The Magazine

To Be Continued

The Democratic Congress's inadvertent budget reform.

Feb 26, 2007, Vol. 12, No. 23 • By JAMES C. CAPRETTA and YUVAL LEVIN
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This way of doing things is not only convoluted and inefficient, it also creates a natural breeding ground for earmarks and micromanagement. Members with a gift for manipulating the numerous (and often hidden) contortions of the process can tuck away a great number of spending requirements in the folds of the gargantuan bills. In the 2006 process, Congress passed more than 12,800 earmarks. Depending on who you ask, this year's continuing resolution has either completely eliminated earmarks or buried a modest number in the fine print.

In the coming months, as the government lives under this new CR without the sky falling, perhaps the time will come to ask what is wrong with making something like this--a trimmed-down process by which Congress each year formally amends the previous year's budget rather than starting from scratch--the new budgeting routine?

One potential disadvantage of a continuing resolution approach is a diminution of Congress's much-vaunted "power of the purse." But for too long, Congress has confused its power of the purse with the executive's authority to manage the daily operations of the government. The federal budget has become a tool of micromanagement, which neither improves the functioning of government nor serves the interests of its constituents. Earmarks and comically specific mandates to the executive are not the power of the purse. Congress, through its power to appropriate, can set priorities for the federal government and require the executive to serve those causes, but a process that hides key priorities beneath mountains of minutiae does not serve that purpose. A budget process that involves necessary changes, rather than a set of massive and indecipherable ex nihilo bills each year, would not reduce the power of the Congress to legislate changes in the way public money is spent. It would merely rein in the capacity of Congress to do so in the dark, and beyond its proper bounds.

Executive branch supremacists, meanwhile, could argue that such an approach might actually limit the president's sway, since his ability to use the veto would be constrained. Rather than confronting 11 separate bills, each of which he could threaten to veto for causes unique to that bill, he would now be confronted with a short list of amendments to the previous year's budget, which he would have to take whole or reject entirely. But in fact, the current broken budget process often produces the same result--only with a massive omnibus budget bill rather than a brief and manageable continuing resolution.

A further objection may be that CR-type budgeting would limit the ability of government to respond to changing circumstances. But by enacting exceptions and revisions, Congress could direct its attention to key national needs, and, by giving the executive more leeway in execution (combined, ideally, with more stringent oversight), such a process could actually improve the responsiveness of the federal budget to changing priorities--recognizing that such changes are in fact few and rare, but important.

Finally, fiscal conservatives might argue that building each year's budget on top of the previous year's would set in stone programs that ought to be reconsidered each year. But the current budget process already works that way. As Ronald Reagan once remarked, "a government bureau is the closest thing to eternal life we'll ever see on this earth." The key difference in a refined CR approach would be to lessen the room in the process for fraud and abuse, and for earmarks and hidden new spending. If Congress wished to eliminate a program, it could do so through an exception or rescission.

True, if Congress were in the habit of routinely cutting spending, a refined CR approach would not make sense. But since novelty in the budget almost always means new and greater spending, an approach that highlights and constrains the new should be welcome to fiscal conservatives. It would act as a natural restraint on the appropriations process, and would trim fat from a system that has grown morbidly obese.

An annual continuing resolution may not be ideal, but it would be significantly better than the process we have now. It could evolve into the most significant budget reform in decades and an enormous, if unintended, gift from the new Democratic Congress to the cause of budget discipline.

Yuval Levin and James C. Capretta are fellows at the Ethics and Public Policy Center.