12.11: Federal Budget Process
Reform the federal budget process. Other Information:
Reforming the Federal Budget Process. When Congress established its current budget process in 1974, the United States was
in debt by about a half-trillion dollars; it is now in debt over $14 trillion. Regrettably, for any proposal to deal with
the nation's fiscal problems, the budget process does little to help and in many ways impedes good and bold policy. For one
thing, its focus on just 10 years diverts lawmakers from dealing with the mounting long-term challenges, such as retirement
programs. For another, the lack of firm budget controls and enforcement procedures makes fiscal discipline very difficult.
Reforming the budget process is therefore an implicit part of reforming the budget itself. In the Heritage plan, we change
the budget process to impose enforceable caps to reduce total federal spending to 18.5 percent of GDP by 2021 (including entitlement
programs) and then keep spending at that level. Within those overall caps we also cap non-defense discretionary spending at
2.0 percent of GDP. Anti-poverty spending is also capped, as described above. These statutory restrictions on future spending
are to be no higher than the modern historical level of federal revenues. We also propose amending existing federal laws that
provide permanent or indefinite appropriations for federal agencies or programs (including and especially entitlement programs),
or that allow agencies or programs to spend funds they receive from fees or other sources, rather than depositing them in
the U.S. Treasury, so as to retrieve congressional control of spending for those agencies and programs. Within our specific
reforms for Medicare and Medicaid we also include a fixed budget amount for each program. To make the budget process more
visible, understandable, and accountable to the American people, we require Congress to estimate and publish the projected
cost over 75 years of any proposed policy or funding level for each significant federal program. Any major policy change should
also be scored over this long-term horizon. Finally, in addition to calculating the costs of proposed congressional actions
without regard to the response of the economy to those actions (known as "static" scoring), we require a parallel calculation
that takes account of that response (known as "dynamic" scoring) so as to make more practical and useful cost information
available to Congress when it decides whether to pursue the actions.
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