Order Code RL30550
CRS Report for Congress
Received through the CRS Web
Biennial Budgeting: Issues and Options
Updated March 4, 2004
James V. Saturno
Specialist on the Congress
Government and Finance Division
Congressional Research Service { The Library of Congress
Biennial Budgeting: Issues and Options
Summary
Difficulties in the timely enactment of budgetary legislation have long fueled
interest in the idea that the congressional budget process could be better structured.
Consideration of budget matters in the form of concurrent resolutions on the budget,
reconciliation, tax measures, public debt measures, authorizations, regular
appropriations, continuing appropriations, and supplemental appropriations, has been
criticized as time consuming, repetitive, and inefficient. One long discussed reform
proposal would change the budget cycle from one to two years.
Biennial budgeting is a concept that may include several variations. It may
involve multiyear authorizations, two-year budget resolutions, or two-year
appropriations, or some combination of the three. Most proposals incorporate all
three factors.
Biennial budgeting has a long history at the state level. Although the trend since
World War II has been for states to convert to an annual budget cycle, according to
the National Conference of State Legislatures, 21 states currently operate with a two-
year cycle, and two additional states operate with mixed cycles that put significant
portions of their budgets on a two-year cycle.
In addition to congressional support, biennial budgeting has enjoyed support
from the Reagan, George Bush, Clinton, and George W. Bush Administrations.
Proponents of biennial budgeting generally advance three arguments. They
contend that a two-year budget cycle will (1) reduce congressional workload by
eliminating the need for annual review of routine matters; (2) reserve the second
session of each Congress for improved congressional oversight and program review;
and (3) allow better long term planning by the agencies that spend federal funds at
the federal, state or local level.
Critics of biennial budgeting have countered by asserting that the projected
benefits would prove to be illusory. Projecting revenues and expenditures for a two-
year cycle requires forecasting as much as 30 months in advance (rather than 18
under an annual budget cycle). This would result in less accurate forecasts, and could
require Congress to choose between allowing the President greater latitude for
making budgetary adjustments in the off-years, or engaging in mid-cycle corrections
to a degree that would effectively undercut any reduction in workload or intended
improvements in planning. Opponents also point out that annual review of
appropriations requests is an important part of oversight that would be lost under a
biennial budget with no guarantee that a separate oversight session would be
effective. Furthermore, they argue that reducing the number of times that Congress
considers budget matters may only raise the stakes, and thereby heighten the
possibility for conflict and increased delay.
This report will be updated to reflect any changes in practice.
Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Pros and Cons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Arguments Favoring Biennial Budgeting . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Arguments Opposing Biennial Budgeting . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Legislative History of Biennial Budgeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Types of Biennial Budgeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Multiyear Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Two-Year Budget Resolutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Two-Year Appropriations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Biennial Budgeting in the States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
List of Tables
Table 1. Dates of Enactment of Last Major Appropriations Legislation,
FY1996-FY2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Table 2. States With Annual and Biennial Budgets . . . . . . . . . . . . . . . . . . . . . . 12
Biennial Budgeting: Issues and Options
Introduction
One of the chief congressional concerns about the budget process in recent years
has been the amount of time it requires. The current process, which provides for
consideration of budget questions in the form of concurrent resolutions on the
budget, reconciliation, tax measures, public debt measures, authorizations, regular
appropriations, continuing appropriations, and supplemental appropriations, has been
faulted as repetitive, and inefficient. This, in turn, has fueled interest in the idea that
the congressional budget process could be better structured.
Despite the perceived or actual permanence of much federal spending, the
process of formulating, enacting, and executing budgets has remained
characteristically annual. This annual budget cycle poses a dilemma for Congress.
On the one hand, annual review of spending legislation can afford Congress the
opportunity to maximize its influence concerning the operation of various programs
and policies. On the other hand, many Members have expressed concern with the
high percentage of congressional workload that is devoted to budgetary matters.1
An annual budget cycle, however, is dependent on the timely enactment of
budgetary legislation. Consideration of individual pieces of budgetary legislation is
often closely linked to consideration of other pieces, so that delays in consideration
of one measure may have an impact on the timing of consideration of all subsequent
budgetary legislation. In recent years, final action on appropriations measures has
occurred an average of 87 days after the start of the fiscal year on October 1 (see
Table 1). The result has been frustration with the budget process, and a desire to
reduce the number or frequency of budget measures that need to be considered.
