International experiences informing federal budget reforms in the USA: exploring accruals, transparency, fiscal rules, and multi-year budgeting

IMPACT

Whether the bar is as high as being fiscally sustainable, or as low as agreeing on a budget every year, the US federal budget process has not been able to meet it. While budget processes cannot deliver results in the absence of political will, the reforms proposed in this paper would facilitate informed decision-making and put pressure on myopic politicians. The reforms include, first, instituting accrual appropriations only for liabilities where long-term costs are significant. Second, increasing accountability by making budget decisions more accessible to the public. Third, shifting away from impractical fiscal rules and towards pragmatic and transparent fiscal goals.

ABSTRACT

In recent years, the US government has been unable to satisfy even the most basic conditions of a budgeting process. In the 40 years since the last comprehensive federal budget reform, many countries have enacted innovative solutions. The authors analyse the lessons that international experiences have for the USA. They conclude that introducing partial accrual budgeting, producing a citizen’s budget, and eliminating fiscal rules could improve the realization of long-term costs, increase accountability, and limit the use of fiscal sustainability as a bargaining tool.

KEYWORDS:

• Accrual budgeting
• budget transparency
• congressional budgeting
• federal budgeting
• fiscal rules
• multi-year budgeting
• US federal government