Title: The More It Changes, the More It Stays the Same: The Dilemma of the US Budget
Abstract: To the average American citizen, the decade of the 1980s will probably be remembered the Decade of the Budget. During that span of time the federal budget literally subsumed all domestic and exerted an unprecedented influence on foreign and national security policy. Wildavsky probably summed it up best when he observed that. Nowadays the State of the Union and the state of the budget have become essentially equivalent.(1) To budget watchers, the dominance of the budget in the 1980s was neither totally unexpected nor especially surprising for there were signs of its emerging dominance during the latter stages of the Carter Administration. The reaction of American financial markets to the proposed Carter Fiscal Year (FYI 1981 budget with its anticipated $16 billion deficit clearly demonstrated the interrelationship of the budget on the economy and the economy on the budget. The reaction of Wall Street was so adverse that the budget was recalled and revised by the Administration to bring it into balance. In addition, early in calendar year 1980, the Democratic Congress resorted to a novel use of the process of reconciliation to reduce the deficit. The reconciliation process, provided for in the 1974 Budget Act was designed to be applied in the fall to reconcile the first and second budget resolutions required by that piece of legislation. Used at this late stage of the budget process it became difficult, if not impossible. to amend laws to either reduce spending or increase taxes. In 1980 the process was applied to the first budget resolution with the result that $8.2B of spending reductions and tax increases were enacted by Congress. What tended to obscure the importance of budget policy during the Carter era was the importance attached to budgetary process, in particular Zero Base Budgeting (ZBB). Carter claimed that this new budgetary technique would focus the budgetary process on a comprehensive analysis of objectives and needs. and expand participatory management in the federal government. The extent to which these lofty objectives were actually achieved remains a matter of some debate.(2) Attention was certainly not lacking when it came to the Reagan budget policy. The Reagan supply side tax cut, reductions in social spending paired with increases in defense spending, all compounded by a major recession resulted in large deficits as far the eye could see. All of this was dutifully reported by the media. The problem with the media reports was that they focused on the immediate events and not the longer term policy outcomes which locked in the budget for the foreseeable future the dominant instrument of public policy. The rise in importance and increasing attention paid to the federal budget during recent years should have overjoyed practitioners of budgeting and those academics who write about the budget. Yet much current budgetary literature seems to indicate uneasiness with what has happened and searches for ways to fit what is occurring into existing budgetary paradigms. The most likely reason for this is that much of the scholarly writing dealing with the budget tends to focus oil reform, rational procedures for budgeting and objective analysis based on empirical evidence the basis of budgetary decision-making. It turns out that budgeting in the 1980s was driven not by a search for economic or managerial rationality but by those old dirty words politics and political ideology. If one questions this, it is only necessary to turn again to 1981. The rapidity with which the Reagan Administration offered a specific set of detailed budget reductions clearly demonstrates that something other than a comprehensive, objective evaluation of all government programs was the driving force behind what happened. The same claim can be made regarding the one major area of Reagan Administration budget growth--the defense budget. The massive increase in defense spending, particularly in the area of the procurement of weapons, was not the result of an overall assessment and reorientation of defense policy. …
Publication Year: 1991
Publication Date: 1991-10-01
Language: en
Type: article
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