Draft "Blue Dog" Democrats' Budget Enforcement Proposal

03/09/2004

1. Stop digging the hole deeper -- Reinstate budget enforcement rules

Reinstate paygo rules for all legislation which would increase the deficit.

• Reinstate PAYGO rules require that any legislation dealing with mandatory spending or revenues that would increase the deficit be paid for with offsetting changes in mandatory spending or revenues.

• A separate vote would be required in the House to waive the PAYGO requirements (instead of including a waiver of paygo rules as part of an omnibus tax bill)

• The bill would prevent budget gimmicks intended to circumvent PAYGO rules by prohibiting spending or tax legislation that delays costs outside of the five year window and prohibiting the use of “directed scorekeeping” in which legislation directs CBO to use certain assumptions to provide a more favorable budget estimate.

Establish discretionary spending limits

• Set discretionary spending limits for three years at the levels contained in the President’s budget. The cap would be on total discretionary spending, with flexibility to shift funds within the cap.

• Discretionary spending limits would be adjusted to reflect costs of highway reauthorization legislation if the increased costs are fully offset

• A separate vote would be required in the House to increase spending above the discretionary spending limits (instead of including an increase in spending limits as part of an omnibus appropriations bill)

• Establish criteria for emergency spending and require the President and appropriations committee to provide justifications for emergency spending based on the criteria. Allow for a separate vote to strike the emergency designation in a spending bill

2. Comparing reality to promises for enacted legislation

Establish a “trigger” mechanism to monitor costs of Medicare prescription drug bill

• Establish targets for spending on Medicare prescription drug benefit and Medicare Advantage program enacted last year. The targets would be equal to the CBO estimate of outlays for the prescription drug legislation when it was passed by Congress.

• If Medicare actuaries determine that the targets have been exceeded in any fiscal year, the Secretary of Human Services would be directed to negotiate lower prices for prescription drugs provided to seniors under Medicare plans and report to Congress and the President on any savings achieved.

• If the savings negotiated by the Secretary are not sufficient to reduce total costs to the budget targets. The President would be required to submit to Congress legislation to address the increased cost of the Medicare Part D or Medicare Advantage program.

• The President’s proposal could include additional measures to reduce the costs of prescription drugs, changes in payments to insurance companies, other changes in the prescription drug benefit, reductions in other spending or increased revenues to offset the increased costs, or simply affirmatively approving the increased spending without offsets.

• Congress would consider and vote on the President’s proposal and other alternatives on a fast track basis. Congress could reject the President’s proposal and make no changes to the program, but would have to vote up or down on the proposal.

Establish a revenue “trigger” based on revenue projections when tax cuts were enacted

• Establish revenue targets equal to total revenues projected in the budget resolution adopted by Congress in 2003.

• If total revenues fall below the targets by more than a di minimus amount, the President would be required to propose legislation to offset the revenue shortfall through spending reductions or increased revenues or explicitly authorize an increase in the debt limit by the amount of the shortfall. Congress would consider and vote on the President’s proposal on a fast track basis.

• The reductions in the top two marginal income tax rates would be suspended unless the President proposes and Congress enacts legislation achieving savings equal to the amount revenues fell below the target.

Establish a process for reviewing existing programs

• Establish a Federal Agency Sunset Commission to review and evaluate the efficiency and public need for each agency using specified criteria and recommend whether each agency should be abolished or reorganized

• Requires the abolishment of any agency or program within one year of the Commission's review, unless the agency is reauthorized by Congress.

3. Consider long-term impact of budget legislation

Address long term liabilities

• Require the budget resolution to include information on the 75 year liabilities of Social Security, Medicare, other government retirement programs and interest on the debt in present value terms under current policies.

• Establish a point of order against any legislation which would increase the long term liabilities of Social Security, Medicare, other government retirement programs and interest on the debt by more than a certain percentage

Posted by Jeff Lemieux at March 10, 2004 11:26 AM