Ideas, Inheritances, and the Dynamics of Budgetary Change

Long the lifeblood of public administration, budgeting in the United States acquired a new importance during the 1980s and 1990s because of the fiscalization of the policy debate. But how much has American national budgeting really changed? This article examines the evolution of federal budgeting over the past half-century, exploring such developments as the massive growth of entitlements, congressional budget reform, and the protracted battle over the budget deficit. It finds that year-to-year changes in budget results have been relatively small even while budgetary rules and procedures have experienced sweeping change. At the same time, the composition of federal spending has undergone a quiet revolution. The traditional concept of budgetary incrementalism offers an incomplete explanation for these dynamics. To make sense of them, the article focuses on two key factors: the impact of policy inheritances, and the role of actors' causal and normative beliefs. These factors shape the ideational and material context within which boundedly rational actors negotiate decisions. The tension between changes in ideas and entrenched budgetary commitments has often served to stimulate institutional reform.     

State budget periodicity: An analysis of the determinants and the effect on state spending

Much of the public budgeting literature focuses on the institutional rules of budgeting and how those rules affect process and outcomes. This study focuses on a particularly rudimentary rule of budgeting: the length of the budget period. State budgets are dictated (constitutionally or statutorily) to recur over one-or two-year intervals. Statistical analysis of the determinants of state budget periodicity shows that the more states spend, ceteris paribus, the more likely they are to budget annually. I hypothesize that budget periodicity has the opposite effect on spending: Biennial budget states spend more, ceteris paribus, than annual budget states spend. Ordinary least squares analysis does not support the hypothesis, but with instrumental variable methods, biennial budgeting exhibits a positive and statistically significant effect on state spending.     

The Case for Congressional Budgeting

William Howard Taft and Frederick A. Cleveland’s vision of executive budgeting clashes with the unique status of the U.S. Congress among the world’s legislatures, and its proponents may exaggerate the potential for presidents to act as fiscal guardians. This article advocates more congressional budgeting by reinstituting effective fiscal rules and strengthening the role of the budget committees. These mechanisms would enhance fiscal discipline and aid consolidation.     

Introduction: Reflections on Two Decades of Congressional Budgeting

Even casual observers of federal policy making cannot help but notice the increasing preeminence of the Congressional budget process. The Congressional Budget and Impoundment Control Act of 1974, which created this process, brought forth profound changes in budgeting practices, both within Congress and between Congress and the president. In addition, the last decade has seen numerous attempts to use the process for deficit control. The goal of this special symposium is how congressional procedures-adapted over time-have affected the federal budgeting process. Each article examines the original purpose of the 1974 statute and analyzes the statute's impact over more than two decades.     

The Budget Enforcement Act of 1990: The Path to No Fault Budgeting

The Budget Enforcement Act of 1990, included in the controversial and comprehensive budget legislation passed by Congress in October, makes a number of significant changes in federal budgeting. It shifts the focus of the budget process from deficit reduction to spending control, provides five-year spending totals and mini-sequesters for defense, international and domestic appropriations, and puts entitlements and revenue expenditures on a pay-as-you-go basis. The Gramm-Rudman-Hollings deficit targets have been raised substantially, Social Security surpluses taken out of the deficit calculation and allowance made for further adjustments for inflation, Operation Desert Shield, and other emergency spending, minimizing the prospect for general sequestration. OMB has been given important new estimating authority and the roles of the congressional committees involved in budgeting have been altered.     

Perennial Budget Reform Proposals: Budget Staff versus Elected Officials

This article defines budget reform perennials at the national level as those that reoccur multiple times, with little chance of passage and little change from one iteration to the next. The literature has seldom examined proposals that do not pass or the staff effort that goes into keeping flawed proposals from passing. The article describes the sources of such proposals and what can conceivably be done to lessen the tension they cause. The research is based primarily on qualitative interviews and legislative testimony. Examples of reform perennials include biennial and capital budgeting.     

The Budget Enforcement Act and Its Survival: Congress Hears from Experts

The unpopularity of the Budget Enforcement Act of 1990 grew in light of the recession, recent international events, and continuing record budget deficits. This prompted many Congress members and congressional committees to consider the future of the Budget Enforcement Act of 1990. Two hearings, held in October and November of 1991, exemplify the kinds of choices facing the Congress and the type of advice that Congress has been receiving. This article reviews the testimony given at the hearings by experts with established knowledge of federal budgeting.     

