Committee Paper Analyzes Budget Process Reform Ideas

Author: Steve Winn
Share this page

The House Budget Committee released a paper last week examining potential alternative options for budgeting as part of an ongoing effort to propose ideas to overhaul the Congressional Budget Act of 1974.

The paper examines four alternative approaches: performance-based budgeting, portfolio budgeting, capital budgeting and zero-based budgeting.

Each of these alternatives is considered as a way to ensure that the budget process no longer assumes “the legitimacy of the previous year’s spending levels,” as each would require federal agencies to justify spending levels each year.

While the paper finds strengths with several of the alternative approaches, it warns of potential unintended consequences from some.

With capital budgeting in particular, the paper says, “proponents of higher spending would be tempted to get more programs classified as ‘investments’ to receive favorable budgetary treatment.”

Fiscal experts have long argued for some form of process reform as a way to introduce more long-term thinking into budget discussions.

However, many caution that at a time when discretionary spending relative to the economy is already on course to hit 53-year lows, process reform should lead to closer scrutiny of major mandatory spending programs like Social Security and Medicare.

External links:
Alternative Approaches to the Federal Budget (House Budget Committee)

Share this page

Related Issue Briefs