Blue Dog Blueprint for Fiscal Reform
Blue Dog Blueprint for Fiscal Reform
GOAL: Balance the budget within 10 years by reducing the debt-to-GDP ratio to 60 percent. An interim 5-year goal of primary budgetary balance would also be established.
OVER 10 YEARS
Statutory PAYGO – Requires the cumulative estimated impact of legislation affecting direct spending and revenues enacted each year to be deficit-neutral. Any increase in the deficit would be reduced through sequestration. No exemptions would be allowed for policy areas.
- Introduced by Representative Baron Hill (H.R. 2116); Status: Modified proposal signed into law.
Discretionary Spending Caps – Establishes statutory limits on non-security, discretionary spending. Levels would cut spending 2% for each of the next 3 years and then freeze spending in the next 2 years. The proposal would save an estimated $400 billion over the next 10 years.
- Introduced by Representatives Frank Kratovil and Travis Childers (H.R. 4871); Status: One-year of 2% cuts included in the FY11 Budget Enforcement Resolution.
Expedited Rescission – An expedited rescission process would be established to require a congressional up-or-down vote on any rescission proposals for which the president requested action.
- Introduced by Representative Walt Minnick (H.R. 4921); Status: Introduced in the House. Modified legislation transmitted by the Obama Administration and introduced by Chairman Spratt.
Deficit Reduction Trigger – In order to meet the 5 and 10 year deficit and debt targets, annual progress will need to be made. Each year, the Budget Committee would be required to report out budget reconciliation instructions by April 15. The instructions would direct the various committees of jurisdiction to reduce the deficit by an amount equivalent to the difference between CBO’s projections and the current year target. The proposal would save an estimated $350 billion over 5 years.
- Introduced by Representative Betsy Markey (H.R. 5008); Status: Introduced in the House. FY11 Budget Enforcement Resolution reflects interim fiscal target of deficits at 3% GDP by 2015.
Balanced Budget Amendment – The constitutional amendment would prohibit outlays from exceeding total receipts starting in 2020. The president would be directed to submit a balanced budget annually.
- Introduced by Representative Bobby Bright (H.J.Res. 78); Status: Introduced in the House.
BEYOND 10 YEARS
Annual Assessment of Long-Term Obligations – The budget resolution would be required to include a present-value measure of long-term entitlement obligations and special tax preferences (as reported annually by the Financial Report of the U.S. Government).
- Introduced by Representative Joe Donnelly (H.R. 4856); Status: Introduced in the House.
Bipartisan Fiscal Commission – Creates a 16-member panel to submit a report recommending changes that balance the long-term spending and revenue scenarios for the nation. If Congressional leaders fail to introduce their own proposal, expedited consideration of the SAFE Commission’s legislative proposal is required.
- Introduced by Representative Jim Cooper (H.R. 1557); Status: Presidentially appointed bipartisan fiscal commission currently meeting with the goal of reporting out recommendations by early December 2010.
BUDGET PROCESS REFORMS
Improper Payments – Improves transparency, prevents payment error, recovers overpayments, and holds agencies accountable for waste. Improper payments are estimated to total $98 billion annually.
- Introduced by Representative Patrick Murphy (H.R. 3393); Status: Passed by both the House and Senate.
Strengthen Program Integrity – Several federal programs are designed to eliminate waste, fraud and abuse. Research shows there’s a positive return on investment in these programs. The authorization levels for these programs would be increased.
- Introduced by Representative Kurt Schrader (H.R. 5363); Status: Introduced in the House. FY ’11 Budget Enforcement Resolution includes a down payment for program integrity initiatives.
Performance-based Budgeting – Requires annual assessments of federal agencies to determine the effectiveness of programs in meeting established goals and the quality of management. Agencies would be directed to develop improvement plans to address any issues.
- Introduced by Representative Henry Cuellar (H.R. 2142); Status: Passed with bipartisan support in the House.
Tax Code Analysis – Expands on the current Joint Committee on Taxation (JCT) annual report of tax expenditures – “spending through the tax code” or “tax loopholes” – to reflect the aggregate revenue lost and to evaluate and identify inefficient tax subsidies.
- Introduced by Representative Scott Murphy (H.R. 5291); Status: Introduced in the House. More limited study included as part of tax extenders package (H.R. 4213) passed by House.
Sunset Commission – An independent, bipartisan commission would be established to review federal programs that are permanently authorized and make recommendations for those that should be sunset. Congress would be required to vote on the commission’s recommendations and thus require such programs to be reauthorized in future years. (To be introduced)
- Introduced by Representatives Glenn Nye and Charlie Wilson (H.R. 5568); Status: Introduced in the House.
Audit Defense Spending – Requires an annual audit of the financial statements of the Department of Defense starting in FY17. Companion legislation to a bill introduced by Senators John McCain and Claire McCaskill. (To be introduced)
Executive Reorganization Authority – An independent, bipartisan commission would be established to recommend reorganizational changes to the federal government in order to eliminate duplication and inefficiency. The president would be provided with the authority to propose and gain fast-track consideration of changes in structures and responsibilities of federal agencies and programs. (To be introduced)
JCT Independence – To insulate JCT from political pressure in its expanded analyses, it is transitioned into an independent legislative branch agency modeled on the CBO. (To be introduced)