Appropriations Politics in Congress: The House Appropriations Committee and the Executive Agencies

In the topsy-turvy world of congressional budgeting, last year's analysis is often out of date this year. How, then, could a work as old as most college sophomores have any relevance today? Richard Fenno's The Power of the Purse is a classic that passes the most challenging test of all time. Despite the very significant changes that have occurred in the congressional budget and appropriations processes, more than mere historical interest is to be found in Fenno's masterful study. While there are many relevant parts of the book, the following selection is from Fenno's exploration of the interplay between agency budget officials and the appropriations subcommittees. It was a pleasure to read these chapters again and I suspect that many other readers will be surprised at how insightful and fresh the study remains.     

Performance‐Based Budgeting: The Contribution of the Program Assessment Rating Tool

Under the President's Management Agenda for performance and budget integration, the Office of Management and Budget (OMB) designed the Program Assessment Rating Tool (PART) to breath new life into performance‐based budgeting as envisioned by the Government Performance and Results Act (GPRA). This article discusses what PART is designed to do and how the PART process works. Based on recent Government Accountability Office (GAO) reports addressing implementation of PART in the last four fiscal years, the article answers such questions as: Has PART made a difference in program operations? What is the relationship between PART and GPRA? Has progress been made in improving the evidence base for PART assessments? How well does PART assess programs related to a common goal? What has been congressional reaction to the PART process? Are PART and performance budgeting making a difference in government?     

The Policy Constraints of Deficit Reduction: President Clinton's 1995 Budget

The federal budgeting process is now limited by deficit reduction policy constraints. This article examines the FY 1995 budget requests within the context of long term budget trends, changes in the federal budget process, and the recently established political and fiscal budget constraints. It further examines enactment of the Omnibus Budget Enforcement Act of 1993, the policy changes it contained, and its further tinkering with the process of budgeting. Finally the article evaluates the first budgeting process of the Clinton administration and their initiatives in deficit reduction following these policy constraints.     

The Ups and Downs of State Budget Process Reform: Experience of Three Decades

From zero-base budgeting to the Government Performance and Results Act, state budgeting systems have been synonymous with budgeting reform for over 30 years. This article examines the trends, both long-term and short-term, which have been identified through analysis of state budgeting office practices. Particular emphasis has been placed on understanding the changes in performance measurement over the period of 1970 to 2000. The findings reveal trends such as changes in the makeup of budget office personnel, a lack of budget offices in moving toward cost accounting, and trends in budget preparation and budget documents. Some budget reforms seem to have plateaued, beginning in the mid-1990s, while other reforms have exhibited "backsliding." It is clear that the states are not all marching in unison in reforming their budget systems. As with earlier phases of this study, the 2000 data raise many questions that will be explored in future research.     

From Performance Budgeting to Performance Budget Management: Theory and Practice

This article examines the decades‐long practices of performance budgeting in different countries and their associated challenges from a multilayered institutional framework. Based on theory and lessons learned, the article recommends an array of strategies to address institutional and organizational barriers. It also proposes to reconceptualize performance budgeting as a performance budget management system and suggests how multiyear budget planning, financial risk assessment, policy planning, the departmental budget cycle, the program budget cycle, stakeholder engagement, regular spending reviews, and performance audits should be integrated more closely to address the long‐term fiscal challenges faced by many governments and to respond to the public pressure on agencies to do more with less.     

Is the U.S. Congress an Insurmountable Obstacle to Any “Far‐Sighted Conception of Budgeting”?

In recent years, Congress has recurrently failed to meet its minimum responsibilities in federal budgeting. This article analyzes whether it is possible to repair this problem, using concepts popularized by Allen Schick in his influential article “The Road to PPB.” His article compared the PPB reform effort to the history of budget process reforms that started with the design of the executive budget. It publicized a logical sequence of budget process improvements that started with control and then advanced through management and planning. The article did not substantially address the role of Congress, but eight years after it was published, Congress reasserted its constitutional role in the budget process. Its record of performance since then has ranged from mixed to dysfunctional. The Congress has been criticized for budgetary delays, micromanagement, myopia, procrastination, indiscipline, and an inability to prioritize intelligently. If these faults are set in stone, then an integrated system of budgeting, as described in “The Road to PPB” and related work, is unattainable. On the other hand, if reform of Congressional budgeting is politically feasible, improvements to that system can utilize the unique contributions that a legislature can make to a good system of budgeting.     

