Fiscal Challenges: An Interdisciplinary Approach to Budget Policy

Cover......Page 1
Half-title......Page 3
Title......Page 5
Copyright......Page 6
Contents......Page 7
Preface......Page 9
Questions for Chapter 2......Page 13
Part I The Law and Politics of Fiscal Policy......Page 17
A The Founders......Page 20
C The Appropriations Committees......Page 21
D The Congressional Budget Act......Page 22
E Budgeting to Reduce the Deficit......Page 25
F Budgeting to Worsen the Deficit......Page 29
II The President\'s Budget......Page 31
B Drafting the Budget Resolution......Page 33
C Constraining Other Committees......Page 35
D Changing the Budget Process......Page 36
E Considering the Budget Resolution......Page 37
A Appropriations Bills......Page 38
B Authorizations of Appropriations and Legislation on Appropriations......Page 40
V Reconciliation......Page 42
A The Scope of Reconciliation Instructions......Page 43
B Committee Responses to Reconciliation Instructions......Page 44
C The Byrd Rule\'s Limits on Reconciliation......Page 46
VI Conclusion......Page 50
Questions for Chapter 1......Page 52
I Budgetary Challenges and Temptations......Page 55
A Numbers Matter......Page 56
B Picking Economic Assumptions and Estimation Methodologies......Page 58
i. Places to Shop......Page 59
ii. Directed Scoring and Scorekeeping......Page 60
i. Off-Budget Trust Funds and Other Earmarked Accounts......Page 62
ii. Emergency Supplemental Appropriations......Page 63
iii. Tax Expenditure Budget......Page 64
A Basic Number and Timing Tricks Compared......Page 65
B Looking Through the Budget Window......Page 66
i. Inconsistent Use of Cash and Accrual Accounting......Page 67
ii. Simple Delayed Payments or Accelerated Receipts......Page 70
iii. Long-Term Timing Shifts......Page 71
IV Procedural Games......Page 77
V Conclusion......Page 78
3 Transparency in the U.S. Budget Process......Page 84
I Transparency in the Federal Budget Process......Page 86
B Transparency in the Budget Process: Current Rules......Page 87
A Two Trade-offs......Page 91
i. Arguing and Bargaining......Page 92
ii. Accountability: Good and Bad......Page 93
i. Closed Committee Sessions for Overall Allocation......Page 96
ii. Delayed Disclosure – in General......Page 99
iii. Delayed Disclosure – Congressional Committees......Page 103
iv. Delayed Disclosure – Budget Summits......Page 104
v. Delayed Disclosure – Advisory Committees......Page 105
A The Supply of Optimal Rules......Page 109
C Leaks......Page 111
ii. Budget Summits and Advisory Committees......Page 113
IV Conclusion......Page 114
Questions for Chapter 3......Page 115
I Introduction......Page 119
A The Excessive Deficit Procedure, and the Stability and Growth Pact......Page 121
B The Stability and Growth Pact......Page 123
A Government Debt, Deficits, and Spending......Page 124
B Discretionary Fiscal Policy......Page 125
A Political Economy of the Budget Process......Page 132
B Fiscal Rules and the Budget Process......Page 137
V Conclusions......Page 140
Questions for Chapter 4......Page 143
ARTICLES......Page 146
BOOKS......Page 150
CONGRESSIONAL RECORDS......Page 151
CONGRESSIONAL REPORTS......Page 152
LEGISLATION......Page 153
Part II Understanding Federal Deficits    and Public Debt......Page 155
I Introduction......Page 157
II Recent Budget Policy......Page 160
A The Medium Run......Page 163
B The Long Run......Page 167
III The Economics of Deficits and Debt......Page 168
A The Incidence of the National Debt......Page 169
B How Do Taxes and Spending Affect the Economy?......Page 170
C Deficits and Future Taxes......Page 171
D The Budget Position in National Income Accounting......Page 173
E Other Economic Effects of Deficits and Debt......Page 177
F The Overlapping-Generations Model......Page 178
A Government Balance Sheet......Page 185
C Generational Accounts and Fiscal Gaps......Page 188
V Summary and Conclusion......Page 193
Questions for Chapter 5......Page 198
6 Counting the Ways: The Structure of Federal Spending......Page 201
A Three Key Measures of Fiscal Performance......Page 202
B Why Do We Care About These Measures of Fiscal Performance?......Page 205
i. Retrospective Assessment of Past Fiscal Performance......Page 207
ii. The Value of Prospective Measures: Trends and Benchmarks......Page 209
iii. The Capacity to Adjust Spending Decisions and the Risk of Fiscal Ossification......Page 211
II A Critique of Existing Measures of Fiscal Performance......Page 213
A Trends in Unexpended Budgetary Authority......Page 214
B Loans and Guarantees......Page 216
i. Pension Benefit Guaranty Corporation......Page 217
iii. Net Position of the United States......Page 219
D Social-Insurance Commitments......Page 222
E An Alternative Perspective on Budgetary Aggregates and Trends......Page 225
III Implications, Extensions, and Further Lines of Research......Page 227
IV Conclusion......Page 233
Questions for Chapter 6......Page 234
I Introduction: Budget Deficits, Politics, and Behavioral Economics......Page 237
II Politics......Page 239
III Behavioral Economics......Page 240
IV The Political Psychology of Deficits......Page 241
V Some Experiments......Page 242
VI Why Might People Support the Initial Tax Cut in the STB Strategy?......Page 243
