislation, I think there is
something wrong with us. It is not with the process.
I think that CRS' memorandum ought to be placed in the
record. I have it here, Mr. Chairman.
So, Mr. Chairman, although the idea of biennial budgeting
certainly warrants further study, I have to say I don't think
it will turn out to warrant the hoopla. It is Congress' job to
come up with the budget no matter how ugly the process, and
delegating that responsibility every other year to Federal
bureaucrats is not what our constituents had in mind when they
sent us here.
We have the time to do it. We just lack probably some of
the inclination. Thank you.
[The prepared statement of Mr. Moakley follows:]
[GRAPHIC] [TIFF OMITTED]63105.041
The Chairman. Without objection, you want this article in
the record?
Mr. Moakley. I want to frame it and put it on the walls.
[The information follows:]
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The Chairman. Against which portrait? I knew what the
answer was going to be on that one.
I very much appreciate your encouragement of the work
ethic, Mr. Moakley, and I am happy to call on one of the
hardest workers here, Mr. Linder.
Mr. Linder. Thank you, Mr. Chairman. I am just pleased to
be here and listen to the testimony. I have no opening
statement. I am anxious to hear the testimony.
I would like to respond to one thing Mr. Moakley said, that
floor time versus nonfloor time is 25 or 20 percent of what we
do. But my guess is the nonfloor time on the budget takes four
or five times as much as the floor time, the conference
reports, negotiating back and forth with the White House; and
to do that every other year would give us an awful lot of time
to do oversight, which would seem to be lacking.
Mr. Chairman, I look forward to hearing our witnesses.
The Chairman. I am happy to call on Mr. Sessions.
Mr. Sessions. Thank you, Chairman. I am delighted to be
here today, and I am very proud of my chairman for bringing
forth full and forthright discussion.
I believe that this in-depth discussion about the idea of
biennial budgeting is very, very important. My colleague, Mr.
Moakley, says that we don't spend too much time on the budget.
I tend to disagree with that. I think we do spend too much time
on the budgeting and too little time on oversight.
I have had a great number of dealings with Inspector
General Walker. We have talked about the duty of oversight and
the opportunities that we have to make this government not only
work more efficiently, but provide a set of tools so that we
can make government do the things and help it to perform in the
ways that it should.
I believe that probably the greatest avenue of success that
will be coming as a result of biennial budgeting will be not
just the impact on Congress but on agencies. Agencies always, I
think, would tell you that if they get a budget that is early,
with money that is appropriated to where they know exactly what
Congress is asking them to do, they can perform their planning
function properly.
And I remember doing a college paper back in 1977 on the
effectiveness of giving the Pentagon a 5-year budget, and I am
well aware that we are not talking about 5-year budgets here,
but of how a 5-year budget would allow what was then the
largest department of the government to move efficiently and
effectively, not only through their procurement, but also on
their things--the day-to-day needs and looking forward in
technology. And I think if it was true in 1977, it would
certainly be true now in 2000 and 2001 and on a going-forward
basis. I believe this would help us and the government to more
effectively look at waste, fraud and abuse.
I believe that it is a management tool that companies, many
companies, Fortune 500 companies employ. They do a 5-year view,
not just of budgeting, but of the actual money that will be
spent, where they are going to spend it, how they are going to
spend it, what the priorities are. We will have an opportunity
to talk more fully with agency heads to ask them to predict and
to show Congress what their needs are, instead of on a year-to-
year budgeting, on a longer-looking, more forward-looking
basis.
So I think if we look at what is happening in the States,
we can glean the good part of those opportunities, and Mr.
Chairman, I am very proud to be a part of this effort for us to
have an in-depth look, an opportunity to know what the
advantages could be, what the pitfalls are. And I believe that
the administration, being here today as they are, will be able
to present us with a view from a great deal of wisdom--men and
women who have participated with President Clinton in running
this government for the last 7 years. They have been through
not only trial and tribulation, but they have seen some things
that I think that in their last few months might offer us an
opportunity to make things better.
And it is this making better, the scrubbing down that I
think is very important, and I appreciate your bringing this
forward.
The Chairman. We are certainly proud to have you as part of
the process, Mr. Sessions, and I would like to further buttress
your arguments by providing, without objection, in the record a
litany of the last decade of roll call votes we have had on the
budget on the House floor showing how great that work ethic has
continued to prevail here.
[The information follows:]
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The Chairman. So with that, Mr. Lew, we again welcome you
and look forward to your testimony
STATEMENT OF JACOB J. LEW, DIRECTOR, OFFICE OF MANAGEMENT AND
BUDGET
Mr. Lew. Thank you, Mr. Chairman.
Mr. Chairman, thank you very much for the invitation to
appear at the committee this morning. It may be my first time
testifying before the committee; it is by no means my first
experience working with this committee. I had the pleasure 25
years ago working for the now ranking member, Mr. Moakley, and
learned a great deal about--.
Mr. Moakley. I think you just blew it, Jack.
The Chairman. Thank you very much for being here.
Mr. Lew. And the chairman at the time was Chairman Bolling,
whose picture is sitting right over Mr. Moakley's shoulder
right now. I learned a great deal about the House and this
committee and the important role it plays in making sure things
work well, both in the House and in the Government of the
United States. This may be an issue where Mr. Moakley and I
don't agree 100 percent, but I can tell you, I have the
greatest respect and I am grateful for the work you do.
I would like to start, if I could, by sort of recognizing
where we have been on this issue and how far we have come to
get to the hearing today. Since 1993, the administration has
supported biennial budgeting. It was part of the National
Performance Review recommendations. There are a number of
recommendations that were made there, some of which we have
already implemented, that will help us reduce the size of the
Federal workforce, reduce the deficit, and this is an important
piece of the overall set of proposals that were made.
Two of my predecessors, as you noted, Leon Panetta and
Frank Raines testified in support of biennial budgeting, and at
the time it was not an idea that seemed to have very much
support. The difference sitting here today is that we are in
the middle of a discussion where people are asking, is it
really going to happen this year; and I would like to change a
little bit the focus of the way we testify.
Rather than making the case strictly for biennial
budgeting, I would like to associate myself with the remarks my
predecessors have made, and I would just focus on some
practical considerations, what I think would need to be worked
through for biennial budg-
eting to work, because I think there is, whenever you make
signifi-
cant changes, the risk that you sometimes don't address just
the problem that you are trying to solve, but other things that
may cre-
ate problems, or fail to deal with some of the practical
consider-
ations.
I think the important challenge before this committee is to
work on getting a proposal enacted into law and how to get a
proposal that works, and I would like to focus on some of those
issues.
Any law that provides for biennial budgeting will set forth
proce-
dures. I think it is important that the procedures be
realistic, and
I would start by saying that I don't believe it is realistic to
think
that the second year of a biennium will be a year of no
executive branch proposals and no legislative actions. I think
that the law has to provide for a realistic updating process so
that in the second year there would be an orderly review of
supplemental requests and changes, so that there would be an
active policy process in the second year.
The challenge--the challenge is to have it be an orderly
process so that in the second year we don't end up doing 13
separate appropriations bills that become a kind of disorderly
way of accomplishing what we do today with the regular
appropriations process; and in there is a lot of the challenge
of making biennial budgeting work.
I think there is a need for flexibility in the executive
branch for biennial budgeting to work. There will be a need for
reprogramming authority. There will be a need to give agencies
some more discretion, but there will also be a need to have the
committees, the appropriations committees, have oversight
responsibilities through notice, through approval mechanisms;
and I think the challenge is going to be to find the right
balance, to have the balance be so that the executive branch
agencies can work in a smooth way and so that the appropriating
committees don't end up micromanaging at such a small level
that we have a kind of paralysis in the second year.
It won't work if we end up with no ability to change in the
second year. It won't work if we end up with too much executive
discretion. It won't work if we have too much legislative
micromanagement. I think it comes down, beyond process, to
questions of comity between the branches and whether we can
make it work.
A lot of the problems in the current appropriations process
are not written in the rule book, not written in the statutes.
The problem has been a difficulty in reaching agreement and
reaching agreement in a timely way.
To the extent that we have to do it once, not twice, in a
2-year cycle for all 13 appropriation bills, I think that is a
good thing. I think it will certainly allow more time for
management issues to get attention in the executive branch. I
believe it will allow more time for management issues to get
attention in the legislative branch as well.
Now if it turns out that reaching agreement on 2-year
appropriation bills is more difficult than we think and if the
process leaves us in a state of limbo for a long period of
time, that will be a concern to me. And I would note that
points of order as an enforcement mechanism are very useful as
a tool for blocking certain action, it is not a very powerful
tool for forcing action; and I think that we have to all think
very hard about what we can do to make the process work, so
that there will be action on a 2-year budget if we have a law
that creates these rules to provide for 2-year budgeting.
Because if you get into the 15th, 18th month of a cycle and you
don't have an agreement on the 2-year budgeting, then you are
expanding the window of uncertainty that we often have at the
beginning of the fiscal year now when we run for a month or two
on continuing resolutions.
I would like to address two other issues briefly, and then
I would be delighted to answer your questions. The idea that
biennial budgeting is an answer to all the problems of the
budget process, I think is not correct. I think there are many
things about the budget process that need to be addressed. The
President's budget made several proposals, including having a
Social Security solvency lockbox, providing for Medicare
transfers to ensure Medicare solvency; extending the PAYGO
rules so that we have fiscal discipline in the time of surplus;
and extending realistic budget caps, discretionary caps, so
that we have discipline in the appropriations process. I think
it is very important that all these issues be considered, not
just biennial budgeting apart from all the others.
On the other hand, I would be very concerned about what the
chairman referred to as the controversial budget proposals that
could be added into a bill. Biennial budgeting has many, many
benefits, but if attached to it are provisions that would
either relieve the pressures of the current PAYGO system or
make it easier to take what I would describe as a path away
from fiscal discipline, I think it does more harm than good. So
I think the challenge has to be to design a workable biennial
budgeting proposal, keep it clean of dangerous proposals, and
hopefully expand the discussion to include what we think are
very positive budget reforms beyond biennial budgeting.
Let me close, if I may, on a positive note. I think that my
experience as OMB Director has only reinforced my belief that
what we do on the management side is every bit as important as
what we do on the budget side. The frustration that I have is
that the budget process takes up so much of my time, so much of
the time of the people that we deal with in Congress that we
don't have as much of the year as I would like to devote to
making the programs work better.
I think biennial budgeting, if it is properly designed,
could very much help alleviate these pressures. I think that
beyond design we have to take very seriously and take a look at
our own practices as both executive branch and legislative
branch representatives and ask ourselves, can we make it work
even if the rules are written right.
I believe we can. I think we should try to and I applaud
the committee for taking the step it has taken to advance the
debate on this issue.
[The prepared statement of Mr. Lew follows:]
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The Chairman. Thank you very much, Mr. Lew. That is very
helpful testimony, and you, of course, raised that important
issue of flexibility which is one of the concerns that the
opponents have addressed.
You touched on something that I would like you to expand on
just a little, and you said a new supplemental structure, and I
wondered what you envisage as a structure. Because again,
opponents said what you are going to do is have a load of
additional supplemental appropriation bills; and you said,
obviously we don't want to have 13 appropriations bills in that
second year when we want to focus on oversight. But clearly
that question is before us.
Mr. Lew. I think that the supplemental process is one that,
if properly managed, doesn't have to become the equivalent of
13 appropriation bills. I think just yesterday we saw the
Appropriations Committee take action in the House on a very
substantial supplemental appropriation bill where there has
been an effort between the branches to work on resolving issues
that couldn't have possibly been addressed last October.
The notion that in the second year of a biennium we will
look back and say that all of the decisions that we made at the
beginning of the biennium are 100 percent correct, given
changing needs, changing priorities, I don't believe is
realistic. I think the executive branch needs to take a review
and make proposals.
I think what I would emphasize is that putting together
changes is a very different undertaking than putting together
separate requests for 100 percent of the funding of each
department. When I look at a supplemental appropriation, it
takes days of analysis. When I look at an agency appropriation
for each agency of government it takes weeks and months of
work. It is a very different magnitude if you are looking at
the 5, 10 percent that you are changing, than if you are
looking at absolutely everything from the ground up, oftentimes
repeating the things that you have done very recently, but you
have to go through if you are going to go through every line of
it. The discipline of looking at what has changed and doesn't
warrant new action narrows very much the scope of what you are
addressing.
I think the administration should propose changes. I think
Congress should have an orderly procedure to review changes,
and I think that the danger of not having an orderly process is
that it kind of dissolves into a year-round process where there
are always changes being proposed and always changes being
acted on. I think that would end up taking a lot of time and
that would not be a good use of either the executive branch's
or the legislative branch's time.
So the desire to say that a 2-year budget doesn't require
another look, I don't think is realistic. The challenge is to
design that second look so it is efficient.
The Chairman. So this is what you describe in your prepared
text as sort of a midcycle review process?
Mr. Lew. Correct.
The Chairman. As has been pointed out by all of my
colleagues here, we spend a great deal of time on this, on the
budget process.
You talked about the fact that you spend so much time on it,
other than getting into these other things.
As far as the other agencies of the government are
concerned, what would you say the amount of time they spend on
the budget process itself is?
Mr. Lew. I think it is hard to answer a question like that
statistically. You answer it kind of impressionistically.
The budget year never ends. If you look at where we are
when Congress finishes its work on the appropriations bills, it
is supposed to be September 30th, but in our recent experience,
it has more likely been November 30th or October 30th. Our
budget process is well underway at that point. We usually start
our OMB reviews, so that means the agencies have made their
submissions to us already, around Columbus Day.
We make our recommendations to the President before
Thanksgiving, and we make our recommendations to the agencies
by Thanksgiving. From Thanksgiving until the end of the year,
we work through with the agencies the process of resolving
appeals of OMB decisions on budget levels and ultimately take
to the President issues that can't be resolved short of that.
Then the process from January until the budget is sent up
in February is a production process where we put together the
many volumes that have to support the budget. The agencies are
very involved in that; we are very involved in that. That is a
less time-consuming process for the policy officials at the
agency, but it is a very time-consuming process for the budget
officials.
The period of time from January until March used to be the
time when Congress shifted to the focus on budget matters, and
the administration was relatively less involved. I would say
that the extensive hearing process, which I am not criticizing,
which I think is a very worthwhile process, takes a very
substantial amount of time for not just OMB, but agency heads
for most of February and March.
I know I talked to my colleagues who are very, very much
involved in preparing for their testimony. They take very
seriously the need to come prepared and to have good sessions,
and that involves senior management as well as budget officers.
At the point after, you know, March, the Appropriations
Committee begins working on its appropriation bills. The
committees are very much in contact with the departments, with
OMB. That process goes pretty much until the end when the cycle
begins all over again. So there is really not much of a break.
Now, I am not saying it takes 100 percent of the time of
policy officials, but there is virtually no part of the year
that isn't very much affected by work on the budget process.
I think if you had a biennial budget system in place, you
would have a real chance of creating a 6-month window when
budget matters took a much lower share of senior policy
officials' time, which would allow more time to be spent on
management, and then as that filters down through the layers of
government even more so. So I think there is definitely a
benefit to be had from trying to stretch the process out.
The Chairman. Let me ask just one final question. You said
that since 1993 the administration has been a proponent--and I
know the President; I talked to the President about this. He
has been a strong supporter of it. Was this something that you
have always supported or have you come to this position after
your years of experience working for Mr. Moakley, among others?
Mr. Lew. I must say, personally I take process changes with
a little bit of a grain of salt because if they are not backed
up by the commitment to make them work, they can't work. You
can write a perfect process, but it is not the process that
make decisions. It is the people working in the process that
make decisions.
I have always thought that the appropriations process took
up more of the year than it should. I remember 20 years ago
seeing this diagram that looked like a worm, that described the
budget cycle where there is an 18-month period where parts of
the process are always overlapping each other. I must say my
biggest concern is whether workable procedures would be backed
up by the participants in the process to make it work, and it
does take comity between the branches. It takes a willingness
to allow for some executive decision, to allow for some
congressional oversight, to work in a collaborative way.
We have been better at that at some times than we have at
others. I think that that is a challenge that can't be written
on paper. It is something that people have to commit themselves
to, and if we are committed to put that in, I think it is a
very good idea, and it is one that I very much support.
The Chairman. So you have always been a proponent of the
biennial budget process, then, I guess?
Mr. Lew. Since I have had a firm opinion on the matter, the
answer is yes.
The Chairman. Mr. Goss.
Mr. Goss. Thank you, Mr. Chairman.
You make a good case for wanting to have some time to let
your senior managers do things other than punch numbers. I
think that is very reasonable and refreshing and probably
welcome news to the American public.
The same I think applies to the dual role we have here,
which is legislation and oversight. I think that one of the
reasons we are looking at this from this point of view is to
decide if, we can have a little more time for oversight of the
way you have managed; and I think that is one of the good
things about our system, that it provides a series of checks
and balances, and I think this is part of it. And I do think
the budget cycle as it is presently constituted does tend to
take away, certainly, our time; and it has become such a
workload for all of us that it probably has a negative impact
on our oversight in total. I won't say from point to point, but
I would say, in total, I think we can do better in oversight.
That may not be welcome news to you, but I think it is welcome
news to Americans. At least that is the way we have set it up.
I wanted to ask, you talked about the process and other
parts of the process, other reform, and I wanted to go into one
of those areas which I think might be considered other, and it
is something that has struck me as chairman of the Intelligence
Committee. We have, I am told by CBO, something like 130
programs, worth about $120 billion, which don't get authorized,
but nevertheless get appropriated through the magic of the
Rules Committee or some other system that we have created for
ourselves here. In the Intelligence Committee we have a
mandatory requirement for authorization. If the authorizing
committee doesn't do its work, theoretically no funds get
appropriated.
Now there are lots of ways to deal with that theoretically,
but by and large, I think that gives us an extra incentive to
do our authorization work timely and go through the budget
properly.
And I am wondering, since that only applies to the
Intelligence Committee and one or two other discrete programs
that I can think of, if you have a view on whether or not we
ought to be a little bit more attentive to following the
process of authorization and then appropriation? Does that give
us a salutary gain in our process?
Mr. Lew. I think that the authorization process is a very
important one, and if you look over the last 15, 20 years, it
probably has not worked the way it was intended to work, to put
it mildly. Part of it has to do with the calendar which doesn't
permit authorization legislation to get time on the floor. If
it doesn't get the time on the floor, the incentive to produce
it in committee goes down; it just kind of flows through the
system. I think freeing up floor time and having a calendar
where authorizations were expected to be considered would be a
real gain.
I think that the notion of appropriating with and without
authorizations is something that is divided in several
categories. Authorizations that have expired, where there is an
authorization that has been in place, is a very different
circumstance from programs that have never been authorized at
all; and I don't find it to be as troubling for appropriators
to take the liberty of appropriating in areas where there is a
last authorization, but there is a clear policy that has been
written. I think it would be a kind of artificial constraint,
given our ability to process all of the authorizations to have
programs just go away because the authorization date has
passed.
I think that there is a lot of activity in the
appropriations process that is either on the line or across the
line in terms of creating new authorizations, and I think one
has to take those matters on a case-by-case basis. I think the
rigid rule that says never appropriate without authorization,
no waivers, would leave us unable to address changing
circumstances in a timely manner.
I think if you go too far, it does a lot to diminish the
ability of the Congress to have the kind of serious, detailed
review of policy that should go in to putting initiatives
together, and I think one has to find the right balance.
Mr. Goss. I appreciate that. I think I am probably about
the same place. I know that there is no such thing as a
permanent fixed-in-cement solution for anything around here,
but I am leaning towards trying to find incentives so that
there are rewards for authorization as opposed to,
particularly, new authorization. I agree with your distinction,
and I think that is a useful comment, and I appreciate your
help.
The Chairman. Thank you very much.
Mr. Moakley.
Mr. Moakley. Jack, welcome back. I know Tip would be very
proud of you. I hear that you are in favor, but it sounds like
you are very cautious about it. I find that the fight doesn't
come from so much the budget process as it does the policy
decisions. I think the process isn't bad. We just can't get
people together to agree on what should be in the budget and
how much, and that is where the fight takes place, wouldn't you
say?
Mr. Lew. I think the process today creates more friction
because of the calendar than it needs to. When the budget
resolution is up in the air until the spring and the
Appropriations Committee can't begin its work seriously until
late spring, then we get into the summer and we are seeing
September, October on the horizon, it becomes more difficult to
work through the policy differences. One of the benefits of
biennial budgeting is that it would give the appropriators more
advance notice of what their targets are and give the
appropriators time to work through a lot of the policy
differences.
I don't disagree with your basic notion there is policy in
the process. I mean, it wasn't a process issue that caused the
appropriations process to go until November, but it was a
calendar issue that forced those issues to come to ripen after
Labor Day when we had a September 30th deadline ahead of us.
Mr. Moakley. Is it realistic, Jack, for an incoming
President in his first 4 months to come out with a 2-year
budget?
Mr. Lew. I think that is one of the biggest practical
considerations, the transition issue. I think there is a one-
time transition that has to be thought through very carefully.
I went back and looked at what our schedule was when Leon took
over OMB in 1993, and he sent a short document up in February
on time and the longer documents for a 1-year budget up in
April.
I think realistically--you know, that was an OMB Director,
who had vast experience in Federal budgeting. No one is going
to do it much faster than that, and the notion that you can do
a 2-year budget by February, March is just unrealistic. I think
April is a stretch.
I think that what it says to me is that for the first 2
years of a new system there really needs to be very careful
consideration given to the practical realities of the
transition. I think that it ought to be fully in effect at the
beginning of a Congress. I think it would be ideal for it to be
in the middle of a presidential term so that you didn't have
everything changing all at once, and there are ways that one
could design the transition so that you could have the process
put in place where, on a technical basis, OMB is going to redo
how the computer systems are run, how the agency guidance is
put out, what the agencies give us to work the kinks out when
the time pressure to absolutely comply is not as great, and to
have the idea be that after a 2-year transition you are fully
in the new system.
I think that to wait and say, let's start in 2 years
creates the same problem again 2 years from now. At any point
it is going to be difficult, but it is particularly difficult
at the beginning of a new administration where everything is
new.
Mr. Moakley. Does it also mean the biennial budget process
really creates an avalanche of supplemental budgets in the off
year?
Mr. Lew. I don't think it is an avalanche exactly. I think
one ought to expect there would be a substantial need for
supplementals.
We have seen in the last number of years that we have
substantial needs for supplementals with annual budgeting, in
part because we can't predict where it is going to flood and
where hurricanes will hit, in part because changing
international situations require new commitments that we
couldn't possibly foresee. I think those things will continue
to come up, only a little more so, because they are normal
changes from year to year.
If you look at the Federal budget, I don't have an exact
percentage, but an awful lot of it doesn't change from year to
year. We spend a lot of our time making the same decisions over
and over again. A lot of activity is in the last 10 percent,
which is where the change really is. In the second year, if we
focused on that 10 percent and we had an orderly process, I
don't think it would be anywhere near as time-consuming as
putting a full budget together or in terms of Congress
processing 13 full appropriations bills.
I do think there is a risk, as I noted in my formal remarks
and opening remark, that it could kind of dissolve into 13 ad
hoc appropriation bills. Then I think you end up worse off than
when you started. So it is going to take discipline and the
structure, the process can help provide that discipline and the
people working in it have to make it work. I think it is worth
the effort.
I think the challenge of managing the current process is
probably one that future administrations and future Congresses
will share the frustrations that I and my predecessors have
noted. I think that the changes have to be well designed, and
that is why I have tried today to focus on what the issues that
have to be carefully dealt with are.
Mr. Moakley. Thank you.
Thank you, Jack.
The Chairman. Mr. Linder.
Mr. Linder. Would a 2-year cycle create less incentive for
getting an agreement at the end of the first year? Because it
seems to me that the longer we drag this out, the more we are
getting pressured into our next-year cycle.
Mr. Lew. There is certainly a risk. The end of the fiscal
year is an action-forcing event. The notion of being in a
continuing resolution doesn't strike anyone as a particularly
good idea. It is not good from the agency's perspective; it is
not good from the Congress' perspective. I think it diminishes
public regard for government because it makes it clear we are
having difficulty making the basic decisions that we are
expected to make.
I think the notion of slipping months into a fiscal year is
not attractive under the current system. It would not be
attractive with biennial budgeting. I think the same pressures
that drive you to reach a conclusion now would drive you to
reach a conclusion later.
I do think the challenge of reaching a 2-year agreement
would be slightly larger, significantly larger than the
challenge of reaching a 1-year solution. I think that if we get
into the habit of thinking in 2-year terms, it will get easier
than it seems today. I think it will be harder the first year
than it is 2 years later when it is done for the second time,
but I think if you get well into a fiscal year and you haven't
reached agreement, it is not just the 2-year budget you haven't
reached agreement on, you haven't reached agreement on a 1-year
budget, which means you are in the same situation you are in
today, operating on continuing resolutions.
I think that there is another alternative, which I think
would undermine the benefits of biennial budgeting, which is
waiving points of order and doing a 1-year budget because you
can't reach agreement on a 2-year budget. If you do that, then
you end up back where you have started, and if it is done in a
timely manner, arguably you are no worse off, but you haven't
gotten the benefits because you are going to be right back the
next year doing the same budget negotiations and you won't have
created that window of opportunity for management and
oversight.
Mr. Linder. In virtually every administration, the Congress
and the administration have differences in their respective
priorities and spending. They want to control spending in one
area and add the spending in another, based on programmatic
priorities.
Would our ability to get control of budget spending, get
restraint in spending, be lost if you had the opportunity for
supplementals the following year?
Mr. Lew. I don't think it is supplementals per se that are
the threat to the discipline on spending. It is the people who
write and propose supplementals that we have to look towards.
The supplemental is no different than any other spending
measure in terms of how we use it. If I can go back to the
current system, we made a real effort in this year's budget to
set discretionary caps that would enable us to live within the
caps and to maintain fiscal discipline.
I think if you mark up a budget resolution this year, you
face the challenge that I think is really the answer to your
question. Pretending that the caps can be put in an unrealistic
level will force the kinds of machinations that get around
caps, that I think has given budgeting a bad name in the last
few years.
I think if you have realistic caps, the fact that you need
a supplemental doesn't make it worse. I think if you have
unrealistic caps you are either underestimating what you are
going to spend, because you are going to get around it, or you
are implicitly signing on to policy that many of us find
unacceptable because it would mean cuts that would not be
tolerable, whether it is in education or other areas.
Mr. Linder. You have made several points on the need for
the administration, and particularly your staff, to have time
for oversight and management, to manage programs. What you call
"management," we call "oversight." Do you consider the
oversight process in the legislative branch to be a burden or
can it be helpful to you?
Mr. Lew. Well, I don't know that that is a choice. It is
certainly a burden. I can say that preparing for an oversight
hearing, it does take time and effort.
Mr. Linder. Is it helpful?
