Trends in Public Expenditures in the Next Decade: A Supplementary Paper of the Committee for Economic Development

Trends in Public Expenditures in the Next Decade: A Supplementary Paper of the Committee for Economic Development

Trends in Public Expenditures in the Next Decade: A Supplementary Paper of the Committee for Economic Development

Trends in Public Expenditures in the Next Decade: A Supplementary Paper of the Committee for Economic Development

Excerpt

The Research and Policy Committee of the Committee for Economic Development has issued a statement on the Federal budget each year since 1944, with two exceptions. In the course of work on these statements it became clear that budget policy for any particular year could not be adequately appraised in terms of the facts and prospects for that year alone. A longer look ahead was required.

For example, proposed new expenditure programs often involve relatively little expenditure in the first year but larger expenditures thereafter. Decisions about such proposals require some estimate not only of the future trend of these expenditures but also of the future trend of the budget to which they would be added. Similarly, in considering tax policy for any year, it is important to know what future revenue requirements are likely to be. One recurrent question, for example, is whether tax reform will be possible in the foreseeable future as part of a general tax reduction or must be made within the framework of undiminished revenue requirements.

Recognizing that a longer view of the budget prospect was required, and that some assumptions about the longer future, often not very well founded, did seem to underlie much discussion of the budget, the Research and Policy Committee recommended that the government should publish budget estimates extending beyond the year immediately ahead. In its 1957 statement Tax Reduction and Tax Reform—When and How the Committee said:

"Congress should have before it estimates of revenues and expenditures not only in the coming year but also for four or five years ahead. This is particularly urgent at the present time, and we strongly urge the President to make such estimates available. . . . The President should also submit, along with these over-all budget totals, his estimates of expenditures for each of the major long-term Federal programs."

In the continued absence of any long-term budget estimates from the government, the Research and Policy Committee decided to assemble, for its own guidance, such information as could be obtained from public sources. Accordingly it commissioned Professor Otto Eckstein, of Harvard University, a specialist in public finance, to make the study which is here published.

Dr. Eckstein was not asked to make, and has not made, a recommendation for the future course of Federal expenditures. Neither was he asked to make a forecast of what expenditures will be. Rather he . . .

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