Breaking Down the Broken Budget: Inside Congress’s Dysfunction and the Fight for Fiscal Transparency
Joe Bishop-Henchman
Transparent government it ain’t: last week, the Republican-controlled House and Democratic-controlled Senate approved a 1,050-page bill combining spending for six of the twelve appropriations bills. If they pass the other six this month, as expected, the budget for Fiscal Year 2024 will be complete, but five months late. The 2024 federal fiscal year started on October 1, 2023.
In fact, in the fifty years since the Congressional Budget Act of 1974 established the current federal budget process in use today (i.e., President submits budget proposal, Congress agrees on total revenue and spending, and then passes detailed appropriations bills), Congress has completed its budget on-time only four times: 1977, 1989, 1995, and 1997. Put another way, Congress hasn’t passed an on-time budget 91 percent of the time. It therefore regularly grapples with threatened or actual government shutdowns, temporary continuing resolutions, bewildering reconciliation rules, and last-minute omnibus bills totaling thousands of pages.
Congress getting its work done is important for more than just an arbitrary deadline. If Congress cannot pass a budget for federal programs, it hobbles its own ability to conduct oversight over those same programs. The prioritization and tough questioning about goals and impact that many have observed is lacking in our federal budget process would need months of focused attention to happen, but can’t if Congress is always stuck on keeping the whole thing open for another couple of months (or weeks). As one example, 1,115 federal programs spending $248 billion a year have technically expired because Congress has yet to get around to their periodic reauthorizations.
The result is a federal budget that is opaque, rife with duplicative programs, and lacking in any organized shift of resources from ineffective to effective programs. At the highest level, so-called mandatory spending such as entitlement programs are excluded from the process altogether, meaning that all the drama is actually over just under half the total budget. Small wonder that a goal like balancing the budget—which occurred routinely before 1970 but only in four years (1998 to 2001) since—seems impossible.
The federal budget process needs a big dose of transparency. Luckily, the first steps have already been taken.
Taxpayers Right-to-Know. Taxpayers Right-to-Know requires government agencies to describe and set evaluation criteria for each program they administer, including the cost of administration, expenses for services, the number of program beneficiaries, the number of federal employees and contract staff involved, and criteria for value and success. Championed by NTU and sponsored by Senator James Lankford (R-OK), Senator Maggie Hassan (D-NH), Rep. Tim Walberg (R-MI), and Rep. Jim Cooper (D-TN), Taxpayers Right-to-Know became law in December 2020, putting us one step closer to an elusive comprehensive inventory of all federal programs and their goals.
Apportionment transparency. Congress may pass the budget but executive agencies are the ones who spend the dollars, and any oversight process requires receipts—a verification that the money was in fact spent on the designated purpose. NTU pressed for a law on apportionment transparency to require the White House’s Office of Management and Budget (OMB) to show policymakers and the public how it makes spending decisions with the money Congress appropriates to federal agencies. Presidents of both parties have withheld this information from Congress, until apportionment transparency was inserted into the 2022 budget, and then made permanent.
Ended slushy “contingency” spending accounts. NTU contributed to the end of the slushy $160 billion Overseas Contingency Operations (OCO) account at the Pentagon, after years of research and advocacy pointing out how policymakers were abusing taxpayer dollars. Over more than a decade and three presidential administrations, the OCO account morphed from a contingency fund for the military’s overseas emergency needs to a slush fund for Pentagon programs that couldn’t fit under strict bipartisan spending caps. NTUF pointed out abuses in the account early and often and both the Biden Administration and Congress stopped funding OCO in 2021 and after.
These were initial steps. NTU Foundation’s Taxpayer Budget Office has a long-term goal of a transparent, honest, and sane federal budget, one that:
Ends the use of budget gimmicks. We must confront Congress’s increasing use of the “arbitrary sunset” and other gimmicks to rig budget scores. We are cataloging the budget gimmicks, explaining and tracing these abuses.
Shows the realistic budgetary impact of spending by including dynamic economic scoring and debt interest payments. An honest budget process would include the effects of tax and spending policies on the economy—positive or negative—and the added debt interest cost from new spending programs. Previous House leadership has adopted rules to exclude such facts, but in 2023, the incoming new House leadership rewrote the rules to require use of dynamic scoring, taking into account macroeconomic feedback, in major legislation.
Adopts spending reform and waste cutting ideas. We work across the political spectrum on our growing library of ready-to-go spending reforms. Federal credit and loan programs should adopt fair value accounting of actual risk, saving taxpayers billions in avoided bailouts. So-called “offsetting receipts” should be made apart of the budget process, shining a light on $700 billion a year in little understood federal revenue. NTUF is pushing efforts to encourage data sharing between Congress and executive agencies, to estimate savings from preventative health care, and to eliminate duplicative reports. A fiscal commission could study how to address the dire fiscal state of the federal budget.
The current federal budget process is not sane, not transparent, and above all, not working as it has run up the debt to an alarming level. NTU and our partners and supporters work for common-sense outcomes, building on the tremendous impact with rules changes so far that have saved hundreds of billions of dollars for American taxpayers. The hardest work is yet to come.
Joe Bishop-Henchman is Executive Vice President of the National Taxpayers Union Foundation.