Should Congress Switch to a Two-Year Budget? (S. 306)

What is S. 306?

(Updated March 26, 2018)

This bill would reform Congress’s budgeting and appropriations process so that the federal budget would be prepared on a biennial rather than annual basis. All budget resolutions, appropriations bills, and strategic performance plans would cover a period of two fiscal years rather than just one.

Each budget biennium would be defined as the two consecutive fiscal years beginning on October 1 of any odd-numbered year. The Office of Management and Budget (OMB) would be required to report to Congress on the impact and feasibility of changing the definition of a fiscal year and the budget process based on that definition to a two-year fiscal period.

Argument in favor

If Congress transitions to a two-year biennial budget it will give lawmakers more time for oversight and bring greater transparency to the budgeting and appropriations process. The switch could reduce the likelihood of government shutdowns.

Argument opposed

Congress is going to be inefficient and dysfunctional whether they prepare the federal budget two years at a time or not. Not only that, but it is hard to forecast how much tax revenue will be available two years in advance and how it should be spent.

Impact

Taxpayers, Congressional budgeting and appropriations committees, and the entire federal government.

Cost of S. 306

A CBO cost estimate is unavailable.

Additional Info

In-Depth: Sponsoring Sen. Johnny Isakson (R-GA) introduced this bill to give lawmakers an opportunity to prevent waste and promote efficiency through a greater emphasis on oversight in the budgeting process:

“Voters spoke out in November and they want a change in the way Washington does business. They want Congress to get a handle on the national debt. It’s time that Washington does what every American family has to do: Sit down and figure out what’s working and what isn’t and set spending priorities. This system would increase oversight and reduce wasteful spending, making our federal government more efficient and more accountable to taxpayers.”

Biennial budgets have been criticized for being slow to respond to changes in the government’s fiscal condition. Former Congressional Budget Office (CBO) Director Douglas Holtz-Eakin testified in 2004 that:

“[C]hanging to a two-year cycle could have significant drawbacks.  It could diminish the effectiveness of Congressional control of spending in the appropriation process and could make adjusting to rapidly changing budgetary and economic conditions more difficult.”

This bill currently has 16 bipartisan cosponsors in the Senate, equally divided between Democrats and Republicans. It's predecessor in the 113th Congress was endorsed by 68 members of the U.S. Senate.

Of Note: For more than 70 years biennial budgeting has been a common practice at the state level, but the number of states enacting two-year budgets has fallen from 44 in 1940 to 19 in 2011. Of those states that use biennial budgets, 15 are state legislatures that meet annually while the remaining four are only hold biennial sessions.

Media:

• Sponsoring Sen. Johnny Isakson (R-GA) Press Release
• The Hill
• Bipartisan Policy Center (In Favor)