Shortly before resigning 40 years ago President Richard Nixon signed the Congressional Budget and Impoundment Control Act, setting the course for Congressional budgeting ever since. Originally targeting “impounding” – Presidential withholding of funds approved by Congress – the law also created budget committees in both chambers of Congress and established the nonpartisan Congressional Budget Office (CBO), which calculates the cost or “score” of legislation. The main idea was to give Congress a stronger budgetary role and independent budget information – previously all budget data came from the Executive Branch. It was also thought the reforms would make Congress more cost-conscious when writing laws. In this sense, the Budget Act represented wise and fortunate reform. Like most things, however, time has worked against it.

Before 1974 Congress didn’t know how much it was going to spend in a given year until it was finished voting on appropriations bills. Today, the score given by the CBO to any piece of legislation is central to its fate. Many observers point to the demise of President Clinton’s healthcare plan, which CBO said would increase deficits by $70 billion, and the passage of President Obama’s healthcare plan, which CBO said would reduce deficits by $60 billion, as an example of how influential a CBO score can be.

Over time, Congress has learned how to game CBO’s scoring process to make bills appear to be less expensive than they actually are. One method is to craft bills that artificially create savings within the CBO’s 10-year budgetary window by pushing costs further into the future. The “pension smoothing” recently used to pay for the shortfall in the Highway Trust Fund is a good example of this. Another example is loan guarantees (an issue near and dear to us), which can create huge taxpayer liabilities, yet are only scored at a tiny fraction of the potential cost. One recent loan guarantee worth $6.2 billion for construction of two nuclear reactors had a purported subsidy cost of $0. Congress has also gotten creative with taxes as a way to get around budgetary limits. There are so-called tax extenders, the flotilla of tax breaks “temporarily” extended by Congress, again and again, in order to avoid being scored as permanent. Also complicating things are tax expenditures, targeted provisions in the tax code that function like spending, but are technically lost income, making it difficult to score how much the government actually spends from year to year on specific programs.

Then there is the budget process itself, the central focus of the Budget Act, which includes – in statute – the calendar dates by which the President and Congress must complete different steps of passing a budget. Beginning with the submission to Congress of the President’s budget request on the first Monday in February, the timetable envisions an orderly process with Congress finishing consideration of budget resolutions by mid-April and completing appropriations bills by the end of June. It was always a struggle, but by the late-1990s, this timeline had become complete fiction. Between 2000 and 2012, Congress passed 80 “continuing resolutions” in order to buy themselves time to complete the 12 major appropriations bills required to keep the government running. Many years, usually election years, Congress doesn’t even try to get things done on time. President Obama hasn’t helped considering only one of his budgets has been submitted on time. So now, with only 10 working days left before the end of the fiscal year, the House has passed 7 appropriations bills and the Senate has passed zero.

As the budget act hits middle age, it’s past time to consider some reforms. Shifting to a two-year budget cycle. Giving the Budget Committees more teeth to enforce budget targets by agency – right now they just set the top-line for the discretionary budget. Enhanced rescission authority to allow the President to make Congress reconsider wasteful spending. Revising budget scoring rules to reduce the gimmicks. Accrual accounting. A publically released annual review of how accurate CBO scores are compared to the actual spending that resulted from legislation. Any or all of these are worth considering to revitalize the budget process and help put the country on sounder financial footing.