Chapter 11: Budget and Appropriations Reforms

“No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” – Article 1, Section 9, Clause 7, U.S. Constitution

In crafting our nation, the Framers separated the powers given to each branch of government to establish a true system of checks and balances. Congress was given the “power of the purse”, and controlled our nation’s entire annual budget and funding process for years. Eventually, the creation of an initial budget was moved from the legislative branch to the executive, establishing the system we still utilize today.    

Here’s how the process is supposed to work: The President submits a budget request to Congress for the following fiscal year in February.  The House and Senate then adopt a budget resolution with spending levels to guide the appropriations process. The 12 appropriations bills are then passed through committee and the House and Senate floor; differences are ironed out in conference committee, and a final bill is signed by the President before the new fiscal year begins on October 1.[280]

In reality, the budget and appropriations process is more akin to “Regular Disorder.”[281] In fact, one of the most drastic changes in congressional procedure over the past few decades is the departure from the Regular Order in the congressional budget and appropriations process.

Today, few if any appropriations bills are signed into law before the October 1 deadline. In fact, this process hasn’t been followed “by the book” in decades. Instead, Congress and the President often rely on omnibus legislation and continuing resolutions (CRs). When appropriations bills do pass, they are often delayed, and packaged together as one, large omnibus package, spanning several topics and including unrelated legislative additions known as “riders.” The process becomes overtly political, and often results in delays, which cause last-minute, midnight-hour negotiations. If these negotiations fail, the government runs out of funding, and shuts down. Employees are furloughed, and whole departments and agencies are closed to the public. As discussed in preceding chapters, Congress is failing to meet its Article One responsibilities—and this failure is epitomized by the deterioration of the budget and appropriations process.

The implications for this departure from regular order are increased dysfunction, budgetary inefficiencies, and less accountability in how taxpayer dollars are spent. Inaction and delay have led to extended shutdowns of major portions of the federal government—including the longest government shutdown in U.S. history from December 22, 2018 to January 25, 2019, right at the start of this Committee’s mandate.[282] These shutdowns, delays, and continuing resolutions make it difficult for federal agencies to effectively budget and plan ahead. And as outlined in Chapter 2, increased centralization of the legislative process means more funding bills are bypassing the Appropriations Committee and individual Member input.

The cause of the breakdown in the budget and appropriations process can be attributed to larger factors that are discussed throughout this report, including an expanding federal government and an increase in polarization. The increasing scope of the federal government’s responsibility and budget have made the budget process complex and bulky.[283] When coupled with polarization within and between the parties, the breakdown in the process has empowered political leaders to take greater charge in negotiating throughout the appropriations process.[284] Party leaders can bypass the Appropriations Committee to create large, omnibus legislation to appeal to the most Members possible. But even with congressional leaders leading the way, compromise is particularly difficult in the budget and appropriations process, as polarization has widened the gap in spending priorities both within and between the two parties.[285]

The recommendations discussed in this chapter target the underlying cause of delay and dysfunction in the budget and appropriations process by encouraging communication between the executive and legislative branches, and addressing the most common hurdles in the budgeting process. These recommendations were formed in close consultation with former Members of the Joint Select Committee on Budget and Appropriations Process Reform (JCBA) and build off the JCBA’s bicameral, bipartisan package in the 115th Congress to significantly reform the congressional budget process. In addition, the Committee was aided by the expertise of the Appropriations and Budget Committees and two Committee Members who also served on the JCBA: Chair Derek Kilmer and Rep. Rob Woodall.

The remainder of this chapter will discuss trends in the budget and appropriations process, and the resulting “Regular Disorder.” The chapter will then discuss work of the JCBA and the Committee’s resulting recommendation package to improve the budget and appropriations process. 

As the preceding chapter details, Congress’s responsibility to craft and control the federal budget is outlined in Article One of the U.S. Constitution. This includes the power to raise funds, through taxes, (Article I, Section 8) and then appropriate funds for the federal government (Article I, Section 9). How the budget process occurs in practice has since been detailed and codified through a series of statutes, congressional rules, and precedents.[286] Outlined below are some of the most notable congressional reforms that define today’s budget and appropriations process.

