With the Office of Management and Budget telling agencies to get creative to find ways to cut future costs in an already tight budget year and identify programs to be scaled back or terminated in the face of current budget priorities, the Government Accountability Office has issued a report calling for a fundamental review of government activities to ensure their relevance and fit for the 21st century and their relative priority.
That would start with increasing the transparency of the budget process, as well as putting in place controls, triggers, and default mechanisms to address what GAO called “a large and growing long-term fiscal challenge” that could “gradually erode, if not suddenly damage, our economy, our standard of living, and ultimately our national security.”
“We cannot grow our way out of our long-term fiscal challenge,” according to GAO-06-761T.
It said improvements to the budget process would include the restoration of realistic discretionary caps, the application of “pay as you go” — PAYGO – discipline to both mandatory spending and revenue legislation, the use of “triggers” for some mandatory programs, and better reporting of fiscal exposures.
GAO said that while the budget process itself has not created the budget challenges facing the nation — largely the result of rising health care costs and demographic trends — the lack of meaningful controls has worsened them.
It called for revising the existing budget processes and financial reporting requirements, restructuring existing entitlement programs, reexamining the base of discretionary and other spending, as well as reviewing and revising tax policy and enforcement programs–including tax expenditures.
GAO also suggested creating “a credible and effective Entitlement and Tax Reform Commission, and undertaking a top-to-bottom review of government activities to ensure their relevance and priority.
