Time to reform the budget process

In an unprecedented move, the Senate and House Budget committees announced that they will not invite OMB Director Shaun Donovan for his annual hearing this year. Instead, the two committees will redirect their time and energy toward reforming the budget process altogether.

Good for them.

Washington’s out-of-control spending and lack of accountability concern young people like myself who will inherit high levels of public debt, which curb long-term economic growth and drive up interest rates and inflation that disproportionately affect the poor and working class. A slower economy means fewer jobs and weaker wage growth, and that especially hurts young people who are just starting their careers. 

{mosads}The problem with our current budget process is that it makes it extremely difficult for Congress to even consider reining in the spending area where we devote nearly two-thirds of our budget: entitlements. 

Unlike discretionary spending that is approved through appropriations bills (defense, education, infrastructure, etc.), mandatory spending for entitlements is on auto-pilot (Social Security, Medicare, Medicaid, etc.). Entitlement spending is embedded into law, and it is not subject to the same oversight as – or forced to compete with – other federally funded programs.

Last fall the Obama-Boehner budget deal put off the question of reform yet again, when the Social Security Disability Insurance trust fund was quickly running out of money. Instead of implementing a long-term funding mechanism, the budget deal reallocated $150 billion from the Social Security retirement fund to keep disability insurance afloat until 2022.

Continuing to transfer money back and forth between the retirement and disability funds is unsustainable, however, since both funds are expected to empty out in 2034 as more Baby Boomers age and retire. Combined, these trust funds hold over $2.8 trillion in special-issue Treasury securities, or government IOUs. Without reform, the only solution left is to increase taxes, which the younger generation will shoulder most of the burden for. 

We, literally, cannot afford a crisis in which both retirees and the disabled, who genuinely need help, risk losing their benefits because the government over-promised them payouts that it well knows it cannot provide. It is time to move Social Security on-budget to ensure sufficient funding and oversight for these programs on a regular basis. There is waste and fraud that should be investigated, and operations that can be streamlined and modernized.

Such cost-cutting measures do not jeopardize current or future benefits. In fact, they have the exact opposite effect. By adequately reviewing and reforming these programs, the government can more effectively deliver the benefits it promised to growing populations of retirees and disabled people, while weeding out those who are abusing the system to obtain another unemployment check.

There are many budget process reforms that need to be considered, but the first ought to address our looming Social Security crisis and the entitlement spending that is driving our national debt through the roof. We need to make sure that we have the institutional checks in place to control all parts of our spending, which will then help attract private investment, restore our credit rating, and grow our economy and jobs far more quickly than they are now.

2016 should be a busy year for everyone – on and off the campaign trail. Now is the time to confront the long delayed question of budget process reform. By focusing on this question, the Senate and House Budget committees are leading us on the right path to get there.

Oh is a recent graduate of Claremont McKenna College.