The budget process has sometimes been criticized as unnecessarily repetitive as
well, with some questions being debated in various forms several times each year.
Defense policy, for example, may be debated in terms of priority within the overall
budget in the budget resolution, in terms of policy in an authorization measure, and
in terms of funding levels on an appropriations bill, only to have it all repeated the
next year. Rather than promote efficient consideration, critics contend, this repetition
has contributed to the complexity of the budget process, as well as to inefficiency and
delay.
1This workload is illustrated by the number of budget related rollcall votes, as show in
Norman J. Ornstein, Thomas E. Mann, and Michael J. Malbin, Vital Statistics on Congress
2001-2002 (Washington: American Enterprise Institute, 2002), chap. 7.
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Table 1. Dates of Enactment of Last Major Appropriations
Legislation, FY1996-FY2004
Fiscal Year
Public Law
Date of Enactment
Days Late
FY1996
P.L. 104-134
April 26, 1996
209
FY1997
P.L. 104-208
September 30, 1996
0
P.L. 105-118
FY1998
November 26, 1997
57
P.L. 105-119
FY1999
P.L. 105-277
October 21, 1998
21
FY2000
P.L. 106-113
November 29, 1999
60
P.L. 106-553
FY2001
December 21, 2000
82
P.L. 106-554
P.L. 107-115
FY2002
P.L. 107-116
January 10, 2002
102
P.L. 107-117
FY2003
P.L. 108-7
February 20, 2003
143
FY2004
P.L. 108-199
January 23, 2004
115
A number of possible reforms, such as automatic continuing resolutions, joint
budget resolutions, or merging the authorization and appropriations processes, have
been advanced, at least in part, in the hope that they could make the budget process
operate more effectively. For example, an automatic continuing resolution could
reduce deadline pressures in the appropriations process; a joint budget resolution
could promote early agreement on budget priorities between Congress and the
President; or a merged authorization-appropriations process could reduce overlap
between two. As a result, these reforms offer the potential to make the timely
enactment of budget legislation easier.
Another possible approach to addressing this concern is to change the budget
cycle from one year to two years. By reducing the frequency of budgetary actions,
and better separating their consideration, proponents of such a reform contend that
Congress would be better able to undertake each stage.
Due to the fact that budgeting for the federal government encompasses a number
of processes, biennial budgeting can have several meanings. Biennial budgeting can
involve two-year budget resolutions, two-year appropriations, and multiyear
authorizations. Typically, biennial budgeting proposals include all three aspects,
although proposals embracing only one or two are possible. Biennial budgeting
proposals may focus on enacting budgetary legislation for two-year periods or for two
one-year periods. In addition, biennial budget proposals typically require that
executive branch planning and performance reviews be revised so that they be based
on a two-year cycle.
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Pros and Cons
Arguments Favoring Biennial Budgeting
Supporters of biennial budgeting generally advance three arguments. They
contend that a two-year budget cycle will (1) reduce congressional workload by
eliminating the need for annual consideration of routine or repetitious matters; (2)
allow Congress to reserve time to promote improved oversight and program review;
and (3) allow better long-term planning by the agencies that spend federal funds, at
the federal, state or local level.
Advocates feel that reducing the number of times that Congress has to consider
budget questions will reduce the percentage of congressional time consumed by the
process. They assert that this would allow more time for Congress to conduct agency
and program oversight. By effectively dividing each Congress into a budget year and
an authorization/oversight year, a two-year cycle might reduce competition for
Members’ time and attention, and allow for more effective use of authorizations to
establish policy. Congress would not have to resort to appropriating in the absence
of a current authorization as often, since the authorizations would not be crowded out
of the congressional schedule by appropriations questions. Another anticipated
benefit is that because executive branch agencies would not need to develop and
defend budget proposals as frequently, they could better manage federal programs.
