Good afternoon and welcome to today's webcast entitled Reforming the Broken Federal Budget Process. I'm David Young, the President of the Committee for Economic Development, the Public Policy Center at the Conference Board. Well, Congress, as you know, is responsible for setting the federal budget through the annual appropriations process. In recent decades, Congress has far too often failed to fulfill its duties in a timely and orderly manner, with late and incomplete budgets leading to omnibus bills, continuing resolutions, and regular threats of a government shutdown. Congress is also responsible for setting its own rules of procedure, providing a significant opportunity to change course. Urgent reform is needed to rebuild a predictable and fair budget process that permits Congress to debate fully the important issues at stake in each budget and, importantly, to restore confidence in our fiscal policy for the American people, businesses, and the government itself. Today, we'll look at a few issues, including what laws govern the federal budget process, how the process is intended to operate, and why in fact it's actually broken. How recent challenges with enacting the budget in a timely and orderly manner have affected governance and prevented action on reducing the national debt. And what opportunities for reform Congress should consider to restore predictability to the federal budget process and address rising fiscal deficits. Today, as usual, I'm joined by a distinguished panel including Thomas Kahn. He is the Distinguished Faculty Fellow, the Center for Congressional and Presidential Studies at American University. Laura Carrot, who is the founder and CEO of Who Brew and delighted to share that she is also a CED trustee. We have Joe Kasputis, the CEO at Economic Ventures and delighted to also share that he is a CED trustee. And rounding out our panel today, Luis Bourgeois. He is a researcher and writer here at CED and focuses specifically on fiscal policy. We'll look at 4 main categories today, and I just want to provide the outline for them. We'll start by looking at the importance of the budget process. We'll move on to recent challenges. We'll look at the framework for reforming the budget process, and then we'll closeout with options for reform before passing it over to Luis to share CD's recent solutions brief. So let's get right into the conversation. I know at the beginning we were having some technical issues, so apologies for being a couple minutes late, but I want to make sure that Thomas is now online and can hear us. Thomas, can you can you hear us? I'm just. Yes. Perfect, Thomas, brilliant. Well, welcome, Sir. And let's let's let's get you right into the conversation. Presidential actions Thomas to reduce or freeze federal funding have been have been obviously a prominent story in the news recently. Can she, can you share just a little bit of background on impoundment and how you see Congress and the courts responding to any intend intended impoundment actions? Let me just start by saying that CED, when I was at the Budget Committee for 20 years, it it was really the gold standard. It is such a highly respected source of information and play such a really responsible role for policy makers, both in Congress and the executive branch. And I really want to just give a shout out to CED and salute you for that as and as to your specific question. Look, every high school government class teaches that Article One in the Constitution gives the Congress the power of the purse, and Article 2 requires the president to faithfully execute the laws of the nation. For the last month, President Trump and Elon Musk have unilaterally been cutting billions of dollars that Congress has appropriated, as well, I might add, as illuminating agencies or trying to eliminate agencies that Congress has created and firing thousands of federal employees protected by civil service. It's notable that he has not gone to Congress once, not even once for approval for these actions. And the reason is pretty straightforward. Congress would not have given him the statutory authority to do that. The practice, what he's doing is your question exactly pointed out, is impoundment. And the practice of a president refusing to spend appropriated funds by Congress has a long and controversial history in the United States. Other presidents have absolutely done it, but in a manner generally which has been allowed by law, otherwise allowed by law. President Nixon aggressively impounded funds to block programs he opposed. But in response, Congress passed in 1974 the Impoundment Act, and that restricted the president's ability to impound money. But this law reinforced the constitutional principle that Congress controls the power of the purse. Instead, the law does permit the the president to rescind the money, but it requires the approval of Congress to do so. The President has not submitted any rescission authority. All of this will be ultimately resolved by the Supreme Court because the president is asserting he does have that authority. Thomas, thank you for sharing that and we deeply appreciate the shout out to CED so much. Much appreciated. Joe, I just want to bring you in and then and then we'll pass, we'll pass over to Laura. Just Joe, kind of just your your reflections and reactions to anything Thomas has said it at this point. Well, I remember well the passage of the Budget and Empowerment Control Act of 1974. I was in the Nixon administration at the time and the the motivation of the Congress was to get some control over over how the money is spent, not to have the president just throw it out the window. But along with that important thing they did is they established the budget process. They said, well, if we're going to assert the power of the purge, we need to have an orderly budget process. So in addition to taking dead aim and empowerment and requiring the president to come back to the Congress, they put together the Congressional Budget committees, the need