Opinion: Five keys to a better budget

Historically, federal budgets have been about taking a lot of numbers that already exist — i.e., the baseline — and adding to them a bunch of new numbers that reflect the administration’s or Congress’s wish list.  

This is put into a large book that ignores entitlements and interests costs — roughly 60 percent of federal spending.

Of course to some degree this is ancient history. Even this marginal bit of fiscal management has been ignored in recent years with the Senate failing to even take up, much less pass, a budget for the federal government.   

{mosads}It is a bit ironic that members of Congress are so sanctimonious about a $5-billion loss at JP-Morgan, while not even passing a budget for a $3-trillion enterprise called the federal government, for which they have responsibility. 

To put it another way, today there is no such animal as a “federal budget.”

This creates an opportunity for the next president, especially if his name is Mitt Romney.

There is no need to send to Congress a traditional budget with line after line of numbers that have virtually no meaningful effect on — or relevance to — the vast majority of federal spending. The primary drivers of our federal fiscal problems have been ignored by a Congress that has grown comfortable with its nonfeasance.

A better approach for the president, assuming he intends to corral the out-of-control deficits and debt of our nation, would be to use the budget to challenge Congress to act responsibly.   

The president has, with this vehicle called the “budget submission,” the opportunity to lay down a course that drives policy changes and will produce real action that moves us toward solvency as a national government.

The next president, especially if he is Mitt Romney, should not send a spreadsheet of numbers up to Congress as his budget.   

A line-by-line budget submission simply allows Congress to distract everyone, including itself, into debates over high visibility-but-small return issues like defunding the National Endowment for the Arts or National Public Radio.

The president should instead send a set of major policy changes in no more than five or six critical and significant areas.   

The policies should, if enacted in a form reasonably similar to those proposed, correct the fiscal course and right a good portion of the listing federal ship.

The president’s budget submission should force Congress to act in areas that count as real spending and tax reform.  

The policies should be few, because Congress tends to have difficulty managing too many ideas at once.   

They should be hugely meaningful in their long-term impact on the affordability of our government.  

Here are five areas that would make up a good presidential budget submission:

First, social security reform.  

We all know how to fix it.  

It can be done with very little impact on present or nearly retired people. Change the cost of living adjustment (COLA).  Adjust the means test. Raise the age over a long period of time.   

Second, fix Medicare by addressing healthcare.   

Move to an outcomes-based system. Connect the recipient of the care with the cost. Reform the tort laws. Use a premium-support system. Promote healthy lifestyles. Protect people from catastrophic losses.

The list goes on, but a good package of proposals is critical to fiscal discipline and a better healthcare system.

Third, propose tax reform along the lines of the Reagan-Rostenkowski law, which took rates way down through reducing deductions and exemptions, and include a territorial corporate tax as part of the process.

Fourth, propose the grand bargain, whereby the federal government takes over all Medicaid responsibility and the states take over all elementary and secondary school responsibilities.

Fifth, ready the Defense Department for the inevitable restructuring it has to go through, but which Congress is incapable of dealing with because of the influence of the defense/industrial complex. Do it by setting up three new BRAC commissions — one on procurement, one on benefits and one on base structure.

Now you have a budget that means something, or at least challenges the Congress to do its job of managing our federal fiscal house. 

It does not allow Congress to hide in the corners created by its present dysfunctional budget process.

Judd Gregg is a former governor and three-term senator from New Hampshire who served as chairman and ranking member of the Senate Budget Committee and as ranking member of the Senate Appropriations subcommittee on Foreign Operations. He also is an international adviser to Goldman Sachs.