Mr. Lew. I think it can be helpful. It is no more
intrinsically helpful or unhelpful than our own internal review
process. It depends how well it is done and whether it
identifies issues in a useful way. The fact that it is a burden
doesn't mean we shouldn't do it, but I think we have to
understand it is a burden, and a lot of burdens are good
burdens. So that is why I say it is not really a choice.
I think that the oversight function ought to be viewed not
as an inquisitorial function, but more as "how do we make a
program work better" function. There has been a trend towards
using oversight as a way of sort of catching the wrongdoers. I
think that the most useful function of oversight is to engage
in management reviews as sort of "we have designed these
programs together, how do we make them work well," and if you
find something that is wrong, then you deal with it
appropriately.
I don't want to paint anything with a single brush. There
are very useful oversight hearings that go on in many
committees, but when you ask for my reaction to oversight, it
is very much how it is done.
Mr. Linder. We have had testimony before one of our
subcommittees of this committee with respect to the ability to
do oversight. We have had five chairmen before this panel say
that it is very difficult to get information out of the
administration to do their job, particularly with the Justice
Department. I don't know if you are familiar with those
comments that we have received.
Mr. Lew. I know that we have had a lot of experience in
recent years where the requests for information have been at a
level of detail that is unprecedented, and I don't think it is
a level that necessarily gets at the policy issues that are
really at hand. The amount of time it takes to assemble some of
the data crosses the line from a burden that is a constructive
burden to a real time problem. There are issues of executive
branch privilege where certain internal documents, internal
decision-making processes, I don't think are fully appropriate
for discussion at hearings. The President is entitled to have
confidential discussions with the people around him.
I don't know that there is a partisan issue. I mean, I am
sure we will come up with examples of Democrat committees and
Republican committees that have done the same thing. I think
that the tendency to try and identify a not terribly useful
piece of information that is very difficult to produce and make
the charge of material nondisclosure has gotten to be a little
bit of a concern.
Mr. Linder. I can see that in some committees that were
here testifying before us. I think the Resource Committee had a
legitimate complaint on a simple request they were being
impeded on, but thank you for your help.
The Chairman. Mr. Sessions.
Mr. Sessions. Thank you, Mr. Chairman.
Director Lew, I would like to go back to some of your
earlier comments with my colleague, Mr. Moakley, and by and
large, he asked the question when, when should we do this, and
I found your response very interesting; and by and large, you
said, well, we could do it now, Leon Panetta, when he became
the Director, did a remarkable job then because he had the
experience and the background, but I am not sure that the next
administration, whoever that is, would necessarily view that as
an advantage.
Now, that is a summary of what I heard you say. Can you
elaborate a little bit more, because we are talking about the
advantages of this system, what it would provide; and then I
heard you say, but maybe not in the hands of a new person.
Mr. Lew. That wasn't what I meant to be saying, Mr.
Sessions. I think that what I meant to be saying was that
budgeting for a single year, it wasn't until the middle of
April that Leon was able to get a full year budget to the
Congress. If it had been a 2-year budget, I suspect it would
have been more like May or June. If it had been May or June,
that would have closed the window for congressional action, I
think unreasonably. I don't think Congress can wait until June
to meet a September 30th deadline on appropriations.
I think that the first time biennial budgeting is put in
place for anyone, ourselves included, it would have been a
heroic effort to do it in the first year of a new
administration. There are an awful lot of things that are
different in the first year of an administration. First of all,
the budget decisions are being made much later in the process.
They are being made in late January and early February instead
of November and December. I think when you switch for the first
time to a biennial system, the bookkeeping all changes. You
have real decisions for 2 years, and there are a lot of
processes that have to be put in place that one could
anticipate and do some of the groundwork early. But inevitably
when that goes into effect for the first time it will require
effort, substantial effort, to make it work.
I didn't mean to be suggesting that we could have done it
but someone else couldn't. I think it is a generic transition
issue.
Mr. Sessions. So let us go back to Mr. Moakley's question,
and the question that I am posing. When? When should we do
this?
Mr. Lew. I think in any problem that you try to solve,
where there are transition issues, you can say, oh, let us not
do it because it is going to be hard; or you can say, let us
get started and provide for a reasonable transition so we can
be there as soon as possible. We have supported biennial
budgeting. We continue to support biennial budgeting, and think
that the time for action is sooner, not later. What I was
suggesting is that enacting it doesn't mean saying that on
February 15th or whatever the date is next year there should be
submitted to Congress a biennial budget. I don't think that is
realistic.
I think April is a stretch. I think if you make the
deadline June, it gives Congress very little time to work. I
think that one of the things that we would want to work through
with the Congress in developing a schedule is going through a
lot of the nitty-gritty, practical considerations and reaching
sort of a mutual conclusion as to what is realistic to do in
the first year and the second year; and then in the third year,
where you go to the full implementation of biennial budgeting,
have it be a 100 percent in place. I don't have a schedule in
mind today, but that is kind of notionally what I think would
need to happen.
Mr. Sessions. So you believe that if this committee did
move forward, if this House and the Senate moved forward, that
it could be wise to do that now and then?
Mr. Lew. Absolutely.
Mr. Sessions. So you believe that now is the time and that
the transition then and the understanding should be flexible,
we should understand that the time frame might change a little
bit, but that it would be a workable thing for the next
administration, whoever it is would have the advantage of this
biennial budgeting?
Mr. Lew. With the understanding that, in the first year, I
don't think it would be true biennial budgeting; it would be
the beginning of a transition.
Mr. Sessions. Certainly we would make provisions, to where
we were giving next year's budget early on.
Mr. Lew. I will just throw an idea out. You might want to
have a later deadline for the biennial budget than you do for
the first one, so that there is a little bit more--.
Mr. Sessions. To transition?
Mr. Lew. You may want to have a notional second year budget
that is not binding for the first year.
There are a lot of different ways to do it. I think the
challenge is to get the processes up and running, to have the
decision-making process start to work in 2 years rather than 1-
year terms, to change some of the cultural parts of the budget
process that are slow to change. It is not just writing it down
on paper. It is changing the way a lot of people in a lot of
places do their work.
Mr. Sessions. Good. And now is the time?
Mr. Lew. It will just take longer if you wait.
Mr. Sessions. The second part is, we focused a lot--and you
have in your testimony--on the process that Congress goes
through.
Can you give us a little bit of insight about the office
that you hold as Director of managing the money, managing the
agencies and their performance, what would be an efficiency
that would be gained directly that you see within agencies?
Mr. Lew. Within agencies?
Mr. Sessions. Sure, which is your job.
Mr. Lew. I think that from an OMB perspective, we don't
have a separate management process. It is an integrated budget
and management process. When we do our budget reviews, we
discuss the management issues simultaneously with the budget
issues. And we have in our budget 24 priority management
objectives which are very closely tied to our budget
objectives, something I am very proud we have been able to
accomplish in the last few years, to not have sort of abstract
management principles, but real, tangible goals that are tied
to the budgetary priorities that we have. And we have made
progress on a good many of them.
I think that if we had more time, we would be able to work
at a senior level on more issues like that with the
departments. I think that we have real benefits when we have
senior-level attention to those kinds of issues, whether it is
our experience with the INS who are working together from the
senior levels on down--I mean the Attorney General and myself
right down through the budget offices.
We made a lot of progress clearing up the backlog of people
who are waiting to become naturalized Americans. It involved
coming up with a management plan. It involved coming up with a
person-
nel plan. It involved having the money behind it. It wouldn't
have
happened if it had not been involving the senior officials in
both
departments.
There are only so many of those things you can do when most
of your year is spent on the process of working through, either
internally within the administration or in negotiations with
Congress, the budget funding levels, and I think that the
notion of expanding those kinds of opportunities for each one
you do, it is a major problem that you have a good chance of
solving.
Mr. Sessions. I thank you for being here today, and I will
tell you that I believe President Clinton is well served by
your duty to our country; and I appreciate your being here.
The Chairman. Mr. Goss has one more.
Mr. Goss. Thank you, Mr. Chairman. I wanted to follow up,
if I might, on just the point you made responding to Mr.
Linder's question about oversight.
We have a lot of reason to believe that oversight can be
viewed by different perspectives, where you are in governance,
and you said that you are a little concerned that our focus on
catching wrongdoers was misplaced; and I would say that it is
misplaced if it is involving partisan politics, if the
oversight is being done strictly for partisan political
reasons. I would agree and I share, I think, what is a
universal concern that we not contaminate the substance of
government with too much partisanship.
But I am concerned that anybody would use the allegation
that it is partisan, when we are trying to make a substantial
oversight review of a matter and we have found time and time
again that we do a very high percentage of our business on the
Hill in public session, open door, and the executive branch
does a very low percentage of its business necessarily in
public session, usually behind closed doors, that creates
clearly a job. And quite often when we do the job well, using
the tools, the GAO or the various organizations we have here,
to pursue these matters of oversight, we find we get
information; and then if we can't get the follow-up information
from the executive side of government, we become frustrated,
usually by that time the media has got it, because we do a high
percentage of our business in public.
So the question then is, what do you do next? One of the
reasons I am for biennial budgeting is, I would like to have
the time to consider what do we do next when we get in that
consideration? I wonder if you have an observation on that
relative to the response you made to Mr. Linder.
Mr. Lew. Well, I guess my response--I personally have a
very low tolerance for wrongdoing. I don't mean to be
suggesting that you or we shouldn't be concerned about it. What
I meant to be suggesting is that most management issues that we
need to work through don't involve people who are trying to do
bad things or who even did things that were wrong. It is just
problems that are not "front page of the newspaper" problems
that you need to spend time working through to make things work
better.
I think that the question of what you do when you find out
things are wrong, whether it is because a process doesn't work
or some people did something they shouldn't have done, is the
hardest part. At some point, obviously, if it is a question of
real wrongdoing, it becomes a legal question, but from a
perspective of management and program oversight, it is a
question of what in the structure of a program needs to change
to create a higher likelihood that the job will get done.
I think there has been a very useful increase in focus on
performance measures. I would just note this is kind of similar
to my reaction to Mr. Linder's question. I am very concerned
that as we focus on performance that we not make it a club we
use to say to agencies, you failed to meet your standards, we
are going to take your money away.
Mr. Lew. Having performance measures work requires having
people make an honest appraisal and assessing realistically
what they could have done better with the opportunity to fix
it. And I think the management and oversight process has to be
aimed at how you get things fixed, not how you take people's
money away or you find somebody that did something wrong.
If people did something wrong, the law should be used to
take the appropriate steps. In order to make programs work, you
have to have a window where you identify a problem and you try
and fix it. I don't mean to suggest that it is all partisan. It
is something about the high-pressure environment in which we
govern is focused more on finding the problem than providing a
window to solve it.
Mr. Goss. I think that is a good answer. I think we spend
an awful lot of time, way too much time, in this, what I will
call, standoff between the circle-the-wagons mentality and the
gotcha mentality, and I think that is the mentality of this
town, and I think that there is such waste of time in that
effort. On the other hand, there are very legitimate questions.
Somehow, somewhere somebody has to lead us out of this, and
maybe if we get into biennial budgeting, we can have the time
to figure out how to do this rather than responding to what is
in the newspaper today.
Mr. Moakley. Would the gentleman yield?
Mr. Goss. Of course.
Mr. Moakley. I think it gets down to what I said. I think
most of the problems are the policy differences instead of a
process. What do you do in a situation, should we do this or
that? That is where the fighting takes place, and I think that
is where the slowdown comes, the way that the Congress handles
some of these things based on policy differences and not the
budget process.
Mr. Goss. I would agree that there is some of it that is
policy difference, and I think we all benefit from having an
airing of policy debate. That is what we all come together to
do, and that is wonderful.
I am talking more about process, however, and it does
happen this way. I will give you a case in point. There is an
alleged activity going on called Echelon. Echelon involves
something that is near and dear to all Americans. It has to do
with "is Big Brother eavesdropping on Americans?" and the
answer is, in my view, no. But nevertheless, the perception is
that the answer might not be no. In order to satisfy properly
the people who are asking those questions, you really have to
get down pretty far into the detail of this and respond to case
by case of whatever allegations may be.
My view is if you are blocked from doing that, it creates a
suspicion. That is a process problem, not a policy problem. You
have to be able to get through that process, and you have to
have ultimate candor in the oversight committees. When that
candor breaks down, you have a breakdown in process, and I
called it circle-the-wagons, gotcha, either way. I am hoping
that we are going to buy some time through the Chairman's
leadership on this biennial budgeting so we can get out of that
mentality and do something a little more constructive.
The Chairman. Mr. Linder.
Mr. Linder. I just want to follow up on comments on the
Results Act because my subcommittee will be having a hearing on
the 22nd of this month. Each of the authorizing committees
tends to look at the Results Act in three different prisms. We
would like to formalize in some way to say what was your
mission when you asked for this money, how many people were you
trying to serve or how much were you going to spend, and when
they come back, did you do it. Not an angry argument about we
are going to take your money away, but a formalized plan for
the agencies who, because we haven't had the time or been as
perspicacious on oversight as we should have been. Some
agencies take this more lightly than others do, and if we can
take some formal way so that all agency heads would respond in
the same way, and all authorizing committees look at it in the
same light, I think we could have a legitimate discussion on
whether a program was worth the money spent.
There are going to be changes from time to time in these
programs and the needs of the programs, but the Results Act was
a good idea which has not come to fruition yet.
Mr. Lew. We worked on the development of the GPRA, and we
believe in the goals of it.
I would make a couple of observations. First, the challenge
of measuring performance, measuring results is different for
every agency and every program. We have tried to work with each
of the agencies to develop meaningful measures, and I would say
in some cases it is very hard, legitimately very hard, to
identify the tangible outcomes. Take a scientific area, is your
measure breaking through with Nobel-quality research? Is your
standard having well-managed research projects with or without
breakthrough results? It is very difficult.
I think that having kind of a mechanical approach, which I
don't suggest that you have taken, you have taken a very much
different approach, but to have a mechanical approach that you
set a standard and you don't meet it, there are consequences,
kind of blurs the fact that there are hundreds of different
ways that results can be measured. And if you want agencies to
do it right, and you want agencies to not circle the wagons as
Mr. Goss said, you have to create kind of a safe zone to
discuss what you do with your own measurement of your results,
give you some freedom to fine-tune your measurement if you
designed your measure wrong, not just have immediate dire
consequences because you failed to meet what turned out to be a
badly defined measure.
I have been trying through our internal executive branch
efforts to, with each agency, make this part of the culture
that they do their budgeting and run their programs. I think we
have made tremendous strides. You can have a conversation that
is a results-oriented conversation in virtually any agency,
which you couldn't do 6 years ago.
I think to say we are far down the road towards having
crisp mechanisms that you can use for budgeting is an
exaggeration. But I think it is an important tool that needs to
be given time to work properly, and I would look forward to
working with you and others to do it in a balanced way.
I react to the suggestion that others have made, if they
don't perform, we should take their money away. The circle-the-
wagons mentality will kill any effort for success if that is
the approach we take. As a practical matter, I think you need
to have a much more balanced approach than that.
Mr. Linder. Thank you very much.
Mr. Moakley. Mr. Chairman.
The Chairman. Mr. Moakley.
Mr. Moakley. I agree on the problem of not getting all of
the information, but I don't see how the biennial budget can
fix that. That is between the branches. I don't see how this
takes any more time away from you. You still have the oversight
powers to do it.
Mr. Goss. I would say if you have more time, which I hope
the biennial budget will give us, to set up the safe harbor
process that Mr. Lew is talking about, you will get a good
reward from it. I will say, the committee I chair, which is
probably as nonpartisan a committee as you can find in
Congress, and for good cause--.
The Chairman. Next to this committee.
Mr. Goss. Yes, of course. Yes, next to this committee. In
fact, the comparison is wonderful. We do have a safe harbor and
good oversight and working trust, and it is that way because we
have been able to spend the time together and work out the
processes, and I think that is the highest priority. But not
all of the committees are as small and select and compact and
have that capability. I wish other committees could replicate
the things we use. I would like to provide them the time
allowance and say create your safe harbors and create a trust
and working confidence so that you can do your oversight job in
a fair way without being blocked with the wagons or having the
people who are testifying think, oh, oh, they are going to
figure out a way to get me and hang me. That is all I am
looking for.
The Chairman. Mr. Moakley.
Mr. Moakley. I think you have created that safe harbor
using annual authorizations.
Mr. Goss. Remember, however, that we have a clear mandate
to get our authorizations done so we work at a little tighter
pace on our authorizations. We are the only committee that has
that requirement. I only have one job as a chairman, and that
is get the darn thing done, and that means I have to create the
atmosphere to do it, and the way I do it is creating this safe
harbor. That takes time and constant management. You cannot
just simply set up a system and expect it to work, because the
personalities will kill it if you don't work at it. It is a
little like a marriage, it really is. I don't want to marry the
executive branch, but a pleasant courtship would be all right.
Mr. Moakley. You would like to be there on the honeymoon.
Mr. Goss. Probably, not necessarily.
The Chairman. Let me make just a couple of comments and
throw a couple of questions to you.
First of all, on the issue of setting a date for the first
year of an administration, there are a number of pieces of
legislation for biennial budgeting that have been proposed that
do address that. The question that is out there, what is that
date going to be, and that is why from your initial remarks
about the issue of flexibility, it seems to me that we need to
spend some time and effort thinking about what that date would
be.
Mr. Lew. I think there is a window because the proposals
that I have seen have April. Later than April raises real
questions about the workability of the congressional timetable.
You are constrained on both sides.
The Chairman. That is right.
The other issue that I would like to raise is what you
would see--how the government performance review timetables,
how those would fit within the biennial budget.
Mr. Lew. I think you would clearly have an opportunity to
try to alternate the emphasis in terms of performance reviews
and budget reviews. I don't think that you would ever want to
separate them. I think if you ended up having performance
reviews be totally independent of budgetary considerations, it
would be a step backwards. The challenge is how to switch the
emphasis in terms of how much time you have to do both at the
same time. And right now we have to try and fight to get the
performance issues into the budget schedule. If we had a year
when the budget schedule was less intense, we would have more
time. But you have to do both simultaneously.
The Chairman. This has been a very interesting and helpful
exchange that we have had. There are a number of members of the
committee who are obviously not here, and we would like you to
take some written questions which may come from them. I would
also like to make a request that members of your technical
staff work with us as we fashion this package. We want to
address Mr. Moakley's concerns and some of the other concerns
which have been raised by our colleagues as we proceed with
what is obviously uncharted waters here.
Mr. Lew. We will try to be responsive.
The Chairman. Thank you for being here.
Our next witness is the Director of the Congressional
Budget Office, our friend Mr. Crippen, who, unlike Mr. Lew, has
many times testified before the Rules Committee on a wide range
of budgeting matters, often on Friday mornings.
STATEMENT OF DAN L. CRIPPEN, DIRECTOR, CONGRESSIONAL BUDGET
OFFICE
Mr. Crippen. Good morning. We have a statement, which has
been submitted.
The Chairman. Without objection, that will appear in the
record.
Mr. Crippen. Thank you. It is a good statement that will be
seen as more succinct than what I am about to say.
I recalled, Mr. Chairman, as Mr. Moakley and Mr. Lew were
talking, that in 1981 I was a newly minted Ph.D. starting to
work for Howard Baker, and a number of my classmates and I had
established a tradition in December of going sailing. Not long
after I started for the Senator, I asked whether it would be
possible to go sailing in December. He said, of course, we are
going to be out of session by Thanksgiving. So I made plans
accordingly.
To make a long story short, by the time it came for me to
go sailing, the Congress was still in session. President Reagan
had vetoed a number of appropriation bills. He was about to
veto a continuing resolution, and I went back to the Senator
and told him that the time had come for me to go. He said, of
course. We are almost done, and there are just a couple of
continuing resolutions (CRs) to do. I turned to walk away, and
he said, "You just made one mistake." I thought that was the
end of my short career in the Senate. He said, "Like a damned
fool, you believed me when I said that we were going to be out
by Thanksgiving."
I tell that story for two reasons. First, the situation we
find ourselves in is not new. These end-of-the-year conflicts
over appropriations will take place under any circumstances.
Second, President Reagan used the veto and the year-end train
wreck to reduce spending. The conflicts we have been engaged in
in the past few years arguably have been to at least change or
increase spending.
I would say in this little example as well, those who
assert that biennial budgeting would accede power to the
executive, ignore, I think, the impact on the Chief Executive.
That is why President Clinton and others have resisted things
like an automatic continuing resolution because it does have
the ability to alter power, but again, that depends on who is
in power and on whether that is desirable.
In my discussions with Members, I think I have discerned at
least three reasons behind the discontent with the current
budget process. The first is the annual end-of-the-year mess.
Second is lack of oversight, which we have talked about a great
deal this morning. And third, the comment is often made that we
spend our entire legislative lives doing budget, and that issue
must also be addressed. I would like to make a few comments on
each of these points, Mr. Chairman, and am open for whatever
questions you may have.
Of course, the first issue--end-of-the-year train wreck--
is not new. The last time we had 13 appropriations bills
finished on time was almost a decade ago. The automatic CR is
one way to prevent the end-of-year problem. There are other
techniques, other process reforms, that would help that as
well.
We have, I think, over the past few years had less and less
oversight. It wasn't always so, although that is not to say
that we have ever had sufficient oversight, and maybe there is
no such thing. But oversight is hard work, and I think the
amount of oversight has been declining. In that sense, the
prospect of the two year budget might be quite useful and
encouraging.
I would also note that as you discussed the Performance and
Results Act in the last moments with Director Lew, this year is
really the first year for full reporting under that act.
Reports are due at the end of the month. It would attest to the
ability of the executive branch to critique itself. Are they
meaningful, are they open, are the wagons circled or not?
Second is the Congress's ability to respond to the reports.
Will there be oversight hearings based on those reports, and
will the reports be a useful management tool? We have a real,
live experiment starting in a few weeks on both of those
issues. Looking at oversight issues, I would encourage you to
look at how the reports are received and used.
Third, the constant complaint that all we do is budget
stuff, has been around since the Budget Act was enacted 25
years ago. I first encountered it in 1981, but it was not new
then. I would suggest that perhaps it is the constraints of the
budget process, not the time involved, that is the real rub.
People don't like the budget process because it defeats or
deters or makes it harder to do things that they would
otherwise like to do. So the constraint may not be the core
time or the time involved but rather the questions about
resource allocation and the policy issues.
However, I would say, in conclusion, Mr. Chairman, that we
are in a new world. We have these ongoing surpluses and rapid
economic developments that we can't keep up with in our own
forecasts of spending and growth in the economy. We have the
impending retirement of the baby boomers and the need to reform
Social Security and Medicare. So if biennial budgeting reduces
the number of train wrecks, promotes more oversight, and allows
more time for nonbudget issues, then it is worth a try, at
least temporarily.
We should remember that the reason all 13 appropriation
bills were completed on time in 1988 was because the Congress
and the President struck a two year budget deal. So there is
some suggestion, at least, that it worked in those
circumstances, and it might again. But it is a process change
to address what is largely political problems, and I don't mean
partisan but rather power and policy, as Mr. Moakley has said;
that is, thin margins in both bodies, and a President of the
other party, and the constraints inherent in creating and
implementing a budget. We only know, however, that if we try a
different process that there will be unintended consequences,
and so we need to be cautious about how we proceed.
I will conclude with a second story from 1981. Howard
Baker's first vote (and what turned out to be his last vote as
Majority Leader) was on increasing the debt limit--something
that was difficult to round up 51 Republicans in the Senate in
1981 to support. Ultimately he did, but it was a messy process,
and he looked with much favor on the House process. I think it
is called the Gephardt rule, in which a debt limit increase is
deemed approved when the budget resolution is passed, and so
the House as a regular matter does not vote on debt limits.
So Baker sent me off to talk with Bob Dole to see if we
couldn't implement the Gephardt rule in the Senate. After some
backing and forthing, Dole looked at me and he said, "You know,
someday we are going to be back in the Minority, and we don't
want to foreclose all these opportunities of legislating by
other means." And so he was not only prescient but resisted the
change, and indeed the Senate still has to vote on debt limits.
All of that is to say that one needs to be cautious about
making these changes.
Thank you, Mr. Chairman.
The Chairman. Thank you, Mr. Crippen. You continue to
provide very helpful input to this committee and this entire
process.
[The prepared statement of Mr. Crippen follows:]
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The Chairman. I will say that I recall many discussions
that I have had with Howard Baker in which he has long been an
advocate of making this a part-time Congress.
I will tell you that it was in the first instance of your
three that you outlined, which was the waning hours of the
first session of the 106th Congress, that I successfully
garnered 245 cosponsors calling for the biennial budgeting
process.
Mr. Crippen. That was not an accident.
The Chairman. That was part of our timing process here.
You have very important responsibility at the CBO, and I am
interested to know what impact the biennial budget process
would have on your work as Director of the CBO.
Mr. Crippen. It would obviously depend a great deal on how
you chose to implement the two year budget. We will do whatever
the Congress wants and needs in that process. I would hope and
anticipate--whether it is a formal role in terms of another
budget resolution or not--that there would be ample
opportunities to update the semiannual reporting that we do now
on baselines and economic changes and other things.
At the moment things are changing quickly enough that a few
months makes a lot of difference on a budget outlook, even for
the current budget. The revenues for this budget year, for
example, are running higher than we anticipated even as late as
December. That does not mean that they are going to be higher,
but at the moment they are. What that portends for this year
could be important, but it could be important for future years
as well.
My point is that in a two year process, there would still
be opportunities for the Congress to incorporate updated
estimates for at least the first few years in which these
things are changing quite rapidly. I don't anticipate, however,
having said that, that there would be a great deal of change in
the overall workload. We put out three annual reports, and I
would anticipate that we will continue to do that. There would
be some midsession reporting that would go away, but I don't
think that the workload would change dramatically.
The Chairman. In your work with the executive branch, do
you have any recommendation as to what the time frame would be
for the first year of a new administration as far as its
submission?
Mr. Crippen. I had, frankly, not thought all that much
about the implication of having a new President and a new
budget process simultaneously. Clearly you could enact the law
this year and have its first true effective biennial date be
two or three years into the new President's Administration.
Just as the Congress did back in 1974 and 1975 when it passed
the original Budget Act, there was a one year practice run in
which the requirements were not binding, and everyone went
through the paces. Likewise, it might make sense to enact the
law this year and make it--effective officially, fully
effective--the third year into the President's term.
The Chairman. With your tie to the first branch of
government, I am wondering whether or what thoughts you have on
the argument that opponents of biennial budgeting make that we
are acceding authority to the executive branch?
Mr. Crippen. You have subsequent witnesses here who have
that belief more than I do. Having worked on both ends of the
avenue, with the Congress and the President, I think that it
is, frankly, the other way around--that the executive branch
would lose a modicum of power if you made appropriation bills
less recurrent, more combined, and only once every two years do
you have these end-of-the-year sessions or negotiation. But I
think that is why the Administration has resisted efforts by
the Congress to have continuing or permanent continuing
resolutions or automatic continuing resolutions so that you
have a crisis of sorts to create an atmosphere in which to
reach conclusion on these issues. They well may find another
forum.
