“The American people and their elected representatives focus too little on the long-term implications of budget decisions we make, or avoid making, today,” David Wessel writes in the first chapter of Fixing Fiscal Myopia, a new report from the Bipartisan Policy Center (BPC). “From the way tables are presented in the president’s annual budget, to the dysfunction on Capitol Hill, to the less-than-edifying public debate over spending and taxes, we are fiscally short-sighted.”
The contentious budget battles of recent years have contributed to a decline in the public’s faith in the political system. To encourage a longer-term outlook, the BPC (under the direction of Bill Hoagland, former chief of staff of the Senate Budget Committee, and the leadership of Barry Anderson, former acting director of the Congressional Budget Office and assistant director of the Office of Management and Budget) assembled a team of budget and fiscal policy experts to propose actionable steps to reform the budget process and fix our “fiscal myopia.”
While the 22 members of that bipartisan team did not agree on all policy matters, they were united in four goals for reforming the budget process:
- Assuring sharper focus on the long-term budget outlook and its potential impact on our economic and fiscal future.
- Establishing a long-term budget planning framework to support the articulation, development, and implementation of long-term fiscal policy objectives.
- Creating ways to hold policymakers accountable for the long-term consequences of their action or inaction.
- Providing information about long-term budget trends in ways that are accessible to policymakers and the voting public.
To help achieve these goals, the contributors supported the following ideas:
- In light of predictable demographic trends (especially the aging of the U.S. population and its ramifications for future spending and revenues), it is extremely important to have an assessment of the long term in budgeting — which we define as 25 years, basically a generation.
- Uncertainty in long-term projections is inherent, but such projections do not have to be precisely accurate to be valuable, particularly those that reflect predictable demographic trends.
- Agreement on aggregate, long-term fiscal and economic goals is an essential step towards putting the federal budget on a sustainable trajectory.
- To encourage policymakers’ consideration of the long-term implications of budget decisions, long-term projections—especially for major entitlement programs and major revenue sources—should be included in the president’s budget, the CBO Budget Outlook, and the congressional budget resolution at the same time as ten-year estimates and projections are made.
- The president’s budget and the congressional budget resolution should describe, in language that ordinary citizens can understand, the long-term implications of the proposed budget and how they relate to the nation’s long-term fiscal and economic goals.
- To provide greater accountability for progress towards a more sustainable long-term fiscal future, the president’s Office of Management and Budget and the congressional budget committees should report annually on progress towards the nation’s long-term fiscal goals.
You can read the full report on BPC’s site or watch a panel discussion with the report’s authors.
Related: Understanding The Budget
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