Budget Reforms Embodied in S. 101, the Honest Budget/Balanced Budget Act

GAO discussed the budget structure proposed in S. 101, the Honest Budget/Balanced Budget Act. GAO noted that: (1) S. 101 specifies that the U.S. budget would be a unified budget composed of a retirement funds budget, an operating budget, and a debt and interest budget; (2) S. 101 redefines the term deficit to be the amount by which the combined outlays of the operating and debt and interest budgets exceed their receipts and would not include retirement fund surpluses; (3) S. 101 provides for the creation of a trust fund for the reduction of the deficit and the public debt, and provides for enactment of dedicated cost-reduction taxes; (4) if the status of trust funds were shown separately from general government funds, the deficit would be easier to understand; (5) a distinction needs to made between regular government operations and federal enterprise-type activities, which are intended to be largely self-supporting and require flexibility for making investment and spending decisions; and (6) S. 101 requires the President to submit a balanced operating budget to Congress, except for the costs of deposit insurance, but does not prevent the President from submitting alternative proposals. GAO believes that: (1) the federal budget needs to include all costs and revenues related to federal activities, including unanticipated expenses, in measuring the deficit; and (2) merging most of the current trust fund surpluses into the general budget total hides the general fund deficit.