Standard Errors: How Budget Rules Distort Lawmaking

The article argues that the Congress’s budget process has invisibly influenced its legislative activities and structurally skewed its policy choices. The budgetary structure and tools as they affect lawmaking are largely unanalyzed. Until they are widely appreciated, they may often be random, inefficient, unrepresentative, and even deceptive. Review, critique, and change are overdue in any case. Inasmuch as the Congress is now, after a period of budget anarchy, debating how to refocus on the budget, this is a particularly good time for such activities. The article also argues that additional structures are needed to “counter-balance” both the skewing that results from the current rules and the sheer centrality of the budget in policymaking. In a fundamental way, Congress should review its simplistic focus on the restraint of monetary deficits alone. In the long run, future generations may be equally or better served by the creation of budget-like restraints on non-monetary deficits, such as increased disability, diminished public health, or permanent environmental damage. The structures that have shaped financial decisions in the past may offer solutions to these problems in the future. The article is laid out in four parts. Part One provides a brief historical background of the Congressional budget process, including its roots in Public Choice Theory. Part Two consists of an explanation of four non-obvious concepts essential to understanding the basics of the budget process. Part Three is a series of observations of some serious effects of the process in lawmaking. Part Four lays out suggestions for “counter-balancing” the budget process, including extension some of the Public-Choice remedies to non-monetary measures