Former CBO head: No budget, no payday

It’s no secret the government’s inability to pass an annual budget is a major headache for agencies. But federal employees shouldn’t be the only ones who suffer. One former top official thinks Congress and the White House shouldn’t be paid if the two can’t put politics aside and craft a coherent fiscal policy within the budget process.

In a new essay, former Congressional Budget Office Director Douglas Holtz-Eakin argues that the legislative and executive branches must be held accountable for their consistent failure to produce an annual budget and tackle the crushing debt threatening the country. His recommendation? Withhold their paychecks until they can get the job done.

“To make sure that this budget sticks, a greater incentive is needed: money,” Holtz-Eakin says in a piece included in a collection of essays about challenges and opportunities in government and policymaking by current and former global leaders. “Specifically, it should not be legal to pay congressional or White House salaries unless a budget is in place for that fiscal year. Period,” Holtz-Eakin says -- a candid suggestion for a former head of a nonpartisan government office. “As the Oct. 1 deadline approaches, members of Congress, the president and their respective staffs would face a cutoff in pay unless the budget is passed.” McKinsey & Co.’s Center for Government produced the anthology. Holtz-Eakin is now president of the American Action Forum, a nonprofit center-right policy group.

President Obama recommended that the pay freeze for federal employees be extended until Congress passes a budget. The government currently is operating on a six-month continuing resolution through March 2013.

Holtz-Eakin, who also served as a policy adviser to Arizona Republican Sen. John McCain’s presidential campaign, argues that the government should be required by statute to enact an annual budget that carries the force of law. “That is, it should be a requirement that the federal government add up all types of spending, subtract all sources of revenue and commit as a whole to the difference -- the deficit and its contribution to the federal debt,” he writes.

The president submits an annual budget request, but lawmakers are not obligated to act on it. The 1974 Budget Act directs both chambers to pass an annual budget resolution and reconcile the differences in conference. But, as Holtz-Eakin points out, “there is no real penalty for failing to adopt a budget resolution and increasingly Congress does not.” The sausage-making typically involves proposals and actions by the president and Congress, producing results that “have no coherent relationship with the various types of spending and revenue.”

The former CBO chief acknowledges that “instituting a legal requirement for a federal budget raises a number of issues: what it would accomplish, how it would be enforced and what complementary changes would be needed.” Tying the passage of a budget to the salaries of those in Congress and in the White House would yield better results, according to Holtz-Eakin. “There is no more targeted incentive imaginable and the politics of eliminating this provision would ensure its survival,” he says.