One of the chief arguments of proponents of biennial budgeting is that it
increases certainty about the level of future funding, and thus, allows better long-
range planning by federal agencies and by state and local governments. The Reagan,
George Bush, Clinton, and George W. Bush Administrations have all expressed
support for biennial budgeting. The 1993 report of the National Performance Review
(the Gore Commission) noted, “Considerable time could be saved — and used more
effectively — in both the executive and legislative branches of government if budgets
and appropriations were moved to a biennial cycle.”2 The Clinton Administration’s
final budget submission in 2000 reiterated it’s support for biennial budgeting.3 The
George W. Bush Administration has also included support for biennial budgeting (as
well as other budget process reforms) in the President’s annual budget submission
to Congress. In the FY2004 Budget they stated that:
... a biennial budget would allow lawmakers to devote more time every other year
to ensuring that taxpayers’ money is spent wisely and efficiently. In addition,
Government agencies would receive more stable funding, which would facilitate
longer range planning and improved fiscal management.4
2U.S. Office of the Vice President, Creating a Government That Works Better and Costs
Less: Mission-Driven, Results-Oriented Budgeting, accompanying report of the National
Performance Review (Washington: GPO, 1993), p. 59.
3U.S. Office of Management and Budget, Budget of the United States Government, Fiscal
Year 2001, Analytical Perspectives (Washington: GPO, 2000), p. 287.
4U.S. Office of Management and Budget, Budget of the United States Government, Fiscal
(continued...)
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Supporters point to the multiyear nature of the budget summit agreements between
Congress and the President that have been a major part of the budget process for
more than a decade as evidence of the efficacy of multiyear budgeting, and as a major
factor in recent years for promoting more efficient consideration of budgetary
legislation.
Arguments Opposing Biennial Budgeting
Critics of biennial budgeting have countered with several arguments as to why
some of the projected benefits could prove to be illusory. Reducing the number of
times that Congress considers budget matters, they suggest, may only raise the stakes,
and thereby heighten the possibility for conflict and increased delay. In addition,
enacting a budget resolution and spending legislation every other year could be
effective in reducing congressional workload or aiding longer-term planning only in
the second year of the cycle. Even that benefit may not accrue without accurate
budget projections. Making accurate projections of revenues and expenditures is
always difficult, and, because a two-year cycle requires forecasting as much as 30
months in advance (rather than 18 under an annual budget cycle), biennial budgets
would be more susceptible to error. Less accurate forecasting, they argue, could
result in providing either too much or too little money for individual programs, and
some fear that this would increase the need for supplemental appropriations or other
adjustments that would effectively undercut any intended improvements in planning.
With only a limited ability to anticipate future conditions, critics argue that a
two-year cycle could require Congress to choose between allowing the President
greater latitude for making budgetary adjustments in the off-years, or engaging in
mid-cycle corrections to a degree that would nullify any anticipated time savings or
planning advantages. Furthermore, they argue that annual review of appropriations
requests is an important part of oversight that would be lost under a biennial budget,
with no guarantee that a separate oversight session would be as effective.
In addition, they contend that the institutional incentives for supporting two-year
budgets can vary based on the expected budgetary outcome. A budget plan that
would lock in an amount for the second year of a biennium will draw relatively little
support from program advocates in a time of increasing budgets (because the
program might receive more generous funding later), and, alternately, will draw
relatively little support from program cutters in times of decreasing budgets (because
the program would be somewhat insulated from possible later cuts). In other words,
an action to lock in future budgetary resources may draw opposition when some
decision makers believe that a “better” decision may be arrived at in the future.
Legislative History of Biennial Budgeting
Almost from the time the Congressional Budget Act was enacted in 1974,
budget process reform has been a topic of congressional interest, and biennial
4(...continued)
Year 2004, Analytical Perspectives (Washington: GPO, 2003), p. 318.