The Budget and Accounting Act of 1921, which required the President to submit his own budget request to Congress, marked the inclusion of the executive branch in the budget process. This statutory requirement provided the President with an opportunity to directly outline his budgetary preferences.[287] In 1974, Congress consolidated its own budget proposal under the Congressional Budget Act of 1974 (CBA). The CBA allows Congress to adopt a concurrent resolution on the budget. A concurrent resolution is not law—so the President cannot veto it. So, while it does not have a statutory effect, it does set the revenue and spending levels in points of order.[288] The Appropriations Committee relies on these allocations when crafting legislation. These two reforms also provided the President and Congress a way to reflect their own budget priorities, at times in contrast to one another. 

Another significant change to the budget process was the creation of mandatory spending laws, starting with Social Security in the 1930s. These spending requirements circumvented the larger budget and appropriations process. Today, these programs compromise the majority of all federal expenditures.[289] Other control statutes, starting in the 1980s, were also introduced in an attempt to control the federal deficit. Most recently in 2010, Congress reinstated the 1985 pay-as-you-go (PAYGO) procedures to limit any increase in the deficit via direct spending. Today, PAYGO rules in the House and Senate serve as points of order for certain legislation, often outside of the appropriations process.

Comparatively, the appropriations process has stayed relatively cut and dried throughout congressional history. The appropriations process, as intended, begins after the concurrent resolution on the budget is passed by Congress. In total, there are 12 appropriations bills, each funding the federal programs and activities under their jurisdiction. There are 12 corresponding appropriations subcommittees that research, develop, and pass their own individual bills. These bills are then passed by the full Appropriations Committee, and then the House and Senate (Figure 11.1). In addition to this chain of command, there are expected deadlines for the appropriations process in order to fully fund the government by the start of the fiscal year (October 1).[290]

Figure 11.1: “Regular Order” Budget and Appropriations Proces[291]

figure 11.1

In reality, the budget and appropriations process has widely departed from this idealistic,“regular order” approach. Delays and inaction plague every stage of the process—from the President’s budget submission, to congressional passage of appropriations bills. Figure 11.2 outlines delays in the submission of the President’s budget since 1923. As the figure shows, budget submissions were overwhelmingly on time until the late 1970s—in fact, the only delayed budget submission before that point was 1955, when President Eisenhower missed the deadline by a single day. But today, budget submissions are delayed by weeks, and in some cases, months.

Figure 11.2: Delays in Submission of the President’s Budget, 1924-2019

figure 11.2

Note: Each annual observation shows the number of days after the deadline that the President submitted his budget. Negative numbers are early submissions. The lighter bars are the first budgets of a new presidential administration. Source: McCarty, N. APSA Congressional Task Force, Appropriations Subcommittee.

The next step of the budget process requires Congress to present its budget resolution, which is then adopted in both chambers, and reconciled by a conference committee. This, too, has faced increasing delays and in some cases, is not passed at all. Since 1998, Congress has only completed its budget requirement half of the time. Trends in this sphere show a significant decline in the ability to clear the four hurdles for passage (House adoption, Senate adoption, House Agreement to conference report, Senate agreement to conference report). Figure 11.3 charts this decline.

Figure 11.3: Progress of Congressional Budget Resolutions, 1976-2019

figure 11.3

Note: The progress of each annual budget resolution is scored from zero to four. Adoption of an initial resolution by either chamber scores one point, and the adoption of a conference report by either chamber scores one point.

In addition to delays, the budget process has also become contentious in the Senate in particular. Because budget reconciliation bills can be written in a way to bypass the cloture requirement, they have been used as a vehicle for other, often controversial, legislative language.[292] This parliamentary maneuver offers the Senate Majority an expedited legislative process that is not susceptible to debate and provides a lower vote threshold.

Disappointing delays also regularly describe the appropriations process. Today, only about 10 percent of all appropriations bills are enacted prior to the beginning of the fiscal year.[293] When Congress is unable to pass an individual appropriations bill on time, it has two options: pass several appropriations bills in an omnibus package, or pass a continuing resolution (CR). As discussed in Chapter 2 (Bipartisanship), the use of omnibus legislation allows congressional leaders to form a package of bills that will receive bipartisan support. For appropriations, this often means pairing a more controversial appropriations bill (such as Health and Human Services) with one that will more easily receive bipartisan support (such as Department of Defense). Figure 11.4 illustrates the increased use of omnibus appropriating.

