Congressional Budget Reform: The Unanticipated Implications for Federal Policy Making

What have been the long-term impacts of the 1974 Congressional Budget and Impoundment Act? These 20-plus years have seen fundamental changes to the congressional budget process. Many of these changes have had profound-and unanticipated-changes for policy making. The author reviews these changes and discusses their implications. He finds three main developments that have not received adequate scrutiny. First, the reconciliation process, almost an afterthought in 1974, has in many ways become the most important part of the process because of its ability to centralize decision making and force committees to take action. Second, while the original Budget Act was neutral as to budget outcomes, subsequent changes, including Gramm-Rudman-Hollings in 1985 and the Budget Enforcement Act in 1990, have attempted to use the process to drive policy outcomes. Third, the expanded importance of budget enforcement has led to a great potential for distortions as policies are considered. These unanticipated changes are important to consider if and when the congressional budget process is revised again. In particular, history shows us that the process is better at informing budget choices than prescribing them.