Congressional Budget Process

The subcommittee met, pursuant to call, at 10:03 a.m. in room H-313, the Capitol, Hon. Porter J. Goss (chairman of the Subcommittee on Legislative and Budget Process) presiding.

Present: Representatives Goss, Dreier, Linder, Diaz-Balart, Solomon, and Hall.

OPENING STATEMENT OF HON. PORTER J. GOSS, CHAIRMAN OF THE SUBCOMMITTEE ON LEGISLATIVE AND BUDGET PROCESS

Mr. Goss. Good morning, ladies and gentlemen. The joint subcommittee meeting will come to order. This is a very special day, and it seems like we were here not so long ago on another very special day and it is for that reason that we have a somewhat lighter attendance than we had hoped.

Mr. Beilenson did want to be here and I think he will show up. We have some rules coming forward on the floor this morning that are going to require some of our members to be down there, and I think they will drift in and out. In any event, we are looking forward to the testimony, and we are very much committed to pursuing this subject before us today, which really involves the whole question of budget process and budget reform. This seems to me to be extremely appropriate. We are trying to do great things and if we don't have machinery that can help us do great things we aren't going to get very far.

Formally, the Subcommittee on Legislative and Budget Process and the Subcommittee on Rules and Organization of the House, chaired by David Dreier, my colleague from California, today begin the challenge of reviewing the congressional budget process.

The Rules Committee has jurisdiction over the procedures proscribed for the House in addressing the Nation's budget, as we all know. Under House Rule X, clause 3, the Rules Committee is expressly charged with reviewing and studying, on a continuing basis, the congressional budget process.

As such, today's hearing marks the beginning of our efforts to meet our oversight responsibilities in this historic 104th Congress. I would say that we have done some homework already. We have

had some informal briefings, and we are trying to at least understand all the acronyms and the alphabets involved, to say nothing of the numbers.

We clearly have a wealth of expertise in this committee on this important subject. We hope not to reinvent any wheels, but rather to build on what has been done in previous years in the context of the historic 104th Congress and our absolute commitment to bring balance to our Nation's budget.

David Dreier, the vice chairman of the Joint Committee on the Organization of Congress, also the vice chairman of the Rules Committee, also the chairman of one of the subcommittees here today

Mr. DREIER. I sound important.

Mr. Goss. He is a busy man-has spent countless hours in the last Congress reviewing-I think it should say countless days in the last Congress reviewing testimony and proposals on many issues involving the structure and workings of the House, including the budget process, and developing recommendations for reform. And so reform is very much one of the perspectives we proceed from.

In addition, our friend, Tony Beilenson, who I hope will show up soon, chaired an important bipartisan task force on the budget process in 1984, which made a major contribution to the evolution of our budget process.

Martin Frost and James Quillen have spent many years researching and studying these issues as well, and our committee chairman, Jerry Solomon, who has come in right on cue, has for years devoted his boundless energy to seeking meaningful ways to strengthen and improve our budget process to lead us to balance as soon as possible, most recently with a rather spectacular bill.

The most important thing we do around here is to manage the Nation's finances. The budget is the meat and potatoes of this place, some call it the pork and beans. I think we better stick with meat and potatoes, because that is what this is about. Many people have concluded that since the adoption of the 1974 Budget Act, we have indulged in far too much of the pork on that diet.

With this year's historic adoption of a budget blueprint for bringing our budget into balance, it is crucial that we make sure we have the most effective procedures in place to meet and maintain that goal, that is, the machinery. Unfortunately, too many Members and Americans looking at the workings of the current congressional budget process think it is like looking into a black hole.

Critics say it is too complicated, too cumbersome, and too much is out of our direct control. Members of Congress say that, too. There is general frustration and that is one of the reasons why we are here. We felt it important to begin with the large context to ensure that we understand where we have been so that we can more precisely chart where it is we want to go.

We have chosen three very broad questions to frame our starting point for this review today, mindful that the big picture will eventually lead us to examine specific proposals for reform. Certainly, the most frequently mentioned complaints about the process yield a host of suggestions for quote, "fixing the process," ranging from

some minor tinkering around the edges to dramatic overhaul of the system.

It is our intent to move from today's very broad discussion into a similar type of conversation with some of our highly knowledgeable House Members next week. We hope it will be next week; if not, shortly thereafter. If there appears to be interest in pursuing change, we would then proceed to a review of specific proposals.

For today, we have asked our witnesses to speak to three very broad questions, as I said. First, what are the objectives of the 1974 Congressional Budget Act. I guess that will be somewhat retrospective; which of those objectives are relevant in today's fiscal environment; and should the budget process be redesigned or will the tinkering around the edges suffice?