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budgeting was discussed at least as far back as the 95th Congress (1977-1978).5
Hearings on the subject of budget process reform have often included testimony
concerning biennial budgeting. In addition, on several occasions both the House and
Senate have conducted hearings specifically on the topic of biennial budgeting.6 In
addition to hearings, congressional interest has been demonstrated by survey
findings,7 and the by level of cosponsorship enjoyed by biennial budgeting proposals
that have been introduced.8
In the House, jurisdiction over budget process reform generally is currently
shared jointly by the Committees on Rules and the Budget, and both have considered
the issue of biennial budgeting. No biennial budget proposal has been reported to the
House, although in the 106th Congress the House considered biennial budgeting as
an amendment to a comprehensive budget process reform measure.9
In the Senate, jurisdiction over the budget process is shared jointly by the
Committees on Governmental Affairs and the Budget, under a standing order of the
Senate (first agreed to August 4, 1977). The order provides that if one committee
reports a measure, the other has 30 days to report or be discharged from further
consideration. Biennial budgeting measures have been reported on several occasions
in the Senate, including most recently, S. 92 in the 106th Congress, however no
biennial budgeting measures have been considered by the full Senate.
Biennial budgeting has also been considered by a number of federal committees
and commissions organized to study possible procedural or structural reforms of
Congress, the budget process, or both. In addition to the Gore Commission (noted
previously), the National Economic Commission10 and the Study Group on Senate
Practices and Procedures (also known as the Pearson-Ribicoff Commission, after
5For a more detailed discussion of earlier consideration of biennial budgeting, see U.S.
Congress, Senate Committee on Rules and Administration, Improving the Operation of the
Legislative Branch of the Federal Government, and for Other Purposes, report to
accompany S. 1824, 103rd Cong., 2nd sess., S.Rept. 103-297 (Washington: GPO, 1994), pp.
10-14.
6Printed hearings specifically addressing the issue of biennial budgeting include: U.S.
Congress, House Committee on Government Operations, The Vice President’s National
Performance Review — Recommending A Biennial Budget Process, hearings, 103rd Cong.,
1st sess., Oct. 7, 1993 (Washington: GPO, 1994); and U.S. Congress, Senate Committee on
Governmental Affairs, S. 261 — Biennial Budgeting and Appropriations Act, hearings, 105th
Cong., 1st sess., Apr. 23, 1997 (Washington: GPO, 1997).
7For example, 85% of Representatives and 87.5% of Senators responding to a 1987 survey
indicated that they agreed or strongly agreed with the idea of appropriating on a two-year
schedule. Congress Speaks — A Survey of the 100th Congress (Washington: Center for
Responsive Politics, 1988), pp. 34.
8For example, H.Res. 396 was introduced on Nov. 18, 1999 with 245 cosponsors.
9See CRS Report RL30236, H.R. 853, the Comprehensive Budget Process Reform Act, by
James V. Saturno.
10U.S. National Economic Commission, Report of the National Economic Commission
(Washington: GPO, 1989), p. 11.
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former Senators James Pearson and Abraham Ribicoff) recommended a form of
biennial budgeting. The Pearson-Ribicoff Commission recommended that the
Congress consider half of the regular appropriations bills each year.11 In 1993, both
the Senate and House members of the Joint Committee on the Organization of
Congress included proposals for a two-year budget cycle in their recommendations
to their respective chambers (S.Rept. 103-215, vol. 1, and H.Rept. 103-413, vol. 1).
In the Senate, these recommendations were subsequently introduced as S. 1824,
referred to the Committee on Rules and Administration, and reported in 1994
(S.Rept. 103-297). It is notable that in contrast to the comprehensive approach to
biennial budgeting taken in most biennial budgeting proposals, S. 1824, as reported,
included two-year budget resolutions and multiyear authorizations, but not two-year
appropriations.
In addition to being included in various hearings on the general subject of
budget process reform over the years, biennial budgeting has been the specific focus
of hearings and legislation on several occasions, notably in the Senate. On three
occasions the Senate Governmental Affairs Committee has reported a biennial
budgeting measure: in the 100th (S. 2478, S.Rept. 100-499), 101st (S. 29, S.Rept.
101-254), and 105th (S. 261, S.Rept. 105-72) Congresses.
The most recent biennial budgeting measure to be reported in the Senate is S. 92
(106th Congress). On January 19, 1999, S. 92, the Biennial Budgeting and
Appropriations Act, was introduced in the Senate by Senator Pete V. Domenici, and
referred jointly to the Committee on Government Affairs and the Committee on the
Budget, pursuant to the order of August 4, 1977. The two committees held a joint
hearing on January 27, 1999, on the subject of biennial budgeting.12 S. 92 was
subsequently considered by the Committee on Governmental Affairs on March 4,
1999, and ordered reported with an amendment (a complete substitute making a
number of technical corrections). A written report was filed on March 10, 1999
(S.Rept. 106-12).