The Chairman. What about the issue of their responsiveness?
Mr. Crippen. I find it hard to believe that any agency
would stick its finger in an appropriator's eye just because it
is going to be 18 months before they see them again. Most of
the management is year-round; it is not just in oversight or
before appropriations committees. There is ongoing work between
the appropriations staff, some of your staff, and agencies. I
don't think that lengthening the leash will have an impact.
The Chairman. Thank you.
Mr. Goss.
Mr. Goss. Thank you. You probably are in as good a position
as anybody to judge in terms of time and effort the people who
have put together budgets, whether there would be tangible
savings if we switch the system now. Do you think that there
would be tangible savings?
Mr. Crippen. I suspect there will be some. We are reacting
to budgets, not developing them. However this system works, we
will be in that same mode, presumably. But I have worked in the
executive branch on putting budgets together, and indeed it is
a very time-consuming process. That is not to say process is
not a useful, but I can't imagine that it would not save some
time to not have to go through all of it every year.
Mr. Goss. I am certainly not wedded to change for change's
sake. We are trying to see what the pluses and minuses are. I
have assumed that there would be a time savings.
The other thing, you are in a very good position also to
make any comment you would like on the authorization question
that I asked Mr. Lew. I am a little puzzled sometimes about why
we seem to have slipped away from the authorization process. I
would be curious to know whether you think it has anything to
do with the budgeting process.
Mr. Crippen. I am not sure that I know the cause. There are
different causes and different reasons as to why these things
happen. In some cases, people feel it is not needed; that is,
the program will go on, and therefore we should not break our
backs reauthorizing. But it is an increasing problem if you
measure it by the amount of money that is being appropriated
that has not been authorized. That amount seems to be growing,
just as I think--and this is a casual observation--that
oversight in general has declined in authorizing committees. I
don't know the reason for that. Until you know the reason, it
is hard to have a solution. If time is indeed a factor, and if
the authorizing committee chairmen are more than willing to do
oversight, then a two year cycle might help. I suspect there
are lots of reasons why oversight has declined.
Mr. Goss. I think time is a factor. One of the aspects of
oversight is accountability, and sometimes when there is no
authorization, accountability gets a little blurred, too.
Mr. Crippen. Clearly, these processes were meant to
complement each other--the authorizers to do both oversight and
set the parameters of the policy, and the appropriators to set
priorities among available dollars. So the processes were
intended to be fully complementary, and I think that when they
work, they are complementary, as in your case with the
intelligence authorization and appropriation.
Mr. Goss. I have no objection to an appropriation of an
unauthorized amount subject to the authorization of that
amount. That is not a handy way to do it, and probably not the
smartest way to do it, because it leaves a lot of uncertainty
down the road, and if you are moving numbers and dollars
around, you don't want that uncertainty. But it seems to me
even that would be an improvement over the nonauthorized
approach; do you agree with that?
Mr. Crippen. Yes, I agree. I think that what we are
discussing are mechanisms by which we can not only produce
better decisions and more efficient decisions, but also
recognize that we need to keep, as Senator Dole reminded me
back in 1981, the ability to resolve conflicts. Given the thin
margins you now have and the differences in parties between the
executive and the congressional branches, what mechanisms are
there to force conclusions, to have policy or conflict
resolution? It is not just that you can fully eliminate
conflicts. You may have better ways to do that, but it is not
possible to fully eliminate those conflicts and the discussions
that need to take place.
Mr. Goss. Thank you very much.
The Chairman. Mr. Moakley.
Mr. Moakley. No questions.
The Chairman. Thank you very much. We are going to have
some written questions to submit to you.
Mr. Crippen. We do have some ideas about how it can work.
Thank you.
The Chairman. We are going to bring our last two witnesses
up together, Sue Irving, Associate Director of Budget Issues of
the General Accounting Office, and Lou Fisher, senior
specialist in separation of powers at the Congressional
Research Service. We welcome both of you and thank you very
much. You are certainly free to summarize your remarks as you
see fit. Ms. Irving.
STATEMENT OF SUSAN J. IRVING, ASSOCIATE DIRECTOR, FEDERAL
BUDGET ISSUES, ACCOUNTING AND INFORMATION MANAGEMENT DIVISION,
UNITED STATES GENERAL ACCOUNTING OFFICE
Ms. Irving. Thank you, Mr. Chairman and Mr. Goss and Mr.
Moakley. It is a pleasure to be back. As you all know, I
actually like talking about the budget process, and I am
delighted to come back and join another group. As you noted, I
would like to have my whole statement put in the record.
I would like to stand back a minute and remind all of us
that part of why the budget debate is always going to take a
long time is because it is through the budget that we resolve
the often conflicting demands and views of the American people
about the role of government. You all live in this world, and
you know your constituents want a smaller government as long as
it fixes all of their problems. Someone that I worked for once
said all of American political thought could be summed up in
two sentences: Get the government off my back, and there ought
to be a law.
I think in a very real way when you talk about your
frustration about how long the debate takes, what you are
really saying is that you seem either to debate numbers without
context or to debate the same thing over and over again. I know
Senator Domenici used to talk about having to fight about
whether the space station should be continued first on the
budget resolution, then on the authorization bill and then on
the appropriations bill.
So I am not sure that the issue is really that the budget
takes too much time as much as it is that the debate may not
focus on the important issues and how can you think about
restructuring it to do that.
The other point I would like to make is that in a very real
sense you stand at the threshold today. Having slain, at least
for the time being, the deficit dragon, you have the ability to
stand back and look at two other very important things. The
first is how do you think about the long-term costs of the
commitments the government makes.
We know that the good news is my generation is getting
older. The bad news is we are getting older, and that
demographic tidal wave, absent policy changes, will overwhelm
either the surplus or at a minimum the flexibility to do
anything else in government. When you are fighting the annual
deficit problem, you don't have time to look at that issue and
now you do.
Second, you also are just beginning to reap the benefits of
some far-sighted laws you all enacted: the CFO Act, the
Government Performance and Results Act, and the Clinger-Cohen
Act. These are just beginning to bring to you some performance
and cost information. I think it is fair to say, unevenly done
and unevenly used because it takes time to adjust, but it is
beginning.
These issues confront you whether or not you change the
cycle for the budget process. Whether you stay at an annual
cycle or go to a biennial one, you should think about how to
use that information in cross-cutting ways, because I would
argue that your current authorization and appropriations
committees are quite well suited to do targeted oversight and
program-by-program oversight.
When Director Lew talked about working very hard to prepare
for hearings, I thought to myself, "that sounds like oversight
to me." But both Congress and the executive branch have a
harder time doing cross-cutting oversight. We have quite
appropriately in this government assigned many agencies and
used many tools to address the same problems. We use tax, we
use spending and State grants, we use regulation, and we run
them through different committees and different agencies to get
at a number of objectives, everything from counterterrorism to
health to--I remember Mr. Mica trying to look at trade policy
and figuring out there were 19 subcommittees involved in it.
It is not clear how you do this kind of cross-cutting
oversight on either cycle at the moment, whether you stay with
annual or move to biennial. Mr. Walker, in testifying before
the Senate Budget and House Budget Committees last month,
suggested that you think about whether vis-a-vis oversight you
are in a similar situation to what you were vis-a-vis budget
before the Budget Act. And if so, whether you might develop
something like a performance resolution as an adjunct to the
budget resolution. This would not have numerical rigid
targets--you didn't feed this many people, we are going to cut
your budget. Rather the question is, should the views and
estimates process be modified to have agencies suggest targets
for cross-cutting oversight.
To the extent that you look at biennial budgeting as an
attempt to think about better or more systematic oversight, it
won't happen by itself in any process. You have to think about
how to structure it given the fact that there are disparate
jurisdictions.
Your staff asked me in my focus on biennial budgeting today
to talk about a couple of things in particular. First to note
that Congress is actually pretty good at giving multiyear money
and different timing of money when it thinks it is necessary;
the frequency of decisions is not the same thing as the
periodicity of money. Sometimes the impression is given that
the only way to give the agencies advance planning ability or
flexibility in the use of their funds is to change the
appropriations cycle. However, all of these biennial budget
bills propose two 1-year budgets. We are not going to 24-month
fiscal years in any of these proposals.
The other thing that your staff asked me to discuss was the
experiences of some of the States. We are currently looking in
depth at three States. Let me start with a couple of caveats.
State budgets play a very different role than the Federal
budget, and State procedures and policies cannot be translated
wholesale to the Federal Government; I would not want to be
heard to suggest that you could make your decisions based on
the State experiences. Rather, as you think about what it would
take to implement this if you chose to do it, some of the
mechanisms that the states have used should either give you
ideas or pause. I think that one thing that Director Lew and I
absolutely agree on is this: The devil will be in the details.
How you decide to make biennial budgeting work will determine
whether it transfers power, how it works, and what you get from
it.
The three States of particular interest, I think, are Ohio,
Arizona and Connecticut; Ohio because it is the only large
State that has both an annual legislature and biennial budget
process, and it always has; Arizona because it just last year
moved its budget from an annual to a biennial cycle with the
avowed intent and a structure for seeking cross-cutting
oversight in the even-numbered year. Now, in Arizona they only
appropriate half their money. Federal money flows directly to
the agencies, as does any money created by voter referendum or
any user fees.
The third state, Connecticut is of interest because about a
decade ago it went to biennial with the idea that it would
increase oversight. The Governor is supposed to propose a
biennial budget every odd-numbered year, and they are supposed
to do nonbudget substantive reviews in the even-numbered years.
However, in the last decade in every even-numbered year the
Governor has had a fairly significant number of policy
proposals and budget revisions; this year in a $10 billion
budget, the combination of gross technical changes and gross
policy changes, that is both pluses and minuses, has been more
than $750 million. Based on our preliminary conversations,
Connecticut has not, in fact, done oversight in the second year
except in the context of the appropriations process where they
were doing it before.
None of these States separate authorizations and
appropriations. Most States have one omnibus appropriations
bill or a few. In most States the Governor has a great deal
more power than the Constitution envisions for the President.
In Ohio, there is an entry called a controlling board,
which is composed of six members of the legislature and the
director of the Governor's Office of Management and Budget.
This controlling board does not adjust the total amount of
general revenues appropriated. However, it moves money between
years; it moves money between purposes within a single agency,
and if you are a fee-funded agency, it may approve an increase
in your spending if your fee revenues increase. In addition,
the Governor, as you also know, has the power to cut spending
unilaterally to achieve a balanced budget.
We have more preliminary details on the States, and we will
share that with your staff.
Finally, let me turn to the Federal level. If you are
thinking about how to handle the first year of a new
President's, term, you might want to look at the Department of
Defense both as a possible candidate for early transition and
also as a cautionary tale on how willing your colleagues are to
do this. Under current law the Department of Defense is
supposed to submit and supposed to receive both a biennial
authorization and a biennial appropriation, but you all know it
does not. The department does, however, prepare a biennial
appropriation request, and the Department goes through the
process of preparing a biennial budget. The Department of
Defense would say this is a greater burden than they would bear
under an annual process because they have to do the second year
twice. But it means you do have a department that is ready to
go. You also have a Congress that has been unwilling for
whatever reason to do this.
Whether or not you get the benefits that you seek from a
biennial budget process depends entirely, I think, on what
provisions you design for the second year; how you compensate
for the fact that you will no longer have a fixed period where
the agency comes up with appropriations requests. What will be
the bias about supplementals; will there be a single technical
revision in the second year? How you respond to things that are
unexpected.
So I think it is an open question whether you can make it
work, and because of that, it may be an open question whether
you want to do it. However, if you do go ahead, I think it is
going to take a lot of detailed planning. We are available to
assist in any way. I am happy to answer questions.
Mr. Linder. [Presiding.] Thank you for your testimony.
[The prepared statement of Ms. Irving follows:]
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Mr. Linder. With respect to the States, do Ohio,
Connecticut and Arizona meet every year?
Ms. Irving. Yes.
Mr. Linder. Texas does not.
Ms. Irving. That is correct.
Mr. Linder. From your knowledge of Texas, does the
executive have broad, expansive powers in the off year?
Ms. Irving. I do not know a lot of detail about Texas.
Since I have mostly been looking at the States with the idea of
what they can offer Congress. I have only looked at the ones
that have an annual legislature. Texas is an interesting State
because it is generally viewed as a weak Governor State despite
having a biennial legislature. I can get you that information.
Mr. Linder. Twenty years ago I proposed that the Georgia
Legislature ought to meet in the odd-numbered years and pass
bills, and in the even-numbered years repeal them all.
Ms. Irving. I know too little about Georgia to comment.
Mr. Linder. There have been some comments from both
Republican and Democrat people that the GAO was getting less
and less valuable information in their studies. I am sure that
you have read some of the complaints. I am wondering if it is
getting more difficult to get information.
Ms. Irving. Mr. Linder, I think the experience in getting
information tends to vary widely. For the kinds of studies I
do, it is not a problem. Both OMB and CBO and the committees
and the States have been cooperative.
I am not sure that I am in a position to make a general
comment about access. I know that there have been some
incidents. I think that most of them have been worked out. Mr.
Walker is generally not the kind of person who takes no for an
answer. I don't know that you should be overly worried about
his ability to work these out.
Mr. Linder. He is from my county.
Ms. Irving. So you know what I mean.
Mr. Linder. Let me pass to Mr. Goss.
Mr. Goss. I don't have a lot of questions.
I agree with one of the points you made about the longer
view, and do you have a desire to share with us a mechanism
that works for the longer view process?
Ms. Irving. That is interesting. As you probably know, we
have done some work on looking at how the current budget
accounts for insurance programs and long-term commitments; very
long-term data is a little squirrelly. But we have proposed for
a number of areas it would be a good idea to include in the
budget some supplementary data and improve the quality of
information about these commitments.
I would not propose going as far as we do with credit where
we have shifted from cash budgeting to accrual budgeting
because we are not ready to do that yet for insurance programs,
but we are ready to create the pressure to improve the data by
requiring that it be included as supplementary information.
Then you might think about whether you wanted to go to some
sort of triggers within the process, whether disclosure or a
range of the size of the commit-
ment. I don't think you are ready to integrate it into scoring,
but I think it is important to recognize that PBGC is not a
profit center for the government, and on a cash basis it looks
like one.
Mr. Goss. I think that is a good observation.
I have to go in a few moments, and so I am going to hold my
questions because I would like to hear what the next witness
has to say. Thank you.
Mr. Linder. Mr. Moakley.
Mr. Moakley. You referred to Ohio as a biennial State.
Don't they have the operating budget one year and the capital
budget the other year, and so is it really a biennial budget?
Ms. Irving. In general, I accept the State's definition of
its cycle, but I would say that Ohio comes closer to being on a
staggered biennial cycle than some of the other states who list
themselves as "mixed." For example, Kansas says it has a mixed
cycle, but what it means is that the regulatory boards like
Cosmetology are on biennial cycle, and all of the general fund
is on annual one. Ohio is a split; one year they do capital,
and one year they do operating.
Mr. Moakley. In the off year they do operating budgets, and
they have this control board. Does that almost take the place
of the legislature?
Ms. Irving. One thing that is consistent in States is that
they give a great deal of power to the staff groups. In some of
these States the equivalent of the Congressional Budget Office
actually prepares the appropriation, and they have a joint
legislative budget office. What happens in Ohio is, the
Governor proposes a budget, the legislative budget office looks
at it and analyzes it. Their appropriations committees pass the
appropriations. They are all done pretty fast in the States.
Even during that period the controlling board may be making
adjustments on some of the nonappropriated revenues. The
controlling board has to approve all contracts over $25,000.
But I don't think that I can say that they usurp the power of
the appropriators in the odd-numbered years. But if you
think--.
Mr. Moakley. Don't they have the ability to take money out
of one account and move to another account in emergencies?
Ms. Irving. They can move money between purposes within an
agency, yes, sir.
Mr. Moakley. Would not that be the action of the
legislature?
Ms. Irving. I thought you meant in creating the overall
budget in the off year.
Mr. Moakley. No, I mean just administering the budget.
Ms. Irving. Yes, they basically run reprogrammings and
transfers.
Mr. Moakley. By going to this biennial process, sometimes
you ask bureaucrats and unelected officials to do the things
that elected officials do today.
Ms. Irving. In Ohio it is really as if you picked six of
your colleagues and gave it to them, because the controlling
board is members of the legislature.
Mr. Moakley. That is a great board to be on. Thank you.
Mr. Linder. Actually we have a similar situation in
Georgia, where a panel of legislators can move money, and
reprogram money within agencies.
Since the 16 or 17 States have changed their budget cycle,
has there been a trend to which direction they go?
Ms. Irving. Until this decade, the trend was from biennial
to annual, and the major explanation was the difficulty in
forecasting. In this decade the only shifts have been Arizona
to biennial and Connecticut to biennial.
Mr. Linder. If forecasting is more difficult under a 2-year
budget cycle than a 1-year budget cycle, what is the propensity
to pad budget requests?
Ms. Irving. Of course "padding" is not a neutral term. I
think if I were a good manager and I were trying to guess what
I needed in the second year, I would be inclined to round up to
compensate for uncertainty. I have no empirical evidence one
way or the other. If you are going to retain fixed dollar caps,
of course in the aggregate that can't happen. It becomes part
of the argument between the executive branch agencies.
Mr. Linder. You mentioned the capital budgets that Ohio, I
believe, has. And there has been some discussion for a decade
about moving to biennial budgets and capitalizing major
purchases. Are we at the point where we can do that?
Ms. Irving. It is a difficult switch, and conceptually very
different for the Federal Government. In the States they define
capital essentially as infrastructure--roads, buildings--and
they fund them by floating bonds. Much of what we would think
of as investment at the Federal level we don't own. For example
we give grants to the States to build roads. It is very hard to
imagine depreciating something that you don't own.
Another really big issue is whether you are trying to use
your budget to match costs to outputs or to show the amount of
resources you have committed. Accrual and capital budgeting
help with matching costs in the economic sense with output, but
for physical assets they may really hide how much resources you
have committed. And in general, and we think appropriately,
Congress has wanted to accurately show how much of the
resources produced in this country they have committed. We have
been fairly strong proponents of up-front budgeting for
capital, because if you have actually committed for the whole
building, you should show that you have committed future
resources.
You can, below the aggregate level, improve your allocation
of costs by developing some mechanism so that the agency
getting the building is "charged"; you could use capital
acquisition funds below the aggregate level to allocate the
costs more appropriately, which, as you look more at the
Results Act, you may want to do. But for the Federal Government
at the aggregate level, capital budgeting raises a lot of
problems.
One other thing--many people only want to move the
expenditures to the capital budget and not revenues.
Mr. Linder. Let me just pick up on one last point. You
mentioned the Results Act. Do you think that a more uniform
rule with respect to how it is viewed by agency heads and
oversight committees, such as a fairly carefully thought
through mission statement, then an examination in
reauthorization, how well they approached their mission, are
they still on the same mission, so we don't have mission creep,
because many Federal agencies wind up doing something totally
different than they started doing.
Ms. Irving. Of course they don't do that all by themselves.
Mr. Linder. That's correct.
Ms. Irving. I have trouble with abstract mission
statements, because if you went to the Department of
Agriculture and asked them what their mission is, they would
talk about agriculture and rural America. And if you look at
where they spend their money, they are in the income support
business. The agency culture and clearly what they would
describe, has to do with farmers and rural America, but that is
not where their budget goes. Abstract mission statements have
always made me a little uneasy.
Like Director Lew, I don't think that you want to go to
one-size-fits-all approach, but you may want to go to one set
of categories. You want all of them to get to the question of
what outcome they seek to achieve in a program, which allows
something like a science organization to say in the end what we
are seeking to do is increase knowledge, and I will create the
potential for breakthroughs. We are not going to measure
ourselves on how many breakthroughs there are in any given
year. Ask what are the interim measures or goals, and how close
are we able to link them. For example, we are clear that
increasing prenatal visits helps reduce low birth-weight babies
and improve health. We are less clear on how you make a
scientific breakthrough.
Another thing--cost accounting in the Federal Government is
in an infancy stage. You have a long way to go before you get a
clear linking of resources to results in any consistently
credible way. I think Director Lew is to be credited with
trying to make this work with the executive branch, and I think
it is great that you guys are trying to see how to fit it into
your process, because it offers you great potential.
Mr. Moakley. Thank you.
Mr. Linder. Thank you.
Mr. Linder. Mr. Fisher, we welcome you.
STATEMENT OF LOUIS FISHER, CONGRESSIONAL RESEARCH SERVICE
Mr. Fisher. Thank you.
Sue mentioned the study she has done on three of the
States. One is Connecticut. I talked with a person in
Connecticut this week who has done budgeting up there for 27
years, and he explained that Connecticut about 10 years ago
switched from 1-year budgeting to 2-year budgeting, and there
are several reasons. The big reason was for Connecticut to be
able to do performance budgeting, and he says it has never
happened.
I think he underscored some of the points made here today
by witnesses. You can adopt a new policy and process, and that
doesn't mean that it is going to happen. It depends on what
Members of Congress want to happen in the future. It is a
political decision, not a process decision.
My statement looks at whether there will be a shift of
power from Congress to the executive branch, how efficient this
biennial budgeting will be for Congress and how efficient for
the agencies, and whether there will be new and better
oversight.
I think there will be a shift of power from Congress to the
executive branch. Even proponents of biennial budgeting admit
that. How much depends always on what good faith there is in
the executive branch. You will be giving them greater
discretion. Director Lew talked about under biennial budgeting,
executive people will need more discretion. They can use it
wisely and prudently and in good faith or use it in bad faith.
One of the things that has concerned me in recent decades,
probably the last three decades, is that the executive branch
is getting more and more structured in having short-term
political appointees and not as many long-term careerists who
do have a stake in good faith relations with committees. We
have all seen members of the executive branch having little
interest in legal limits, or constitutional limits, or
relations with Congress, or relations with committees. So if
you are dealing with that, that is going to be a problem to
catch up to make sure that abuses do not get out of hand.
Let me turn to efficiencies for Congress. First of all, as
people have said here this morning, you are going to have a new
administration, untrained, putting together a 2-year budget.
How good will that be? That is one problem. Mr. Lew said that
it would be "a stretch" even to complete that by April, so you
are losing a couple of months. In addition to maybe a late
budget for a new President, you have got the problem of how
good that 2-year budget is. If the estimates are not good
because they are not trained people, you are going to have
particularly difficult problems 2 years out. Again, you will be
finding yourself with estimates that are inaccurate and
inappropriate, and you will be doing oversight, but not
oversight that gets into programmatic concerns. You will be
finding what adjustments you can make in the second year
particularly because of the poor estimates.
Point two, let's say biennial budgeting were in place now,
and there is a new Congress coming in in 2001. Under this
system the authorization decision would have been made this
year. 2001 would be set aside for funding. I don't think any
process can prevent Congress from doing whatever it wants to in
the first year. For example, if biennial budgeting had been in
place in 1994 and the Republicans take control of Congress,
they would be at liberty to do what they did, which is to pass
as much of the Contract with America as they could, even if it
is in the middle of the budget year.
Point three, just as now, you will have reprogramming
within appropriations accounts. You also have money taken from
one account to another. You have all of these adjustments. That
problem with biennial budgeting will be more than twice as bad
because of the poor estimates for the second year. You will be
spending more time finding out what agencies are doing and
misusing the discretion that they have with relatively poor
estimates.
Point four, all of this assumes that the economy is going
on in a fairly stable manner. If you have a downturn in year 2,
you will have to address that. You will have to make political
decisions as elected officials.
Point five, Director Lew suggested that under biennial
budgeting, the executive branch would want more discretion than
they have now. It would be interesting to see what kind of new
adjustments would be made. Maybe the executive branch would
like discretion to move money from year 1 to year 2. That would
be something to be debated. Another possibility is that under
reprogramming right now, some of the reprogramming requests
come from agencies, and it is just for notification to
committees, and other reprogramming requires prior approval.
Congress may decide that under biennial budgeting they will
want to move a lot of things donr by notification into prior
approval.
The next point, if we have statutory caps, you have to live
within limits, and if some programs because of poor estimates
have gone beyond the limit, you have to find money somewhere
else. It may be the case that if the program is climbing, you
can't find one account to take money from, you may have to take
money from two or three accounts to replenish the account that
is growing. So you will have a lot of shifting of money and
changing of account levels.
We have mentioned the National Performance Review Study
that criticized annual budgeting because there is padding. I
think that with biennial budgeting you would expect more
padding.
What are the choices for Congress? You could decide on
biennial budgeting to fund agencies at a minimal level and ask
them to come back for supplementals. That would maximize
congressional control. It will also maximize congressional
work. The other choice is to give agencies ample funding to get
through the 2 years. The downside on that is that you would be
giving greater discretion and control and power to the
executive branch.
We haven't talked about tax bills. I don't know, I guess
those would happen a lot in the first year when you are doing
all your budgeting work. But if you wanted to do tax bills the
second year, I think you would do it, just as you did this year
with the marriage tax penalty bill. I don't think you can
compartmentalize things year one, year two. You make political
decisions, which is what you are supposed to do.
What about the possibility that the 2-year budget wouldn't
pass the first year? We have a hard time now passing a 1-year
budget. I think a 2-year budget would be more contentious, a
lot more difficult to get a consensus.
When the new President comes in, instead of the budget
coming up in early February, it would come up in early April.
You have already lost 2 months under this process, and I think
there is a general agreement that the reason you finish your
budget now in the first year, even if it goes into October,
November, is that you know the following February you have
another budget coming.
How about if there is no budget coming the next year? Will
you be losing the incentive to finish up? Will that debate on
the 2-year budget in year one go into the next year?
Let me turn to efficiencies for agencies. I don't know, I
don't think anyone would know what agencies are going to do
under biennial budgeting. They know, from what I have just
said, that you may have to take money from accounts because
another account is climbing. Would they want to prematurely
obligate money, to lock it up so you can't get at it? I don't
know what the psychology would be in agencies. I think there
would be more uncertainty in agencies for 2-year budgeting
because everyone knows that the estimates are off and money is
going to be moving around. I don't know how agencies will
behave.
There is a thought that there will be more long-term
planning in agencies. Maybe there will. I don't think it will
be that marked. Agencies will still have to come up every year
when you do your oversight on year two. OMB will be watching
agencies very, very carefully. I think any notion that there is
going to be sophisticated planning down the road is probably
not going to happen.
I mention the problem of short-term political appointees.
They are in for 18 months, maybe in for 24 months. Many of them
have not been in government before. They have no idea about
your prerogatives in Congress. They really don't care about it.
They do a fair amount of damage. They leave and go back to the
private sector, and you have to clean up the mess.
I think we are losing agency careerists as part of the
reinvention initiative that happened in 1993. A lot of the
long-term careerists are out of government. I don't see any
move to put them back in. So you are depending more and more on
short-term political appointees.
The last point is that the National Performance Review
criticized annual budgeting because you have to look out 2
years for obligations and 3 years for outlays. That is a
problem. Biennial budgeting will make it a year worse. You will
have to look out 3 years for BA and 4 years for outlays.