We are delighted to welcome our guests. We have a very majestic array, I think, of talent in front of us, and we appreciate them being here. Director O'Neill of the CBO, Susan Irving from GAO, and our friend and former colleague Bill Frenzel, now at Brookings, and Stephen Moore from Cato. We thank you all for coming, look forward to hearing your words of wisdom. I would now turn to Chairman Dreier, who will then turn to Chairman Solomon.

OPENING STATEMENT OF HON. DAVID DREIER, CHAIRMAN OF THE SUBCOMMITTEE ON RULES AND ORGANIZATION OF THE HOUSE

Mr. DREIER. Thank you very much, Mr. Chairman, Mr. Chairman, Mr. Chairman, and we all-our only regret is that we didn't call Bill Mr. Chairman, but we can call him Mr. Chairman now. Let me say that it is nice to be-we left these chairs 9 hours ago, and it is wonderful to be back this morning.

As you illustrated in your statement, Mr. Chairman, this is not the first time that our Rules Committee has attempted to either justify or overhaul the Congressional Budget Act, and it probably won't be the last. As you said, Tony Beilenson tried in the 1980's and our Joint Committee on the Organization of Congress looked extensively at the issue of budget process reform and several of our witnesses testified before that panel which had 37 hearings, Porter, and 243 witnesses.

Mr. Goss. I should have said months.

Mr. DREIER. Yes, right. But I have a sense that this time may be a little different. We passed a budget resolution taking us on a glide path to a balanced budget, and it was noted yesterday at our informal briefing that this is the first sincere effort to achieve a balanced budget since the Congressional Budget Act was adopted in 1974. Resolutions have been passed as was said by Mr. Keith, but clearly there is a sense that there is a real confidence in this

one.

We already are witnessing, however, the fact that the path to a balanced budget is rough and has many obstacles to it. In both a real and imaginary sense our colleagues will point to the budget process itself as one of those impediments to a balanced budget. I think part of the problem is that we have a layered process.

Instead of one coherent process, we have rules, procedures, and timetables stacked up one upon another, all established to address a particular problem at a particular point in history. Little of it

makes sense in today's dynamic fiscal and institutional environment, so I think we need to reevaluate the full process, and we also need to be prepared to respond to the criticisms that will inevitably arise as we attempt to make the budget resolution a reality. That is the purpose of this morning's hearing, and I, too, look forward to our witnesses.

I am sure that they will be able to make some sense of this process. I hope we will be able to work in a bipartisan way with Chairman Solomon, Chairman Goss, former Chairman Beilenson, and other members of the committee to make some sound and very rational recommendations for budget process reform, and I am happy to be now enveloped by two chairmen.

Mr. Goss. Mr. Solomon, Chairman Solomon.

Mr. DREIER. And a vice chairman.

Mr. Goss. And a vice chairman. We have been joined by Mr. Diaz-Balart of Florida, our colleague.

Mr. SOLOMON. It takes a couple of chairmen on either side of Mr. Dreier to keep him under control.

First, let me apologize for running off here in a few minutes, we have a second rule on the interior appropriations bill, and we have to make sure that runs smoothly today.

Mr. DREIER. You better stay here.

OPENING STATEMENT OF HON. GERALD B. H. SOLOMON,
CHAIRMAN OF THE COMMITTEE ON RULES

Mr. SOLOMON. But we will see. First, I want to commend the two subcommittee chairmen for holding the hearing, and we look forward to the testimony, and I want to thank certainly Dr. O'Neill for her work.

I have here in front of me a document called H.R. 1923, and it is 1,700 pages of scored budget spending cuts, and as I look down through the other witnesses, including the GAO, the Brookings Institute, Cato Institute, all of them were instrumental in providing us with many various recommendations that we can give in this bill to the appropriators and to other Members of Congress on just how we can go about bringing about some fiscal responsibility to this Federal Government. What we have done with this document, as you know, was made it the basis for our budget which the three of us voted for, that 5-year balanced budget, last year, this year, and the year before. We have given this to all the Members of Congress so they can use it for further cutting the unnecessary spending and restructuring the Federal Government, so I just want to thank all the witnesses for all of your input that helped us do that, particularly CBO, because it couldn't have validity if it was not scored properly, and it was a very difficult job, and we appreciate the great effort you put into it. Having said all that, I am going to go downstairs and will try to join you shortly thereafter. We thank all of you.

Mr. Goss. Thank you, Mr. Chairman. I hope you are able to report back a successful vote.

Lincoln, did you wish to say anything at the beginning of this? Mr. DIAZ-BALART. Unfortunately, I can't stay long, Mr. Chairman, but I wanted to come by for as long as I could, and I am here to learn. Thank you.

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Congressional Budget Process: Hearings Before the Subcommittee on ...