Replace the Congressional Budget Act of 1974 with a Congressional Budget Act of 2025 to establish a new budgeting process.
Congress should pass a biennial (2-year) budget in every odd-numbered year before June 30th offering sufficient time before the following fiscal year (which begins in October of each year) for the administration to prepare to implement the budget. While adjustments can be made to the budget later by act of Congress, the budget would be set in a single budget bill encompassing all discretionary federal spending.
The House of Representatives would originate the bill between the Appropriations and Ways and Means Committees responsible for spending and revenue respectively. The single budget bill can be divided into the same 12 sections as the budget is currently divided into, but these would all be parts of a single budget bill. When these committees have reported the budget bill to the full House, amendments can be proposed on the floor when any ten (10) Representatives sign onto an amendment. The signatures of any fifty (50) Representatives should force a floor vote on any amendment, although the Speaker can allow a vote on amendments with fewer signatories at his/her discretion. Representatives should limited in the number of amendments to which they can sign on so as to prevent delaying the budget by presenting a litany of amendments and tying up the House’s time.
When the House has passed the Budget Bill (which should always be HR 1) the Senate will have its opportunity to weigh in.
In the 1940’s the free market journalist Henry Hazlitt proposed that the Senate should be permitted only to reduce or eliminate budget line items, but not increase them. A more flexible application of this idea would be that the Senate may adjust the budget to reflect the priorities of the Senate majority but may not alter the budget total. In other words, to increase spending in one area, they must propose cuts to another. The budget total could not be increased. Senators will have to be more careful in their proposals. As the Senate is a more collegial body with a long-term perspective, they should be able offer creative ideas on how to rearrange spending. Like the current reconciliation process the Cloture vote (60 votes) should not be applied to the budget, but individual Senators should be able to offer amendments and offer their objections to proposed changes that have to be considered on the floor so as to retain the influence of the Senate Minority.
Since Senators will not be able to add “earmarks” or frivolous spending to the budget, they will be more jealous of attempts by House members to do so and this contentious relationship should generally lead to reduced waste and unnecessary spending.
When the Senate has made its proposed changes, the Budget Bill should return to the House floor for amendment much as above. There should not be a conference committee on the budget as this offers too many opportunities for a small number of Representatives and Senators to advance their narrower personal agendas in the budget.
When the House and Senate have both agreed to the same version of the Budget Bill it will be sent to the President. The President will have the same Constitutionally prescribed options to sign the bill, allow it to come into law without his signature after ten (10) days, or veto the entire bill.
A new process similar to a “line item veto” can be introduced, however, wherein the President can “impound” all or part of specific line items in the budget while agreeing to the remainder of the Budget Bill. The rest of the bill would become law with the President’s signature or after the provided ten (10) days without a signature. The “impounded” line items would be sent back to the House with the President’s explanation of the impounded items much like a veto. Congress could then, with the support of a majority of the membership of each house in a rollcall vote, restore part or all of the impounded spending which would then be immediately enacted in law as if signed by the President. Congress could not increase any budget line item beyond the total presented to the President in the Budget Bill. They could only restore all or part of the original pre-impound amount.
The budgetary “line item veto” would retain Congress’ primary role as the branch of government responsible for spending while affording the President a stronger role in the budgetary process as the only officer answerable to the entire American electorate. The rollcall vote to restore the impounded spending will inform voters about the fiscal responsibility or irresponsibility of individual Senators and Representatives allowing voters to hold individual legislators accountable or the majority party at elections.
The budget act should also include a spending cap, similar to California’s one-time “Gann Cap.” Spending increases each year would be limited to the rate of inflation and half of the estimated annual growth of GDP in real terms. For example, if inflation was 3% and the GDP grew by 5%, Congress could increase spending in the budget by no more than 5.5%. Over time this will reduce the deficit and lead to budget surpluses. If there was negative GDP growth in any given fiscal year, Congress could only increase spending by the rate of inflation. The cap should never require a decrease in spending in any fiscal year, the worst case scenario should be that the budget remains unchanged, which can provide stability in hard economic times. Although other formulas could be applied to decrease spending over time or to allow greater flexibility.
Spending above the cap would require Congress to pass a separate resolution declaring an emergency and providing for an increase in spending specific to the stated emergency (i.e. a national security emergency, economic or social disaster, or civil strife, or other emergency. Again, voters can then evaluate the significance of the emergency and the nature of Congress’ proposed emergency spending at the next elections.