Ring in Fiscal New Year Jan. 1, One Budget Process Idea

By Jonathan Nicholson

Sept. 21 — It may not be celebrated by watching college bowl games and recovering from partying the night before, but Oct. 1 is the federal government's New Year's Day—the first day of the new budget year.

As lawmakers look at ways to overhaul the federal budget process, though, some are questioning why the government's budget year doesn't match the calendar year, especially given Congress's penchant for making deals in November and December.

Changing the start of the fiscal year would have large ripple effects throughout the government but is not without precedent. Before 1976, the federal fiscal year started on July 1, a date still used by many cities and states. Changing the federal New Year's Day could have an impact on the timing of the White House's budget submission to Congress as well as the timing of annual fights over the congressional budget resolution and annual appropriations.

May Enzi Memo

The idea surfaced in a wide-ranging draft list of process change proposals distributed by Sen. Mike Enzi (R-Wyo.), the chairman of the Senate Budget Committee, in May. Enzi has been trying to build bipartisan support for changes to the budget process but has yet to hold a markup of legislation.

The May discussion memo included the fiscal year change as part of possible changes to appropriations. “Change the appropriations calendar so that the fiscal year begins on January 1. Appropriations are often enacted using the Christmas and New Year holidays as a backstop already,” the memo said.

In recent years, that has proven true. In 2015, the omnibus appropriations/tax extenders law (Pub. L. No. 114-113) was enacted in December as was an omnibus bill in 2014 (Pub. L. No. 113-235). In 2012, the “fiscal cliff” deal between the White House and congressional Republicans was reached right as the year turned.

The Congressional Institute, an Alexandria, Va.-based nonprofit group best known for sponsoring political party conferences at the beginning of each year, is pushing the idea, as part of a larger list of changes it says should be taken up by a proposed bipartisan joint committee on congressional organization.

‘Simple Way to Start the Reform Process.'

“Changing the date of the fiscal year to the calendar year would diminish the risk of government shutdowns, as the entire time frame for completing the works by Congress would be extended. Furthermore, it would be a measure of improving the time management in order to decompress the tight calendar existing under the current legal requirements,” wrote Mark Strand, the Congressional Institute's president, and Anca Butcaru, research fellow, in a blog post.

The pair said such a change should be looked at with biennial budgeting and restricting unauthorized programs from getting appropriations. “Agreement on such an enormous task will not be easy, but there is nearly universal agreement that reform is needed.,” they wrote “Changing the fiscal year would be a relatively simple way to start the reform process with bipartisan agreement and cooperation.”

But the case for changing the date may not be so simple. Bill Hoagland, a former longtime Republican budget staffer on Capitol Hill who serves as senior vice president for the Bipartisan Policy Center, said he was “somewhat agnostic” but leaned against the idea.

“I just don't think it'll make that much difference,” he said. “It's worth studying.”

More CRs?

Hoagland, who had to deal with the “transition quarter” from the 1976 date change in budget calculations, said he worried Congress would merely waste more time instead of less during the year with a later budget and appropriations deadline.

And while a Jan. 1 fiscal year start might spur lawmakers into action, in order to avoid having their workload clash with the holidays leading up to the new year, Hoagland said he worried the change would instead lead them to punt disagreements into the next year.

“It might just increase the probability of more CRs, not less,” he said, referring to temporary continuing resolutions to fund the government. Similarly, he said he worried staffers could lose one of the few times lawmakers are sympathetic to taking time off.

Changing the start date of the fiscal year would also probably push the rest of the schedule back as well, which could create its own problems, he said. A later White House budget submission date, now the first Monday in February, would mean a later budget resolution completion date, he said. That would mean consideration of appropriations would be interrupted by the traditional month-long August break. In election years, lawmakers would lose both August and October as they sought time to campaign.

“I'm sympathetic, but I don't think it's the magic elixir,” he said.

To contact the reporter on this story: Jonathan Nicholson in Washington at jnicholson@bna.com

To contact the editor responsible for this story: Heather Rothman at hrothman@bna.com

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