In the House, the Rules Committee held a series of hearings on biennial
budgeting beginning on February 16, 2000, and continuing on March 10, and March
16, 2000.13 In addition, the House subsequently considered biennial budgeting as an
amendment to H.R. 853 (106th Congress), the Comprehensive Budget Process
Reform Act. The amendment was rejected, 201-217.14 Subsequent hearings by the
11U.S. Congress, Senate Committee on Rules and Administration, Report of the Study Group
on Senate Practices and Procedures, committee print, 98th Cong., 2nd sess., S. Prt. 98-242
(Washington: GPO, 1984), p. 21.
12U.S. Congress, Senate Committees on Budget and Governmental Affairs, To Consider
Budget Process Reform, hearings, 106th Cong., 1st sess., Jan. 27, 1999, S.Hrg. 106-24
(Washington: GPO, 1999).
13U.S. Congress, House Committee on Rules, Biennial Budgeting, hearings, 106th Cong., 2nd
sess., Feb. 16, Mar. 10, and 16, 2000 (Washington: GPO, 2000).
14See vote no. 186 in the Congressional Record, daily edition, vol. 146 (May 16, 2000), p.
H3127.
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House Budget Committee on the subject of budget process reform also touched on
the issue of biennial budgeting, but no measure was reported.15
Types of Biennial Budgeting
Biennial budgeting as a concept has many permutations, and may include any
of the following: a requirement for multiyear authorizations, two-year budget
resolutions, and two-year appropriations. Biennial appropriations may refer to all
appropriations being enacted for a two-year period, all appropriations being enacted
for two succeeding one-year periods in a single measure, or even a system under
which some appropriations are enacted for either a two-year period or two one-year
periods in each year of a two-year cycle. These components may be adopted
individually or in concert, and may be applied under a variety of schedules. Because
of this, biennial budgeting may have different meanings for different people.
Multiyear Authorizations
Many biennial budgeting proposals require that all authorizations be enacted for
periods longer than one fiscal year. Under current practice, many authorizations are
already enacted for multiyear periods. The chief exceptions to this are the
Department of Defense and Intelligence authorizations which are considered
annually. Most proposals also divide action so that authorizations are scheduled to
be considered in the second year of each Congress, separate from consideration of
regular appropriations measures. One proposed benefit of multi-year authorizations
is that the authorizations could be in place before the appropriations process got
under way, providing for smoother working relationship between authorizers and
appropriators.16 One chief concern regarding a multiyear authorization requirement
is that unless supported by biennial appropriations, they may lack the degree of
certainty required to achieve the promised benefits of long range planning.
Although the requirement for multiyear authorizations is often advanced as a
relatively minor aspect of a biennial budgeting, such a system could have major
repercussions with regard to those specific issue areas where it would have impact.
For example, Congress has operated under the presumption that the Defense and
Intelligence authorizations are sensitive to myriad foreign policy issues, and that
these need to be addressed every year.
An attempt to experiment with two-year authorizations for the Department of
Defense in the 1980s proved unsuccessful. This failure has sometimes been partly
attributed to the fact that the experiment was not part of a comprehensive move to
15U.S. Congress, House, Committee on the Budget, Federal Budget Process Structural
Reform, 107th Cong., 1st sess, July 19, 2001 (Washington: GPO, 2001).
16Rep. William H. Natcher testified in 1993 that requiring multiyear authorizations, to be
enacted the year before appropriations measures, would serve the Congress well. U.S.
Congress, Joint Committee on the Organization of Congress, Budget Process: Testimony
of Hon. William H. Natcher, hearing, 103rd Cong., 1st sess., Mar. 11, 1993 (Washington:
GPO, 1993), p. 5.
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biennial budgeting, and was not supported by two-year appropriations, but another
contributing factor was that it was overtaken by other budgetary decisions. The
deficit reduction concerns that led to a late 1987 budget summit between Congress
and President Reagan also effectively required the second year of the two-year
authorization to be amended extensively. Given this experience, support for two-year
defense authorizations waned.17
As proposed in S. 92 and H.R. 3586 (106th Congress), biennial budgeting would
establish a “budget year” and an “authorization/oversight year” for each Congress.