Portfolio Budgeting in the Australian Portfolios-Principles and Practice

In the mid-eighties Australia implemented a budgeting system that is similar in its principles to the U.S. PAYGO rule and the now defunct Policy and Expenditure Management System of Canada. Termed as portfolio budgeting, it seeks to encourage greater ministerial participation (a ministry comprising a number of related departments) in the portfolio budget process. It obligates portfolio ministers to offer offsetting savings for funding new policies. Ministers have to thereby set new policy priorities so that only the most deserving new policies obtain funding through the savings identified. Additionally, portfolio budgeting requires ministers to prioritize their ongoing programs so that budget allocation to these programs reflects ministerial priorities. The article examines the practice of portfolio budgeting in the Australian portfolios in light of these objectives. The article suggests that portfolio budgeting has caused greater ministerial involvement in budgetary management. However, there has been little significant change in budget decision making at the portfolio level. The state of play of portfolio budgeting at the national budget process (cabinet and the Department of Finance) offered little incentive to portfolios to provide offsetting savings for new policy proposals. And, the appropriation structure and the organizational and political dynamics impeded ministers from allocating and reallocating their budgets (operating expenditure or running costs) for ongoing programs along ministerial priorities.     

Playing the Wrong PART: The Program Assessment Rating Tool and the Functions of the President's Budget

The extensive literature about the George W. Bush administration's Program Assessment Rating Tool (PART) has not emphasized an issue that appears quite clearly in interviews with senior Office of Management and Budget (OMB) and congressional staff. Budget analysis can pursue efficiency in two ways. One, the object of traditional analysis, involves assessing programs to understand the ratio of inputs to outputs within an agency, and thus the effects of more or less funding. Another approach, termed “budgeting for results,” measures program performance so as to allocate funding among programs in a way that increases total welfare. The second approach is much more difficult because it necessitates comparison of measures of unlike phenomena, requires expertise that often does not exist, and is more easily contested as invoking values rather than facts. Both congressional and OMB sources report concerns that PART weakened budget analysis by diverting resources from traditional analysis. If one goal of reformers is for the OMB to provide analysis that will influence Congress, the focus should be on strengthening the capacity to do traditional budget analysis.     

Implementing the Chief Financial Officers Act and the Government Performance and Results Act in the Federal Government

The Chief Financial Officers Act of 1990 and the Government Performance and Results Act of 1993, along with other legislation passed by Congress, are stimulating major financial management reform in the federal government. This article evaluates reform implementation against nine criteria developed in previous research on this topic. The criteria are accounting system adequacy, congressional intent, ability of Congress to use financial statement data, executive branch implementation incentives, capability of the Office of Management and Budget, utility of financial statements for decision making, use of performance measures in budgeting, coordination of federal organizations charged with implementation responsibility, and executive and congressional support for reform.     

Budgeting for Federal Capital

This article examines the issues involved in federal investment budgeting and planning for the acquisition of federally-owned assets. It describes the unique role of the federal government and examines the different issues and reforms prompted by differing types of capital and investment sponsored at the federal level. It suggests that meaningful changes can be instituted in our budgeting practices that can make a difference for our budgetary choices without adopting a full-scale capital budget. It also presents a framework for improving federal agency capital decision making based on a study of practices used by leading state and local and private sector organizations. The article is based on testimony delivered before the President's Commission to Study Capital Budgeting.     

Budgeting for Our Times: Target Base Budgeting

Target base budgeting sets limits on how much a department may request in its budget. Departments must submit two budget requests—one within the target base and another for additional funds. Some supplemental requests may be funded from a reserve pool. Target base budgeting has been used in parts of the federal government over the last forty years. Its use continues to slowly expand. This article examines the experiences in three cities: Rochester, Tampa, and Phoenix.     

Budget Control in Virginia Public School Districts

This article examines the selection and use of a budget approval technique. Specifically, two research questions are addressed: (1) Does the use of a particular budget approval method by a governmental body impact the execution of the budget? (2) What characteristics of a local government are associated with its decision to use a particular budget approval method? Both research questions are addressed by analyzing data from public school systems in the Commonwealth of Virginia, specifically, whether using categorical budget approval differs in the accuracy of budgeting versus using a lump-sum approval method. Characteristics of Virginia school districts are also analyzed according to whether any of them are likely to be associated with school districts using a particular approval method. The remainder of this article is organized as follows: the next section describes the role of budgeting control in schools; subsequent sections review Virginia school district budgeting practices, develop the empirical model used to test the hypotheses, describe the sample, analyze the results of empirical tests and discuss implications of the findings.