Summary

In response to a congressional request, GAO studied the feasibility and the advisability of lengthening the federal budget cycle to a 2-year period. GAO reviewed states' experience with biennial budgeting, identified workload and timetable problems, and reviewed ways by which Congress could implement a biennial budget.

GAO found that effective controls and an early consensus on revenue estimates by executive and legislative branches are requirements that could be adapted to federal biennial budgeting. States reported that biennial budgeting allows more time for nonbudget activities and budget planning. However, accurate estimates of expenditures and revenues are difficult for the second year, and legislators perceive a loss of control over executive and state agencies. Congress is critical of the current budget process because it is too time consuming, has an unrealistic timetable, and lacks the means to ensure compliance. Congress has expressed concern that the current annual process affects the accuracy of budget estimates. GAO discussed provisions of four biennial budgeting bills and suggested that, if Congress were to decide to switch to the biennial budget process, it should concentrate budget actions in the first year of each new Congress, conduct oversight in the second year, and adopt a fiscal period beginning January 1 of even-numbered years. GAO further suggested that, apart from biennial budgeting, the federal government needs a modern financial management system that includes: (1) strengthened accounting, auditing, and reporting; (2) improved planning and programming; (3) a streamlined budget process; and (4) a systematic measurement of performance.