Congressional oversight. I think you will do more
oversight. I don't know what the nature of it will be, whether
it will be trying to bird-dog the agencies to see what they are
doing with this discretion or whether it will be looking ground
up at programs, deciding whether you want to keep them or
radically change them.
What will be the change within Congress? Most of your
authorization committees now do multiyear authorizations.
Things won't change for them. That is what they have been doing
for a long time. You have two committees that do annual
authorization, the Intelligence Committees and the Armed
Services Committees. There would be a savings there if you went
to 2-year authorizations.
I think the military area is probably the toughest area if
you wanted to go to 2-year authorizations. It is the toughest
area in terms of new military commitments and everything else.
I look at the Armed Service and Intelligence Committees and say
if you give them a score of 10 for their annual authorization
year one and give them a score of 10 for annual authorization
for year two and then go to biennial budgeting and give them a
score of 10 for their 2-year authorization, would they get a 10
for the oversight they do the second year?
First of all, the second year is not "must" legislation.
You heard from Mr. Goss how much pressure he is under to
complete that. Oversight is going to be a little different the
second year, and the second year is when Members are running
for reelection. I don't know what the priorities will be. It
will depend partly on party leaders, but I don't think you are
guaranteed more oversight under this system in 2-year budgeting
than you get at the present time.
It is also likely that under 2-year budgeting you will not
segregate oversight and authorization bills in year two. I
think Armed Services and the Intelligence Committees would feel
free in the off-year to pass whatever authorizations they
thought were necessary, not the large authorizations they do in
year two but some authorization to address emerging issues.
You would lose a little bit of oversight this way, the kind
of oversight you get every year from the Appropriations
Subcommittees, and that is oversight with a lot of teeth, with
a lot of leverage, a lot of sanctions.
From all this, I can't tell you what is going to happen. I
don't think anyone can tell you what will happen.
In 1996 you passed the Line Item Veto Act, which was
declared unconstitutional 2 years later. So we are back to the
process we had. It didn't affect too many agencies. It didn't
affect too many committees.
Biennial budgeting will affect everything. It will be a
very dramatic change, very deep change. You may want to do it.
You may want to decide to try it incrementally in some areas.
If there is some program, some agency that has enough
stability, you are comfortable with, learn a little bit from
that, maybe get the Appropriations Committee, the CBO, GAO to
make some suggestions where it might work best, starting out on
a pilot basis.
Those are my comments. Thank you.
[The prepared statement of Mr. Fisher follows:]
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Mr. Linder. Mr. Fisher, you seem to have spent your career
looking deeply into the inner workings of our government,
deciding that it doesn't work.
Mr. Fisher. I am here for 30 years. I love it. This is the
greatest job you could have.
Mr. Linder. Have you ever given any thought to whether we
should get rid of either the authorizing or appropriating
committees?
Mr. Fisher. I have given thought to it. I think authorizing
committees, these are the committees that create programs. I
don't know how you get rid of program committees like that.
Mr. Linder. They provide the authority for spending. Why
don't they do spending?
Mr. Fisher. You could--we have gone through periods where
you have a committee that does both authorization and
appropriation. We have gone back and forth over our history.
The new one on the block, of course, is the Budget Committee.
It is the third layer. To me you have to do authorization. You
have to do appropriation. You could combine them.
There is a thought as to how much we need budget
resolutions every year, particularly if it is interfering with
the work of the Appropriation Committees in getting started.
But we have three layers. I think there is good reason for
returning to two layers.
Mr. Linder. I am interested in your comment about losing
talent because of the reinventing government proposals.
Specifically, what changes were made in policy that caused
career professionals to decide it wasn't worth staying?
Mr. Fisher. I think the policy was to get rid of close to
300,000 employees.
Mr. Linder. Most of those were in the military.
Mr. Fisher. A lot were in the military.
One of the interesting changes is it is not as though
government is smaller after losing 300,000 people. We simply
contract out a lot of things that agencies used to do, and that
is a concern to me, where you have people in the private sector
doing things that agencies used to do with accountability to
Congress.
Mr. Linder. You have two or three comments in your written
statement about short-term political appointees being less
attentive to constitutional restraints than career
professionals. Do you have any evidence to back it up?
Mr. Fisher. Oh, only a lot of anecdotal evidence, a lot of
stories. I have written about it at times. It happens. I think
it is natural that people coming in from the private sector,
they just don't understand constitutional limits or even
statutory limits or prerogatives of the committees, and their
priority is to get something done for the President who put
them in place.
Mr. Linder. I tend to agree with your assessment. I am just
wondering if you have any empirical information on that.
Mr. Fisher. I have never really seen anything in a
sophisticated, statistical way. We have a lot of problems of
this nature. I think they have less problems with careerists
who are here and they know they have to come back over a long
period of time and deal in good faith with committees.
Mr. Linder. In your prepared statement you have talked
about agency heads being very nervous about losing funding in
the second year. Why is that any different than today?
Mr. Fisher. It is not wholly different. I think it is
different probably because in the second year the estimates
aren't going to be as good and people don't know what is going
to happen. There would be more uncertainty the second year.
Mr. Linder. If tax bills are going to be introduced in any
event in year two, I think the only Department that doesn't--
that thinks those tax bills are spending bills, it is a tax
cut. How does this have an impact on our spending budget?
Mr. Fisher. Not on spending. I assume that anything of a
revenue nature would be done the first year when you are trying
to decide what your budget is.
Mr. Linder. Whether it is income or outgo?
Mr. Fisher. Yes. And I am thinking that even if you try to
do it all in year one there will be occasion where Congress
will decide they want to pass tax legislation in year two.
Mr. Linder. Have you looked at the performance budgeting of
New Zealand over the last decade or so?
Mr. Fisher. I have not.
Mr. Linder. We are going to have some testimony from a
gentleman who was in their parliament. I find it pretty
interesting because his point is going to be that they paid
attention to the oversight, and it gave much more control to
the legislative branch over the spending side of issues. It
might be an interesting session.
Mr. Moakley.
Mr. Moakley. I just wish the whole committee were here to
hear your side of the story. I agree with most all of it. I
know that many people really think that by going biennial is
going to cure all the budget problems. It is not. We are going
to have problems that are going to be stretched out a little
bit.
I am afraid that the executive gets too much power out of
this, and I am afraid the bureaucrats will end up making
decisions that Congress should make themselves. And I would
think that, if anything, probably much more study should go
into whether we go biennial. And I think you can't look at a
State because it has gone biennial and figure, hey, they did it
so we can do it. They don't have to raise money for the
military. They don't have to do a lot of things we have to do.
And, as Ms. Irving said, when they go into their capital
budget, they float bonds. I mean, we pay our gas tax and
something else from somewhere else.
I think the United States is probably unique in its budget,
and I think to use lesser countries that have just such a small
percentage of our overall budget, a small percent of our
duties, would really just be an exercise in futility. I don't
think it would solve anything.
So I welcome you any time, and I am very happy you are
here, and as I said, I only wish that the rest of the committee
were here to hear your views.
Mr. Fisher. I wish I knew more why Members of Congress are
coming to the point of wanting biennial budgeting. I am not in
their shoes. I don't know how awful it is to schedule things on
the floor and get it through and what the end of the year looks
like.
Mr. Moakley. I think because somewhere in their mind they
feel this is going to cure a lot of the problems. But a lot of
the problems are policy differences and not budget differences.
I think, especially when you have such a small majority and
when you are split between minority and majority, many of those
problems get exacerbated because they are only a few votes
separating one side from the other and, therefore, the fights
get heavier and probably more dramatic. But I just don't think
there is a magic wand out there.
As far as oversight, I think much of the oversight--some of
the oversight is overlooked because it is not as sexy as going
out and plowing new fields and bringing new programs on and
finding other solutions to certain problems out there.
Oversight is like going over the old stuff, and we have done
it. We have been there, done that. So I just think that
oversight doesn't necessarily get addressed when people have
more time that they may save by having this bicentennial
budget.
Just like you say, in Connecticut, they changed it for a
purpose, and they never addressed the purpose. I think it
probably could very well happen here.
Mr. Linder. I think Mr. Moakley and I differ on one point,
and that is I think the sense of those who are supportive of
biennial budgeting is that it consumes not only on the floor,
but in our process, it consumes an unbelievable amount of our
time, and it is policy driven, and it flows over between House
and Senate.
But there is a growing number of us who just believe we
haven't had the time and taken the time to do the appropriate
oversight, and I asked Mr. Lew if they viewed our oversight as
helpful or hurtful. I would like to think that we could get
involved in oversight activities that the administration would
welcome and not just be digging up dirt on other things. I
think there is a sense that we would do more of it and more
constructively if we had a biennial budget.
Mr. Fisher. What has happened in recent years to put us in
the position of maybe wanting to go to biennial budgeting? For
more than 2 centuries Congress every year has been able to do
the budget work, and I would think that is about as important a
function an elected official can have, budgeting. I don't think
it is clear that what has happened that makes it difficult to
do every year. Something has happened. It is not clear to me.
Mr. Linder. Number one, it has been around for some time,
being kicked around. It is an old idea that has taken a lot of
time for people to come around to.
Number two, I think Ms. Irving referred to the States
having a different role than the Federal Government. Because
when I was in the legislature, that was the job, to pass the
budget. That is virtually what we did. And I think there were
one or two policy issues that were large that the governor was
proposing that year that had to do with how the money was going
to be spent anyway. But here we have many other things to be
concerned about--the military, HHS policy decisions--and we are
not paying the kind of attention that we think we ought to be.
Ms. Irving. Oversight, not "gotcha" oversight, but what you
call constructive oversight, is really hard work, and it
involves re-examining your base. Every year some universities
put out a memo to its faculty saying the students entering
today as freshman were born in year X, they don't know what a
record player is, they have never seen a dial telephone, they
have always had computers in their lives and AIDS in their
lives. They can't imagine anyone who didn't have a VCR. They
don't know who Ronald Reagan was, much less that he was shot.
Yet many of the programs in existence today, were created
before that child was born. So you need to re-examine your base
and think about what government is doing and how.
I guess the question really to ask yourselves is, is what
about the annual budget cycle is stopping oversight? And what
is it about a shift to biennial appropriations that will make
it more likely or more successful to do that kind of oversight?
How do you do cross-cutting oversight? Is what is really
stopping you the annual process or is it the fact that there
are fundamental disagreements both in Congress and among the
American people?
Mr. Linder. I will give you an example. Until 1995 we had a
national helium reserve started in 1929 to make sure we would
have helium for our next war. In 1993 and 1994, the first 2
years I was here, that became a fight on an amendment on an
appropriations bill. The majority, which wanted to pass the
bill, had to stand in lockstep against cutting this program for
fear it would lose adherence.
All of these programs developed over constituencies, and
rather than having that fight on an appropriations bill, it
seems to me some honest public discussion of the issue could
have brought the two sides together on it in some other policy
environment than on the floor on an appropriations bill. Every
one of these programs develops their own constituencies.
It was Ronald Reagan who said that the closest thing to
perpetual life was to be in a program, and we have programs
throughout that either Joe or I could cut if you gave us each a
wand. They would be probably different, but if we sat down and
talked about it we could realize together that some of these
programs aren't serving a useful purpose anymore. But when it
comes down to the debate on the program being an amendment on
an appropriations bill, it doesn't get the same kind of
attention it would in another setting.
Mr. Moakley. Mr. Chairman, may I at this time just make a
statement? I really extended the budget term to bicentennial. I
meant biennial when I said bicentennial.
Mr. Linder. We will forgive anything.
Ms. Irving. I think one of the things Lou mentioned is very
important. These bills implicitly assume you have to move
everything to the same cycle. They shift the budget resolution,
authorization and the President's budget. But multiyear
authorizations are already the norm.
You could argue that, given that you have had multiyear
fiscal policy agreements, you could easily shift to multiyear
biennial budget resolutions if you could figure out a way to
adjust for changing economics and revenue estimates; you could
still keep your annual appropriations cycle; to the extent the
appropriations process is delayed because of waiting for the
budget resolution, this shift might help. You need an
adjustment ability in there, especially given what has been
happening to revenue estimates lately. You don't have to do the
same thing to all parts of the process. That is another way to
think of phasing if you are trying to experiment: you could
move some things but not everything.
Mr. Linder. Thank you both. Would you each be willing to
receive written requests for more information?
Mr. Fisher. Be glad to.
Mr. Moakley. Thank you very much. Thank you.
[Whereupon, at 11:50 a.m., the committee was adjourned.]
BIENNIAL BUDGETING: A TOOL FOR IMPROVING GOVERNMENT FISCAL MANAGEMENT
AND OVERSIGHT
----------
Thursday, March 16, 2000
House of Representatives,
Committee on Rules,
Washington, D.C.
The committee met, pursuant to call, at 9:30 a.m. in Room
H-313, The Capitol, Hon. David Dreier [chairman of the
committee] presiding.
Present: Representatives Dreier, Goss, Linder, Hastings,
Moakley and Slaughter.
The Chairman. The committee will come to order. We have
just found that we begin with two Members, and now Mr. Hastings
is here, it is three. So we appreciate all of your being here.
This is the third and final hearing in a series that we
have had to examine the various proposals for establishing a 2-
year budget and appropriations cycle.
We have already heard from our colleagues and from the
executive branch and congressional support agencies. Today we
will receive testimony from members of the academic community,
representatives of budget reform organizations, State
legislatures and the U.S. Chamber of Commerce. Later in the
hearing we will be joined by our former colleague Leon Panetta,
who also served as Director of the Office of Management, and
Budget and Chief of Staff of the White House, and Chairman of
the House Budget Committee. He will be testifying, if God and
technology willing, by video conference from California.
But I want to first welcome our witness, our very respected
former colleague with whom I have had the pleasure of working
on a wide range of international policy questions, as well as
institutional questions here. He is the director of the Woodrow
Wilson International Center for Scholars. He and I served
together as cochairmen back in 1993 of the Joint Committee on
the Organization of Congress, which actually recommended the
adoption of a 2-year budget and appropriations process. He was
the deciding vote which allowed biennial budgeting to be part
of the joint committee's recommendations to the House. I want
to commend him for his continued dedication to following
through with the work product of the joint committee.
Before I begin, I want to make note of the fact that just
last night during their deliberations on the fiscal 2001 budget
resolution, the House Budget Committee for the first time
adopted a sense of the House amendment calling for the
consideration of a biennial budget process as part of a
comprehensive budget process reform.
Let me state that I consider biennial budgeting to be
comprehensive budget process reform because of its potential to
improve government fiscal management, programmatic oversight,
budget stability and predictability and government cost-
effectiveness. I would also note that the Rules Committee is
already on record in support of other budget process reforms by
nature of the fact that we have favorably reported out H.R.
853, the Comprehensive Budget Process Reform Act, last August.
I know I also speak for the distinguished Vice Chairmen of
the committee Mr. Goss in saying that we will continue to work
with the Budget Committee to advance these various reforms here
in the House.
So I again extend a very warm welcome to you, Lee Hamilton.
We are glad to have you back, and at this point I would like to
call on Mr. Goss.
[The prepared statement of Chairman Dreier follows:]
[GRAPHIC] [TIFF OMITTED]63105.077
Mr. Goss. Thank you, Mr. Chairman. I think you have summed
it up extremely well and underscored our commitment. The
committee has moved forward on this, and I think that the
evidence of that is in the quality of witnesses we have before
us today. And I join you in welcoming Mr. Hamilton back.
The Chairman. Mr. Moakley.
Mr. Moakley. It is always nice to be with Lee, and, Mr.
Chairman, I want to thank you again for holding these hearings
on this very important proposal.
I know we have some long-term proponents of biennial
budgeting on the schedule, but I expect we will hear some words
of caution about the idea, and I would just like to remind my
colleagues of just a few points.
The evidence and common sense tells us there will be more
supplementals under a biennial system than under an annual one,
and this obviously is not a good thing. In my opinion,
switching to a biennial system will make it harder to reach
agreement on the budget in a timely fashion for two reasons:
First, the agreement has to cover a longer period, namely, the
entire Congress; and secondly, without the need to turn quickly
to next year's budget, it is more likely that the difficult
issues will slop over into the next year.
Most years we spend less than one-fifth of our time on
budget-related measures. Authorization bills are not crowded
off the schedule. They are more likely to falter over policy
disputes, not lack of time. And good oversight is a challenge
no matter how much time we have.
The fact is biennial budgeting does not lead to more or
better legislative oversight. Connecticut converted to a
biennial budget in 1993 to improve oversight and program
review, and according to the General Accounting Office, State
officials acknowledged that there has been no improvement in
either of these areas.
Biennial budgeting actually weakens oversight in two ways.
First, it removes 1 year of appropriations committee program
review; and second, it shortens the leash on executive branch
officials.
I hear some of my colleagues cavalierly saying, the current
system just hasn't worked, so let us try something else. I am
surprised to hear some of my conservative colleagues embrace
radical change without considering all the consequences, but if
my friends are dead set on going ahead with this proposal, I
urge them to go very slowly, and please don't ask a brand new
President to initiate a brand new process. Do not put the
entire Federal budget on an untested biennial system all at
once. Some parts of the biennial budget will be better suited
to a biennial process; some will not.
That is what Arizona did it when it moved incrementally to
bicentennial budgeting over several years, starting with the
portion of their budget that was most stable. And keep in mind,
what some States call biennial budgeting wouldn't be recognized
as that by other States.
Each year Ohio works on a 2-year plan for half of the
budget. One year they decide on a 2-year operating budget. Next
year they
decide on the capital budget. This is continual budgeting and
not biennial budgeting under my definition.
So, Mr. Chairman, I really believe it is a mistake to move
in this direction, but if you insist on change for change's
sake, let us find the way to get there that causes the least
damage. Thank you.
The Chairman. Thank you very much, Mr. Moakley.
[The prepared statement of Mr. Moakley follows:]
[GRAPHIC] [TIFF OMITTED]63105.078
The Chairman. Let me just make a couple of comments on your
statement. First, I was talking to our former colleague Leon
Panetta day before yesterday on the telephone in anticipation
of his coming, and he told me that he has been pushing this
since the mid-1970s, so we have really taken a quarter of
century, and that is the point of the hearings. We are trying
to spend a lot of time thinking about it. When Lee and I
chaired the joint committee on the organization of Congress in
1993, we had exhaustive hearings on this. So we spent a great
deal of time looking at it.
So your point on inflicting this on a new President, I
think that the statement that was made by your former employee,
now the Director of the Office and Management and Budget, Jack
Lew, he was very clear in encouraging us to spend time thinking
about that transition process that would take place for a new
administration, and so I think that there is some very valid
points that have been raised.
Mr. Moakley. But, Mr. Chairman, you have to take the
testimony where it comes from. Absolutely the administration
would love to have a biennial process. It puts them in a
stronger position. So Jack Lew, my dear friend, is in the
administration. Leon Panetta later became the Budget Director
for the administration. So I think that the executive
department would love to have it. I think it weakens the
legislative process, and it doesn't make anybody more
interested in oversight.
The Chairman. Well, we are going to continue that
discussion.
Mr. Linder.
Mr. Linder. I am just anxious to hear the testimony of the
thoughtful and sober gentleman from Indiana. His style is
sorely missed around here. Thank you.
The Chairman. Mr. Hastings.
Mr. Hastings. Thank you, Mr. Chairman. I will say right up
front, I am a strong proponent of the biennial budget. I
suppose that is because of my background in the legislature.
Nevertheless there are some concerns that are obviously
legitimate concerns from those that oppose that, and I hope
that these public hearings will address some of those concerns
that the other side has.
At this time Mr. Chairman, I would like to submit a letter
by Governor Locke from my home state of Washington, and I look
forward to the testimony we have today.
[The information follows:]
[GRAPHIC] [TIFF OMITTED]63105.079
The Chairman. Thank you Mr. Hastings and without objection,
it will appear in the record.
Let me say that we are audiocasting this to the World Wide
Web, and so I encourage you to turn your microphone on, Lee, so
that your wonderful words of wisdom can go throughout the
entire world. And welcome. It is nice to have you back, and
look forward to your testimony.
STATEMENT OF LEE HAMILTON, DIRECTOR, WOODROW WILSON CENTER
Mr. Hamilton. Thank you very much, Mr. Chairman, and my
friends and colleagues on the committee, former colleagues. Of
course, I will ask that my statement be made part of the record
in full.
The Chairman. Without objection.
Mr. Hamilton. I will try to just hit some of the highlights
of it. I want to thank you for giving me this opportunity to
appear before you, and I appreciate, Mr. Chairman, the
leadership you have given on this issue.
And I recall with great favor our work together on the
Joint Committee on the Organization of Congress. One of the
main recommendations of that joint committee was for biennial
budgeting. It was not adopted at the time, but I still think it
is a very sound proposal.
I understand this is an issue you have gone over pretty
carefully in the past, and I don't want to take unduly time
from your deliberations. I do think biennial budgeting would
improve government, primarily for a simple reason, and that is
I think it would free up Members' time for important work that
is now being squeezed out by competing pressures. I will not
try to recap the arguments that you are very familiar with and
which I set out in the early part of my statement. They are
familiar to you, I am sure.
I have come to the view--came to the view, I guess, some
time ago that the present budget process was just too
cumbersome, and that the process made every problem in this
body a budget problem. That, perhaps, is a little exaggeration,
but not too much. Now, obviously, the budget is enormously
important, but to view every problem that you confront as
strictly a budget problem, and that tends to be the case, it
seems to be, more and more, is not good, and Congress, I think,
is in a kind of a perpetual budget cycle with a budget crisis
nearly every year. So I don't think this process of the way we
handle the budget now serves the American people very well. I
think it is too--far too little oversight is involved. I am
going to talk a little bit more about that.
I believe under the present system--and here I would take
odds with my friend Mr. Moakley--I believe under the present
system you have way too much power in the President as it is
today in the budget process. The President is by far the
dominant figure in the budget process today. His budget is
adopted--95, 90 percent of it is just adopted. I can remember
Members of Congress saying over and over and over again, the
President's budget is dead on arrival. Well, that is malarkey.
A President's budget is adopted by the Con-
gress year after year, 90, 95 percent of it, and when you come
down
to the final negotiations on a budget, all the power is with
the President--or not, all of it but most of it, simply because
he has got the veto power, and he has the bully pulpit.
To say that the President does not have disproportionate
power today in the budget process is to totally ignore the
reality. The President is overwhelmingly the chief budget
officer of the United States Government. So the question is how
do you begin to get back some of that clout and power in the
executive branch, and I disagree with my friends who think that
the biennial budgeting process would cede power to the
President. The President already has most of the power with
regard to budget.
I think the Congress spends way too much time on the
budget. I think it leaves very little time for long-term
thinking--I am going to pick up that in just a moment--and
having served on authorizing committees, I think the
authorizing committees today are almost out of the picture; not
completely, I guess, but almost out of the picture because of
the total focus on the budgeting process here.
Now, let me emphasize two things about the biennial budget
process that I think is very important. Number one is
oversight, and number two is long-term thinking. I know you
have had a lot of testimony on the oversight point. I believe
that the oversight function of the government is--of the
Congress is enormously important. I think it is at the very
core of good government. I think the Congress obviously has to
do a lot more than just write the law. It has to make sure
those laws are carried out the way Congress intended.
Oversight has a lot of purposes, and the blunt fact of the
matter is the way Congress operates today, we just don't have
time for good oversight. Let us take a look at the
congressional schedule in the House. Most of the time we know
you are meeting from Tuesday night to Thursday night. That
means everything gets compressed into Wednesday and Thursday.
Legislation has to be produced. Very little time for extended
oversight hearings under the present schedule of the Congress.
Now, biennial budgeting is not going to solve all the
problems, but I think it would give the committees more time
for rigorous oversight.
Oversight makes sure programs conform with congressional
intent and ensures that programs and agencies are administered
in a cost-effective and efficient manner. It ferrets out waste,
fraud and abuse. It sees whether or not certain programs have
outlived their usefulness, and it compels the administration to
make an explanation or justification of policy; incidentally,
something that administrations often do not like to do, to
articulate policy completely. So I believe oversight is one of
the most important and effective tools of the Congress if it is
properly done.
I would not argue that biennial budgeting will increase the
power of the Congress relative to the President. I would argue
that it would give the Congress the opportunity to increase the
power relative to the President, and that opportunity would
come about if the Congress aggressively pursued its oversight
responsibility.
I think oversight can protect the country from an imperial
Presidency, and I think it can protect the country from
bureaucratic arrogance, both of which are all too common, in my
view, in government today.
The responsibility of the Congress in its oversight
function is to look into every nook and cranny of government
affairs and uncover wrongdoing and put the light of publicity
on it. It is an enormously important power, and I believe the
Congress underuses and underestimates its power in oversight. I
think that Federal agencies begin to get very nervous whenever
someone from the Congress starts poking around, and I believe
that is to the good. Federal bureaucracies do not stay on their
toes unless they expect review and oversight from the Congress.
My personal belief, and I am sure I am in the minority
here, is that oversight is every bit as important a function of
the Congress as passing legislation. President Wilson thought,
quote, "The informing function of Congress should be preferred
even to its legislative function," end of quote. So a very
strong record of congressional oversight or of continuous
watchfulness I think would do a lot to restore public
confidence in this institution.
I am, therefore, encouraged in the interest that the
committee and many of you have shown in effective oversight,
and I believe that moving to the biennial budgeting process
would give oversight a significant boost by freeing up the
committee's time and giving the Congress an opportunity to be
more assertive with regard to the executive branch.
Now, the second point I want to emphasize is the long-term
strategic thinking. The first year I was in the Congress, a
very wise person said to me that the problem with the United
States Congress--this was back in 1965--the problem was that
Members never had enough time to put their feet up on the desk,
to look out the window and to think about the long-range needs
of the country. I have had many, many occasions to reflect on
the wisdom of that statement, and I have come to appreciate it
more and more.
The fact of the matter is that the Federal Government
simply does not spend enough time in long-term thinking. Now,
it may be unavoidable. Policy-makers have to focus on urgent
problems. You have what is becoming now a popular phrase: The
tyranny of the in-box. You can't give attention to challenges
that lie over the horizon.
I think we have to learn something from the private sector
here. The private sector is much, much better in thinking out
ahead to the problems that they are going to be confronted
with, and we need to find ways and means of improving the
ability of not just the Congress, but of the executive branch
as well to think long term. There are all kinds of challenges
out there.
I had a conversation the other day, I would recommend it to
you. Just sit down with one of the leading demographers in the
country and talk with them about what they can see the problems
are going to be in this country on the basis of the demographic
makeup of the country today and the trends that are coming. It
will astound you what they can already see in terms of
challenges the country is going to confront. Congress doesn't
do enough of that, but neither does the executive branch, and
we have got to find ways and means of making the Congress and
the executive branch able to think long term, to think ahead of
the next election, to think ahead of the next 6 months, to
think ahead of the next year, to think in terms of 5 years, and
10 years, and 20 and 30 year time frame.
