House Budget Committee Chairman Tom Price said Wednesday he’s seeking a bipartisan agreement on what U.S. fiscal policy should try to accomplish as a critical component of his broader effort to overhaul congressional budget rules.
“Policymakers and the public at large need to reach consensus on a standard or set of standards against which we will measure our level of fiscal responsibility. Without such consensus, we lack a sound foundation upon which to build an effective budget process,” he said.
Price spoke at the outset of a House Budget Committee on budget process reforms, focusing on the need to set clear fiscal goals.
Price said he wants the budget process reform effort to be a “bipartisan project.”
“We all have a vested interest in a well-functioning budget process. Establishing and codifying a set of fiscal goals should help there be bipartisan success in this endeavor. After all, if we can agree on where we aim to go from a fiscal perspective, we already have something in common – even if there are real and meaningful disagreements about how we get there,” the House Budget panel chairman said.
Price said that for much of American history the basic goal of fiscal policy was to achieve a balanced federal budget.
He said some analysts have suggested seeking a balanced federal budget in which annual operating expenditures do not exceed revenues while still allowing for borrowing capital investments.
Price noted other fiscal experts have said there should be requirements that public debt not exceed a certain percentage of the economy or that spending be limited to a certain percentage of GDP.
“Whatever benchmark the country adopts, the integrity of the standard will require defining the terms and enforcing the goals – remaining vigilant against attempts to re-classify spending in order to go over, under, and around enforcement mechanisms,” he said.
The House Budget Committee received testimony from Douglas Holtz-Eakin, president of the American Action Forum; Maya MacGuineas, president of the Committee for a Responsible Federal Budget; and Harry Stein, director of fiscal policy at the Center for American Progress.
Holtz-Eakin told the House Budget panel a stronger budget process with clear goals would be a big step forward. But he said hard fiscal choices still need to be made.
“Process reform, no matter how well intentioned or considered, is no substitute for the actual reforms needed to address the looming debt crisis fueled by federal spending,” he said.
“No reform to the Budget Act or statutory spending cap or sequester can replace the needed debate on what should be a realistic or fair retirement age, or what is the proper federal role in seniors’ health care delivery. So while I commend any meaningful improvement to process reform, I would also caution this Committee’s membership that the clock is ticking on the need for that broader discussion,” he added.
MacGuineas, of the Committee for a Responsible Federal Budget, said the fiscal status quo is unacceptable.
She said the U.S.’s deficit and debt problems “are far from solved,” adding there are many advantages to getting the debt to more manageable levels.
“Having a fiscal goal is a key part of budgeting. A fiscal goal should be aggressive enough to help fix the problem but realistic enough to be achievable. A fiscal goal should be accompanied by procedures to achieve goal and stay on track. A fiscal goal should include enforcement mechanisms, which can be done through carrots or sticks,” she said.