for an annual budget resolution, the reconciliation of that between the House and Senate, how much would be spent, how much would be taxed, whether they'd be a deficit, whether they'd be a surplus and some allocation to the various 12 appropriations that the Congress in acts annually. So they put a very disciplined process together and they did one other crucial thing and that is the establishing Congressional Budget Office, which started 1974 under the capable leadership of Alice Rivlin, who was a great economist and, and dedicated to fiscal responsibility for her entire lifetime. She has since passed away. But I, I, I think the Congress really did step up and put a process in place, but, and it worked for a while and then they found they couldn't sustain it. There was always a political issue that would get in the way and a debt ceiling issue would come. And somebody had a favorite program that they wanted to see passed, and they would hold their breath and refuse to vote for the debt ceiling and grant the threat of the government to shut down. And the. The history is littered with examples of Congress trying to reform itself and then not having the discipline to go ahead with it. We'll talk later about reform proposals, but I think is a a watershed right now. I, I know you wanted me to say something later about the size of the debt and deficit. Yeah. Yeah. Let's, well, yeah, we'll bring in the debt later. And you mentioned 2 interesting points, one, fiscal responsibility and also the challenges that were faced. So we'll try and weave those, those points into the conversation. I want to bring Laura into the conversation, who is also joining us by the phone. I think. So Laura, I just, I just want to double check you can hear us and we can hear you. Yes, I can, and I'm sorry I'm not on video. Great. Well, welcome again, Laura. I just want to get your kind of initial reactions and reflections to the situation that the US is going through just with regards to this topic around the broad importance of the budget process. So I have a lot to say which I will hold for later, but I'm going to say something which is really simplistic, but I think really important, which is with what's going on right now and what, and I'm going to be totally non partisan about this. It was what's going on right now with the president trying to cut so many things going, I'm going to say around the process. It creates enormous uncertainty and with uncertainty comes huge risk. So I approach this from a business minded perspective, not so much a policy perspective, but but if you don't know where the money is going and what the priorities are, it's very hard to plan. And I think that that risk level for our economy has heightened exponentially because of what's going on. Yeah, thank you, Laura. And I, I just want to bring go back to to Thomas here a little bit because I think it's important for all everyone that's tuned in today and and anyone that listens to this webinar to, to really have a deep understanding as to the process itself and more than just the process like the, the key stakeholders who are involved. So Thomas, just want to bring you back in just for for you to provide a brief overview of of the budget process and also who are the key stakeholders involved in moving that process and those decisions along. Great question. And I just want to say that I agree with, I think the points that Lewis and Laura made were spot on. And I think they, I think they raised really important issues that hopefully we'll have time to get back to. I think Lewis actually laid out in some manner that the budget process the way it's supposed to work, but unfortunately it has not been working very well, I'm sorry to say. If the president is supposed to submit his budget in early February every year except when he's just been elected, Congress is supposed to consider his budget and then pass the budget resolution by April 15th. Then the Congress, with the budget resolution conference report passing, can begin writing the 12 appropriations bills. And then if the budget resolution has reconciliation instructions, as it does this year, then the authorizing committees are required to send to the Budget Committee by a certain date legislation meeting those reconciliation instructions. Then the House and the Senate conference those differences, and then they pass a reconciliation bill. The stakeholders include Congress, the administration, the American people, and most specifically within the Congress, the House and Senate Budget Committee, the authorizing committees, of course, the Appropriations Committees, and most notably the administration and the leadership of the Speaker, the Majority Leader, the Minority Leader, and the Minority Leader in the House. Interesting. Thank you. Thomas. Joe, you, you mentioned the national debt and I know it's front and center of one of the key issues that you focus on. It's also a key issue that CED focuses on. Congressional decisions to enact budgets with deficit spendings are a crucial driver of unsustainable national debt. What from your perspective, can you just give us a an overview of of what the current fiscal outlook for the federal budget looks like as we look at deficits and the national debt? Certainly, David, I'd say the outlook is really very grim and it's been made worse by the lack of attention to a budget process by the Congress just not having an orderly consideration of these facts. Let's just look at deficits for a moment. The difference between how much the government gets in revenue and how much it spends for this fiscal year we're currently in. We're five months into it. It's estimated that the deficit will be about just a shade under $2 trillion. That's $2 trillion. We're going to go deeper into debt this year. That represents 6.2% of our GDP. For many years the deficit average about 3.8%. So it's, it's getting close to double what its long term historical average was. But what is really scary is if you go to the Congressional