Implementing legislation for constitutional provisions must answer many questions. Existing budget statutes already provide good foundations for key BBA terms. Statutory budget targets must optimize across long-term fiscal responsibility, short-term policy stability, comprehensiveness, accepting political and institutional realities, neutrality, practicality, and feasibility. The Responsible Budget Targets Act is an excellent start for a principles-based BBA’s implementing legislation. Its targets would set up a decade-long transition to structural primary balance: balance over the medium term excluding interest costs. This would support stable and predictable budgeting compared to annual balance while slowing the growth in the debt burden. Spending could grow with a rolling average of GDP growth with adjustments to avoid structural deficits, to accommodate automatic stabilizers, and to reflect enacted changes in revenue policies. Like the Swiss debt brake, it would allow immediate emergency response with offsets over the subsequent six years. These targets could be reinforced by suspending the debt limit each year that the budget meets the targets. An “incremental” approach for automatic program adjustments is a promising alternative to today’s ineffective automatic enforcement provisions. Finally, implementing legislation could address the role of the courts in enforcing a BBA and related statutes.

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Implementing Legislation for a Principles-based BBA

  • Kurt Couchman

摘要

Implementing legislation for constitutional provisions must answer many questions. Existing budget statutes already provide good foundations for key BBA terms. Statutory budget targets must optimize across long-term fiscal responsibility, short-term policy stability, comprehensiveness, accepting political and institutional realities, neutrality, practicality, and feasibility. The Responsible Budget Targets Act is an excellent start for a principles-based BBA’s implementing legislation. Its targets would set up a decade-long transition to structural primary balance: balance over the medium term excluding interest costs. This would support stable and predictable budgeting compared to annual balance while slowing the growth in the debt burden. Spending could grow with a rolling average of GDP growth with adjustments to avoid structural deficits, to accommodate automatic stabilizers, and to reflect enacted changes in revenue policies. Like the Swiss debt brake, it would allow immediate emergency response with offsets over the subsequent six years. These targets could be reinforced by suspending the debt limit each year that the budget meets the targets. An “incremental” approach for automatic program adjustments is a promising alternative to today’s ineffective automatic enforcement provisions. Finally, implementing legislation could address the role of the courts in enforcing a BBA and related statutes.