Now, I know that some of that is being done in the
executive branch, some of it is being done in the Congress, and
I applaud all of that. I mentioned to one of you a moment ago
that we had George Tenet come down to the Wilson Center a few
days ago and talk about the CIA, and he was saying-- Mr. Goss
will be interested in this, I am sure he has heard it from
him--that he must free up more time for his analysts to look to
the future because the Agency has been too focused on the short
term, and I think the Congress needs to do the same thing.
Congress is predominantly focused on short-term needs for
many reasons, but one of the principal ones is that you have a
1-year budget cycle.
Now, the point of this kind of long-term thinking is not
that the government is going to solve all of these problems
easily, but I think we should at least be considering the
issues and examining how best to deal with them, and moving to
a biennial budgeting would allow the Congress, I believe, to
focus more on some of America's future challenges, much more
than it currently does.
So, Mr. Chairman, I conclude my testimony. There are a
number of reasons for it. I know you are familiar with them. I
would emphasize the oversight function which I think needs to
be markedly improved in the Congress, and the ability to think
long term, and I think the biennial budgeting process would
assist, would give us the opportunity, I guess this is the best
way to put it, to improve those functions and to improve the
performance of the Congress. I thank you.
The Chairman. Thank you very much, Mr. Hamilton.
[The prepared statement of Mr. Hamilton follows:]
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The Chairman. That is a very, very helpful statement that
you have provided, and I will tell you that the focus on the
issue of deliberation is one which I think can't be underscored
enough when we go back to the framers and realize what it is
that they were trying to establish here. Deliberative process
was a very, very high priority for them, and I am reminded of
our former colleague Mo Udall, who, when I came here in my
first year, said to me that Congress is like a fire station. We
rush to put out a fire, and the moment that fire is under
control, we simply rush to another one, and sometimes that fire
is not completely put out. And so I do think that the need for
deliberation is very important, and I appreciate your bringing
that to this debate on the issue of biennial budgeting.
I will call on Mr. Goss.
Mr. Goss. Thank you very much. I am very glad that I was
here to hear that testimony. I think you hit on two themes that
are absolutely critical that, frankly, we haven't had brought
before us before. I would like to talk to you further on the
subject of long-term vision and strategic concept, as it were,
both domestic and international, because I think that is the
single greatest gap. Things are moving so fast, we don't seem
to have the opportunity to understand the vision as we set
about the task of trying to provide the capabilities to get to
the vision, so consequently we are running at a fire quite
often, whether it is the tyranny of the in-boxes, as you say,
or just too darn much to do.
On the oversight question I also couldn't agree with you
more. One of the reasons for my interest in biennial budgeting
is to give us time that can be applied to oversight. You
mentioned you talked with Mr. Tenet. You probably recall that
the intelligence authorization is mandatory. We have to
authorize. It is unlike any of the other committees that are
supposed to authorize, but, as you know, the Rules Committee
can waive the "supposed to", and then we get on with our
business. That is not true in intelligence, and consequently in
intelligence we have a rather penetrating focus, very intense,
very broad scope of everything that is going on in the
Intelligence Community, which is entirely appropriate because
we are the safeguard that the Intelligence Community operates
within bounds.
But we also have that mandate to authorize, and I find that
it assists us in doing our oversight to have that, and I find
that we have a better understanding both with the people we are
overseeing and the appropriators about what we are doing as a
result of this process. But I am perpetually pressed for time
on annual budgeting. That comes to a conclusion that you can
come to, an ergo, that therefore biennial budgeting is
something that we might profit from.
My thought was if that is true, do you think that there
would be any wisdom in going back and looking at the
authorizing committees, which you have portrayed as not as
important as they should be, and requiring mandatory
authorizations before these appropriators move for some or all
of the committees, as we do it on intelligence? It is a thought
I am kicking around in my mind and
with a few other of the chairmen. I would be interested to know
if you think that is too extreme a step.
Mr. Hamilton. Porter, I just haven't thought about
mandating it. I knew that was the situation with regard to the
Intelligence Committee. I have been greatly distressed at the
decline in the impact and influence of authorizing committees.
I guess I just have to think about the question of mandating.
It might be part of the solution to do it, to require an
authorization before you get to the appropriation. So I am open
to it.
Mr. Goss. I would like to take advantage of our friendship
and this occasion to invite myself to extend this dialogue, if
I could, down the road, because I think these are both areas
that need looking at.
Mr. Hamilton. You know what happens all the time now is
that the executive branch just moves up on the authorizing
committee, so why fight the battle? We are going to have to
fight it. Let us push it over on the appropriators, and we will
fight the battle over there. That is understandable why that
happens, but it is the process that bothers me a great deal
because I think it turns all kinds of issues into strictly a
budget issue, and this is not desirable. That is not the
perspective which you ought to have on--not the total
perspective that you ought to have on a given problem.
Mr. Goss. The other point, if I may continue for just a
moment, Mr. Chairman, the other point is we have heard a lot of
concern, and I think Mr. Moakley has underscored this very
well, as have several of the witnesses, about being sort of
penned in for 2 years, that midcourse corrections would be very
hard to make under biennial budgeting. I don't have that
problem, but I would be curious to know if you think projecting
our midcourse corrections is going to be a problem, if you
would go into it.
Mr. Hamilton. I don't believe so. I think you are still
going to have flexibility in the system. You are still going to
have supplementals coming up. Members are still going to be
able to assert themselves on all sorts of issues that pop up
from time to time, and I am not overly worried about that.
The thing that I just cannot understand about the position
of those who oppose the biennial budgeting, who say that it
will increase power to the President, is that the system today
gives all the power to the President, or a very large share of
it, and I think you have got to find--I agree with them that
you need to strengthen the congressional branch in the
budgeting process vis-a-vis the President. I agree with that
premise, but I think the present system is such that all the
chips lie with the President, and I am looking for ways and
means, frankly, to give the Congress more leverage, and I think
the biennial budget gives us the opportunity to do it. It
doesn't guarantee it, because you could not take advantage of
the opportunity, but it will give you the opportunity.
Mr. Goss. Well, from the perspective as a Member of
Congress in today's world I agree with you. It seems we are
looking up rather than looking down at the process. Thank you
very much.
The Chairman. Mr. Moakley.
Mr. Moakley. Lee, it is nice to see you looking so well.
Just to continue on the long-term look by the Congress, I
agree that our authorization committees are being eroded little
by little. Let me ask you about the creation of task forces to
do the work of the committees. In this morning's paper, Speaker
Hastert created a new Republican task force headed by
Representative Cox to look into our long-term foreign policy
with Russia. Why shouldn't the International Relations
Committee be doing that?
I think these are the things that erode our committee
process when, all of a sudden, task forces are put in that
preempt the committee's work and come straight to Rules
Committee with some kind of a report, and the members of the
committee never touch it.
Mr. Hamilton. I think I agree with you, Mr. Moakley. I
believe that the creation of these kinds of ad hoc committees
undercut the committee process, and the committee process is
being undercut in lots of different ways, and I think the task
force might be one of them. A task force of that sort says in
effect we don't have confidence in the committee to work it
out. Now, there may be reasons for that sometimes, but that
is--it does send that message.
The committee system is in jeopardy here. As a chairman of
a committee a few years ago, I couldn't have a committee
hearing on Monday, I could not have a committee hearing on
Tuesday. I could not have a committee hearing on Friday. I
could only--if I tried to set a committee hearing any of those
days, I would just--Members would be outraged. So it means that
every committee has to do their job on Wednesday and Thursday,
and that is why you end up with 20 appointments on Wednesday
and Thursday, and why you can't go into a committee for more
than a short period of time.
The Chairman. If the gentleman would yield that point, I
would say last Friday we had a hearing here, had a very large
turnout, and Congress was not in session today.
Mr. Moakley. This is the exception though.
Mr. Hamilton. He has got more clout than I have.
Ms. Slaughter. We meet at midnight.
The Chairman. And we still have a large turnout.
Mr. Moakley. When you were here, this used to be a day job.
Mr. Hamilton. That is the difference between International
Relations and Rules Committee.
Mr. Moakley. Lee, I remember when you were Chairman of the
committee, and I was Chairman of this committee, and you came
to the this committee many, many times, and you got your bills
in, and you got them to the floor on time. What is changed
between then and now?
Mr. Hamilton. Well, we get the bill to the Rules Committee
and to the floor, and often through the floor, but it would
never be enacted into law.
Mr. Moakley. That is--the Senate is the problem.
Mr. Hamilton. I won't disagree with you there, but the
primary piece of legislation of the International Relations
Committee has always been the foreign aid bill, and my
recollection is it hasn't been enacted into law since 1980
something.
Mr. Moakley. Would that be any better under biennial
budgeting?
Mr. Hamilton. I can't say to you absolutely, yes, I think
it would be better. It depends on how aggressively the Members
would take advantage of the opportunity. I don't look upon
biennial budgeting as solving all the problems. We often have
in the Congress a predilection to seek a procedural solution to
substantive problems, and we all know that you can't do it. I
mean, I have spent a lot of my time in Congress on reform of
the process, and I believe in that, and I think it is helpful,
but I never fool myself to think that it would suddenly make
the resolution on these difficult political issues, important
policy and political issues, easy. They are tough by
definition. Process helps a little bit.
Mr. Moakley. Do you think that because we serve a 2-year
term, that long-term oversight is not a very important part of
our program?
Mr. Hamilton. Well, I think there are a lot of reasons why
oversight is not important. That may be an important one.
Oversight is tough work. It is boring.
Mr. Moakley. And it is not glamorous.
Mr. Hamilton. It doesn't get glamorous.
Mr. Moakley. It doesn't get headlines.
Mr. Hamilton. Media is not interested in it. And let us be
frank, constituents aren't too interested in it either. So
there are a lot of reasons why oversight has declined, and I
think you have to try to resist it and to think of ways and
means of improving the oversight.
I have now--I am a part of the executive branch now in the
Wilson Center. Half of our budget comes from the Federal
Government, and half is private, and I testified yesterday
before Mr. Regula's subcommittee for our budget. That was a
very routine kind of a hearing. You would be amazed how much
work goes into that and how a single question from a member
stimulates all kinds of reactions in the Executive branch. You
may just fire the question off suddenly and not give an awful
lot of thought to it. I know that is not the way you usually do
it, but occasionally you do, but it is amazing what that does
in the executive branch. Everybody gets shook up when they
think the Congress is looking at them, and I think it is a good
thing when you do look at them myself.
So I am a strong believer in the necessity of oversight. I
think everybody is. Does the biennial budgeting help it or not?
You can have a difference of opinion on that, but one of the
things I hope, Mr. Chairman, will come out of your hearings
will be the commitment on the part of this institution you have
got to do a better job of oversight no matter what happens to
biennial budgeting. It is an important part of your work.
Mr. Moakley. Well, I think that is--as I said, the
Congressional Research Service said that we spent about one-
fifth of our time on budgets. I think many people think it is
like 50 percent or 60 percent, but it is one-fifth. If there
were some way to direct the Members into oversight, which there
isn't because you have just made the case why oversight isn't
that glamorous or anything else--so I am saying we may save
time, but what do we do with the time? We will probably have to
address more supplemental budgets because it is a biennial
budget.
Mr. Hamilton. Well, I think Members are still going to have
the opportunity--are going to find ways to assert themselves,
and the supplemental budget would be one if you are in a
biennial cycle. But you are not going to be dealing with 13
bills in the second year. Suppose you have two or three
supplementals, which I think might be possible. That is not 13,
and, therefore, you would free up some time, I believe.
Mr. Moakley. Maybe we should change the committee system
and have a committee on oversight, and then the chairman of
oversight makes sure there will be some oversight done.
Mr. Hamilton. Well, there have been moves in that
direction, you know, to require a subcommittee in each
committee to deal with oversight. There are a lot of steps that
have been taken in that direction that are helpful. At the end
of the day, it depends on the chairman of the committee.
Mr. Moakley. I think you are right.
Mr. Hamilton. The chairman of the committee has to say,
okay, this is an important role for this committee, we are
going to do it, I am going to do it, the staff is going to do
it. Oversight creates a lot of work for the staff, and
sometimes they resist.
Mr. Moakley. Thank you. Thank you very much, Lee.
The Chairman. Let me just say in response to that exchange
that Speaker Hastert at the beginning of the 106th Congress
spent a great deal of time with me on the issue of oversight,
and its establishment is a very high priority in this
committee. And you recall we did a training session on the
question of oversight, and we have in each committee, as you
correctly pointed out, encouraged oversight by having a
subcommittee to do that. Obviously we need to enhance that in
every way we can. That is why you and I have come to the
conclusion that moving toward this biennial cycle will play a
role in doing that. And also, I have felt strongly that a shift
from what has been sort of mixed political oversight to
programmatic and policy oversight is a very important thing,
and we again have, I believe, made very positive moves in that
direction, but clearly more could be done.
Mr. Hamilton. Not all oversight is good. Oversight can be
done in such a way that it complicates. But generally speaking,
I think Members carried it out very well. I would like to see a
lot more emphasis in the training of newer Members that takes
place today at the Harvard School and other places on the
techniques that are available to a Member for good oversight.
Members come into this institution skilled in many things,
communications; they know how to use the media. They are
skillful politicians or they wouldn't been here. But I don't
think they necessarily come in well-trained and well-schooled
in what the techniques available to them are to conduct good
oversight through, you know, reports, GAO, the Library of
Congress, trips, visits. There are all kinds of techniques that
are very, very important, and Members have to take advantage of
them.
The Chairman. Thank you.
Mr. Linder.
Mr. Linder. Do you think we travel too little?
Mr. Hamilton. In general, I think I would say yes.
Mr. Linder. And when we do, it has become a political
issue, so people are reluctant to take trips, and you learn
things on that trip you cannot learn anywhere else.
Mr. Hamilton. Absolutely. I think trips both within the
country--you look--you have the responsibility for budgeting
these things, and you have to remember that the executive
branch always has a point of view, and it may not be your point
of view, and you don't want to get yourself in a position so
that you are dependent upon the executive branch for
information solely, and I think trips are a very important
aspect of a Member's duty.
In my own case I think I could be criticized for not taking
enough trips, although that might sound a little strange to
some of my constituents, but--former constituents.
But the answer to your question is they should travel, but
it makes all the difference, John, on how they travel and what
they do when they travel. Trips have to be well-organized, they
have to be well-staffed. You have to have questions in mind
that you want to pursue, and it is part of the oversight
function, if it is well done.
Mr. Linder. Should we have been surprised both in the
executive branch and on the congressional side by OPEC and the
sharp increase in gasoline prices? Nobody saw it, and we should
have seen it. My guess is the private sector saw it coming for
a long time by looking over the horizon.
Mr. Hamilton. I don't think anybody who follows OPEC should
be surprised by it, and I think my answer is we should not have
been surprised by OPEC doing that at some point. The
difficulty, of course, always is knowing exactly when they
would do it, but anybody who follows the OPEC oil ministers
knows that they are very sophisticated people, and they know
exactly what they are doing.
And look at the increase of revenues created in each of
these countries. These countries are now experiencing, John,
50, 60, 100 percent increase in their government revenues
because of oil, and so it shouldn't surprise you that they are
going to move that way.
Mr. Linder. I do think we are so focused on the day that we
didn't see next month. How much of everything you have said
this morning is the changed function of Washington? When you
came here, you brought your family and lived here. People do
not do that very often anymore, and so half of this Congress
never gets both feet out of the airplane. They have one foot on
the ground and one foot on the airplane.
Mr. Hamilton. My view, and I am sure it is a minority view
today, is the Members of Congress don't spend enough time in
Washington, and they don't spend enough time in doing the
nitty-gritty that committee work requires them to do. And I
know that kind of runs against the political trends of the day.
You are right, when I came to Washington, the popular thing,
the normal thing to do was move your family here. You became a
resident, in effect, of Washington, and you spent most of your
time here. You went back on weekends. I really followed that
pattern through my career here, but it reversed, and today it
is a political liability to be associated with Washington and
to have your family here.
What that has done is it has put pressure on Members to
spend less and less time in Washington and less and less
attention, therefore, to the hard work of government, including
oversight. You want to get here as late as you can, you don't
want the votes until Tuesday night, you want to get out of here
Thursday night, you want to be in your districts, you want to
be with your family, all of which are very understandable
reasons, but there are consequences to that that I think people
have to examine and look at.
Mr. Linder. Thank you.
The Chairman. Ms. Slaughter.
Ms. Slaughter. Thank you, Mr. Chairman.
Good morning, Lee. It is good to see you again, and I think
you and I both spent a lot of time on how to reform the House.
We couldn't decide what to do with the Chairs. We had to rotate
them, too. We did away with a whole committee, a number of
subcommittees. I am not sure it made a whole lot of difference,
frankly. We debated whether we needed a Budget Committee or
not. We were all concerned, and I still am, with the fact that
we don't really have debate time. Everything is structured and
timed so that even in a committee, you only have so much time
to spend on a point and which may then be left somewhere. And I
think all of us have had the experience that you sit in a room
with people who listen to you, sort of glaze over waiting for
your time to be over, not really paying attention to what it is
you are saying.
The oversight that we have had, I think, in Congress for
the last 2-1/2 years has mostly been the White House and one
investigation after another coming to practically nothing. But
my concern with the biennial budget--and I have an open mind, I
really don't know whether that is best or not, I have served my
6 years on the Budget Committee--is that people I do respect
here say that it would be a denigration of power from us and
handing over, again, to the executive branch, who would have
more to say about the second year and have more control over
what we do and basically take our job away.
I was surprised at the statistic that Joe mentioned on how
little time we really spend on budget. It seems to me like we
spend all of it, budget and appropriations. That starts the
beginning of the year, and we go through this dance of
legislation, and then the turn is over. We come up to a crunch
at the end.
I would be curious to know, because, as I pointed out, a
lot of people that I respect a great deal believe it is not a
good idea, your point of view, because I certainly respect you
as well. If you could just give me a sort of concise, round-up
why you think that would be a better thing for Congress.
One other reform we talked about, too, Lee, while I digress
a moment, the fact that we are not in Washington enough. You
remember we discussed whether we should work on a monthly
basis. We looked at all the months that we worked here, and
with the exception of June, we had these long holiday periods,
times when we are in the District, and we were looking as to
whether we ought to have a schedule which was 3 weeks working
in Washington, a week in the district, and we would have a 5-
day workweek here, and then we would know exactly where we
were. We would know how we could schedule. We would know what
we could do when we got to the district. I think it did give
you more of a sense that your job was here as well as the time
you spent back in the district.
I think Congressman Linder is exactly right. I am back and
forth to Rochester three times a week--not that much. I can't
afford it, USAir is costing too much, but it does seem to me we
barely get here, and I don't have time for my ear infection to
clear up before we get back on the plane.
I guess in the 14 years I have been here, a large part of
it has been how can we make this better, and we certainly do
talk it to death, but we don't seem to, I don't think, arrive
at very much that makes an inordinate amount of difference here
in how the place is run.
Mr. Hamilton. Several reactions. First of all, US Airways
needs your business, Louise. They are having a struggle.
Ms. Slaughter. My district, though, is subsidizing all the
low-cost fares. We get tired of that.
Mr. Hamilton. I saw where the Majority Leader in the Senate
said the other day that two-thirds of the time of the Congress
is on the budget. So he--I am sure he is speaking largely from
a Senate perspective, but that is a very large amount of time.
Well, you asked me about the question of power. First of
all, I think it is the right question, and I understand that
reasonable people can come to different conclusions on it and
in supporting biennial budgeting. In part I support it because
if we seize the opportunity in the Congress, I think we would
regain some power vis-a-vis the executive.
What I am impressed, Louise, about the present process is
the dominance of the President in the budget process today.
When a President sends up to the budget, some of these experts
sitting around here will know better than I, but my guess is
that a President's budget is basically 90 or 95 percent enacted
every year. He has always all the chips. Moreover, when you get
into the negotiation process, which creates a lot of headlines
around this city every year, the President has the power
because of the veto, because of the difficulty of the Congress
coming together. He has the upper hand in budget negotiations,
and he almost always--not always--he has to make some
compromise, but he almost always gets his way.
Well, so I am impressed that the present system puts
terrific power in the President, and the Congress' power is
marginal. We like to talk about the power of the purse, but to
be very blunt about it, the power of the Congress on the budget
is marginal, in my view. Not unimportant. If you shift a
billion dollars here and a billion there on a certain programs,
it can be very important, but overall in the total.
There isn't anything in the biennial budget system that
cedes additional power to the President. I think what you are
really talking about in biennial budgeting is giving the
Congress the opportunity to exercise more clout through
effective oversight, through long-range thinking, than they now
have. I don't think biennial budgeting is going to end
congressional control, and I don't think it is going to
guarantee improved oversight. I just think it gives you the
opportunity, it gives you the time, and the question is how are
you going to use that time? Are you going to use it
effectively? And if you do use it effectively, I think you
would modestly gain more power than you now have, modestly,
nothing dramatic. You and I know the procedural changes, they
are not going to change the world. They are going to impact on
the margins.
You asked me to kind of sum up. I believe I would say under
the present system you have too little oversight. I think you
have too much power in the executive branch today. I think too
much time of the Congress is spent on the budget. I think too
many people approach policy problems here strictly as a matter
of budget and not on other aspects as well. I think there is
too little long-term thinking. I think the authorization
committees where most of your expertise should lie have been
reduced in power, and the appropriators have enormously gained
power.
It is no accident that Members coming into the Congress
today want to get on appropriations committee or Ways and
Means. When I first came to the Congress, they wanted to get on
Education an Labor because that was where the action was. So it
has's just shifted completely, and I don't think that is
altogether healthy.
And on the scheduling, that 3-week/1-week business, I don't
think I really have much of a judgment about that. I know that
has been kicked around a long time. My principal point would be
that I think the Congress needs to spend more time in
Washington. You cannot have a hearing delving into OPEC
policies and doing a serious job of it and forcing an
administration to articulate their policy on OPEC if you are
only here for a couple of days and you can't get your Members
to focus on anything because they have got 20 meetings
scheduled. And people have to understand the consequences of
that kind of scheduling.
Ms. Slaughter. I don't know what the answer is to that
schedule. I have got six people probably waiting for me right
now.
Thank you, Lee. It is good to see you.
Mr. Hamilton. Nice to see you again, Louise.
The Chairman. We will excuse you if you would like to go.
Ms. Slaughter. I will be back.
The Chairman. Mr. Hastings.
Mr. Hastings. Thank you, Mr. Chairman.
A couple of things. You spent a bit of your time there on
not enough time for long-term or strategic planning. I can
assure you from the west coast, in my 6-hour experience of
going back and forth across the country one way, I spend a lot
of time in my mind strategically thinking, and you get back
here and don't have time to do what you are talking about.
A couple of things I have picked up in the testimony and
the remarks by witnesses and Members here is that there seems
to be two major areas of concern: the role of the authorizers,
which probably is, I would agree, not going to be solved by a
biennial budget; but the other one is the supplemental. Mr.
Obey testified earlier and at length, and as you know, Mr. Obey
is one who has a great deal of affection, I guess is the proper
word, for this institution, and he was suggesting that the
supplemental process will be dragged out in such a way that it
will slow this whole process down. My answer to that was once
you get through the initial biennial budget, then you have a
budget in place, and if you don't pass the supplemental, the
government still runs, which I think is the positive from that
standpoint.
But I would like you to elaborate more than what you did in
response to Mr. Moakley's observation about the supplemental on
how you see the supplementals would work once the biennial
budget is adopted.
And one other issue, too, that was brought up, because the
biennial budget has every possibility of being pushed probably
back into the second year, that is just being the politics of
it, you kick it ahead, kick it ahead until who knows. Respond,
if you would, to those observations.
Mr. Hamilton. Well, I think Mr. Obey probably is correct
when he says that there will be more pressure for some
supplementals, but what would impress me is that Members are
going to find a way to assert themselves, and if they feel
restricted, they will take advantage of the supplemental or
insist on another supplemental.
But you are talking here about a few supplementals versus
13 appropriations bills, and passing two or three supplemental
bills will be time-consuming, but there are always going to be
issues arising. There are emergency issues or issues that
Members want to bring forward, and they are going to do it on
supplemental. I think that is appropriate. I don't think there
is anything wrong with that. But you would, I believe, have
much less intrusion by the budget if you had biennial budgeting
than if you had to pass 13 appropriations bills every year. I
guess that is the principal point.
Now, if they do what you suggested and punted the budget
into the next year, that would be a serious mistake, and so the
Congress would have to discipline itself to get the budget done
in the first year if you are going to have the advantages, if
there are advantages to biennial budgeting, in the second year.
I might just take off from your question and say that I am
appalled with the omnibus bills. The omnibus bills are an
abomination in the process, if not in substance. And we have
become--you have become, I guess I should say, now far too
dependent upon the omnibus bills. They are popular because they
hand a lot of power to very few Members, and I think in terms
of good process they really violate every concept of good
legislative process.
I used to--I know you have had the experience many times.
When we would get these omnibus bills at 2 o'clock in the
morning, they would be 3 or 4,000 pages long and be asking you
to vote on them at 10:00 in the morning, and all you have is
the raw legislative language in front of you which doesn't tell
you anything about the content of the bill. And it is just an
outrageous process, and I think a lot more exploration needs to
be done why it is done so much in the Congress. I think I know
some of them, but not all of them. It is the process. It is
just outrageous.
Mr. Hastings. It appears to me, too, that going through
this and discussing this, the issue of the other body has been
brought up, and I would--in fact, you alluded to it earlier
that the Senate is part of the problem. I suppose that is the
wisdom of our Founding Fathers to have this conflict of the
legislative branch, but ironically it appears that there seems
to be more acceptance at least in the Senate than in the House
for a biennial budget. That is my reading of this, and that
seems to be very, very positive. Thank you very much.
The Chairman. Thank you very much, Lee. Let me just
conclude with a couple of comments and then a question that I
would like to raise with you.
First of all, in--I will say that I got 250 cosponsors on
the legislation calling for biennial budgeting. Do you know
when I obtained those cosponsorships? Often at 2 o'clock in the
morning when we were sitting downstairs. So I want you to know
that provided a little impetus for people to come on board. It
was in the waning hours of the first session of the 106th
Congress, and in the last calendar year actually over 40
percent of the roll call votes we had downstairs were on
budget-related issues themselves. So we clearly have spent a
great deal of time on it.
I would like to--I have been asked by the staff to go
through on a question on a proposal that we had in our joint
committee 7 years ago, and I would just like to go through
that, and included in the recommendations was a proposal that
the Budget Committee use the off-year session for long-term
studies and to hold hearings and receive testimony from
committees and jurisdictions regarding problem areas an the
result of their oversight activities. The Budget Committee
would then issue to the Speaker under this proposal by January
1 of each odd-numbered year a report identifying the key issues
facing the Congress for the next biennium, and I am just
wondering if you can expand on the thinking behind that
proposal, if you recall it particularly, on its impact on the
ability of the committees of the House to focus on long-term
concerns which we have been talking about here this morning as
well as the issue of programmatic oversight.