Budget Office, which I mentioned before and and look at the projections that they do very carefully at 275 economists and analysts looking at every government program, they project that the deficit annually will, will, will, will grow to 2.7 trillion by 2035. And that will represent still about 6.1% of GDP. So from 1.9 trillion now to 2.7 trillion by 35 S every year you have two plus trillion adding to the debt. Now we get to the debt. The debt held by the gross debt held is about $35 trillion. the US is in Hock for 35 trillion and we're adding to it at at 2 trillion plus annually. And we'll continue to do that. It's estimated again by the Congressional Budget Office that by 2035 our our total debt will be just under $60 trillion. So we're going to go from current 35 trillion almost double to 60 trillion. Now we can probably borrow that much money as long as the United States continues to grow at about two, 2 1/2% in the long term average. But what we probably can't do is paid for the interest costs. You know, we had, we, we just had a long vacation on interest from the fiscal crisis of 2008 up until right up until coming out of COVID in 2022. There were times when TT bill, A10 year T bill was actually for an interest rate less than 1%. So the government was piling up debt at very low interest rates. Well, I don't think we're going to see interest rates like that anymore. We're going to see 3 1/2, four and a half percent. This is what the Congressional Budget Office projects. But there has to be a point at which interest becomes unbearable. Right now the interest is equal to about the defense budget and the interest costs. Last year with just under $900 billion, we paid out an interest and and by 2035 the estimate will be double that $1.8 trillion will be our annual interest cost. Now what programs are going to get squeezed out as a result of that? You can imagine, well, the situation is worse than you think. The Congressional Budget Office is limited to current law. So all the numbers I just gave you assume that the Trump tax cuts expire at the end of 2025 and are no more. Now, obviously, the House Budget Committee just came up, reported out a bill that said, let's go ahead with the Trump tax cuts that'll cost another 4 1/2 trillion dollars over the next 10 years. They did come up with an idea that they try to save $2 trillion along the way. And I guess the Department of Government Efficiency is anticipating filling that hole with some of the moves they're making. But nonetheless, even if they achieve the two trillion, you have another 2 1/2 trillion dollar annual drag added to the deficit. That's not in the numbers I gave you. Then there's one other point and that is Social Security is completely outside all of this and is headed for a disaster in 2000 and 3833. Rather, my nightmare scenario is we do nothing about Social Security, which Trump has said that's we can't touch Social Security do nothing about it. That means that every American's going to take a benefit cut in 2033 when there's no more money to pay out. And the nightmare scenario is we reach into the general revenues for it. That costs another half a trillion a year. Yeah. Thank you. Thank you. I think. It's very grim and I think there's implications for business, but I'll stop now and I'd like to talk about that later. Yeah, no, fantastic. And we're going to get to want to bring Laura in just to speak a little bit about the implications on business. But Joe, you are not alone. CED certainly is not alone with regards to raising awareness around around this topic. And it's also just for those tuning in. It is a topic that played almost zero role in both campaigns last year, despite the the impact or potential impact of it. There was an interesting interview last week with Ray Dalio, the the asset manager interviewed on CNBC and I just quote. You know, Dalio saying to the Trump administration, if you don't cut debt now, you'll face an economic heart attack. So the, the issue area and the severity of it is, is growing across all quarters. Laura, I just, you know, we've, we've spoken about, you know, the federal government spending and the fact that revenue decisions are critical for US businesses and the economy. You alluded to it in your your opening comments. I'm just wondering if you could expand a little bit from your experience how the federal budget effects businesses, the broader economy and private sector thinking and how to your, to your earlier point, how it, how it creates this environment of, of uncertainty. And given that environment of uncertainty, what does it actually mean for private enterprise? Thank you. So I, I want to start with a piece of the conversation that I find striking that it's not in, it's not there. And you know, the process itself is designed to accomplish something and we, we collectively don't spend very much time with, about talking about what is the process designed to accomplish in the business world broadly, you're held accountable to making money. So what the budget is supposed to do is help you plan and give direction in terms of resource allocation and, and, and execution to help you do that. I think arguably the, the outcome that's supposed to happen from government spending is for the welfare of the American people. And what what I don't see, and I'm going to come back to business in a second, is the conversation about how well the money is spent and is it actually accomplishing what the goals are. So that's just my first observation. The second, the second thing is someone used a word heart attack. I think we were referring to Ray Dalio. And as I was, as I was thinking about this, you know, CEOs have bosses, they're called board of directors. And the CEOs kept borrowing and borrowing and borrowing to make their plan. It's called headed to bankruptcy. And I started thinking about my past board of directors and the kinds of heart attacks that'd be happening that that would be happening if I was advocating a similar plan to what the the federal