Former finance minister and current Intelligence Minister Yuval Steinitz told
The Jerusalem Post
Sunday that The New York Times
’ decision to publish an op-ed
advocating for two-year budgets had put the issue back on the
The piece, written with economic historian Niall Ferguson,
argued that two-year budgets would reduce the political bickering and
brinksmanship that led to unnecessary economic standoffs in places like the
“It is politics that explains why, according to the
Congressional Budget Office, the federal government will likely run a deficit
every year from now until 2038. It is politics that explains why President Obama
and Congress have been unable to agree on the reforms of taxation and
entitlements that are so manifestly needed,” the two wrote.
“So are there
any alternatives? The obvious one is to enact budgets for longer than a single
Israel innovated the two-year budget system, passing biannual
spending and tax plans from 2009-2014. Upon entering office in 2013, Finance
Minister Yair Lapid eliminated the two-year budgeting system effective in 2015
after critics pegged it as a source of high deficits.
In 2012, the
deficit unexpectedly swelled to nearly triple the original target, in part,
critics said, because of the difficulty of precisely forecasting revenues and
expenditures so far in advance. Lapid said he kept a multi-year budget in place
for 2013-2014 because the 2013 budget was set to be approved only in
In their piece, Steinitz and Ferguson argued that multiyear
budgets offered several advantages, such as providing ministries with certainty,
which would help them make multi-year investments.
“With annual budgets,
much of the year is devoted to budget preparation. No sooner is the process over
than it has to begin again. This treadmill leaves little time for
ambitious structural reforms, or for legislators to scrutinize how public money
is actually spent,” they argued.
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