It's Time to Try Two-year budgets

Many review panels, including the prominent Packard Commission in 1986, have strongly recommended biennial budgeting. Since the Pentagon's 1988 and 1989 budgets were submitted simultaneously, Defense officials have tried to move in this direction. But mainly due to a lack of support in Congress, biennial budgeting never has been fully implemented.

Ample precedent has been set for two-year budgets. More than 20 states use bien- nial processes. As the former governor of Texas, President George W. Bush is familiar with the cadence and tempo of a two-year approach. During his presidential campaign, Bush strongly advocated a shift to a Texas-style biennial budget cycle. "If the discord in Washington never seems to end, it's because the budget process never seems to end," he said, adding that the current process results in, "too much polling and not enough decision-making."

Last year, Senate Budget Committee Chairman Pete Domenici, R-N.M., introduced the biennial Budget Appropriations Act, noting that Congress spends nearly half of its time on the budget process. The bill won bipartisan support, but the measure faltered due to opposition from the appropriations committees.

A two-year process allows state legislators more time to consider non-budgetary issues, to more carefully weigh new initiatives, to conduct better legislative oversight and to shorten legislative sessions. The biennial process allows officials to monitor spending under the current budget while drafting objectives for the next one.

Under the annual process, an enormous amount of work is crammed into a legislative session that runs from February (when the President submits his budget) to Oct. 1 (when the new fiscal year begins). In addition to enacting the regular budget, Congress spends time reviewing current supplemental and emergency budget requirements while conducting hearings on the next year's budget.

The Defense Department needs longer-term planning. The time and money needed to develop and field new weapons systems almost always exceed planners' expectations, in part because the annual funding cycle creates tremendous uncertainty in the long-term outlook of Defense programs. Through biennial budgeting, Defense officials and contractors could manage programs more efficiently by doing longer-term planning and working out more favorable agreements with suppliers. Also, Defense planners and budgeters would have time to conduct the analyses and evaluations necessary to improve the link between projected spending and strategy.

Traditionally, most opposition to biennial budgeting has come from the appropriations committees because the annual process gives them enormous influence and leverage. But we have already witnessed something akin to a biennial process with the Bush administration's fiscal 2002 Defense budget. The Bush administration didn't submit its Defense request until the end of June-nearly five months late, leaving Congress with little time to deliberate. And although the budget submission did reflect additional funding for several existing programs, it essentially built on the Clinton administration's defense budget for 2002 while deferring major changes until 2003.

Essentially, this means that the Pentagon has been operating under a de facto biennial budget for 2001 and 2002, albeit one that lacks the stability that would accompany a true biennial process. A useful approach in the near term would be to build on the work already done by Defense Secretary Donald Rumsfeld's budget planners and submit a biennial budget for fiscal 2003 and fiscal 2004 next February. Since the Defense planning process projects programs five years in advance, the data for fiscal 2004 already reside in the Pentagon's database. Congress could greatly enhance program stability if next year it authorized and appropriated Defense funds for fiscal 2003 and 2004. Changes for unforeseen events, which Rumsfeld hopes to minimize, could be dealt with in supplemental, emergency funding legislation. The administration would submit the next full budget in 2004 for spending through 2006, thus allowing the next administration time for review and appraisal after taking office Jan. 20, 2005.

Shifting to such a schedule would be difficult, requiring careful management and political concessions in Congress and the executive branch. But it would be a good start toward a more orderly and thoughtful budget process.