government is doing. Because Ray's right, we're headed towards disaster when it happens. I don't know, but we're headed towards disaster. I want to just make a couple other points. One is I think going back to stakeholders, you know, it's interesting, I think most people don't think through how much of the government spending actually goes directly to the private sector. So of the discretionary spend the government that Congress has control over, it's 1.7 trillion, 45% of that goes directly to non government contractors, which includes the defense industry, the Veterans Affairs, Department of Energy, Health and Human Services. They are not technically government, they are businesses. And you know, they have to come at this like a business would. And if you don't know how much money you're getting, it has serious adverse implications as to how you plan, which we'll talk more about later. The, the last thing that, well, maybe I'll just emphasize that for one second, which is, you know, I was thinking about the uncertainty that comes from, am I getting funded or not? Is there going to be a government shutdown or not? And it, it makes it impossible to run a business in that kind of environment. And you know, if you compare the I'm not in the defense industry, but I, I was in retail, but and also manufacturing, you know, in the manufacturing world, if one of your biggest and possibly your only customer just talked about what they were going to spend, but never actually committed to an order, you couldn't run your business. I mean, how would you staff? How, how would you manage your inventory because you don't know what you're going to be asked to make and on what time frame. You're constantly in this mode of sort of struggling to to predict, am I going to have more or less Generally, I think it's going to be less. And how am I going to deal with that? And what you're not thinking about is keeping up with competition. Am I investing in the future? Am I attracting the right level of talent? All those kinds of things. So the point I'm trying to make, just to to end this is when people talk about the budget process, I don't think there's enough recognition that a large percentage of the discretionary spend that Congress is in charge of goes right to the private world, and that's a big deal. Yeah. No, no, absolutely. Thank you. Thank you, Laura. I want to move back to to Thomas and I also want to just change the topic a little bit and, and have a conversation, a brief conversation just around some of the recent challenges. Thomas. Despite the formal budget process outlined in the 1974 Congressional Budget Act, Congress has experienced challenges, as we know, in passing the federal budget in a timely and orderly manner. Thomas, from your experience, your kind of academic and professional experience, what, what are some of these challenges Congress has faced regarding, you know, the late budgets, the omnibus bills and the continuing resolutions? Thank you for that question. And and the budget process is a mess. Let me just go back to one thing about the debt because I just think it is so important to the points that Joe is making the debt ServiceNow cut, we now spend as much on debt service as we do on our National Defense. That's quite stunning if you think about it and it is the fastest growing part of the budget. Secondly, another danger of a large debts and deficits is higher interest rates because when the government goes into the private markets to borrow money, it's competing. I think all everybody is watching this understands is competing against the private sector. That's right. And then finally, it's notable that historically governments run larger deficits when we're when they're in times of economic recession, which makes sense because tax revenue is down and expenditures are higher. We now are enjoying a strong economy. We're enjoying growth and yet nevertheless we have such high debt deficits. Imagine what happens when we go into an economic recession as we inevitably will. Imagine then what will happen? You know, there's an old saying, you fix the roof when the sun is shining. Well, the sun is shining and we are not fixing the roof. To the contrary, in terms of your question about the budget process, Congress has not passed a budget on time since 2003. It hasn't passed all appropriations bills since 1996 on time. Lawmakers have used continuing resolutions almost every fiscal year since 2000. We actually are in a continuing resolution right now. The fiscal year ended on September 30th and we're now in the almost the end of February and we're still in a continuing resolution which is a terrible way for the government to fund is priorities. Other problems we've had with the budget, we've faced regular government shutdowns, near defaults over debt ceiling increases that have led to a down grading of our credit rating, and finally, the adoption of omnibus spending bills that are thousands of pages long. The Congress has a day or less, even maybe a few hours to look at. And then, of course, it's the deficits and deaths that we were talking about. So what is the cause of these problems? Why? Why? Why is the budget process such a mess? And it's a complicated problem, but I just offer two, two causes right now. We can maybe get into it later. The 1st is, naturally, we have significant political polarization in this country. It's hard for Congress to agree because the parties are so ideologically divided and numerically divided. And then on top of that, one party, the Republican Party, and I don't say this is a partisan, but just as an observer, the Republican Party itself is internally divided between the very conservative Freedom Caucus and the more mainstream members. And that's why Republicans cannot pass spending bills by themselves and need Democratic votes. So why do we have such large growing deficits in debt? Well, sadly it's all the reality is that fiscal budgets mean cutting spending and raising taxes. But politicians don't like doing