Proposed Changes in Budget Process Would Be Counterproductive

The House Budget Committee will consider two bills tomorrow that would mark a step backward for the budget process.

• The Budget and Accounting Transparency Act (H.R. 1872) would add an extra amount to the recorded budgetary cost of federal credit programs, beyond their actual cost to the government, to reflect what private lenders would charge if they issued the loans and loan guarantees.  By artificially inflating federal lending costs, this change would disadvantage direct loans and loan guarantees compared to other federal programs and make cuts to them more likely, as we highlight in a new paper.  We explained the bill’s serious flaws last year in this in-depth analysis and this shorter paper.

• The Biennial Budgeting and Enhanced Oversight Act (H.R. 1869) would move the federal budget from an annual to a biennial cycle and make other changes in the budget process.  While proponents claim that biennial budgeting would lead to more thoughtful and deliberative budgeting, its disadvantages would outweigh its advantages, as we explain in this blog post and this analysis.