Mr. Hamilton. I am pleased to be reminded of that
recommendation, but I think the thought behind it was the same
thing I was trying to express, perhaps not so well, earlier
about the need to develop mechanisms to get the Congress to
think long term. What prompted that recommendation was the very
thing that prompted my observations here; that is, Federal
Government and Congress just doesn't do enough of it. If you
agree with that, most people I think do agree with it, then you
ask yourself what kind of mechanisms you put into place to
require it, and that is what we are trying to do with that
proposal with respect to long-term studies and a report, making
the committees focus on the long-term needs. I thought then and
I think now that it is good for both.
Incidentally, I was glad to be reminded that I cast the
deciding vote for the biennial budgeting. I am glad to be
reminded of that.
The Chairman. I remember going down there through that in
the brand new HC-5. We were going through that. Tom Mann spent
a lot of time there, and some of the other people in the room--
I remember we had a very, very interesting debate because I
remember David Obey was a member of our committee then, so it
was a rigorous one. Let me express again--.
Mr. Moakley. Mr. Chairman, before I--.
The Chairman. Mr. Moakley.
Mr. Moakley. I just want to put in the record the
Congressional Research Service table that shows that the House
only spent one-fifth of its time on all budget-related
legislation. I know there has been a lot of figures thrown
around.
Mr. Hamilton. There are different ways to measure it.
Mr. Moakley. Okay. I am sure there are. And also as far as
you say that there wasn't enough time for appropriations bills,
authorization bills, there were only three appropriation bills
that took more time on the floor than the authorization bill,
the foreign aid bill, out of your committee. So, I mean, we do
have time to spend on authorization.
Mr. Hamilton. We can't get them enacted into law.
Mr. Moakley. That is not our fault, thank you, and it is
not for lack of time. So I don't think a biennial budget is
going to help that either. Do you?
Mr. Hamilton. I think it gives you the opportunity to help
it, Joe. Does it do it? Does it guarantee it? No, it doesn't.
Mr. Moakley. Thank you very much.
The Chairman. Let me just say that no one here has claimed
at all that going to the biennial budget in the appropriations
cycle will, in fact, be a panacea to all the ailments or the
kind of challenges we have here in this institution, but with
so many very thoughtful people having spent so many years at
this, as an alternative--and the success we have seen in States
and other areas--is something worth considering.
And following Mr. Moakley's directive, I would like to say
that we are going to continue to be deliberative and thoughtful
and open to a wide range of views on it, and as such I would
like to request of you that you be available to respond to
written questions that we might be providing.
Mr. Hamilton. Mr. Chairman, may I just say that Mr.
Moakley's last point in his opening statement about a phased-in
approach should be looked at very hard.
The Chairman. We discussed that at length with Jack Lew the
other day in the testimony that he provided here.
So will you respond to our written questions?
Mr. Hamilton. I would be happy to do the best I can.
The Chairman. Thank you very much. Appreciate it.
We are going to go to a panel now, which will consist of
Tom Mann, the W. Averell Harriman Senior Fellow in American
Governance at the Brookings Institution; Professor Phil Joyce
at the George Washington University Department of Public
Administration; Professor Charles Whalen of Cornell University;
and Professor Roy Meyers of the University of Maryland.
So if the four of you would come forward, and we look
forward to your testimony, and I will say that without
objection, the prepared remarks that you have will appear in
the record in their entirety, and if you would like to provide
a summary for the committee, you have all witnessed this
discussion we have had, when there was obviously a larger
membership here, so any thoughts you have in response to the
exchanges we have had would certainly be welcome, too.
It is nice to see you, Mr. Mann. Welcome to the committee.
I don't know if you have been here since I have chaired the
place. Have you?
Mr. Mann. One time, not enough, but happy to be back.
The Chairman. Okay. Thank you very much. Were we talking
about the same thing?
Mr. Mann. No. As I recall we were talking about the ethics.
The Chairman. Oh, right, right. I remember that. Thank you
very much. It is nice to see you.
STATEMENTS OF THOMAS E. MANN, W. AVERELL HARRIMAN SENIOR FELLOW
IN AMERICAN GOVERNANCE AT THE BROOKINGS INSTITUTION; PHILIP G.
JOYCE, PROFESSOR, GEORGE WASHINGTON UNIVERSITY DEPARTMENT OF
PUBLIC ADMINISTRATION; CHARLES J. WHALEN, PROFESSOR, CORNELL
UNIVERSITY; AND ROY T. MEYERS, PROFESSOR, UNIVERSITY OF
MARYLAND
STATEMENT OF THOMAS E. MANN
Mr. Mann. Well, thank you, Mr. Chairman. I have had the
good fortune of working with you over the years. I have
enormous respect and appreciation for the seriousness with
which you try to improve this institution, and also to defend
it as a critical part of our constitutional system. So I want
to be clear about that.
Let me tell you I feel very uncomfortable because first I
testified before you, and I find myself bracketed by two former
Members, Lee Hamilton and Bill Frenzel, who are some of the
classiest people ever to serve you.
The Chairman. We don't want to leave out Leon Panetta.
Mr. Mann. And Leon will be here later, at least the
disembodied voice of Leon.
You know, they are wise people. You are wise people.
Reasonable people can disagree on this.
The Chairman. That was Jefferson's line.
Mr. Mann. Yes, and what a source. I mean, I acknowledge
there are uncertain consequences to biennial budgeting that my
take may be absolutely wrong and yours and others' take may be
much closer to the reality, and if you go ahead with this, I
urge you to do it, as you said, deliberatively and in a way in
which you don't freeze yourself into a process that ends up
backfiring on you.
In a sense I feel like Bill Murray in Ground Hog Day. I
wake up each day, and there I am saying, why is it that
biennial budgeting isn't a good idea? Mr. Chairman, let me
summarize it this way, because I listened very carefully to the
last set of comments. Lee said something in passing. He said,
there is always a temptation around here to find procedural
solutions to substantive problems. That is because sometimes it
is easier to fashion a procedural change than it is to solve a
substantive problem. I would frame it slightly differently. I
would say there is always a temptation, understandable one, to
find apolitical solutions to political problems.
The realty is the fiscalization of policy debate in this
body over the last 20 years has little to do with process and
everything to do with the broader context of budgets and
politics, and my--sort of my feeling is that today. And you
said it yourself, it was the end of the session at 2:00 a.m. In
the morning when you got all those cosponsors.
There is such frustration with the year-end train wrecks
and the political gamesmanship that is going on at the end of
the year on appropriations matters that you figure, well, we
can have half as many if we go to a 2-year budget process. I
mean, that is understandable. But you have to understand that
if those train wrecks and if that gamesmanship is being driven
by broad political forces, narrow margins in the House and the
Senate, divided party government, difficult decisions that have
to be made, genuine differences that exist, mobilization of
interest groups, if all of those things are true, you are going
to find vehicles to have those fights, whether you have a 2-
year budget cycle or not, and that is my concern.
One of the things that you have to be careful about is not
building up public hopes that you really are going to take care
of some; don't worry, we won't have these political problems
anymore because we fixed it.
Now, I know you are focusing on the more traditional
administrative rationale for this, and there are presumably
experts--I have read some of the testimony--others who will
appear, that will make a sort of strong case for it. It is a
debatable proposition as to whether those very desirable
outcomes, like more long-term planning and sort of freeing up
time for oversight, avoiding duplication, will flow from this
kind of change. For a whole host of reasons that are listed in
my testimony, I am skeptical. I just--I would like to believe
it would happen, but I guess I don't believe it will happen.
And in particular and you had a very interesting exchange
on congressional oversight. I would say, first of all, there is
some pretty good oversight that goes on on a regular basis in
the Congress. You are a little too self-critical. There are
pockets of the House in subcommittees of authorizing committees
and on appropriating committee where Members with serious
policy interests and concerns about how programs are being
implemented are asking tough questions and getting good
answers, and that should continue.
What it takes is either the serious interest of Members or
the political motivation, and it is best if you have both, and
then you really get oversight, but I don't think freeing time
is really the issue. That extra time, if any is freed, and I am
skeptical of that, could easily be filled with more time fund-
raising or spending more time with lobbyists or doing other
things. There are lots of possibles, and Members are adults.
They have to make choices about what is important to them, and
you have to count on them. You do serious deliberation and
oversight. Others can do it if they are willing to set that as
a high priority. So that is my broader concern.
Finally, the point I would simply make is this is a case
where we can really learn something from other countries. Alan
Schick has really studied the experience abroad. No other major
democracy has moved to a 2-year budget cycle. They all have
annual appropriations, Schick reports, but all of them have
figured out ways of providing a longer time horizon, of
multiyear budgets, of flexibility for programs with which it
will work, that are relatively noncontroversial, that have the
opportunity to plan in advance. And what I would urge you to do
is move into this gingerly, take some predictable
noncontroversial programs, do some 2-year budgeting with them
in appropriating, do some evaluations, and then see if it isn't
worth expanding them from there.
Finally, one of your biggest political institutional
problems is indeed the other body, working with the Senate, and
it has been bicameral strains that have caused more problems
than annual appropriating and budgeting. And there are no
procedural fixes for that, but I think you could do something
about it. Thank you.
The Chairman. Thank you for offering your healthy
skepticism as opposed to a corrosive cynicism.
[The prepared statement of Mr. Mann follows:]
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The Chairman. Professor Joyce.
STATEMENT OF PHILIP G. JOYCE
Mr. Joyce. Thank you, Mr. Chairman. I would like to submit
my entire testimony for the record.
The Chairman. Without objection, it will be included in the
record.
Mr. Joyce. First, let me say I am very sympathetic to the
frustrations that lead supporters of biennial budgeting to
advance this reform. If you look at the Congress, you can
hardly avoid concluding that the budget process is time-
consuming, that deadlines are missed, and that--at least the
kind of oversight that I think you called policy and program
oversight--that there needs to be perhaps a lot more of that. I
think if you defined oversight more broadly to include what I
might call gotcha oversight, you might have a sort of different
conclusion, but I think the kind of oversight where you look at
programs from the ground up, sort of examine how they are
working, I think it really would be a benefit to do more of
that.
And I am also sympathetic to the plight of the executive
branch, which must believe that it is engaged in nonstop
budgeting as well, and some of the advantages certainly that
people suggest from biennial budgeting are benefits to
executive branch agencies. I think that was one of the things
that led Vice President Gore's National Performance Review, at
the same time that the Joint Committee recommended biennial
budgeting, to make that same recommendation.
But much as I would like to, I do not necessarily conclude
that biennial budgeting is the cure for these ills, and I want
to expand on this by noting at least some reservations I have
about what I think are the two major parts of this reform. The
first is biennial budget resolutions and the second, biennial
appropriations.
On budget resolutions I think the budget resolution over
history has done what it was intended to do. It has allowed the
Congress to compete with the President in the setting of
overall fiscal policy. I think reconciliation, perhaps, has
been a particularly useful part of the process because I think
it can be credited for making it easier for the government to
get from deficit to surplus.
But I have two reservations, even in a world where we have
surpluses, about biennial budget resolutions. The first, that I
think you have heard about before and I know you will be
hearing about later, so I won't expand on it here, is simply
the difficulty of doing longer-term budget projections. I think
the CBO and OMB track records provide ample evidence of the
difficulty in doing budget projections even for one fiscal year
into the future.
The second is that I think a biennial budget resolution
would increase the chance that policy would not only lag behind
those budget projections, but also lag behind the desires of
the electorate. Things can change very quickly in terms of the
political situation; whether the electorate wants a tax cut or
not a tax cut, et cetera. Doing the budget resolution 2 years
at a time might increase the probability that you were lagging
behind that judgment of the electorate.
The second part of biennial budgeting really has to do with
biennial appropriations, and I think that on the congressional
side the argument for biennial appropriations hinges on the
possibility that less frequent budgeting will lead to more time
being devoted to other matters, as you have heard, particularly
oversight. When I think about this, I think the argument for
increased oversight is actually easier to make in the Senate
than it is in the House, and the reason for that is because in
the Senate there are a lot many more Senators that serve on a
lot more committees. As you know, in the House, Members who
serve on the Appropriations Committee by and large do not have
assignments on other committees. And so I don't think it is as
clear, at least at the committee level, that the time that
Members are spending on appropriations is necessarily being
taken away from the opportunity to do oversight.
In order for the twin benefits that are offered of less
budgeting and more oversight to materialize at all, I think you
have to be convinced of two things. The first is that the
biennial process will not become a de facto annual process, and
the second is that if the biennial process is effective, more
time available will actually equate to more oversight. I am
also skeptical of both of these arguments.
In the first case, I think the uncertainties associated
with budgeting for a $2 trillion enterprise would call the
sustainability of a biennial appropriations process into
question, and I am particularly concerned because I know this
committee is worried about fiscal control. More and larger
supplementals will not only eat up time, but might result in
less fiscal discipline. These kinds of "must pass"
supplementals have a tendency to become legislative Christmas
trees, and I think we need to at least worry about that a
little bit. That may be particularly true as Mr. Obey, I know,
noted in the Senate, where there is not as tough a germaneness
rule.
Of the other possibility, the possibility that there will
be more policy and program oversight, I believe as supporters
of biennial budgeting do that an increase in oversight would
help the Congress to better discharge its responsibilities,
particularly because of legislation like the Government
Performance and Results Act, which I think is already paying
dividends. I do not believe, however, that the primary
impediment to better oversight is lack of time. As Mr. Hamilton
pointed out, I thought very well, oversight is hard, it is not
sexy, it doesn't pay a lot of electoral rewards. So I am
skeptical that simply making more time available for oversight
will make more oversight happen.
So in conclusion, I did want to note that in my written
testimony--I won't go over these in the interest of time--I did
offer some technical suggestions and raised some technical
issues that I think you should think about if you want to move
ahead and enact this reform. I would join Mr. Mann and others
in encouraging you, however, to proceed cautiously, as you did
with the Line Item Veto Act, perhaps by delaying
implementation, implementing slowly or providing some sunset
provision that would enable you to evaluate the full
implications of this change prior to making it a permanent part
of the budget process.
I thank you very much for your attention.
The Chairman. Thank you very much. We appreciate it.
[The prepared statement of Mr. Joyce follows:]
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The Chairman. Professor Whalen.
STATEMENT OF CHARLES J. WHALEN
Mr. Whalen. Thank you, Mr. Chairman. I am pleased to be
here to discuss this issue with you this morning. The starting
point for my remarks is the understanding that many Members of
Congress feel the current budget and appropriations process
leaves both the executive and the legislative branches with
inadequate time to devote to oversight, program management and
evaluation, and other nonbudget matters.
An academic study published in 1989 indicates that biennial
budgeting within the Defense Department did indeed allow more
time for the agency to work on nonbudget matters, including
planning for the future program, evaluations and problem-
solving. Studies examining the State-level biennial budgeting
experience also find that biennial budgeting is less costly and
less time-consuming than annual budgeting, even after annual
adjustments are taken into consideration.
There is no guarantee that a streamlined Federal budget
process would improve government fiscal management and
oversight. But we do know that the just-mentioned study of the
Defense Department experience suggests there is potential for
significant gains in terms of both efficiency and cost savings.
State-level studies meanwhile find that biennial budgeting
States give greater attention to oversight, management and
planning, Connecticut's experience being a notable exception,
as Representative Moakley has indicated today. Moreover in
these States there is widespread belief that this heightened
attention to nonbudget issues improves government performance.
While some have expressed concern that biennial budgeting
will lead to increased budget requests, due to agency padding,
two published studies, one issued in 1994 and another released
in 1984, do not find evidence of this at the State level.
Finally, I agree with Dr. Alice Rivlin, former head of both
the CBO and the OMB, who has testified in the past that
minimizing unexpected changes in U.S. fiscal policy can be
beneficial to States, government contractors and program
recipients, indeed to nearly all individuals and organizations
affected by federal policies.
Under biennial budgeting, stability and certainty would
also be increased when policy changes are made, because such
changes could be imposed gradually and without an automatic
revisiting of those changes. Of course, some see an annual
revisiting of appropriations as an essential congressional
tool. While I agree that it is of value to have this annual
appropriations tool, I believe annual appropriations and
frustrations over the lack of time for oversight may be two
sides of the same coin. If that is the case, then the ultimate
question for Congress is which does it value more, the
flexibility of annual appropriations or an opportunity, as has
been said earlier today, for increased attention to oversight
and other issues that are neglected under the current process?
The Chairman. Thank you very much.
[The prepared statement of Mr. Whalen follows:]
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The Chairman. Professor Meyers.
STATEMENT OF ROY T. MEYERS
Mr. Meyers. Thank you very much for the invitation. I would
just like to read a few snippets of my testimony and
particularly focus on the concerns that were raised during Mr.
Hamilton's testimony about oversight and strategic planning.
Twelve years ago I wrote a very long paper about this topic
for Senate Governmental Affairs when I was working at the
Congressional Budget Office. Although I used the "on the one
hand/on the other hand" typical approach of CBO, it was a
pretty negative report. Twelve years later I would have to say
that my thinking has evolved a bit, and I am a bit more
supportive of the idea, although it still presents some
problems. In fact, I would argue that a simple biennial
budgeting bill is insufficiently ambitious, and I will get to
some points about that in a few minutes.
The budget process has changed significantly in two ways
that are relevant to this bill. First, back in the 1980s, there
was still a fair amount of concern in Congress that biennial
budgeting would prevent the Congress from reacting quickly to
an unanticipated recession, and, of course, opponents of
biennial budgeting said that was a drawback. Now, though, it
would be generally held that this would be a good thing about
biennial budgeting if it would deter Congress from being
tempted to displace the Federal Reserve's role in reacting to a
recession, for there is a lot of evidence from economists that
discretionary countercyclical fiscal policy does not work. In
the case of an unanticipated national security crisis, I think
it is unlikely that a biennial budget would prevent the
Congress from reacting, so I am not worried about that.
The second way in which budgeting has changed since the
late 1980s is that throughout the 1990s, the Congress and the
President engaged in negotiations that produced several
significant multiyear budget agreements. I think the multiyear
budget agreements have been a mixture of good and bad. They
have been good because they recognize the political necessity
and economic necessity for a fiscal glide path; that you
couldn't balance the budget in a year. But you may remember, I
would expect with negative feelings what happened in 1995 and
1996 when you were having this long debate about whether 7
years or 9 years was an appropriate period, and it turned out
that both the President and Congress were wrong. Luckily,
things have been much better than we expected in economic
terms. However that did not guarantee the politically lasting
nature of the agreement.
I think the reality here is that there is, if you will, a
timing balance for our political cycle, and it is the 2-year
electoral cycle for the House. Comprehensive budget agreements
don't last much longer than that. Therefore, it would make
sense to move from a 5 or 7 or 9-year agreement to a more
natural period of 2 years.
Now, ways in which I think this bill is insufficiently
ambitious. I would suggest that you need to go back to H.R.
853, and append parts of it to this bill, because I don't think
biennial budgeting will work without them. I understand that
H.R. 853 is a comprehensive bill, and that is a difficult bill
to pass in any Congress. Neverthe-
less, one segment of it, the limitations on emergency
supplementals, would be a reasonable answer to the concerns
that many people have raised--that the even year would feature
a Christmas tree supplemental, or an endless series of
supplementals. So I would suggest that you take at least that
part of H.R. 853 and append it to this.
In addition, I believe that a joint budget resolution makes
a lot of sense, although I would admit that there is nothing to
guarantee that a Congressman and a President could agree on a
joint resolution if that was the statutory process.
But I do think it is quite unlikely that Congress could go
it alone in trying to adopt a 2-year budget resolution, under
the threat of Presidential blame that we have all become
familiar with, when Congress already has a great deal of
difficulty adopting a 1-year budget resolution.
Now, to finish up with some discussion of oversight and
planning. As someone who studies the budget a great deal, I
have spent a little while in the past weeks looking over the
President's budget proposals. There is an interesting
disjuncture between the first half of this budget and the
second half. The first half of this budget might be called
"1,001 policy initiatives," and the second half of the budget
is a review by budget function, that is, by national defense,
international relations and so on, of the performance goals
that were adopted by the agencies in response to the Government
Performance and Results Act. Unfortunately, there is little
connection between the performance planning process and the
President's budget initiatives.
I think there is a similar problem in the Congress, and it
relates in particular to the committee structure that you have
been discussing. In fact, I would suggest that Congress is
unlikely to do more strategic planning and quality oversight
unless the Congress returns to the kinds of proposals Mr.
Dreier was making in 1994 and 1995 about committee
organization; in fact, go far beyond those and seriously
consider again the idea of combining the appropriations and
authorizing committees. I know that is an issue that Tom Mann
has studied in the past.
The final issue I would like to raise is what kind of
incentives are necessary for Members of Congress to do better
oversight. I don't think it is a problem of time. I think it is
a problem of what makes the job of the Congressmen more
attractive. Obviously Members of Congress need to be reelected,
and they spend a great deal of time trying to gain earmarks for
their districts, and from the agency perspective, particularly
in the GPRA context, those kinds of earmarks are often
perceived as being inefficient and ineffective. Whether that is
true or not, I suppose, could be a matter of debate, as it has
been a matter of debate in the Republican Presidential primary
in the past few months. I happen to agree with Senator McCain's
point of view, but I might be wrong.
But the reality is that if Members of Congress spend so
much time trying to earmark provisions in the bill, they are
obviously going to have much less time to do the kind of
measured oversight and review of performance plans that GPRA
intends. So "biennial budgeting or not," I think, is not the
real issue. Rather, if the Congress were to increase the amount
of time available for oversight, there would, also need to be a
widespread commitment within the Congress to perform the kind
of oversight that the sponsors of biennial budgeting say they
want.
Thank you very much.
Mr. Linder. [Presiding.] Thank you.
[The prepared statement of Mr. Meyers follows:]
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Mr. Linder. I just have a couple of questions. I apologize
for having to run out, but we have a bunch of students on the
steps waiting to have a picture taken. You can't inconvenience
the photographer.
You mentioned the sunset provision in your testimony. My
experience with sunset provisions is that they never work. When
an agency comes time to be sunsetted, you have a focused group
of people directly affected who are going to overwhelm you with
the yeses, but the population at large doesn't even know it is
happening. You are not going to have--in terms of
reauthorizing--you are not going to have any negatives. Can you
tell me any place where it has worked?
Mr. Joyce. What I was thinking about was not a sunset
provision of, for example, authorizations, but a sunset
provision for the biennial budgeting process itself. The idea
would be that before you would decide to put what could
potentially be a radical change into the permanent process, you
test it. Once you have enacted a piece of legislation, it
becomes harder to enact a new piece of legislation to make it
go away than it would to put a sunset on it. And I was
suggesting that if you want to go ahead, and there are concerns
that have been raised, sunsetting might be a way of pilot-
testing the idea of having biennial budgeting.
On the question of sunsets for individual programs, I
cannot give you any examples where that has necessarily worked,
because I think that you know at any point in time, whether a
program has sunset or not, the question you have to ask is what
can political forces bring to bear at the time when that
program was available for sunset. This is the same way of
saying, who cares about this program being continued, and
whatever political forces are out there that care about it
being continued are going to rise up at that particular point
in time.
Mr. Linder. When special interests find that their program
is about to become sunsetted, they suddenly find all of their
relatives to write. The average American doesn't have any idea
what they are talking about. They don't respond. So it is
always overwhelming, and the political pressures have a
continuance in all that.
Mr. Mann. But in this case who are the interests affected;
who are the constituents? You are absolutely right for most
public programs, but here we are talking about a new procedure
to use within the legislative and executive branches, and I
think what we are saying is we don't know honestly what the
consequences would be.
Our preference would be that if you are determined to move
ahead, first you do it with some particular programs that have
stability and predictability and bipartisan support and see how
it works, but if you insist on going forward with the whole
process, think of it as a pilot and say, you will do it for one
budget cycle, two budget cycles, and then review and see
whether you want to stick with that or move back. I think in
that case you wouldn't have the same political dynamics of
people holding onto an existing system.
Mr. Linder. Reference was made to your comments previously
about combining authorizing and appropriations committees,
which my State essentially does, and I think State government
is different than Federal Government with respect to the kinds
of issues you deal with. I would like to hear your comments on
that.
Mr. Mann. Yes, yes. It is one of those principles that
sounds great, but when you really get down to it, it ends up
being very problematic. The reality is different kind of
considerations are properly brought to bear by authorizing and
appropriating committees. There is a reason for them being
separate entities. The problem today is that a lot of
authorizers feel they have been squeezed out by the budget
process, by demands from the reconciliation process, by
appropriations. But the solution, I think, is not to combine,
but to figure out ways of creating opportunities and room for
authorizing committees to operate.
I would feel, however, that a 2-year budget cycle wouldn't
have much of a bearing on that. I mean, the House's great
comparative advantage is the capacity for a division of labor
and specialization, and authorizers don't need to hold back in
a year because there is appropriations that year. I think we
need more leadership and creative efforts on the authorizing
committees, not a structural combination of the two types of
committees.
Mr. Meyers. Obviously the main barriers to doing it are
seniority rights on committees, and connections between
individual Members and constituent groups.
Mr. Linder. Are you hinting that maybe the asphalt
interests aren't interested in the transportation bill?
Mr. Meyers. Actually, I was going to bring up
transportation in a minute.
So in that sense, I think committee reorganization is
probably a theoretical issue, but I think it is one that at
least this committee needs to have on its plate.
I would disagree with Tom in the following sense: I don't
think the authorizing committees and appropriations committees
do many different things right now. Point one, look at the
annual authorization for defense and the annual appropriation
for defense, and show me the differences; there aren't too
many. Do the same thing for the transportation appropriations
bill and what comes out of Mr. Shuster's committee. I think
there a lot of parallels between the products of the two
committees. Of course, there are multiyear authorizations for
the different transportation modes, but the reality is that
there is an annual dog fight between the two committees. I
think this is by and large dysfunctional for the Congress.
If I could just make one comparison, I spent a little time
in Mexico City in January working with the Chamber of Deputies
down there. As you might know, Mexico is finally making a
transition toward a multiparty competitive democracy, and away
from a Presidential state, so that the legislature is
apparently going to have a little more power in the practical
sense. Although the Mexican Constitution gives the legislature
the authority to pass the budget, in reality they have had no
impact on it at all. They are starting from scratch, in that
they do not have a stable, powerful committee structure, and to
that extent it is beneficial for them to try and think about
how they are going to design their committee structure and
compete more effectively with the President. I think they have
a better chance in the next 10 years of doing so than does the
U.S. Congress, if the Congress continues to believe that it is
well-served by the existing, overly complex committee
structure.
Mr. Linder. One more question. You said this is being
insufficiently bold.
Mr. Meyers. Ambitious.
Mr. Linder. Did I miss your recommendation on how we could
be more ambitious?