either. They like doing the opposite because politicians like getting re elected and getting re elected means telling the voters either cut your taxes or increased spending for your programs. Raising taxes. Cutting spending is a good way to lose an election. And my 30 years on Capitol Hill, sadly I saw that happen a lot just as the first George Bush. What happened to his RE election? So right now, the House, as Joe said before, is about to pass a budget with all of the dire situation we're in in terms of the debt, it would add 3 1/2 to four, up to $4 trillion to our budget. And it could be even more. The Senate is actually talking about using a budget gimmick, really quite extraordinary that would hide the cost of the tax cuts, to pretend that they don't cost anything. And they show only eight years of their tax cuts rather than nine years. So the budget process is not working well, I'm sorry to say, but the incentives for Congress are not to meet their requirements. In fact, they're the opposite. Thank you, Thomas. I want to move. I think we've set the scene perfectly. And I know those tuning in probably have the same question I'm about to ask all three of you is OK. We we've, we've kind of articulated the the problem, we understand the deficit, we understand the debt. So, so how do we, how do we start implementing a, a course correction? And I just want to go kind of the same question, but we'll start with Joe, then Laura, then back to Thomas. But Joe, from from your perspective, what, what do we do to, to kind of course correct here and start solving what, what all three of you and you know a vast number of, of other people not on this call recognize as a significant issue facing the United States? Well, I think Thomas put his finger on it when he said the politicians have no incentive to to to do anything that's fiscally responsible. The incentive is to cut taxes or spend more. And the Citizens United decision, which allowed corporate money to flow to congressional and senatorial races, I think had a lot to do with the the the polarization and determination of people to do nothing but make the situation worse. So one of the things I'd love to see is to get campaign spending under control that existed before the Citizens United decision. That's wishful thinking. The very interesting thing is I've had one on ones with some of the most senior people in the Congress, including Nancy Pelosi when she was the speaker. And, and every single one of those one on ones, the people who agree completely with me that we must do something about the deficit. And, and then I leave their office and, and they do the opposite. They want to cut taxes or of course that money. So it's a, it's a big challenge. And the the first task is to educate the electorate so that people realize this is an issue. What's in front of us, let me say what's in front of us. If we keep on this pathway, interest rates will inevitably rise. We'll have less private sector investment. With less private sector investment, we'll have less productivity and we will have lower standards of living coming at the very time when the US population is expected to top out and start to shrink. So that's another challenge to keep things growth going and at the very time when we are making huge efforts to close our borders to immigration. I mean, I'm all for immigration reform and for sensible immigration to bring in the skills the country needs, but but we do, we're not going to have it in our population growth. So we we face a very poor economic outlook for business and for the average American standard of living will will go down. How do we move the needle? We have to educate the electorate. The second thing is I think the Congress has to wake up. If you step back and look at it in a broader context, the Congress doesn't work at all. It hasn't been able to get get its business done. The president has taken over. And this was well before Trump and, and, and before Biden. They were running the place with executive orders in, in the vacuum that exists and Congress had set itself up to be irrelevant. And right now, Congress is irrelevant. Listen to all the senators that were opposing some of the more critical Trump nominees and, and they've all backed down and except the gets, you know, some of the most controversial ones that senators said they'd never vote for confirmation for this person. I won't mean any names, but you know who they are. They all got through and, and, and Trump's going to get his way. And it's going to be Trump's budget from now on. Anything the Congress does, until the Congress gets its act together and and has something significant like the budget empowerment control in 1974, Trump's going to run it. And I don't think the Constitution was set up to work like that. Yeah, thank you. Thank you, Chair. I want to just bring back, bring Laura back in. And Laura, this this really gets to like kind of as we look at solutions, are there lessons learned or fiscal and budgetary principles that businesses actually use and deploy that could be useful to facilitating a course correction and solution within the government and the government process? Yes. And I realize as I'm listening to my esteemed colleagues that I'm definitely not a policy expert or a politics expert. And what I'm going to say is, I think remarkably Pollyannish given the complexity of what needs to happen. But the direct answer to your question as I was thinking about this, there's really three things that we do in business that I think are critical to managing a budgeting process to get the the best outcome. The first one is complete the budget ahead of the fiscal year. If you are completing a budget well into the current fiscal year, by the time you're done, you're already thinking about the next budget. And you know, it's much better to spend time doing the do than planning to have a plan. Because if all you do is plan to have a plan, nothing ever happens. So, you know, the first thing is, again, I don't know what tools