Budget Process

Proposals have been made to move the federal budget process from an annual to a biennial cycle. The goal would be (1) to streamline the congressional budget and reduce the time that Members of Congress must spend casting seemingly repetitive votes, (2) to allow agency officials to spend more time on financial management and analyses of program effectiveness rather than on budget preparations and justifications, and (3) to help agencies better manage their operations by providing funding certainty over a two-year period. This testimony discusses state experiences with biennial budgeting, the questions of periodicity and availability of funds, and technical and implementation issues that must be considered if the federal budget is switched to a biennial cycle.

GAO noted that: (1) the biennial bills before Congress would shift the entire budget cycle from annual to biennial; (2) the President would submit a budget every year; (3) authorizations would be for 2 years or longer; (4) budget resolutions would be adopted and appropriations enacted every 2 years; (5) Congress would be required to enact two 1-year appropriations; (6) all the biennial budget bills introduced in this Congress provide for this kind of cycle; (7) most extend the time provided for development of the budget resolution--moving it from April 15 to May 15--and hence shorten the time provided for appropriations action in the first session of a Congress; (8) experience with multiyear fiscal policy agreements and multiyear authorizations provides no evidence to suggest that budget agreements, authorizations, budget resolutions, and appropriations need to cover the same time period; (9) multiyear fiscal policy agreements and multiyear authorizations make a great deal of sense, but they do not require changing the appropriations decision cycle from annual to biennial; (10) if multiyear agreements on spending caps and enforcement regimes are continued, a biennial budget resolution may also be possible; (11) while biennial appropriations could save time for agencies and for Congress, they would result in a change in the nature of congressional control and oversight; (12) proposals to change the process should be considered partly on the basis of their effect on the relative balance of power in this debate; (13) similarly, any mechanisms developed to implement biennial budgeting could have an impact on the balance of power; (14) GAO previously supported the use of multiyear authorizations for federal programs; (15) these can help both Congress and the executive branch by providing a longer-term perspective within which a program may operate and appropriations be determined; (16) in considering whether the federal government should shift to a biennial budget, it is important to recognize the critical distinction between how often budget decisions are made and how long the spending authority provided for agency use is available; (17) for agency budget officials--both agency budget officers and program managers--the arguments for biennial budgeting may seem quite strong; and (18) if Congress decides to proceed with a change to a biennial budget cycle, including a biennial appropriations cycle--careful thought will need to be given to implementation issues.