Federal Budgeting and Finance in 1991: The Future is Now

The large federal deficits run throughout the 1980s generated concern that we were mortgaging our future. In 1991, the note came due. The potential for aggravating the long-run deficit problem constrained fiscal policy from reacting to the recession. Institutional and partisan conflict and the controls established by the Budget Enforcement Act (BEA) limited responses to a remarkable budgetary opportunity—the dissolution of the Soviet Union—and to a serious budgetary threat—exploding health care costs. The BEA controls were applied rigidly with a few minor exceptions, and credit reform was implemented successfully; on the other hand, Congress and the president made no headway on further deficit reductions even though long-run projections worsened. The agenda-setting role of the president's budget for the fiscal year 1993 diminished, as the document's format was heavily influenced by the upcoming presidential election. In contrast to this mixed record for federal budgeting, progress was made in building a financial management structure and developing accounting standards.     

Breaking up Is Hard to Do: The Dissolution of Judicial Supervision of Public Services

Public services in many states have been placed under federal court supervision. In our 1991 PAR article, we examined the implications of the federal judicial decisions in supervising the Kansas City Metropolitan School District for the "new triumviate" governing public services—public officials, legislators, and judges. In this article, we examine judicial decisions affecting the same school district a decade later to reveal the impact of judicial supervision on the school district and to discern the implications for policy termination. We find that, once begun, judicially mandated federal court supervision of public institutions is not readily terminated, even pursuant to the wishes of the United States Supreme Court.     

The Ludwig Martens–Maxim Litvinov Connection, 1919–1921

Research began when the author realized that Antony Sutton had misidentified the author of a key document published in his Wall Street and the Bolshevik Revolution (1974). This article reports on the interception by federal agents of the document (a letter) brought from the Copenhagen office of Soviet diplomat Maxim Litvinov and intended for Kenneth Durant who was employed by Ludwig Martens, Lenin's unrecognized representative in New York City. Analysis of the letter revealed the true author and opened a research channel for learning more about the backgrounds of three Soviet agents: Bornett Bobroff, Nora Hellgren, and Wilfred Humphries.     

Performance-Based Budgeting to Enhance Implementation of the CFO Act

On August 5, 1992 the United States Senate Committee on Governmental Affairs passed the "Government Performance and Results Act" sponsored by Senators Roth and John Glenn. In introducing this legislation in 1991 Senator Roth made the following statement. ^* This legislation (S. 20) is intended to put teeth into federal efforts to introduce performance measurement currently under implementation by the Office of Management and Budget under the authority of the Chief Financial Officers Act of 1990.     

The Rise of Competitive Federalism

This article challenges the prevailing view of increasing political and fiscal centralization in the federal government. Since 1978, the authors argue, the nation has entered a new era of "Competitive Federalism" with federal, state and local governments locked in a competitive struggle for taxpayer resources and support. The new era has emerged largely because of the loss of the tremendous fiscal advantage held by the federal government during its centralization period, 1929 to 1978. Although "deregulated" and free to move into any area of domestic policy, the federal government is constrained by necessary budget pressures and a "reformed" income tax structure. Competitive Federalism has emerged as a new balancing force between Washington, D.C. and the fifty state-local governments and will govern the federal system for the foreseeable future.     

The price of nationalism: Evidence from the Soviet Union

This paper investigates the effect of implicit subsidies from the Russian Republic to other republics within the former Soviet Union on voting behavior in the All-Union Referendum of March 1991. These subsidies comprised the difference between interrepublic trade balances at domestic and world prices. A model of voting behavior incorporating effects of ethnic composition and subsidies on voting yields the estimating equation. Regression results suggest voters are influenced more by economics (subsidies) than by politics (ethnicity), although ethnicity was an important determinant of republican cooperation with Soviet authorities. Analysis of estimation results suggests the level of implicit subsidies required to increase support for the Soviet regime from 60% to 75% would have equaled 10% of the Russian republic's GDP.     

