Steinitz to ‘Post’: Op-ed puts 2-year budget back on agenda

NYT op-ed argues that 2-year budget would reduce the political bickering, brinksmanship that lead to unnecessary economic standoffs.

Yuval Steinitz 370 (photo credit: Marc Israel Sellem/The Jerusalem Post)
Yuval Steinitz 370
(photo credit: Marc Israel Sellem/The Jerusalem Post)
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 he co-authored advocating for two-year budgets had put the issue back on the policy agenda.
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 United States.
“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 year.”
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 August.
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.