need to be put in place to hold Congress accountable to this, but we should make it mandatory that the budget gets done ahead of time. The second thing is, and again, I know this is really easy to say, but in business resource allocation is arguably the one of the critical priorities of the management team right after strategic planning. You know, what a strategic plan is supposed to do is set out a long term vision that says this is where we're headed and this is what we're trying to achieve. And the resource allocation, which comes in the form of capital and expense money, you know, funds the the path to get there and in some cases defunds the stuff that isn't working or doesn't matter. You know, going back to the concept of measuring return, I don't have knowledge that Congress in these conversations is spending enough at any time evaluating how these various, you know, equated to business again, business units are performing. Are they good at what they do? And if they're not, what could be better? And, and to me in business, what we do is we fund the performers and we defund the non performers. And if the if the non performers go on long enough, we get a new management team who can perform. So I don't know how to make that happen in today's complex environment. But that's the second principle. It actually, I just I covered the third one, which is be willing to change teams if the management team isn't performing. Look, you either have confidence or running these, these again, I'm going to call them business units or you don't. Yeah, and you either have people that can achieve the objectives or you don't. And one of the hardest things is to assess that and make sure you have people that can get the job done. And this goes, Laura, this goes a little bit to what Joe was saying. One of the elements there is just education of the electorate, both in terms of the process, the current situation, but also kind of if you take a lesson from the private sector and businesses, you know, how, how well or how badly are people actually doing. And I feel like in the private sector, there's greater visibility to, to gauging that than potentially there is in the in the public sector. Thomas, I want to, I want to bring you back in on this and I've got a dual question, A2 part question for you. Firstly, as we look at solutions, what are a few principles that you would highlight for reforming the budget process? And what are some specific policy options Congress may or should consider to improve the timeliness in passing the federal budget? And just back to something that Laura was just talking about, unfortunately, and I, I, I agree entirely with with with her recommendations. And sadly, the political process does not give an incentive necessarily for outcomes that work, but what is politically most advantageous to the members of Congress. And it, it actually goes back to Joe's point in part about, about huge amounts of, of political donations and, and, and that actually, sadly has a very profound impact in terms of what Congress can do in terms of, and by the way, I do want to give in terms of the debt and deficit. I just do want to mention two organizations that really do a very, very good job in addition to CED in terms of highlighting the deficit debt. One is the Concrete coalition, the other is a Committee for Responsible Federal Budget. They put a lot of very good material and they are very helpful, along with what CED does in forming the public and holding politicians accountable for the deficits in debt. Voters should be asking them every election and every town hall. What are you doing about it? How are you lowering the deficits in debt? And it's not enough to say, well, I'm cutting spending because if they're cutting spending but cutting taxes, then the outcome is raising debt. So they've got to do both in terms of of, of the, the, the process, the budget process and significant reforms. I would start with a very simple rule and actually rules that were in effect in the 90s. I'm very proud. I worked in 1997 on the last budget plan that got our budget in balance for three years. It was a bipartisan bill that was signed into law by President Clinton. Newt Gingrich worked on it. Trent Lott And it's the last time we did balance the budget and we had two rules in place. One, the most important one, was called the Pay as you go rule. No bill could go to the floor of the House or the Senate that added to the debt. It's so simple. If you want to cut taxes, pay for it somehow. If you want to increase spending, pay for it somehow. And we followed that rule and it worked. In terms of other things I would recommend there and there are a number of other interesting proposals out there and I and CED to its credit, has endorsed several of them. There is biennial budgeting which gives Congress two years rather than one year to review an appropriations bill and one year to pass the bills and then the second year to do oversight. There should be limits and caps on emergency spending so emergency spending isn't used as as a a loophole for huge amounts of additional deficits. There are others out there like automatic continuing resolutions. There are rules and proposals to prohibit Congress from passing any legislation with a physical with a fiscal impact until a budget is adopted. My favorite is Congress cannot go in any foreign junkies until they pass a budget. That would be very effective, I guarantee you, because they love to go abroad. I say that somewhat lightly, but I I am very serious and we have to hold members of Congress comfortable for their votes and, and the voters are not doing that. And maybe we can help create a process that would achieve that. Interesting. Thank you, Thomas. Joe, I want to bring you in just on one point that Thomas mentioned, which is the biannual budget process. And just get your thoughts and, and reflections because it seems that there's a lot of sense to this in terms of if they, if they can't do it on an annual basis, why not, you