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Setting the Record Straight: Lessons Learned from Budget Process Hearings

Jul 12, 2016

The House Budget Committee recently held a series of hearings to examine reforms to the congressional budget process. While Republicans’ goal was to find changes to the budget procedures that would solve our inability to put the budget on a sustainable path, the budget process did not cause the problem; the current budget impasse comes from deep differences on policy and Republican unwillingness to compromise. The hearings brought to light a number of other Republican myths about congressional budgeting.

Myth: Republicans are pushing bipartisan, neutral budget process changes.

  • Reality: Republicans’ budget process proposals only support their own extreme agenda.

Democrats are not averse to considering proposals that make the budget process work better, but the major proposals put forward by Republicans are all designed to support their agenda that disinvests in America’s future and our vital social safety net. For instance, they propose a Constitutional amendment to require a balanced budget, but since they refuse to consider new sources of revenue – like closing tax breaks that disproportionately benefit the wealthy – they make draconian austerity measures all but inevitable. They also propose freezing future appropriations in the baseline estimates, which would make it harder for Congress to make necessary investments in our future as priorities and costs evolve over time.

Myth: the congressional budget resolution only controls discretionary spending.

  • Reality: the resolution sets the government’s total budget: all spending and revenue.

The budget resolution controls the whole budget, not just discretionary spending. It establishes targets for the level of revenue coming in and spending going out of the federal government, including both mandatory spending (which accounts for two thirds of all spending) and discretionary appropriations. If Congress wants to cut or raise taxes, it sets the new level in the budget resolution and the taxing committees are then responsible for moving legislation to implement the new levels. Likewise, if Congress wants to cut or increase mandatory spending, the budget resolution sets those new levels.  The budget can even provide fast-track procedures for enacting the tax and spending legislation by including reconciliation instructions to the relevant authorizing committees. 

Myth: Congress can’t change mandatory spending.

  • Reality: Congress can – and does – change mandatory spending programs when it wants.

Mandatory spending automatically increases or decreases based on the number of eligible applicants and the levels they are entitled to receive. But Congress often changes the terms of mandatory spending programs – cutting Medicare reimbursements to doctors, expanding or contracting SNAP food benefits, adding new requirements to Medicaid, changing the terms of student loan interest rates, etc. The budget resolution can include reconciliation instructions that pave the way for legislation implementing these changes, or the changes can occur in authorizing legislation passed under regular order.