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Budget
Solutions:
NOTE: This projection assumes that
revenues increase gradually to 18.3 percent of GDP, the average level of
the past 30 years. Source- Congressional Budget Office23
As
the graph above illustrates, federal spending is projected to increase
dramatically above revenues collected, under current law, mainly due to
rapid increases in entitlement spending. Congress, through a set of
budget reforms, must take entitlements and the federal budget off
autopilot.24 This can only be done through bipartisan
cooperation, which seems to have eluded this congress.
Solutions:
Social Security Automatic
Triggers
Social security is one of the
largest contributing factors to future federal deficits. To take social
security off of autopilot, congress must enact rules that enforce
accountability and are not easily broken. One proposal is to create
automatic triggers that reduce Social Security outlays every time the
Social Security trustees forecast a long-term imbalance. There are many
ways to do this, including modest increases in the retirement age, and
indexing benefits to prices instead of wages above a certain minimum.25
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to Solutions
Medicare Funding Warnings
Medicare is also projected to be
a large contributor to the federal deficit in the coming years. One
proposed reform involves an automatic trigger. Each time Medicare
trustees report imbalances, or sound a ‘funding warning’ congress must
act to reduce benefits. A system like this is currently in place for
the new Medicare prescription drug bill, Plan B, but it doesn’t
necessarily require action. Accountability is the key. Medicare
Funding Warnings must initiate action by the president and
congress.
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Biennial Budget Process
Another proposed reform
completely changes the budget process from annual to biennial.
Supporters of a biennial budget process argue that a two-year budget
resolution adopted in the first year and overseen and evaluated in the
second allows congress more time to set spending priorities, and more
time for non-budget related duties. Others say that the biennial budget
process is not flexible enough- projections made in the first year that
effect spending in the second could be wrong.27
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Make the Budget
Resolution a Law
Making the budget resolution a
law would have a variety of effects on the current budget process.
First, it would force congress and the president to set their budget
priorities earlier. Also, if the budget resolution is a law, it is
easier to enforce budget rules that limit spending. There could be many
unintended effects, though. If congress and the president are
fundamentally at odds regarding spending priorities, the budget process
could be subject to veto and take even longer than the current process.
Congress would argue that a shift in power to the president over
budgetary matters is worse than the current system.28
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