Options to Restore More Discretion to the Federal Budget

will manually insertUS fiscal policy has long been unsustainable, driven largely by automatically growing entitlement spending and insufficient revenues. Often overlooked is the extent to which this preordained fiscal policy limits policymakers’ discretion to act on new priorities each year, whether through newly legislated increases in spending or through tax reductions. This study lays out reforms to the federal budget process that could restore greater discretion to congressional lawmakers, so that a greater share of revenues is not automatically allocated without any vote by a current Congress. Such reforms include various triggers in entitlement and tax programs that limit their automatic growth, more transparent reporting and informative displays of budget information, and more requirements to subject programs to periodic review and reauthorization. Examples are provided for how such reforms could be applied to specific entitlement and tax programs.