The implications of this, as has been discussed in other chapters, is that individual Members—and even the Appropriations Committee—are bypassed in the legislative process. Appropriations bills formed this way are often released with little time for Members to review, and are immensely long, making it difficult for Members and staff to review before a vote on the floor.[294]

Figure 11.4: Appropriations Coverage, per FY, 1998-2016

figure 11.4

Notes: Calculations by author[295]

In some years, Congress fails to pass a given appropriations bill or an omnibus appropriations bill on time (as illustrated in Figure 11.4). In those cases, to prevent a government shutdown, Congress turns to its other alternative: CRs. CRs are used to keep the government funded until either more appropriations bills or an omnibus bill is passed by Congress. And unfortunately, not only are there more CRs over time, but these CRs span far more days on average.[296] Congress is increasingly relying on CRs not only to patch funding gaps, but actually provide funding in its entirety. Figure 11.5 compares the number of continuing resolutions passed with the number of days these CRs cover.

Figure 11.5: Continuing Resolutions Introduced Throughout the Fiscal Year, FY 1998-2016

figure 11.5

Notes: Calculations by author[297]

The implications of these delays and subsequent long-term CRs reverberate throughout the federal government. When appropriations bills pass on time, prior to the start of the fiscal year, government agencies can plan their budgets accordingly. However, over time, the ongoing uncertainty of stop-gap funding measures has led to hiring freezes, recruitment problems, and negative effects on the morale of federal employees.[298] In some cases, national security has been placed at risk by the threat of funding loss or inconsistency.[299] Worst of all, the American taxpayer is left footing the bill.[300]

The delays and departures from “Regular Order” in the budget and appropriations process also has implications for the legislative activity and the relationships between Members of Congress. When faced with a tense, must-pass deadline, all other legislative activity is often put aside. But as Matthew Owens, Executive VP and VP for Federal Relations, Association of American Universities, testified to the Committee during the September 19, 2019 hearing on the Joint Select Committee’s findings, the responsibility to fix Congress’s broken budget and appropriations process relies on Congress itself:

“Namely, no single budget process reform or package of reforms can by itself remedy the prevailing dysfunction. Process reforms alone cannot force Congress to reach budget deals. Political will is needed. But process matters, and small or large changes can create ownership and buy in for new expectations and enormously for budgeting. Right now, expectations are low, and norms are broken. As was noted earlier, it has been more than 20 years since all appropriations bill were passed prior to the start of the fiscal year.”  
Matthew Owens, September 19, 2019

It’s with this responsibility in mind that The Joint Select Committee on Budget and Appropriations Process Reform (JCBA) was formed. Similar to this Committee, the JCBA was a bipartisan select committee. Unlike this Committee though, it was bicameral, and included bipartisan Members of the Senate. The JCBA’s mandate was specific: "significantly reform the budget and appropriations process."[301] JCBA co-chair, Rep. Steve Womack (AR-3) testified on the JCBA’s approach during the Select Committee’s September 19, 2019 hearing:

“We should focus on budget process, not budget outcomes. Outcomes are specific levels of funding or proposals to reduce the deficit by a certain amount. Process is how Congress determines how much to spend or how to determine what policies to enact to reduce the deficit. I would like to see us modernize our procedures which will hopefully set up Congress for success in the future, regardless of who happens to have the majority at any given time.”
Rep. Steve Womack, September 19, 2019

JCBA Members held several meetings over the course of its tenure and developed serious recommendations to reform the broken budget and appropriations process, return Congress to a system of Regular Order, and regain control of the power of the purse. While the JCBA was unsuccessful passing legislation, it crafted draft legislation that formed the foundation for the recommendations outlined below.[302] Relying on the extensive work of the JCBA, this Committee worked alongside former JCBA Members, as well as the House Appropriations and Budget Committees, to develop seven recommendations, which are detailed below.

Recommendations

Conclusion

The congressional budget and appropriations process is in dire need of reform. Delays, and in many cases, inaction have become commonplace. The result is increased delays throughout Congress and a strained relationship with the executive branch. Without a timely budget, appropriators are unable to plan ahead. Other, essential legislation is forced to the sidelines as Congress scrambles to fund the government through omnibus legislation and CRs. And without timely, individual appropriations bills, federal agencies and programs are crippled by the uncertainty of future funding.

Congress has a clear responsibility as outlined in Article One to allocate funds for the federal government—a responsibility that it is not currently meeting. The recommendations outlined in this chapter and formed with the JCBA provide solutions to return to a system of regular order. By improving communication and information sharing between the two branches, and exploring options like a biennial budget, Congress can remove the roadblocks that have encouraged delays and polarization.

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