Mr. Meyers. Well, I thought reorganizing committee
structures was probably overly ambitious, but I think going
back to parts of H.R. 853 and trying to address some of the
complaints that people have made about biennial budgeting by
incorporating parts of that bill into a biennial budgeting bill
would make sense. I would not suggest that you take up all of
H.R. 853, for example, I think the automatic continuing
resolution is a very bad idea for a variety of reasons.
Mr. Linder. May I ask each of you to be willing to respond
to written inquiries? Thank you.
Mr. Linder. The committee is going to be in recess just
long enough to vote. Please take your seat. Welcome. I will
vote and be right back.
[recess.]
The Chairman. [Presiding.] Let me welcome our second panel
and just say that it is a great pleasure to see our
distinguished former colleague Bill Frenzel, who is with the
Committee for a Responsible Federal Budget. And I had the
privilege of recalling that he sent a letter to me in the mid-
1980s when he and I were the only two Members of the House to
vote against every single appropriation bill. I wanted to save
that letter. I don't know exactly where it is, but I think I
may have saved it someplace. And 7 years ago when I was
proceeding with the work on the Joint Committee on the
Organization of Congress, when we were working on biennial
budgeting, I had the privilege of working closely with Mr.
Frenzel on passage of a very important public policy question,
which has been a great success. That is the North American Free
Trade Agreement.
So I welcome him here; and Robert Bixby, the executive
director of the Concord Coalition; and Jim Horney of the Center
on Budget and Policy Priorities.
The Chairman. So, Mr. Frenzel, if you would proceed.
STATEMENTS OF BILL FRENZEL, COMMITTEE FOR A RESPONSIBLE FEDERAL
BUDGET; ROBERT L. BIXBY, EXECUTIVE DIRECTOR, CONCORD COALITION;
AND JIM HORNEY, CENTER ON BUDGET AND POLICY PRIORITIES,
ACCOMPANIED BY CAROL COX WAIT
STATEMENT OF BILL FRENZEL
Mr. Frenzel. Thank you very much, Mr. Chairman, Congressman
Linder. I am accompanied by Carol Cox Wait, who is the director
of the Committee For A Responsible Budget. I chair that
committee with former Congressman Tim Penny. The committee is a
bipartisan, nonprofit, educational institution that studies the
Federal budget and related matters mostly focusing on process.
The committee is completing a project with financial support
from the "Big-5" accounting firms, in which we have invited
experts inside and outside the government to review the process
with us. We are completing a report which we expect to have
finished before the end of the month. We will be glad to share
with the committee and with other interested people.
In a nutshell, Mr. Chairman, our committee supports
biennial budgeting, but with a few caveats. The first is we
support biennial budgeting along with biennial appropriations
and tax cycles. We believe that biennial budgeting has to be
accompanied by biennial cycles for appropriations and revenue.
We would not like to see 2 years of appropriations take place
in 1 year and then a repeat of appropriations in the following
year. We want to be very careful about that particular point.
We also believe that it is essential that caps be put on
discretionary spending, and, of course, we support caps on
entitlements as well. They need to be worked into the process.
The difficulty that we perceive here is that under the
reconciliation process, you might not get to agreeing to caps
until after the 2-year appropriations, or some of them, have
been passed. If so, the caps will therefore be meaningless.
We have recommended previously to you and others that it
would be a good idea to have a budget resolution that needed to
be signed by the President, but we have made some suggestions
in here as to how you might establish the caps before the
appropriations are passed. A joint budget resolution is one of
them, but we leave it up to you as to how to do it. But we are
concerned that the caps have been the only effective limitation
on spending, and we believe they should be part of whatever
kind of a program you go for here.
We also support separate caps for defense and nondefense.
We support entitlement caps, which I have mentioned, and we
believe that this should be an important part of the system
when you move the process to a 2-year biennial system.
Again--very simply, we support the biennial program. But we
believe it must be accompanied by these other changings so that
it doesn't run away with the process.
Again, we will have a full report on the budget process
within a couple of weeks, and we will be glad to share it with
you. We thank you for the opportunity to appear before you.
The Chairman. Thank you very much.
[The prepared statement of Mr. Frenzel follows:]
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The Chairman. Mr. Bixby.
STATEMENT OF ROBERT L. BIXBY
Mr. Bixby. Thank you, Mr. Chairman and members of the
committee. I am here representing the Concord Coalition, which
is a nationwide, grassroots bipartisan organization dedicated
to strengthening the Nation's long-term economic prospects
through prudent fiscal policy.
Our organization is cochaired by former Senators Warren
Rudman of New Hampshire and Sam Nunn of Georgia. They, along
with our approximately 200,000 members, have been working for
the past 8 years to build the grassroots constituency for
policies that will encourage elected officials to make the
tough choices required to balance the Federal budget, keep it
balanced on a sustainable basis, and strategically deploy any
budget surpluses that develop to help prepare for the fiscal,
economic and demographic challenges that will occur as the
population becomes sharply older in the coming decades.
I am tempted to just say that I associate myself with the
remarks of Mr. Hamilton and shut up, because he said a lot of
what I want to reiterate about the potential benefits of going
to a biennial budgeting system. It is easy to forget that just
10 years ago the budget was mired in large and growing
deficits, and the budget process was appropriately geared
towards eliminating those deficits.
With the budget caps and, we would reiterate, the
committee's endorsement of maintaining budget caps--with budget
caps, with the pay-as-you-go limitation on mandatory spending
and revenues, those budget process reforms have helped us to
achieve the more favorable fiscal climate that we find
ourselves in now.
The lesson to be learned from the overall success of the
BEA is that budget process reform, while not everything,
certainly can be an important tool in helping to achieve
strategic long-term goals.
So if you look forward now and say, what is our new
challenge, you see the retirement of the baby boomer
generation; overall demographics as people are living longer;
and the challenges ahead for Social Security, Medicare and
Medicaid. It is not just entitlement programs--inevitably we
are going to have spend more on those programs with the aging
of the population. But it will put pressure on the
discretionary side of the budget as well. It will put pressure
on revenues. That means it is all the more important for you as
policy-makers to make wise decisions about committing Federal
resources.
The promise of biennial budgeting in that regard is that it
hopefully would free up more time for you to take a more long-
term view of things and not be bogged down in the annual year-
to-year fights over budget resolutions and appropriations
bills. While no amount of process reform can substitute for the
hard policy choices you face, we do believe that moving to a
biennial budget would help shift the emphasis from the
immediate and often repetitious battles to the broader
questions of strategic planning, oversight, and reform.
Let me make a couple of points about the process of
biennial budgeting and how it fits in. First of all, if you
look at it, it makes sense from the overall view of the cycles
of Congress. You are on a 2-year cycle, so it makes sense to
come in the first year of the 2-year cycle and adopt a budget
resolution that in some ways sets out your priorities, in some
ways, I guess, responds to the President's priorities. And that
becomes the tool for the political statement of that Congress.
And then hopefully in the second session, you could do the
oversight work and make sure to monitor how your plan was
working.
I would also reiterate what Mr. Frenzel said. Frankly, one
of the attractions for the Concord Coalition is if you have a
biennial cycle, hopefully it would lessen the opportunity for
fiscal irresponsibility, we might say. I think if you try to do
it 1 year--the problem with moving to a biennial cycle is,
might you get involved in second-year supplementals that would
be so large and cumbersome as to defeat the whole purpose. That
is the downside of moving to biennial budgeting, and that would
have to be addressed in some way. Some sort of procedural
mechanism would have to be in place to guard against that. But
hopefully in having a 2-year cycle, you would be able to spend
more time on oversight.
Now, granted, as Mr. Hamilton and others have said, the
work of oversight is painstaking. It is not as immediately
rewarding as appropriating. And, I don't know if a lot of
process reform will be guaranteed to take place or that it will
be any more thorough than it is now, but I think it would
provide you the opportunity for that oversight. And, frankly,
you have heard from a lot of experts in the three hearings. I
would like to suggest that you are the final experts as to
whether or not biennial budgeting would free up more time for
you. You know what your time constraints are and what your time
pressures are. We can only guess. So while I am happy to say
from the Concord Coalition's point of view we think it would
free up more time, in the ultimate judgment, it is really
yours, and if a sufficient number of Members of Congress think
it would free up more time, we are prepared to take you at your
word.
Let me just conclude the remarks by saying that now that
the budget process need not be focused exclusively on deficit
reduction, you do have a unique opportunity to do some weeding
out, modernization and updating of government programs before
the retirement pressures of the baby boomers hit. So we have a
narrow window of opportunity here. Both the GAO and the CBO
have recently reminded all of us about the--not only the fiscal
pressures, but the need to do some more extensive government
oversight. CBO always has their cookbook of options, which they
just came out with last week, and so if biennial budgeting
gives you more time to consider those long-term options, the
better.
And finally, let me just reiterate that in the process, the
key is making the second year work. The key is beginning to get
everything done in the first year, including the reconciliation
bill, all the appropriations bills, and having some sort of
orderly second year corrections, review.
I don't know whether it is the President who sends up a
corrections bill and the Budget Committees deals with it. I
think there is an opportunity, though. I don't think biennial
budgeting needs to result in a flood of supplementals. I think
there is an opportunity perhaps in conjunction with some of the
other improvements in the budget process reform that were
recommended in H.R. 853, which we supported, to bring the
emergency spending loophole under control and to focus maybe on
one big supplemental in the second year. And so it would be an
orderly thing and not 13 separate minisupplementals which could
easily get out of hand, and then the whole thing would not be
worth doing.
The Chairman. Thank you very much.
[The prepared statement of Mr. Bixby follows:]
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The Chairman. Mr. Horney.
STATEMENT OF JIM HORNEY
Mr. Horney. Thank you, Mr. Chairman, Mr. Linder. I
appreciate the opportunity to testify before the committee
today. The Center on Budget and Policy Priorities is a
nonprofit policy institute that works on an array of policy
issues with particular interest in matters of fiscal policy,
and policy impacts on low and moderate income families. Along
with my written statement, I would like to submit for the
record a paper on biennial budgeting, written by Bob
Greenstein, the Executive Director of the Center.
The Chairman. Without objection it will be included in the
record.
[The information follows:]
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Mr. Horney. That paper is a slight revision of the paper
that was published last March before I joined the Center. I am
in complete agreement with all the points in it, including its
conclusion that on balance, the disadvantages of biennial
budgeting are likely to outweigh the advantages, but rather
than go through the various arguments made in that paper, many
of which have been addressed by other people testifying here
today and in your previous hearings, I want to focus on one
particular issue of biennial budgeting that I am particularly
familiar with. That is the likelihood that the budget
projections will change dramatically from the time that
Congress begins considering a 2-year budget and the time that
the second year of that cycle is actually completed.
For more than 7 years before I joined the Center staff last
July I worked at the Congressional Budget Office. At CBO I was
in charge of the unit with responsibility for coordinating the
baseline budget projections. In that position I could hardly
fail to be struck by how dramatically those projections changed
from time to time. I was responsible every 6 months or so for
trying to explain why the projections of the deficit or surplus
had changed substantially in just a few months. I firmly
believe that those changes occurred not because CBO wasn't
doing its job properly, but instead because that the Federal
budget and the United States economy is so large and so
complicated and so dynamic that no person or organization will
ever be able to project outcomes with any degree of certainty.
The very best estimates are going to be off.
For example, since last March CBO has increased the
estimate of surplus for fiscal Year 2000 by $84 billion. It has
increased the estimate of the surplus for 2001 by $105 billion.
And lest you think that based on the record of the last few
years that budget projections always get better, as recently as
the early nineties we had a long period where the projections
continuously were getting worse. For instance, from March 1990
to March 1991 CBO increased its projection of the deficit for
fiscal year 1991 by $181 billion and its projection of the
deficit for the following year by $238 billion.
Unfortunately such large changes are not unique. CBO had a
very interesting chapter in the economic and budget outlook
they published just this last January in which, among other
things, they analyzed the record of the budget projections over
the last 14 years. Basically they took the difference between
the projected deficits and the actual outcomes for 1986 through
fiscal year 1999 and took the average of the errors, absolute
average of the errors, meaning they didn't take into account
whether the estimate was too high or too low because they would
average out and they would not be terribly far off. Based on
that, looking at the absolute average, the average absolute
error over that period for projections of the deficit for the
budget year, that is the year that starts on October first and
the year the projections were actually made, the average error
equaled 1.1 percent of GDP. Based on their current economic
forecast, the average error for 2001 would be $112 billion.
For the second year--the first outyear, the year after the
budget year--the error is even larger. It is equal to 1.6
percent of GDP, again based on the current estimate that is
$170 billion.
So that means that if CBO's current projection for surplus
for fiscal year 2002 is as accurate as projections have been on
average for the last 14 years, you should expect that the
surplus will be either $170 billion higher or $170 billion
lower than the $212 billion that CBO has projected for 2002.
This is not intended as a criticism of CBO, particularly
since I was at least partially responsible for some of those
projections that turned out so wrong. It is simply to indicate
that projecting budget outcomes is incredibly uncertain. The
best estimates are going to be off by many billions of dollars.
Congress cannot do anything about the uncertainty of the
budget estimates but it can decide in structuring a budget
process how to deal with that uncertainty, and I think it is
reasonable to ask whether locking in a budget plan for 2 years
is the appropriate response in the face of such uncertainty.
Members of Congress often argue that the Federal Government
should be run more like a business. Businesses today I think
you could argue are facing more uncertainty than they ever
have. Who, for instance, could have imagined just a few years
ago the challenges and the opportunities that the Internet is
presenting for today's businesses. But how are businesses
responding to this increase in uncertainty? They are responding
by becoming more flexible and responding more rapidly to
changes in their environment, not by locking themselves into a
plan rigidly and not changing that when they need to.
Can you imagine a CEO today going to his stockholders and
saying in the face of the dynamic economy that we are facing
right now, "I think the best thing to do for this company is to
lock us into a business plan for 2 years, spend a year trying
to decide whether that business plan is working and only then
consider significant revisions to that budget plan?"
I think there are good reasons why Congress shouldn't
update the Federal budget as often as many businesses update
their business plans, but I think it is hard for me to believe
that it is best for the Congress to respond to changing budget
situations and the changing needs of American citizens only
every 2 years.
Now, of course, all of the major biennial budget proposals
allow for modifications of the budget instead of a year, but if
those modifications become routine and you end up spending
almost as much time in the second year on revising the budget
as was spent on the budget in the first, you won't get any of
the promised benefits--more time for oversight and more
thoughtful consideration of long term problems. So you wouldn't
get the benefits.
At the same time, you are also likely to get budget
outcomes that may not be as good because more of the budget
decisions would be made in an ad hoc fashion rather than part
of a thorough structured analysis of the budget. Frustration in
Members of Congress with the budget process is completely
understandable. But I am afraid that biennial budgeting would
do nothing to ease that frustration and could, in fact, lead to
budget outcomes that would be less desirable.
Thank you very much.
[The prepared statement of Mr. Horney follows:]
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The Chairman. Thank you very much. We appreciate your
testimony and the time that you have put into this. I don't
have any particular questions, although I would like to ask all
of you again that you accept written questions that will come
from the committee. We have one more panel that we are hoping
to have considered before we go to our teleconferencing
testimony from Mr. Panetta.
Mr. Linder, do you have any questions?
Mr. Linder. Just one. Which reforms, process reforms, were
turned around. Which ones?
Mr. Bixby. Specifically I think the idea of having caps on
discretionary spending and the pay as you go limitation on
mandatory programs and revenues certainly helped control
spending.
Mr. Linder. We broke those caps. In fact, we have broken
the caps every year since Gramm-Rudman I, Gramm-Rudman II, and
the 1990 agreements.
Mr. Bixby. Technically, the caps aren't broken because of
emergency spending, but I certainly agree and have been quite
critical of the emergency spending loophole which really didn't
get out of hand until the last 2 years. In the mid-1990s the
caps had the effect of keeping spending down even if they
weren't strictly adhered to. The last 2 years I think the caps
got unrealistically low, so there are a lot of emergency
loopholes, and I think that is one of the keys, and I think Jim
and I would agree on this. The key if you are going to do the
biennial budgeting is to use realistic assumptions about
discretionary spending so that in the second year you don't
have to do, you know, outside supplementals.
Mr. Linder. Thank you. Thank you, Mr. Chairman.
Mr. Frenzel. Mr. Chairman, might I comment? You are dead
right, we busted caps, we busted Gramm-Rudman. When it didn't
work, we made Gramm-Rudman II. We have invented all sorts of
things to restrict spending, and they haven't worked. The only
thing that has worked has been the caps beginning with BEA 90.
While they may not have done everything you and I would have
liked them to do they at least made Congress think a little bit
about exceding them. Last year they didn't think quite hard
enough I am afraid, but nevertheless I think the caps have some
effectiveness and should be part of the system.
Mr. Chairman, in light of a comment on the panel, would you
permit Ms. Wait to make a statement, a very short one.
The Chairman. Surely.
Ms. Wait. I just wanted to refer to Mr. Horney's argument
that you shouldn't have a biennial budget process because it
could interfere with fine-tuning to adjust to changes in
economics and budget outcomes. I would like to associate myself
with Alice Rivlin in this regard. Alice has written that budget
forecasts and economic forecasts are kind of like weather
forecasts. We can look out the window and we know what the
weather is like today. We can predict with some certainty what
it is going to be tomorrow, and over the long haul we can
predict business cycles will occur though we can't predict them
with the kind of certainty we would like any more than long
range weather forecasts are dependable.
But Alice also has written, that it is folly to think we
can or should fine-tune Federal fiscal policy to respond to
relatively small changes in the overall economy and in budget
outcomes. As big as $170 billion sounds you are talking about
changes at the margin equal to small percents of GDP that
simply don't merit constructive action by Congress to change
fiscal policy. If biennial budgeting discourages that, we think
it would be a very good thing.
Mr. Horney. If I could add just one thing, I agree
completely with the point that the Congressional budget is not
an effective tool of fiscal policy as far as affecting economic
cycles. I think the Federal Reserve is much more effective, but
I do think that large changes in the projected spending and
projected revenues should be taken into consideration in
policy, and I can certainly tell you that many Members of
Congress feel that way because we got phone calls weekly at CBO
saying "how have things changed since your last projection."
The other thing is these changes occur because revenue
projections change and projections of particular programs
change. Medicare is a good example. There has been a dramatic
change in the rate of spending there. I could question whether
the response of Congress last year was appropriate, but it is
certain that many Members of Congress thought that the dramatic
slowdown in the rate of spending in Medicare warranted some
congressional action.
So I may not agree with all of the decisions Congress may
make, but I do think it is important to take those things into
consideration.
The Chairman. Thank you all very much again. I ask that you
accept written questions we will be submitting from the
committee, and wonderful to see a former colleague Mr. Frenzel
here.
Mr. Frenzel. Thank you, Mr. Chairman. You and your
committee's dedication to making the Congress work better is
greatly appreciated.
The Chairman. Thank you very much, Bill.
Our last panel consists of Dr. Martin Regalia, the Vice
President and Chief Economist of the U.S. Chamber of Commerce
and Ronald Snell, Economic and Fiscal Division Director From
the National Conference of State Legislatures. Gentlemen, it is
nice to see you and please feel free to offer a summary.
I say we are dealing with somewhat of a time constraint
because we are trying to hook up our video to California where
we are going to be hearing from Mr. Panetta, so I hate to
impose that kind of limitation on you, but I hope you can
extend that. Thank you very much.
STATEMENTS OF DR. MARTIN REGALIA, THE VICE PRESIDENT AND CHIEF
ECONOMIST, U.S. CHAMBER OF COMMERCE; AND RONALD SNELL, ECONOMIC
AND FISCAL DIVISION DIRECTOR, NATIONAL CONFERENCE OF STATE
LEGISLATURES
STATEMENT OF DR. MARTIN REGALIA
Mr. Regalia. Thank you, Mr. Chairman. My name is Martin
Regalia. I am the Vice President and Chief Economist for the
U.S. Chamber of Commerce, and we appreciate the opportunity to
testify today, and I ask that my full statement be in the
record.
The Chairman. Without objection it will be included.
Mr. Regalia. I will summarize it quickly. The existing
congressional budget process is overly time consuming and often
unable to produce a budget in a timely fashion. The Chamber
believes that the adoption of a biennial budget cycle will
streamline the process, allow Congress to develop a workable
budget in a timely manner and make more time available for
congressional oversight.
The current process is fraught with problems. Deadlines are
repeatedly missed. The government regularly fails to enact all
individual appropriations bills to fully fund the government by
the beginning of the fiscal year. Even the multiple continuing
resolutions to keep the government in operation has become a
common place event, and this annual quandary does not serve
anyone of any party or the American public.
Resources are wasted on repeating the budgetary process
each year. Immense amounts of time and manpower required for
budgetary preparation, review, submission and legislation, and
this in turn siphons these valuable and limited resources away
from the task of managing and adjusting existing programs to
keep pace with today's changing times and from attending to
other nonbudgetary matters. The current process leaves too
little time for oversight and congressional oversight is vital
to maintaining the integrity of our country's fiscal health.
Adoption of a biennial budget system would allow the
President and the administration more time for management of
Federal programs and the Congress more time for programmatic
oversight over the course of the budget cycle. A biennial
budget would also promote better long term planning. Budgeting
for the longer term would entail greater uncertainties in
forecasting of revenues or projecting funding requirements of
agencies and programs. However, supplemental appropriations and
rescissions can compensate for these shortfalls as well as for
the need to adapt to changing economic and programmatic
conditions.
In conclusion, I would just say that adoption of a biennial
budget is a process that will improve the efficiency and
effectiveness of the Federal Government. We urge the Congress
and the administration to join together in enacting biennial
budget legislation, and we thank you for these hearings.
[The prepared statement of Mr. Regalia follows:]
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The Chairman. Thank you very much, Mr. Regalia. Mr. Snell.
STATEMENT OF RONALD SNELL
Mr. Snell. Mr. Chairman, Mr. Linder, thank you for the
opportunity to be here. I am a member of the staff of the
National Conference of State Legislatures. One of our primary
concerns is the continued vitality of the legislative
institution, and we feel that the examination you are making of
the budget process in Congress is essential to that vitality.
We applaud and thank you for your efforts.
I was asked to comment specifically on what lessons States'
experience with annual and biennial budgeting might have for
your study. You have heard a fair amount of evidence about the
structure of biennial budgeting in States, not only today but
in previous sessions, and you know that something less than
half the States have biennial budgets and something more than
half have annual budgets.
My point I think is that the experience of these States
leads to no conclusive lessons for your committee. The State
budget practices vary greatly amongst themselves. The
situations States face in the size of their budgets and the
structure of their processes varies not only within a State and
from year to year but amongst the States as well.
I will make five points quickly and be happy to answer any
questions. I would ask, Mr. Chairman, that my full statement be
part of the record.
The Chairman. Without objection.
Mr. Snell. My first point is that from the perspective of
State legislatures, annual and biennial budgeting systems work
equally well. That has been demonstrated by surveys done of
legislatures over the past 30 years. In response, secondly, to
a specific issue raised in this committee, States do not
demonstrate that biennial budgeting in and of itself
necessarily transfers authority to the executive branch, and I
would choose only one example to make that point.
Texas has a biennial budget. It is one of the 10 largest
States in population and in budgeting, and it is the
legislature with the greatest amount of legislative budget
discretion of any of the States. The Texas legislative budget
board essentially writes the budget for the State of Texas. It
administers the budget. It makes changes in the budget in the
off year when the legislature is not in session.
The third point I would make is that biennial budgeting
certainly creates the opportunity for long-term planning and
for legislative review of agency performance but State
experience in taking advantage of that opportunity is
definitely mixed. Again, to pick the example of Texas, the
Texas legislature is exemplary in its review of State agency
performance. But in other States, executive branch staff and
legislative staff report to us that legislative oversight is,
as far as they can tell, no different in biennial States than
from annual States.
My fourth point is that it is certainly true that biennial
budget-
ing can create a need for budget revisions and supplemental
appro-
priations in the second year of the biennium, but this is as
true for annual budgeting States as it is for biennial
budgeting States. The occasion arises due not to the process of
the budget but extraneous circumstances, the majority of them
being the fiscal conditions at the time.
My final point is that from the executive branch
perspective, biennial budgeting does improve the efficiency of
the budgeting process because it reduces the amount of time
that has to be spent from year to year in assembling the budget
and this is undoubtedly the reason that executive branch
officials in both annual and biennial budgeting States highly
recommend biennial budgeting. From a legislative perspective it
is not so certain that this is a valid statement in its favor.
Thank you, Mr. Chairman. I appreciate the opportunity to be
here.
[The prepared statement of Mr. Snell follows:]
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The Chairman. Thank you very much. Thanks to both of you
for your testimony. What is the relationship between the fact
that the Federal Government has an annual budget and the States
and the budget process of the States have.
Mr. Snell. It is not clear that there is any definite
relationship. It seems that States tended to shift to annual
budgeting in the 1950s and 1960s more because they were
shifting to annual sessions than because of the Federal budget
schedule. The issue of the Federal budget schedule that creates
greater issue for States is that our fiscal years do not
coincide, but that is an issue that I think States have come to
live with.
The Chairman. Thank you. And Mr. Regalia, as obviously the
Chamber of Commerce represents many businesses, large and small
I know very well, I was wondering if you could elaborate on the
point that biennial budgeting increases predictability and
stability for those served by Federal programs and those that
receive Federal money such as research grants and all this.
This is an argument that actually the chairman of the Interior
Appropriations Subcommittee Ralph Regula has made at very, very
great length, that going to the 2-year cycle will assist in
contracting and create a modicum of stability that does not
exist today.
Mr. Regalia. Well, I want to think when you look at Federal
programs and you look at Federal budgeting in general there is
a great difference between the private sector and the public
sector and the difference in the intent. I mean what you are
really looking at the Federal Government level is providing
public service, a public good in a way that is most efficient
and most effective. It is not some decision that a business
makes on the basis of an investment and a rate of return on
that investment. It is an entirely different process that
generates it.
I think what we are seeing is that if you have Federal
programs that understand their outlay schedule and their
appropriations over a 2-year cycle, that they don't get the
kind of end of year spend out that you see in many programs,
that you get a more reasoned approach to providing the service
and that you do tend to create some market efficiencies in the
first year because the administrators of those programs
understand that they have to keep a certain level of service
ongoing through the entire 2-year cycle.
So it is a different process than we see in businesses and
as a result I don't think the analogy between how businesses
balance their books or report their books and the budget of the
Federal Government or State entity or even a local entity I
don't think is a good comparison.
The Chairman. Mr. Linder.
Mr. Linder. I may be interested in submitting some
questions in writing to you on it. Thank you.
Thank you, Mr. Chairman.
The Chairman. Let me just ask before we conclude, Mr.
Regalia, we have had testimony clearly stated that biennial
budgeting makes more sense from an economic perspective and you
as an economist and a businessman might offer some comments on
that assertion that someone made.