This proposed division could augment the separation of authorizations and
appropriations currently embodied in House and Senate rules, and enhance the
perceived difference between authorizations and appropriations that some Members
feel has been weakened in recent decades.18 However, it is possible that the result
could instead be an erosion of the separation between authorizations and
appropriations. Since there might not be any opportunity to consider authorizing
legislation in the first year of a Congress, Members may feel it necessary to use
appropriations bills as legislative vehicles to revise policy questions immediately
through appropriations bills, rather than have to wait for the second
authorization/oversight session.
The use of appropriations bills to carry authorizations could become a
significant concern in any circumstances under which it was desirable to consider
policy questions in the first year of a Congress, and thus undercut the proposed
bifurcation. For example, changes in the international climate could require a
reassessment of priorities for defense or foreign operations spending, or changes in
the economy could spur the need for a reevaluation of domestic policies without
respect to whether it was the first or second year of a Congress. The incentive could
be especially great when an election signals a dramatic shift in national policies and
lawmakers want to address those issues, as the Reagan Administration did in 1981,
the Clinton Administration did in 1993, or House Republicans did in 1995 with the
Contract With America.
Two-Year Budget Resolutions
Since the enactment of the Congressional Budget Act in 1974, the budget
process has centered around the concurrent resolution on the budget, which sets
aggregate budget policies and functional priorities for Congress. The budget
resolution is used to coordinate the various budgetary actions that are taken over the
course of a session of Congress. Proposals to convert the budget process to a
two-year cycle are likewise typically centered around a two-year budget resolution.
17David C. Morrison, “Two at a Time,” National Journal, vol. 21, no. 35 (Sept. 2, 1989), p.
2172; and Robert J. Art, “The Pentagon: The Case for Biennial Budgeting,” Political
Science Quarterly, vol. 104, no. 2 (summer 1989), pp. 193-214.
18As illustrated by testimony on budget process reform on several occasions in recent years.
One example is the extensive testimony before the Joint Committee on the Organization of
Congress in 1992.
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Although the budget process is characteristically annual, there are a number of
aspects that encourage Congress to look beyond a single fiscal year. In particular,
section 301(a) of the Congressional Budget Act currently requires that the budget
resolution include binding figures for the upcoming fiscal year, plus planning levels
for at least each of the four ensuing fiscal years. In recent years, budget resolutions
have typically included planning levels beyond the minimum number required by the
Congressional Budget Act. For example, the budget resolution for FY2004
(H.Con.Res. 95, 108th Congress) included planning levels through FY2013. The
Budget Act also provides for the enforcement of the five-year totals for revenues and
direct spending, and allows multiyear reconciliation instructions. In addition, the
Senate’s Pay-As-You-Go point of order (section 505(a) of H.Con.Res. 95, 108th
Congress, the FY2004 budget resolution) prohibits the consideration of revenue or
direct spending legislation that would increase or cause an on-budget deficit for the
first year covered by the budget resolution, the total for the first five years, or the total
for the second five years.19
Proponents of biennial budget resolutions suggest that both Congress and the
President would benefit by extending the binding levels to two years, adopting the
broad outlines of fiscal policy only once each Congress. As Joseph White of the
Brookings Institution stated in testimony before the Joint Committee on the
Organization of Congress in 1993, “Annual fights about priorities between the same
Congress and President do nobody any good.”20
Opponents, however, contend that by providing Congress with the opportunity
to participate in setting fiscal policy, budget resolutions have served a useful purpose.
They further contend that while fiscal policy can be set for two-year periods, it is
potentially subject to considerable uncertainty, and that eliminating an opportunity
to either alter or confirm current policy makes the process weaker.
According to supporters, the experience with presidential-congressional budget
summits in the 1980s and 1990s has demonstrated the effectiveness of establishing
a multiyear framework for the budget. Notably, the 1987 agreement between
Congress and the Reagan Administration, the 1990 agreement with the Bush
Administration, and the 1993 and 1997 agreements with the Clinton Administration
have all been built around the projected future impact of a budget plan. Subsequent
budget resolutions, and budget implementing legislation, have generally adhered to
these agreements. By institutionalizing this arrangement, advocates of biennial
budgeting hope to duplicate its perceived success.