know, extend that timeline and actually create a little bit of sustainability into their decision making process and the, and the budget process. But let me say I'm very much in favor of that. I, I am in favor of that along with several of the recommendations that are in CDs very fine solutions brief, which I know Lewis is going to talk about later. There's a lot of good ideas in that solution brief, but one of the top ones is to go to a, a biannual A2 year budget process. You would obviously in that process update the, the, the coming year, but you'd always be working 2 years out. That'll give us a bit more of a long term look. It would also give time for something that Laura mentioned a couple of times. You're I'm sure we're all aware that every department sends a report annually on on its program effectiveness to the Congress. I don't know of any much with as much record of anybody looking at it, asking questions about it, suggesting better metrics that there was a time in budgeting when it was very popular in the in the 1980s to have outcome based budgets. So, so you had output measures for every agency. And yes, it's hard to measure what the output is of the State Department, but there are pieces of the State Department you can, you can put to, to, to a yardstick and where you can, you do, and, you know, a two year process would give a chance to look at things like that. And they ask questions about a program effectiveness and program evaluation. And by the way, the GAO is now called the General Accountability Office. They do some excellent evaluations of programs and, and, and point to where things are broken. And those reports should be used by the authorizing committees and the appropriations committees. And a two year process would help that. So I'm all in favor of that. And just let me end my comment by saying I'm also in favor of what Thomas said about no junkets. Until a budget is passed, I think something would have even more teeth. And it's unthinkable that the Congress can probably ever enact it. But what they really should do is have no recess until a budget is passed. And if they go over the deadline and don't have a budget done by the beginning of the fiscal year, the pay to the membership should be withheld. And how about that for an incentive? No pay, no foreign junkets, and no recess. That's what the American people should demand of the Congress given their awful record of refining themselves. I mean, if you go back to the different times when they've made attempts, and I'll call attention to the Super committee, which was the biggest debacle I've ever seen in 2011, where Congress said they just couldn't agree on the number. Let's appoint 6 Democrats and six Republicans and give them one of potential powers and, and come back with a million, trillion and a half dollars worth of reductions. And, and if, if they don't come up with that, then we're going to have a draconian process in place where we're going to cut discretionary spending by a fixed amount, cut defense spending by a fixed amount. And guess what? the Super committee couldn't come back with anything. So that set the clock ticking on the draconian process, and the Congress said, oh, never mind, we didn't really mean it. Yeah, thank you. Thank you, Joe very. I don't know if you could see the virtual screens here I'm looking at, but you got a, you got a whole selection of claps to to some of your comments there. I want to bring in Laura for the for the final word here because I just think learning or at least trying to learn from the private sector is, is critically important. Laura Joe, Joe mentioned kind of outcome based metrics. I just wonder if you could share just some some thoughts, reflections from your experience on examples from the business community of let's just say, successful organizational change and how do we start changing things to move it in the right direction and what lessons we can take from the private sector? Thank you. You know, I was thinking about specific examples and since I only know I've only lived through my own experience, I'm going to refer to my own experience and offer some principles about what it takes to make this happen. If you're trying to affect broad transformational organization change, you think about 3 broad categories that need to be addressed, culture, process, and tools. The process we spent a lot of time Speaking of already, but one of the things that I think we didn't speak about or we did perhaps in the impoundment discussion is, is it totally clear whose decision it is and who gets an input, who gets to recommend and who actually gets the final call. But that's not clear. It leads to, in my opinion, an inordinate amount of conversation and confusion and frankly arguments. So that's the first one. I would say the second I going back to the broad topic of accountability, you need to have a properly incented high performing management team that wants to win and you know, define winning however you want to define it. But they want to win. They want to make something happen, you know, without the, the power to hire and fire, you can't affect that. And it goes directly back to the, to the conversation we just had that both Joe and Thomas were talking about in terms of who's holding Congress accountable and who actually is going to say to them, this is not OK, you have to change it. I, I don't know the answer to that question, but no one seems to be holding Congress accountable. And I think that's a huge problem. If you don't have that in the business world, you fail. The third, which you haven't talked about today, if it goes back to to Social Security, is in the business world, we would describe this as get rid of sacred cows. Again, I know this sounds completely Pollyannish. I get it. But if if not everything is on the table, you don't get a clearview of what is possible. If people are holding things back to protect them because they want to or because their voters say they have to, you're going to get into a power