many of you in this room. we also have dr. phaup. he works at the george washington university. his research aims to improve performance of federal budgeting by the criteria of efficiency, equity and stabilization. and prior to that, until december, 2010, he directed the federal budget reform initiative at the pew charitable trust. welcome to all of our panelists. as dr. price mentioned, i am reporter at "the washington post," i cover a budget and fiscal policy here in congress. mr. posner: thank you for all being here. i think there's one thing that we all can agree on, which is the budget process in some way shape or form is broken. we wouldn't be here if we didn't really believe that. i start off all of my lectures with my students on the federal budget saying, unlike social

security, health care or food aid, the budget is the one thing that politicians have to do every year. well, apparently not every year. so, there's an exception right there. showing everything about the budget is the exception to the rule. but i think we can tick off a list of things that don't seem to work, the disproportionate attention paid to discretionary spending, even though it's a declining share of the total resources, the fact that the targets for spending are largely symbolic and don't seem to be adhered to by the rest of the congress. the fact that for the most part, most of the budget is off limits, there are walls around mandatory tax expenditures and the like and there's no concerted review available to bring together how all those programs interact in areas such as higher education, low income housing and all the various other programs and policy goals that we care about. we say we have a unified budget

but we really don't. in some ways the budget act was different than this. it was a comprehensive way for congress to tackle priorities, take them on through a special set of committees they create, it was in some ways in experiment creating a shadow set of committees could bring the rest of the congress to bay. it probably was the other way around. the budget committees are influential by exception, only the extent to which the leaderships adopt them as their pet process to effectuate leadership reforms is the budget committee's work gaining leverage. a lot of us would like to see that change to some extent. a lot of us would like to see a budget where we as a nation periodically enact priorities and changes in priorities and the like. i'm going to talk today about one possible proposal along those lines, recognizing that reformers' experiments are

likely to be -- to take 20 years to reach fruition. i have a nice, long gestation period i provided for myself. this process is something we call portfolio budget and it's a product of the work of the national budget round table that myself and maya and butler co-chair a group of budgeteers that meet together and talk about these issues. basically, the question is, can we somehow give renewed life to that vision that congress had in 1974, that we can in fact make hard choices again through some kind of concerted way of looking at our priorities. the notion that this is difficult, particularly for a polarized congress, is one of those things that we all have to agree on. the question is isn't it better to start working on approaches today to do some kind of more rationalized budgeting so that

they'ren the shelf and have been tested rather than waiting until that inevitable fiscal crisis, and it will come should we take no more action on the budget. the c.b.o. and g.a.o. and others show that debt will crow if you look longer, don't bother, you'll have nightmares or be in disbelief that that kind of thing can happen. nonetheless, it's a question of, are we doing a pord of continual crisis oriented budget or can we shape it to more social purposes. this process of portfolio budgeting it's a process that steve ruddburn here and i here in the audience, have been working on for some time. many nations do this as an annual process, nations like canada, netherlands, australia, across the board have take on pieces of their budget that they look at across all the different tools they use to enact policy.

so, we looked at the question, uld we do something like this? i might add that these oecb nations have been very successful in taking these processes on and in really making real changes that not only achieve substantial savings , but improve the performance of those areas alike. in some ways, our motto was provided many years ago by the old budget director david stockton, who said budgeting should be about focusing on weak claims not weak claimants. ideally we'd like a process that could ferret out programs that aren't performing as well as others and make decisions in some ways accordingly. here isy, the notion that we would take a group like higher education, where we have $130 billion of tax and spending

programs across many different agencies, and we would look at what collective outcomes are we achieving in terms of access by students to higher education, in terms of states and parents spending on education and a variety of other outcomes we care about and look collectively at how well the current portfolio programs is work, whether those programs in some ways, offset one another, as they often do, whether they complement one another and whether there are some areas that appear to be more effective than others. that is a notion of this, that we would take pieces of the budget periodically. "we," i mean both the executive branch and the congress to have a special deep dive, if you will, to look at how we are doing as a nation. now, i understand that among --get years, we are often now, i understand that among budgeteers, we often are find of

ideals and proposals that are often not politically correct. this is probably one of them. but let me give you an argument as to why this proposal may in fact be better suited to the times than some of the others. when we take a look at areas like tax expenditures and entitlements, as the chairman infrastructure, someone suggested, regulatory budgeting. these are broad based areas of reform that many proposed valuable and valiant reforms that are often, you know, olympic divers. they're beautiful and make no splash. really doomed to fail in some sense in the political life and they threaten too many interests because they're so cross cutting. what we like to think is that portfolio budgeting could tap into those areas that we agree on as a nation. we agree that there should be effective food safety coverage in the united states. we just agree there should be 15 programs across any different agencies covering it. we agree possibly that we would prefer to move to source some unified food safety agency like

many other agencies have. we might agree there should be many programs effectively addressing higher education. we don't necessarily agree that some of those programs might do more to enable students to purchase beer than to afford tuition. the question is, can we, through ais portfolio process, do concerted effort of buz budget reform, to really focus and galvanize the congress' attention on this. one other point and i'm going to finish here. recognizing this is not a natural act for congress to do, to bring together a variety of programs under a single roof for special analysis, i would suggest that this is exactly why the budget committees exist. they have the cross cutting perspective and really the analytic tools with the budget functions and functions that we really never fully utilized to bring about such review. possibly in concert with the authorizing committees. it's been done before, the

budget committees used to convene task forces periodically in their long life. 2000 being the most recent with senator medici, to focus and take deep dives on issues. that's proposition that the budget committees could find a new role in this area acting with other committees to put these issues on the table and have what i call, a performance-based reconciliation, where each of these portfolio areas are given a fiscal target that has the possibility of not only being motivated by fiscal goals, but by performance goals at the same time. ultimately, we would like to see the executive branch joining in on this and we would all be marching together singing "kum ba yah." >> thank you, paul. maya, you're up next. ms. mcginnis: i mentioned a couple of budget process problems that i see on the outset. and thin a