VII Does It Make a Difference if  Specific Cuts Are Required?......Page 246
VIII Deus ex Machina: Forcing a Balanced Budget......Page 251
IX What Does This All Mean? A Discussion......Page 253
Questions for Chapter 7......Page 256
ARTICLES......Page 258
BOOKS......Page 261
GOVERNMENT REPORTS......Page 262
LEGISLATION......Page 263
Part III Budgeting and Fiscal Constraints at the State Level......Page 265
8 Budgetary Arrangements in the 50 States: In Search of Model Practices......Page 267
I Variation in State Budgetary Practices......Page 268
II Challenges to Evaluation......Page 270
A Supermajority Vote Requirements......Page 274
B Balanced-Budget and Reserve Requirements......Page 275
C The Budget Cycle: Annual Versus Biennial Appropriations......Page 276
D Tax and Expenditure Limits......Page 279
E Balance of Legislative and Executive Powers......Page 282
IV Conclusion......Page 284
Questions for Chapter 8......Page 286
I Introduction......Page 287
II Overview of Fiscal Institutions......Page 289
A  TELs  and Vote Requirements......Page 290
B Balanced-Budget Rules......Page 291
D Debt Limits......Page 292
III Do Fiscal Institutions Work?......Page 293
A Median-Voter Model......Page 295
B Leviathan View......Page 297
C Contracting Perspective......Page 299
V Conclusions......Page 302
Questions for Chapter 9......Page 304
10 When Does the Ballot Box Limit the Budget?: Politics and Spending Limits in California, Colorado,\rUtah, and Washington......Page 306
I Expectations About the Effects of TELs......Page 309
II Measuring the Full Impact of Fiscal Institutions......Page 311
A Total Expenditures by State and Local Government, per Capita......Page 313
C State Debt, per Capita......Page 315
A Introduction......Page 316
B Did the Gann Limit Work?......Page 318
D The Letter of the Law......Page 321
E Political Reactions to a TEL: The Case of the Gann Initiative......Page 327
F Lessons from California......Page 328
IV Other Tax and Expenditure Limits......Page 329
V Conclusions......Page 334
Questions for Chapter 10......Page 336
Part IV Intergovernmental Aspects of Budget Policy......Page 345
I Introduction......Page 347
II Government Structure and Infrastructure: A Brief History......Page 350
B Universalism, or Something for Everyone......Page 355
C Benefit Taxation......Page 356
D Taxless Finance......Page 357
IV Evidence from the First Cycle: State and National Borrowing and Spending, 1790 to 1860......Page 358
V The First Rules and Their Effect on States: The First Cycle of Constitutional Changes......Page 360
VI The Quantitative Effects on State Debt, 1841 to 1860......Page 363
VII Playing Against the Rule: Local Governments in the Second Cycle, 1870 to 1902......Page 365
VIII Complications and Home Rule in the Second Cycle, 1875 to 1900......Page 371
IX The Rise of Special-Purpose Governments in the Second and Third Cycles, 1850 to 1933......Page 373
X Back to Local Governments: Limiting Liability for Special-District Debt in the Third Cycle......Page 375
XI Conclusions......Page 377
Questions for Chapter 11......Page 380
I Introduction......Page 382
A Crucial Differences Between Federal and State Budgets......Page 383
i. Integration into State Political System......Page 387
ii. Integration into National Policy......Page 389
iii. Modesty......Page 390
II The Problem of Cyclicality......Page 391
B State Impact on Federal Program Integrity......Page 392
C Substantive Instability in State Fiscal Policies......Page 393
III Federal Burdens on State Fiscal Management......Page 394
IV Reforming State Fiscal Management......Page 398
A Equipping States to be Better Fiscal Partners for the Federal Government......Page 400
i. Procedural Reforms......Page 401
ii. Substantive Reforms......Page 403
ii. Restructuring Federal–State Funding Programs......Page 406
iii. Reallocating Responsibilities Between Federal and State Governments......Page 407
B Reforming Federal--State Fiscal Relations......Page 404
i. Avoiding Federal Harm to State Budgets......Page 405
V Conclusion......Page 408
Questions for Chapter 12......Page 409
ARTICLES......Page 412
CONGRESSIONAL REPORTS......Page 413
LEGISLATION......Page 414
Part V Judicial Powers and  Budget Policy......Page 415
13 New Property, Entrenchment, and the Fiscal Constitution......Page 417
I Statutory Structure of Social Security Taxing and Spending......Page 418
II Entrenchment for Social Security......Page 423
Questions for Chapter 13......Page 432
I Introduction......Page 434
A  Guinn v. Legislature of the State of Nevada and Supermajority Requirements for State Revenue Increases......Page 435
B  Lonegan v. State  and the Demise of Constitutional Limitations on State Debt......Page 440
C  Lance v. McGreevey  and the Balanced-Budget Requirement......Page 444
III Budget Processes and Politics......Page 446
A  Pataki v. New York State Assembly: The Governor as the \"Constructor\" of the Budget......Page 448
B  Alaska Legislative Council v. Knowles: The Limits of the Item Veto and the Appropriations Bill......Page 452
C  Bennett v. Napolitano: Judicial Modesty Produces Executive Power......Page 456
IV Conclusion: In Search of Lessons......Page 457
Questions for Chapter 14......Page 460
ARTICLES......Page 462
CASES......Page 463
LEGISLATION......Page 464
Index......Page 467