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A History (and Future) of the Budget Process in the United States

Budget by Fire

verfasst von: Paul Winfree

Verlag: Springer International Publishing

Enthalten in: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

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The United States has one of the most unique budgeting processes of any modern government. The “powers of the purse” are enumerated under the Constitution, but they were hotly debated by the nation’s founding fathers. However, the lack of a legal guide for exactly how to delegate the powers, and under what conditions, has led to a process marked by power struggles—primarily between Congress and the presidency—over the last 230 years. Still, the budget and appropriations process is central to the functioning of the federal government.

This book covers the transformation of American government through the lens of shifting budgeting power, while documenting the evolution of economic policy through the federal budget. As the nation and the federal government have expanded, the budget process has entirely broken down. This book also recommends changes that would help the budget process function more effectively. The chapters are organized both chronologically and topically to help the reader think through the evolution of the budget process. With its comprehensive approach to the history of the budget process—covering the entirety of US federal existence—this book will be a go-to resource for academics and public policy professionals interested in Congressional and executive history.

Inhaltsverzeichnis

Frontmatter

Chapter 1. Introduction

Abstract

Conflict and ambiguity were built into the budget system from the beginning, requiring cooperation between equal branches constantly vying for power. The history of the budget process reflects a combination of how these branches have dealt with electoral politics as well as economic policy. When the budget process has been successful its structure does not have a material effect on the outcomes. However, it has not been very effective in helping to resolve fundamental disagreements about policy or politics. This problem has become heightened over time as the budget process has been asked to reflect more disputed matters. The introduction also examines the structure of the budget system in early America, including its weaknesses for managing public credit and the foundations for the new Constitution.

Paul Winfree

Chapter 2. Debt Is the Price of Liberty

Abstract

The early period covering the first presidential administrations was defined by a government of divided set of responsibilities and new powers to enhance the nation’s public credit. Debt was generally seen as a necessary means for providing for the needs of the country. Both Hamilton and Jefferson agreed that debt retirement was beneficial but disagreed on the mechanics. Far from a protectionist, Hamilton understood that the country’s standing in foreign debt markets was critical to long-run hopes of success for the new country. Jefferson, instead, showed how complicated the distribution of budgetary powers was in practice. This foreshadowed many debates to come where budget policy was shaped by domestic politics and differing notions on the type of federal government that the country should have, but also economic theory and external threats.

Paul Winfree

Chapter 3. Bounded by War

Abstract

The budgetary reforms derived between the War of 1812 and the Civil War were, for the most part, born out of necessity or symbolism. External demands led to innovative ways to raise money to fund the federal government. However, the sinking fund continued to develop as one of the most important mechanisms for debt management. Congress also tried new methods in an attempt to distance the federal government’s finances from that of the economy following banking crises. Tariff policy extended beyond simply the need to raise revenue for the government and into protectionism, causing revenues to become much less predictable and creating a constituency for a growing government. This dynamic foreshadows the inevitability of the income tax.

Paul Winfree

Chapter 4. Building a Visible Government

Abstract

The progressive budget reformers sought efficiency through standardization, transparency, and bringing business practices to the government. Balancing the federal budget was seen as a form of efficiency. However, the executive budget process created in 1921 was a difficult fit compared to existing institutions. Congress also replaced a system where they governed federal debt on a rolling basis with a series of limits. It is impossible to know for sure how the American Founders would have considered the fundamental reforms of this period; however, the control over taxation and debt had been seen as the primary determinant of sovereignty to be vested in the people. The progressive reformers, of course, believed this power was best placed in the hands of the executive.

Paul Winfree

Chapter 5. The End of Balanced Budgets

Abstract

The government grew in size, scope, and responsibility during the Great Depression. By the end of World War II, the dominate position of public policy was that the government had a formal role in promoting economic outcomes. As the government grew to take on new roles, a reorganization became necessary. The new budgeting institutions, in particular the Bureau of the Budget, took on additional responsibilities. Congress and the White House also formerly engaged in a comprehensive policy to replace tariffs with taxes to finance federal spending but also to manage individual behavior. At the same time, the government came to be seen as having an active role in the economy. This was exemplified by the New Deal programs and the Employment Act of 1946.

Paul Winfree

Chapter 6. In Pursuit of Full Employment

Abstract

The government and the economy became seen as inseparable by many policymakers by the 1960s. Full employment and stable prices were the principal economic objectives of the period and acted as a driving force behind new legislation, including the Great Society programs. The Office of Management and Budget had become central to not only executing financial plans but also overseeing the management of agencies. President Nixon would push the powers amassed during the last fifty years too far and Congress responded by introducing significant reforms to the budget process. However, economic policy would remain consistent and the budget process reforms would only place Congress in a formal role within the executive budget process still driven by the presidency.

Paul Winfree

Chapter 7. A New Era of Congressional Budgeting

Abstract

Voters and politicians in the past have demanded some level of control over the deficit when it reaches a high-water mark if, for no other reason, to achieve some level of symbolic victory over the federal debt. However, the last forty years of history demonstrates how difficult it has become to reduce the deficit even during periods of economic growth. Presidents have commonly sought to stimulate the economy while the economy was growing only to be pulled back by a Congress controlled by the opposing party. However, when both Congress and the White House are controlled by the same party, fiscal tightening is mostly shelved. The Clinton era is the only recent connection with the neo-Keynesian budget policies of the post-World War II period.

Paul Winfree

Chapter 8. Breaking up the Budget Process

Abstract

The current budget process is asked to resolve too many issues that are both debatable and difficult to resolve using the current framework. This includes how the overall budget fits into the economic policy of the country. In the 1940s, the architects of the Employment Act established an infrastructure for establishing economic policy that should be expanded to include debate over the principles of policy as related to the budget. Congress should be required to decide on these principles before they can proceed to writing the budget or considering appropriations bills. Therefore, the economic policy can inform budget policymakers. This will allow the process to work out some of the aggregational problems before dealing with the distributional challenges.

Paul Winfree

Backmatter

Titel: A History (and Future) of the Budget Process in the United States
verfasst von: Paul Winfree
Verlag: Springer International Publishing
Electronic ISBN: 978-3-030-30959-6
Print ISBN: 978-3-030-30958-9
DOI: https://doi.org/10.1007/978-3-030-30959-6

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Über dieses Buch

Inhaltsverzeichnis

Frontmatter

Chapter 1. Introduction

Chapter 2. Debt Is the Price of Liberty

Chapter 3. Bounded by War

Chapter 4. Building a Visible Government

Chapter 5. The End of Balanced Budgets

Chapter 6. In Pursuit of Full Employment

Chapter 7. A New Era of Congressional Budgeting

Chapter 8. Breaking up the Budget Process

Backmatter

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