Some opponents, and some proponents of biennial budgeting as well, however,
argue that the lessons to be learned from successful executive-congressional summits
are somewhat narrower. Opponents suggest that while these occasional summits
have proved useful in the context of facilitating the following year’s budget process,
19For more on the PAYGO point of order, see CRS Report RL31943, Budget Enforcement
Procedures: Senate’s Pay-As-You-Go (PAYGO) Rule, by Bill Heniff Jr.
20U.S. Congress, Joint Committee on the Organization of Congress, Budget Process:
Testimony of Hon. Anthony Beilenson and a Panel of Experts, 103rd Cong., 1st sess., Mar.
23, 1993 (Washington,: GPO, 1993), p. 82.
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it would not be possible to institutionalize the process. They suggest that the political
and budgetary context that brings Congress and the President to the bargaining table
is also necessary to ensure a commitment to implementing the outcome. Some
proponents feel that a biennial budget resolution should only be adopted within the
context of an overall move to a two-year cycle. Without biennial implementation,
they argue, a biennial budget resolution would not present sufficient certainty for
long term planning, significant savings in congressional workload, or provide
additional time for oversight.
Two-Year Appropriations
The most controversial aspect of biennial budgeting proposals is, arguably, a
two-year cycle for appropriations. Most proposals would require all regular
appropriations measures to be considered in the first year of each Congress, either for
a single two-year fiscal period, or for two one-year periods. In both cases Congress
would not need to act on appropriations during the second year of each Congress,
except for emergency and other supplemental appropriations needs. Some proposals
in the past have opted, instead, for a process that would stretch out the current
process so that while the appropriations process could begin in the first session of a
Congress, the fiscal biennium would not begin until October 1 of the second year.
This would give Congress and the President a period of 20 months, rather than the
current eight months, to negotiate appropriations details. Under such proposals,
Congress would still not need to act on appropriations in the off year, except for
emergency or supplemental appropriations.
Most proponents of biennial budgeting contend that two-year appropriations are
an essential part of any biennial budgeting system. In their view, it is primarily the
annual nature of the current appropriations process that produces the strain on the
current system. They assert that a major benefit of biennial appropriations would be
that during the two years for each Congress, there would be a year in which routine
appropriations actions could be avoided. Although emergency and other
supplemental appropriations actions might be necessary in the off year, they believe
this change would still result in a reduced congressional workload, and would free
up enough time for Congress to conduct meaningful program reviews. For the
executive branch, as well as for state and local governments, biennial appropriations
would be beneficial, because they would provide sufficient certainty to allow for
better long term planning. Finally, proponents also suggest that reducing the number
of times in which Congress and the President must confront each other over budget
priorities would allow for better overall comity between the two branches.
Current practice already includes a number of the devices proposed as part of
a biennial budgeting system. For example, appropriations currently provide for both
advance appropriations to become available in future fiscal years, and budget
authority available for periods of longer than a single fiscal year for a number of
programs. In the view of opponents, however, making these practices mandatory for
all programs will not result in greater benefits. It is not, they contend, routine
appropriations that cause conflict and delays in the budget process, so widening these
practices to mandate their use for all programs every other year would not result in
any significant improvements in the process. Conflict and delay occur because of a
lack of consensus on non-routine matters, either within Congress or between
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Congress and the President. Attempting to resolve these issues for two years at a
time, they assert, would simply raise the stakes and thereby heighten the possibility
for conflict and increased delay. In addition, they argue that it is the impending start
of the fiscal year on October 1 and the anticipation of a new budget submission by
the President the following February that force action. Without these deadlines, it is
possible that it could take the full two years for Congress and the President to
produce a budget, making projections of a year devoted to oversight less likely.