battle as opposed to who's actually performing. So the third thing I'd say is get rid of sacred cows. And the the last thing is, I can't remember whether that Thomas or, or Joe was just talking about this, but in my opinion, at least in my experience, measure, measure, measure. Define what it is you want to achieve. It's hard to make metrics. I completely agree with that. But you have to do it as best as you can. And then you measure, you track, you update, you scorecard, you talk repeatedly throughout the year, and you make adjustments before problems happen. You know, typical scorecarding is if it's very simple, you get a red, you get a yellow, or you get a green. If it's green, you don't talk about it. If it's yellow, you talk about, you know, what can be changed immediately to get it to be green. Usually that's relatively simple. And if it's red, you may have to change course entirely, but you do it before the issue happens as opposed to talking about it afterwards. So again, I'm just relating that from my own experience, but I suspect that most CEO's would have something similar to say about this. Thank you. Thank you, Laura. And I really appreciate the, the clear and articulated outline when you you talk about these three areas, culture, process and and tools. I know we're approaching the, the top of the hour. There are a couple questions here, but I don't think we'll sadly get to them. So my apologies to Nick, Amy and and Jane. I really appreciate you submitting some questions. I want to invite Louise in. Louise is a researcher, as I said at the beginning at CED. He focuses specifically on this area for us. And I want him to to share some of the top line solutions from Ceds recent solutions brief on this topic, which will be published next week. So, Luis, let's bring you into the the conversation here. Thanks, David. See these new solutions Brief recommends a series of solutions as our panelists have discussed today. So, faced with 36 trillion and total outstanding national debt and an annual budget deficit of $1.9 trillion, Congress must not only act to carry out its fiscal responsibilities for each year's budget, but also address the long term challenges of our nation's unsustainable debt and budget deficit. Perform the broken budget process. Congress should consider comprehensive solutions that improve the timeliness throughout the process, mitigate challenges to regular order, permit greater debate on important topics, and incorporate longer term planning into addressing our nation's fiscal outlook demands. Action now So our recommendations for Congress are ideally intended to be part of a comprehensive reform package, and Congress may consider these options either through reforms to rules, via legislation, or through a bipartisan congressional committee on fiscal responsibility. To improve timeliness, Congress may require lawmakers to pass the budget on time by prohibiting legislation with any fiscal effect from being considered until a budget is passed, and to do this, congressional leadership may prevent members from leaving for scheduled recesses with exceptions for genuine emergencies. Congress may also consider moving from an annual budget process to a biannual 1, which can include two year budget resolution, two year appropriations, and or multi year authorizations of federal programs. To mitigate dysfunction and challenges to regular order, Congress may strengthen budget mechanisms, including enforcing as you go statutes, capping increases in discretionary spending, and utilizing sequestration as a last resort. Congress may also consider implementing automatic continuing resolutions at the start of the fiscal year that Congress has failed to pass the federal budget on time. Congress may also consider reforming the debt limit and options include automatic increases that fiscal targets in the budget resolution are met or requiring a debt limit increase or suspension vote with any legislation with a significant fiscal effect. And finally, to incorporate longer term planning, Congress may extend the time horizon for the Congressional Budget Office baseline budget projections from 10 years to 25 years and requires CBO to assess the long term impact of budget proposals, including interest, costs and all scoring. Congress may also require statutory medium and long term targets for regular appropriations and for the national debt as a share of GDP, with the goal of reducing the national debt to a more sustainable 70% of GDP. Congress may also establish long term targets for capital financing activities and consider an emergency reserve fund to respond to natural disasters, geopolitical events, and other unanticipated crises, perhaps financed by long term bonds, coupled with plans to mitigate these lists. So back to you, David. Louise, thank you so much. And now the top of the hour, a couple of housekeeping notes and I just want to give you a round up of of what's coming next in in March. Obviously, as you know, there are fast moving developments in Washington DC with the new administration. So to help you stay ahead of the new policy landscape, please do check out the Conference Board's Navigating Washington initiative. This is where we will be pretty much analyzing every executive order as it comes out each and every day. Two upcoming webinars, the first on March 20th, financial services, what next for the new administration and again, delighted to say I'll be joined by an esteemed panel. And then a couple of days after that, on March 25th, we change topics completely and we start looking at education, workforce and the impact of artificial intelligence as we have a webinar entitled Are we Educating the Workforce of the Future? But with that said, we're right at the top of the hour again. Thomas, Laura, Joe, Louise, thank you so much for the interesting conversation. Deeply appreciated. Thank you, and we wish you all a lovely Thursday afternoon. Take care. Thank you. Thank you. So much. Thank you very much. Thank you. _1741776830011