From shutdowns to simple slices: a better way to fund the gov’t

Another year, another funding failure. The modern appropriations process has been in effect since the 1970s. Since then, Congress has passed all appropriations on time in only four fiscal years. And never this century.

Democrats in Congress should fix appropriations when we next take power. It’s central to good governance. It’s also vital to constitutional integrity. If Congress wants to reclaim the power of the purse, it needs to show Americans that it can manage the purse.

Here’s one solution: multi-year appropriations. The status quo is annual appropriations. There are months of posturing followed by hours of thrown-together deals. Instead, Congress should authorize and appropriate each agency on its own timeline.

The Federal Aviation Administration (FAA) is a good example. Last Congress, we authorized the FAA for five years. This means Congress held hearings, debated policy, and then passed a statute that gave the FAA its mandate and its marching orders through 2028. However, the FAA still needs Congress to appropriate money for it every year, or else it stops work (except for air traffic controllers). In my proposal, Congress would authorize and appropriate the FAA for five years. The Treasury would grant pre-approved funds to the FAA each year until its mandate expires.

There’s nothing special about five years. Some agencies would benefit from longer timelines: the National Institutes of Health might be 10 to insulate science from politics. And the Constitution’s directive against standing armies means the Department of Defense should stay on annual cycles. Some agencies might be conditions-based: for example, Social Security should be perpetual but its pending insolvency should force Congress to act. The point is that Congress would stop budgeting-by-crisis each year and instead legislate intentionally.

The most important benefit of this proposal is that it adheres to the dictum that complex things that work evolve from simple things that work. The federal government is complex. The current process asks politicians to program this complexity every year, under pressure. Complexity-from-scratch does not work. Make it simple. Committees can work on the policy and budget for the Environmental Protection Agency, for Head Start, for the Federal Transit Administration as individual, intentional initiatives.

The timelines for each agency would be multi-year and staggered. So, Congress would continuously be programming slices of the federal government. From simple slices that work comes complexity that works. No more cliffs and no more shutdowns.

Multi-year appropriations also imposes discipline. Fiscal discipline comes via inflation. Because Congress appropriates nominal dollars, the real value of those dollars would decline each year. Agencies would be under modest pressure to improve productivity each year. This is in sharp contrast to the status quo. Congress often reaches its annual deals by increasing spending across the board –– the Pentagon to get Republicans, programs to get Democrats. These agencies spend down their budgets at the close of each fiscal year to justify the top-line.

Political discipline comes by divorcing the agencies’ mandates from the president’s. When Congress authorizes and appropriates a multi-year mandate for an agency, it does so behind a veil of ignorance. It does not know who will preside across the length of that mandate. This elevates statesmanship over gamesmanship.

Multi-year appropriations will not end political games nor is it the full answer to fiscal responsibility. I write about reducing the debt and a fresh-start tax code elsewhere. But it’s an important part of better governance and renewed constitutional order.