Critics of two-year appropriations also point out that budget forecasts are prone
to error, and that with a total budget in excess of $2 trillion, even small errors in
terms or percentage can result in significant errors in terms of dollars of revenues or
expenditures. Projecting revenues and expenditures for a two-year cycle requires
forecasting as much as 30 months in advance (rather than 18 under an annual budget
cycle). Even if routine appropriations could be considered every other year, with
only a limited ability to anticipate future conditions, critics argue that a two-year
cycle would inevitably result in incorrect funding decisions. Whether the result was
to provide too much or too little funding for individual programs, it could necessitate
Congress choosing between allowing the President greater latitude for making
budgetary adjustments in the off years, or themselves engaging in mid-cycle
corrections to a degree that would nullify any anticipated time savings or planning
advantages.
Biennial Budgeting in the States
Perhaps because many Representatives and Senators have government
experience at the state level, state practices are often cited in deliberations on budget
process reform. In particular, 21 states operate under a two-year budget cycle (see
Table 2), and this experience is cited by many in discussing the applicability of
biennial budgeting to the federal government.
However, state experience does not provide any single answer concerning
biennial budgeting. Even states that operate under a two-year cycle do not all have
the same processes. For example, Missouri enacts its operating budget on an annual
cycle, but its capital budget on a biennial cycle; Kansas budgets for some regulatory
agencies two years at a time within the overall context of an annual budget; and some
states, such as Minnesota, consider both their operating and capital budgets on two-
year cycles, but in different years. As a result, support can be found both for and
against adopting a two-year cycle at the federal level.21
One argument of opponents of a two-year cycle has been that the trend among
states has been to shift from biennial to annual budget cycles, particularly in those
states with larger populations. This trend, opponents suggest, demonstrates that
biennial budgeting represents a way of budgeting less applicable to modern
circumstances. In support of this they point out that in 1940 only four (of 48) states
operated with annual budget cycles. Most states operated with biennial budget cycles
21Ronald K. Snell, “Annual vs. Biennial Budgeting: No Clear Winner,” Spectrum, vol. 68
(winter 1995), p. 23.
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because the state legislatures only met every other year. Today, with the prevalence
of annual sessions, 29 states use annual cycles, including eight of the 10 most
populous states.22 However, the changes have not all been in favor of annual
budgeting. At least four states (Hawaii in 1967, Nebraska in 1987, Connecticut in
1991, and Arizona in 1999) have switched to biennial budgeting after extended
periods in which they used an annual cycle, and several others (Indiana, Minnesota,
and Wisconsin) returned to biennial cycles after brief experiments with annual
budgets.
Table 2. States With Annual and Biennial Budgets
Annual Budget with
Biennial Budget with
Biennial Budget with
Annual Legislative
Annual Legislative
Biennial Legislative
Sessions
Sessions
Sessions
Alabama
Arizona
Arkansas
Alaska
Connecticut
Kentucky
California
Hawaii
Montana
Colorado
Indianaa
Nevada
Delaware
Maine
North Dakotaa
Florida
Minnesotaa
Oregona
Georgia
Nebraska
Texasa
Idaho
New Hampshirea
Illinois
North Carolinaa
Iowa
Ohio
Kansas
Virginia
Louisiana
Washingtona
Maryland
Wisconsin
Massachusetts
Wyominga
Michigan
Mississippi
Missouri
New Jersey
New Mexico
New York
Oklahoma
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Utah
Vermont
West Virginia
Source: National Conference of State Legislatures
a. These states enact consolidated two-year budgets; all other states with biennial budgets enact two
annual budgets simultaneously.
22California, Florida, Georgia, Michigan, New Jersey, New York, and Pennsylvania all
operate with annual cycles, while Ohio and Texas operate with biennial cycles.
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One of the chief arguments of opponents is that biennial budgeting would
inevitably lead to greater authority for the President. Again the experience at the
state level is inconclusive. For example, Arkansas, with a biennial budget, has far
stricter limits on the governor’s authority to transfer funds or cut spending
unilaterally than does South Carolina, with an annual budget.23
The natural tension between the desire for longer planning horizons and the
increasing inaccuracy of budget projections when stretched over longer periods is not
solved at the state level. The same basic system of funding stability and incremental
budget changes that characterizes federal budgeting operates at the state level. Few
programs are subject to sweeping changes in any given year, regardless of the budget
cycle, suggesting that the need for a longer budget cycle to ensure better planning,
and fears of the inadequacy of assumptions about the future are both overstated.
23Snell, “Annual vs. Biennial Budgeting: No Clear Winner,” p. 23.