Time to Reform the Budget Process - TheFiscalTimes.com

Time to Reform the Budget Process - TheFiscalTimes.com by Bruce Bartlett.

I disagree with ending the President's budget and submit my own alternative.

While the President's budget is dead on arrival many years, the estimates from the agencies are absolutely essential. Exploiting this need for information is the key to passing a budget on time.

The budget process, which should be biennial, should begin with the President's transmission of a Joint Budget Resolution, which must be enacted and signed before detailed estimates are transmitted. I seem to recall that Bush actually did this one year. I seem to remember that it worked so well that Congress was not pleased. (CBO should by law be restricted from assisting appropriations committees on a detailed level until the JBR is passed).

The detailed budget submission must then reconcile to the JBR and if Congress does not act on any tax bill or appropriation, current law is automatically extended within the JBR baseline.

That is the less radical provision. The really radical provision is to do regional taxation and spending - although it would take a constitutional amendment for region-specific VAT rates. Each region would pay for discretionary spending within the region with a VAT and non-retirement social service spending with a regional expanded business income tax (including military retirement).

There would be a national VAT as well to fund purely national spending, like NIH and NASA, while an income surtax would fund net interest, debt repayment to the Social Security Trust fund and other trust fund repayments as well as overseas military deployments and other international operations (including third world IMF debt forgiveness).

The process would be similar to the one outlined above, with the president submitting national appropriations targets, revenue targets at the national and regional levels and regional appropriations aggregates. The Congress would enact a JBR along those lines and then the President and the Regional Vice Presidents would submit detailed budget numbers to the national and regional caucuses, which must be passed by the begining of the fiscal biennium.

Regions would have a balanced budget requirmeent, with automatic VAT and business income tax hikes and budget cuts occurring in the event of a projected deficit during the biennium, unless the national caucus acts to subsidize a region that is both out of budget balance and in recession.

The national government could continue to run deficits in time of war or recession, but must be balanced through adjustments to income and VAT rates and automatic budget cuts in times of peace and prosperity - although the goal would actually be debt reduction (and elimination of the Paulistas win the day and gain enough votes to "End the Fed" - although that could never happen unless the debt were entirely repaid).