Mr. Regalia. Well, I think that again when you look at the
Federal process and the point of spending at the Federal level
is to provide a certain level of public goods, and then it is
the financing job to figure out how to get the money and there
is really only a very limited place to do that. I mean you
either borrow it or you tax it and both of those come out of
the private sector. One has a bigger impact on savings, bigger
negative impact on savings than does the other. But when you
look at trying to impute a certain efficiency to that
expenditure process, I think you have to trust the manager of
the program to a certain extent, and I think managers do best
when they know what level of outlays they are trying to
provide, what level of outlays they are trying to mete out to
the recipients and what their budget is.
As a manager in both a company in the private sector and in
a trade association, which really doesn't use the same model, I
would much prefer to know what it is I am required to produce,
what it is I am supposed to be providing and give me my budget
and I will figure out the most efficient way to do that and we
will also make sure that I don't overspend in the first year,
when I know that I have to make the budget stretch for 2 years.
You will still have some of the spendout problems in the second
year, but you remove it for 1 year. I think that it just
provides managers in the programs with a better sense of what
their available resources are and what the requirements or what
our expectations are as to what they are going to provide.
Rather than having to go through kind of a Kabuki dance at the
end of every year by spending out the money they have, and
justify what they are going to do next year. If that is the
incentive we give them, managers are very good at providing
that.
The Chairman. We certainly found that to be the case for
many years. Let me just ask one final question for you, Mr.
Snell, and that has to do with the amazing disparity that
exists in the appropriations processes State by State. I
understand that a third of States have one appropriation bill
and yet Arkansas has 500 and there are 10 or 12 States that
have one or two measures, and I was wondering if you could
elaborate just a little bit on the appropriations processes as
they go around the country.
Mr. Snell. Thank you, Mr. Chairman, I think the greatest
single difference between the Federal and the State
appropriations process is that State governments, State
legislatures do not regularly use the authorization process
that is so much a part of money management in the Congress. Any
authorization process that occurs in State legislatures is at
the inception of a program when a program is statutorily
created and it isn't repeated after that. What States tend to
have is a combined authorization and appropriations process
that does not separate them into components. The number of
bills is a striking feature, but I think you would see in
States that use one omnibus appropriation bill that it is quite
similar to the result you would get if you pasted the 500
Arkansas bills end to end. The number of bills doesn't mean
that the process is more fragmented in Arkansas or more
consolidated in the State of Texas with the 2000-page
appropriations bill.
I say also that the process in States is as a rule a little
more centralized than it appears to me to be in Congress in the
sense that leadership in State chambers works very closely with
the chairs of State appropriations committees to divide
available funds and to watch the use of available funds in the
course of the process. Much less centralized attention is given
to the policy side of the decision making in State
legislatures. That is a fragmented matter.
And finally, I would say that legislatures echo the
practice in Congress, as I understand that, in that there is a
substantial gulf between the work of the policy committees and
the work of the fiscal committees of legislatures. Over the
past 20, 25 years there has been a steady fiscalization of the
policy-making process in State legislatures that is observable
in, I think, every State. Fundamental decision making has moved
to the budget or finance or ways and means committees.
The Chairman. Thank you very much. Thank you both very much
and again we will have written questions. We hope you will
respond to those and we look forward and appreciate your very
helpful insight.
Okay. We are now going to go to our final witness coming to
us all the way from beautiful Monterey, California. We are
happy to welcome my very good friend and former colleague. As I
said, he was the Director of Office Management and Budget,
Chairman of the Budget Committee, and White House Chief of
Staff and has what I think will be a very interesting and
helpful perspective. I will tell you, Leon, we have had our
colleague Lee Hamilton and three panels precede you on this
program and so you are our cleanup batter here, and we look
forward to your testimony. If you have prepared remarks, they
will appear in their entirety in the record, assuming you have
faxed them back here to us, if you haven't already, and we look
forward to the statement that you would like to offer us. Thank
you.
STATEMENT OF THE HON. LEON PANETTA, DIRECTOR OF THE PANETTA
INSTITUTE (via video conference)
Mr. Panetta. Mr. Chairman and members of the Rules
Committee, thank you for this opportunity to discuss biennial
budgeting. While I regret that I can't be there in person with
you, David, I appreciate the opportunity at least to try to do
this by video. Since I am here on the Monterey Peninsula I
think I have the better part of the deal on location.
As I mentioned to you, in my first term, when I was
Congressman for the 16th District in California, I believe it
was in the 95th Congress, 1978, I introduced the first biennial
budgeting bill in the House of Representatives, and I continued
to reintroduce that bill in subsequent years with well over 40
cosponsors. You might be interested to know that the range of
cosponsors went from people like Dick Gephardt and Al Gore to
David Stockman. So we had a very good cross section of both
Democrats and Republicans who supported those original biennial
budgeting bills.
I am pleased that now this year, Year 2000, the Committee
on Rules and hopefully the House and the Senate are seriously
considering this very important reform.
As you may know, there has been a number of studies on
various budget reforms over the years. I have participated in a
number of hearings both before the Budget Committee as well as
the Rules
Committee. There were reform task forces that were established
that looked at these issues under our former colleagues.
Congressman Butler Derrick had, as I recall, one task force.
Tony Beilenson headed up another task force, and I guess what I
would recommend to your staff is that they take the time to
analyze all of that previous good work because I think it will
give all of you a better sense of history on this proposal as
well as the viewpoints of the Members.
I think it suffices to say as you well know that one
Member's reform can be another Member's demise. Reform
proposals are often viewed as threats to the status quo and to
committee jurisdiction, but when the existing budget process is
not working effectively or efficiently I really don't think you
have any other alternative but to consider possible
improvement. The challenge for your committee is to determine
whether those reforms that the Congress considers will truly
improve the way you do the business of the people or whether
continuing crisis, as you have now in the budget process, is
the preferred alternative. I think that is the choice. You
either continue the kind of current crisis operation that you
have with regards to the budget or you try to improve the
process.
While the biennial budget is not going to resolve all of
the budget problems that people confront, I think at the very
least it will provide a more rational time frame for
responsible budgets. After all, establishing a process for
controlling decisions on expenditures and spending is why the
budget was put into place in the first instance.
The modern day budget process developed in the cauldron of
intrigue and concerns and disputes that eventually produced, as
you know, the Congressional Budget and Impoundment Control Act
of 1974. The principal goal of that legislation was to restrict
the President's ability to impound spending, but it was also
obvious to the Congress that it couldn't very well limit the
President's ability to try to control spending and not do
something to try to limit their own spending habits.
The original authors, people like Dick Boling, John Rhodes,
Ed Muskie, tried very hard to bring some order to the
Congressional decision making process. They were hamstrung by
the imperative of always having to try to protect all existing
centers of power, to try to make the new process appear as
benign as possible because you have all of these power centers
that were concerned about what the budget process would do to
them, but the drafters of the Budget Act knew that while it
would be a difficult time that they also recognized that
Congress had an obligation to the people to try to operate
within overall budget constraints.
The first budgets were the result of extensive
negotiations. When the Budget Act passed and the first budget,
I was around for some of those first budgets, they were the
result of long negotiations between the leadership and the key
chairmen and they were able to at least work out a negotiated
approach to trying to resolve budget differences, but as
deficits began to grow and multiply, it was obvious that
stronger steps had to be taken in terms of enforcement.
I give you one example, Mr. Chairman. I was chairman at the
time under Bob Giaimo when he was chairman of the House Budget
Committee. He made me chairman of the Reconciliation Task
Force. Reconciliation was the tool that was included in the
original Budget Act but was never used mainly because the
chairman and the leadership did not want to see any kind of
mandatory requirement passed in the form of reconciliation. It
wasn't until the early eighties that we used reconciliation for
the first time and it proved obviously to be a very important
tool in the budget process.
There was a constant dilemma about how do you try to
enforce the decisions that are made by the Congress, and what
we went through was a period when we engaged in a number of
budget summits and negotiations that really reflect a lot of
what is in the present budget process today and as a member of
the Budget Committee, as chairman of the Budget Committee, I
think I participated in almost every budget summit that was
held between the Congress and the administration at that time.
To give you a few examples, there was the Balanced Budget
and Emergency Deficit Control Act of 1985, basically that was
the Gramm-Rudman law, and what that did was it established
deficit reduction targets and a process of sequestration which
cuts across the board if those targets were not reached. As a
matter of fact, we today still have sequestration in place. If
certain targets aren't reached the administration can in fact
cut across the board.
1987, there was another budget agreement that was
negotiated, I was a part of that, between the Congress and the
Reagan administration that produced further deficit reduction
targets. The 1990 Omnibus Budget and Reconciliation Agreement
was a huge agreement, negotiated as you may recall, over a
summer. That was between the Congress and the Bush
administration, and it established two very important tools of
enforcement, discretionary caps and the pay as you go
requirement. The 1993 Omnibus Budget Reconciliation Act
extended those caps and the pay go requirements as did the 1997
Balanced Budget Act.
So for those that argue that somehow reforms don't make
sense or you shouldn't look at them, the reality is that over
the 20-year history of the budget process we have tried to make
constant changes in reforms to try to improve the process. I
have to tell you, that if you looked at the key reforms that
were put in place, particularly discretionary caps and the pay-
go requirements, there is no question in my mind that were it
not for those enforcement tools there would be no balanced
budget today because those were the tools that were needed to
enforce the targets that were established.
I think whatever you do with regards to 2-year budgets, I
would really strongly urge the Congress not to do anything that
would impact on discretionary caps and the pay-go requirement.
Those are very important tools. Don't get rid of them if you
want to maintain budget discipline.
While I would like to emphasize is that reforms alone can't
substitute obviously for the substantive decisions that have to
be made on budget policies. They can ensure that once those
decisions are made they will be effectively carried out. The
point is that reforms can make a difference I think to the
efficiency and effectiveness of the budget process, if they are
carefully designed and implemented.
As you well know, any reform is only as good as the
majority vote on the floor of the House. Since any requirement
can be waived by the Rules Committee if it is supported by a
majority vote, I think for any reform to succeed it must enjoy
the broad support of the leadership, key chairmen and ranking
members and a strong bipartisan cross section of both parties.
In addition, I don't have to remind you that there are no
silver bullets in the budget process. For as long as I can
remember there have always been Members that have tried to find
that one simple and elusive answer to all of the budget worries
that face the Congress. Whether it is a constitutional
amendment to balance the budget or a line item veto or the
Gramm-Rudman law, the reality is that the budget process is not
just simply going to be saved by a single legislative act.
The budget process is a legislative process, and in that
reality lies both its strength and its vulnerabilities. Nothing
can replace, and I think that that should be emphasized,
nothing can replace the fundamental trust between Members. That
is essential to making any budget process work effectively.
I had the good fortune to have good Members like Bill
Frenzel and Bill Gradison as my ranking members on the Budget
Committee. We enjoyed and maintained a relationship of trust
and confidence that no reform can replace. If somehow you can
restore that kind of personal trust in the budget process there
isn't a reform that you can enact that will not work, but in
the absence of that trust few, if any, reforms can succeed.
But I am assuming that there will be a better relationship
between the parties and the administration, and I believe that
the result, biennial budgeting, is one of those reforms that
makes very good sense for both the Congress and the executive
branch to adopt for the following reasons, and let me just
touch on the key points.
First of all, the present budget process is simply not
working. It is broken. It is driven by crisis. Each year the
budget resolution is delayed past the statutory deadline. The
resulting delays occur then in the appropriations process. When
a budget resolution is finally enacted, the targets often are
so unrealistic that the appropriators have to delay the larger
and more controversial appropriations bills until late in the
fiscal year. The results obviously are continuing resolutions
or several continuing resolutions until ultimately a negotiated
agreement is worked out between the Congress and the President.
The sad reality is that in a government split by parties,
crisis has become the key ingredient for forced budget
decisions. The result is that more and more decisions are
delayed well into the new fiscal year, and spending is already
occurring in many programs. Ongoing spending needs rather than
a careful evaluation of programs, let me repeat that, ongoing
spending needs rather than a careful evaluation of programs is
what drives decision making. While it may be too much to expect
that a 2-year budget cycle will eliminate all crises, and I am
not naive enough to believe that it will, in the very least it
can confine the larger budget battles to one year instead of
having them occur every year. And I have to tell you that
simply providing that ceasefire, that time, I think is
extremely important to providing perhaps a little better
stability and a better relationship when it comes to budget
negotiations.
Secondly, much better budget planning and management can
take place under a 2-year biennial budget. Too many budget
decisions by both the Congress and the administration are made
on a short-term basis rather than focusing on long-term funding
needs, crisis management approach to budgeting forces, ad hoc
spending decisions that are based not on the kind of long-term
planning that ought to be involved in deciding how we spend
taxpayers' dollars. The current process is very inefficient.
The task of budgeting consumes a great deal of time and energy
that could be better devoted to addressing programmatic issues
in the longer term and in a more in-depth perspective. Not only
is the Congress constantly in a crunch of making hit and miss
budget decisions on programs, the executive branch is caught up
in exactly the same problem.
During the months of September and October when Congress
and the administration are typically negotiating final
appropriations levels for the new year, the agencies and
departments of the executive branch are beginning the new
fiscal year operating under continuing resolutions while also
expending great amounts of time trying to figure out what the
spending levels will be for the next fiscal year. The problem
is that until final decisions are made on the current spending
year, it is impossible to determine what spending levels will
be made for the next fiscal year. So both the Congress and the
executive branch need the time to more carefully evaluate
current programs and plan and manage funding needs for existing
programs. Clearly a 2-year budget cycle will provide that
needed time.
Currently greater program oversight is needed by both the
Congress and the administration. I think the reality is that
very few committees, and certainly it was the case when I was
in the Congress and it was the case when I was in the
administration, not enough time is given to oversight of
existing programs that operate within the Federal Government.
Only when a scandal breaks out or a GAO audit appears that
there is a committee that takes the time to review existing
programs, and that is often too late. Most committees will work
on new authorizing legislation but give little attention to
thousands of programs that are currently in the Federal budget.
The additional year will allow the committee to spend the
required time reviewing the effectiveness of the programs that
spend somewhere between 1.4 and $1.8 trillion. In addition, the
various appropriations subcommittees, while they do their
annual reviews of programs under their jurisdiction, and I
commend them for that because that is their job, I think they
could do an even more careful job on hearings and studies if
they had an additional year to review programming.
My view right now is both the administration and the
Congress have fallen into a pattern each year where they repeat
the same act. They present pretty much the same testimony on
each program before the Appropriations Committee, same
questions are asked, the same favorite programs are funded. And
I don't think it would hurt either the members of the committee
or those testifying to be subject to greater scrutiny.
The same oversight responsibilities could also be
implemented within the executive branch. When I was Director of
the Office of Management and Budget, that agency is responsible
for reviewing the effectiveness of existing programs, but on a
year-to-year basis where you are constantly developing budgets
you don't have the time to really do the kinds of in-depth
reviews that need to be done with regards to existing programs.
Lastly, improved economic projections I think make 2-year
budgets much more realistic. The reality is that the current
state of economic and spending projections have improved
greatly. We have a pretty good sense of how much is going to be
spent over what period of time. As a matter of fact most
current budgets usually do 5-year projections or even 10-year
projections. While I am not saying that a 10-year projection is
that exact, it is to say that a 2-year projection I think is
well within the margin of error. You can predict pretty well
what a program can expend over a 2-year period, and I think we
have got the basis on which to know pretty well what a 2-year
budget would look like.
It is important for Congress and the administration again
to maintain obviously the right to make necessary adjustments
in that off year, but it is also important that revisions are
very limited and based on emergency needs. The last thing we
want to have happen is to have a huge supplemental covering all
13 appropriations bills appearing every other year. I think
that would destroy the 2-year budget process. I recognize there
will be a temptation to do that. That is one of the criticisms
of going to a 2-year budget, but both the President and the
leadership are going to have to ensure that any supplemental is
limited to essential revisions and emergencies.
As with all reforms, Mr. Chairman and members of the
committee, a biennial budget will take careful work and
preparation. Like any reform, biennial budgeting will not work
if the process either becomes too inflexible or too open ended.
For the process to work, the two branches will have to avoid
the extreme and find the proper balance under which the major
task of budgeting is carried out every 2 years. That balance
will require essential cooperation between the branches.
In addition, I would strongly recommend--I think my
colleague Jack Lew, Director of OMB, suggested this--that there
be an appropriate transition period before the Federal
Government and the Congress converts over to biennial
budgeting. It has got to be recognized that this reform will
constitute a very fundamental change in how the budget process
operates, and a conversion to biennial budgeting will have to
take into account the magnitude of the change that would be
required, both in terms of the need to make necessary
conforming changes to the laws as well as in terms of the need
for both the Congress and the executive branch to develop and
implement new practices for proposing, considering and enacting
2-year budgets.
I think a biennial budget built around a 2-year life of the
Congress offers a better way for Congress to commit itself to
continuing fiscal discipline and to better planning for the
coming years. The bottom line here is the present system is not
working, it just isn't. In the very least, this reform will
provide the time necessary to move forward towards a more
sound, effective and responsible budget.
Is there a risk involved in doing this? Of course there is.
But is it a risk worth taking considering the crisis that
currently surrounds the budget process, I believe it is, and
for those reasons I would therefore urge the committee to
support and the Congress to adopt a biennial budget process.
Thank you very much.
[The prepared statement of Mr. Panetta follows:]
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The Chairman. Thank you very much, Leon. That is very
helpful and you come before us with an extraordinarily unique
perspective obviously having served as chairman of the Budget
Committee and as Director of the Office of Management and
Budget, and I would like to take advantage of the very unique
and important experiences that you have had by just making some
comments and then raising a number of questions, and I will
just throw a few things out and let you expand on them if you
will.
For starters, one of the concerns that has been raised by
some of the opponents is that we would see a dramatic increase
in the number of supplemental appropriations bill. They believe
that would be a problem and I wondered if you might comment on
that.
Second, critics have also said--your most recent experience
has been the executive branch level so you are not concerned
about the prospect of ceding greater authority to the executive
branch. We have had testimony from Lee Hamilton this morning in
which he said in fact that he believed the opposite to be the
case, that biennial budgeting would enhance our abilities here
to have greater authority, but we would appreciate your
thoughts on that.
And having been at the OMB and having done your work as
Budget Committee chairman, there are some who argue that if we
were to go to a 2-year cycle that somehow agencies would be
less responsive than they are today under the annual cycle that
we have.
And then another point that you raised I would like you to
expand on if you could, and that is the question of the 2-year
projections and the fact that you are saying that they are
basically within the margin of error, and I wonder if you could
possibly elaborate a bit on that.
So I think that gives you enough to respond to. I see you
taking notes on those things.
Mr. Panetta. Thank you. I think the first issue that I
recall even in some of these first hearings we had on biennial
budgeting was the concern about whether or not there would be
additional supplementals that would be offered as a
consequence, and clearly there is that danger, unless both the
President and the Congress make very certain that supplementals
ought not to be presented unless they adhere to what I think
are pretty much the present guidelines.
Number one, that it should deal with emergency needs.
Obviously if there is a Kosovo or a Persian Gulf or some kind
of military contingency, then obviously that would demand a
supplemental, and if indeed there are disasters that take place
in the country, that too ought to provide a basis for
supplemental requests. But I would restrict the supplemental to
emergencies and those kinds of needs as opposed to simply using
the supplemental as a vehicle to increase spending in other
areas.
Now, to get that accomplished, as you know, both the
Congress and the President pretty much have to agree as to what
those guidelines will be. They can be abused. They can be
abused both by the President and by the Congress, but I think
if this is going to work there has to be an agreement that you
are not suddenly going to have additional supplementals
provided. I think there is
no need for more than one supplemental being offered in the off
year to try to meet any contingencies that are involved, and I
would limit--very frankly, I would limit any supplemental to
one proposal in the off year. I don't think there is a need to
do more than that.
So there are ways to try to limit that but clearly it is
going to take both the President and the Congress agreeing that
supplementals have to be limited to emergencies, they have to
be limited to urgencies that are deemed to be the case by both
the President and the Congress.
Secondly, on the greater authority, I have heard also the
criticism about ceding greater authority to the executive
branch. I don't believe that for a minute because I have to
tell you, the one thing that worries the hell out of an agency
head is having to appear before the Congress, not just on
spending requests because that has turned into kind of, you
know, an annual presentation where they go and say pretty much
the same testimony, and I have been on both sides of that. You
give the same testimony, you present the same facts, you are
limited in time and you know that if you basically get through
those first few questions you are basically on your way to
getting your funding.
What would frighten the hell out of me as an agency head is
if I had to go up to Congress in an off year where that
committee spends an awful lot of time going through every
program under my jurisdiction and begins to question me about
how are these programs working, what are they doing, how are
they impacting, how much is being spent, how many bureaucrats
are involved in the implementation of these programs. That kind
of in-depth questioning process scares the hell out of anybody
in the executive branch, and I think it would provide greater
opportunity for those in Congress to be able to oversee
existing spending programs, to oversee each agency and I would
say that both, not only the appropriations committees which are
pretty expert in terms of dealing with the particular programs
under their jurisdiction, but I think the authorizing
committees ought to do the same thing very frankly.
Authorizing committees--I was on the Agriculture Committee
during the time I was in the Congress. I think we spent very
little time looking at the myriad of programs that were
established at the Agriculture Department. We were always
interested in developing new programs. We were always
interested in developing new spending but we spent very little
time, very frankly, looking at existing spending programs.
So I would say I do not believe that in any way changes the
balance, and if anything, I think it would provide Congress
greater leverage in terms of reviewing ongoing spending than
you have at the present time because right now this thing is so
confined and so price oriented that I would wager to say that
there are very few committees or members that really know
exactly how these programs are working out in the field.
One of my frustrations as Director of the Office of
Management and Budget was to be able to really look at a
program in terms of how is it affecting, for example, if it is
an education program or a program that involves children, how
were the children being impacted by this program, who was
involved with it, how was that program being handled, to go
into the field and actually look at how the programs work. Very
frankly there is too little of that today, and I think more
needs to be done in order to really be responsible how the
dollars are being used.
On the 2-year time frame, the reason I think that--I think
under the 2-year approach agencies, as I have said, would have
to be even more responsive to the Congress. Right now, as I
said, agencies have to make their presentation in a year and
they basically then dance off. If they had to face a year of
oversight with regard to the Congress--now, it does demand that
Congress is going to have to therefore focus a lot more on
oversight on existing programs and that the committee chairmen
are going to have to establish a lineup for that second year in
which they literally go through the agencies and through the
departments and through the programs and establish, you know, a
test of which programs they are going to review.
I think it will make the agencies even more responsive
because they will know that it isn't just the same old act
before the Appropriations Committee. It is going to be a much
more in-depth analysis by the committees that they have to
testify before.
And lastly, on the 2-year projection, my experience is
that--you know, there was a time when I was first chairman of
the Budget Committee when you hear all these projections and
try and to figure out what kind of spending would take place in
the program over a period of time, was the subject of a lot of
conjecture, but I can remember working with both the staff of
the CBO and OMB, sitting in a room and beginning to try to
bring together those kinds of projections. Now, there are still
some areas--I don't know whether it is still the case--for
example, in defense spending areas or some areas where there
hasn't been the concurrence with regards to projected spending
as there has been in most other areas, but I would wager to
say, you put CBO and OMB in one room, they can pretty much come
to agreement on what a projected spending target is going to
look like over a 2-year basis and almost any program in the
Federal Government, and because of that I would feel very
confident in enacting a 2-year budget because you have a very
good sense of what can be expended.
Incidentally, a 2-year budget would provide, I think, even
for the agencies and those departments a little more stability
in the way they then fund their programs, because as you know
right now on the year-to-year basis, the attitude still in the
administration is spend it all as fast as you can because you
don't want to wind up at the end of the year looking like you
have got a surplus of some kind, and I think a 2-year budget
would provide just the opposite incentive. It would make better
managers out of people in the Federal Government who have to
deal with that over a long period of time and be able to
control their assets and be able to control their expenditures
over that period of time. It would make a better manager.
The Chairman. Thank you, Leon. Let me just pose one final
question to you, which you touched on, and see if I could get
you to elaborate. When Jack Lew was here, the natural question
was raised about the prospect of a new President. We all know
that we are going to have a new administration coming next
year, and the question of a transition period is obviously out
there, and you are a supporter of the idea of a transition
period. Jack was uncertain as to exactly what that day--he said
it really couldn't go beyond April in his testimony, but we do
want to make sure that if we look at passing this legislation
this year, which I am hoping we are going to be able to do--
some have talked about having it not go into effect for the new
administration until the next year, certainly not imposing this
kind of tough double burden on them as they move into position.
So I wonder if you maybe could elaborate on what you would
envisage as the transition period that would be best for
dealing with this.
Mr. Panetta. Well, I think that when I went from the
Congress as chairman of the Budget Committee to Director of OMB
I had a pretty good sense of what the challenges would be and
what the time frames would be. I don't know that you can assume
that that kind of expertise is going to be present necessarily
if a new administration comes into place, and a new President
is going to want to take the time to kind of look at what the
budget process is all about and also to be able to begin to
define whatever that President's priorities are going to be,
and in addition to that, the Congress is going to have to make
the adjustment as well.
So I guess my view would be that you would do well to
consider probably not implementing this in the very first year
that a new President takes office. I would probably give it at
least a year or couple of years to make the transition and then
require that a 2-year budget be submitted by the
administration, either that next year or the third year for a
2-year period.
Now if you want to be able to, I think for a 2-year budget
to work you have got to basically follow the 2-year cycle of
the Congress. So it almost means that if you are not going to
do it the first year of the new Congress, then you probably
ought to transition this in probably either at the beginning of
the third year really of a new President. I don't know that you
can do it if you try to do it much earlier, although, again, it
isn't that complicated, Dave, to be able to do this. It really
isn't. If you work on budgets, the ability to then take an
annual budget and stretch it out, instead of just 1 year and
stretch it out over a 2-year period, you know, from a point of
view of the agencies and departments, I think that can be done.
So I guess probably the one way to try to do this
responsibly is to provide at least some transition period at
the beginning, but I would not extend it too far out because if
you do you are going to lose the impetus in passage of the 2-
year budget.
The Chairman. Well, Leon, let me say thank you very much.
We appreciate the perspective that you have offered and the
time and effort that you have put into what is very helpful,
prepared testimony and your response to the questions.
Let me say that we are going to have some written questions
that we would like you to respond to if you would be willing to
do that, and also, I will tell you that you look great and you
are in a California. I won't be there until tomorrow morning,
so I am jealous right now. But I am looking forward to being
back in our great State tomorrow.
Mr. Panetta. It is great weather and I guess our candidacy
was always subject to the question of leaving California.
The Chairman. I remember so well that early on in 1981
someone said to Ronald Reagan, well, would you like to move the
capital to California, and the response that people like you
and I would offer, no, please don't do that because we might
get serious opposition in our campaigns if we were to move the
capital to California. But let me thank you very much again for
your very thoughtful testimony and your fine service to the
country.
Mr. Panetta. My best to you and the other members of the
committee.
The Chairman. Thank you very much, Leon, and with that the
committee stands adjourned.
Additional material submitted for the record.
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[Whereupon, at 12:35 p.m., the committee was adjourned.]
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