The Politics of Public Budgeting: Getting and Spending, Borrowing and Balancing

The Politics of Public Budgeting: Getting and Spending, Borrowing and Balancing

The Politics of Public Budgeting: Getting and Spending, Borrowing and Balancing

The Politics of Public Budgeting: Getting and Spending, Borrowing and Balancing

Synopsis

This updated edition provides a discussion of budgeting at all levels of government in the US, and brings the reader up to date on the federal budget following the Budget Agreement of 1997. By describing change over time, it shows recent events in the context of institutional constraints, prior agreements, and political jockeying over process and outcomes.

Excerpt

When the third edition to The Politics of Public Budgeting was being prepared, the White House and congressional leaders had just failed, dramatically, to come to agreement on how to balance the federal budget. Without a budget agreement, the federal government had closed down, and much to the amazement of the Republicans, the public was not only aggravated by the shutdown, but blamed the Republicans for obstructing the budget process. In 1996 the atmosphere was thick with mistrust, and it did not look as if any kind of balanced budget agreement could be reached.

By May 1997 the picture had changed. The Republicans had barely maintained their majorities in the 1996 congressional elections. With such slim majorities, they needed to cooperate with Democrats in order to get anything done. The president wanted an agreement. A booming economy provided more revenue than expected, allowing two contentious issues--the proposed reduction in the cost-of-living index and the cap on Medicaid spending--to be taken off the table.

An agreement was reached during the spring and summer of 1997 to balance the budget by 2002 by cutting discretionary programs, including defense, and slowing the growth in Medicare spending. The latter was to produce more than $100 billion in savings over five years. The package included net tax cuts of $85 billion over the five years, ballooning to $250 billion over ten years. In addition, the president got about $32 billion in new money to fund his priority programs, including expanded health care for poor children, welfare benefits for legal immigrants, and more money for Pell education grants. By 1998, well ahead of schedule, the booming economy and the surging stock market had generated enough revenues to balance, or nearly balance, the federal budget (the degree of balance depended on whether surpluses from Social Security were or were not counted). The policy debate then shifted to whether to lift the spending caps a little or to keep them tight and spend the surplus on more tax reduction.

The conflicts surrounding the unexpectedly successful efforts to balance the federal budget illustrate a number of features of public budgeting.

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.