Comparing replacement rates under private and federal retirement systems

One measure of the adequacy of retirement income is replacement rate - the percentage of pre-retirement salary that is available to a worker in retirement. This article compares salary replacement rates for private-sector employees of medium and large private establishments with those for federal employees under the Civil Service Retirement System and the Federal Employees Retirement System. Because there is no standard benefit formula to represent the variety of formulas available in the private sector, a composite defined benefit formula was developed using the characteristics of plans summarized in the Bureau of Labor Statistics Medium and Large Employer Plan Survey. The resulting "typical" private-sector defined benefit plan, with an accompanying defined contribution plan, was then compared with the two federal systems. The Civil Service Retirement System (CSRS) is a stand-alone defined benefit plan whose participants are not covered by Social Security. Until passage of the 1983 Amendments to Social Security Act, it was the only retirement plan for most federal civilian employees. Provisions of the 1983 Amendments were designed to restore long-term financial stability to the Social Security trust funds. One provision created the Federal Employees Retirement System (FERS), which covers federal employees hired after 1983. It was one of the provisions designed to restore long-term financial stability to the Social Security trust funds. FERS employees contribute to and are covered by Social Security. FERS, which is a defined benefit plan, also includes a basic benefit and a 401(k)-type plan known as the Thrift Savings Plan (TSP). To compare how retirees would fare under the three different retirement systems, benefits of employees retiring at age 65 with 35 years of service were calculated using hypothetical workers with steady earnings. Workers were classified according to a percentage of the average wage in the economy: low earners (45 percent), average earners (100 percent) high earners (160 percent), and maximum earners (earnings at the taxable maximum amount). Overall, this analysis found that: Excluding Social Security benefits and TSP and defined contribution annuities, CSRS retirees have a higher pre-retirement salary replacement rate than either FERS or private-sector retirees. Private-sector retirees, however, have higher replacement rate than their FERS counterparts. Including Social Security benefits but not TSP and defined contribution plan annuities, CSRS retirees who are maximum earners have a higher pre-retirement salary replacement rate (despite receiving no Social Security benefits) than FERS retirees with the same earnings. Private-sector retirees in all earnings categories have a higher replacement rate than federal retirees with the same earnings. Including Social Security and TSP and defined contribution plan annuities, private-sector retirees in all earnings categories have a higher replacement rate than federal retirees, but their rate is close to that of FERS retirees. The rate is higher for FERS retirees than for CSRS retirees in all earnings categories. This analysis shows that replacement creates could exceed 100 percent for FERS employees who contribute who contribute 6 percent of earnings to the TSP over full working career. Private-sector replacement rates were quite similar for those with both a defined benefit and a defined contribution pension plan. Social Security replacement rates make up the highest proportion of benefits for th private sector's lowest income quartile group. The replacement rate for 401(k) plans and the TSP account for a higher proportion of benefits than does Social Security for all other income groups, assuming the absence of a defined benefit plan.     

Rhetoric and rationality: A study of democratization in the Soviet Union

Can political actors use rational strategies for political conflict when established institutions are unavailable to structure political choices because the institutions are themselves among the contested issues? In Soviet politics from 1985 to 1991, cross-cutting cleavages placed in question the possibility of any stable outcome. We argue that a multi-dimensional issue space was reduced to a single dimension, along which Mikhail Gorbachev could temporarily occupy a median, by the interaction between Gorbachev's own rhetoric and rhetorical tactics used by leaders of his nomenklatura opposition, by Boris Yeltsin as the leader of the democratic opposition, and by single-issue groups called neformaly. The match between these four players' rhetorics and the four strategic options identified by a simple spatial model offers empirical evidence that rational strategies were available despite institutional flux.     

Too Little,Too Late: The CIA and US Counteraction of the Soviet Initiative in the Six-Day War, 1967

The authors' previous research has established that the 1967 Arab–Israeli Six-Day War resulted from a deliberate Soviet plan to provoke Israel into a pre-emptive strike, which would legitimize and trigger a massive Soviet military intervention to aid an Egyptian–Syrian counteroffensive. However, US documents released until recently provided no evidence that the American intelligence community, and particularly the CIA, detected this threat or informed the political leadership about it – even though some indications were picked up at the field level. A newly declassified, retrospective report appears for the first time to show that there was awareness of major components of the Soviet operation (preparations for a naval landing and parachute drop). But closer scrutiny finds that this report reflects Soviet propaganda more than factual intelligence – thus further tarnishing what has hitherto been held as an outstanding achievement for the Agency and its chief.     

Medicaid in the 1990s: Trends, Innovations, and the Future of the "PAC-Man" of State Budgets

Rapidly escalating health-care inflation and congressionallymandated expansions have led to large increases in spendingfor Medicaid, the federal-state program of health care for thepoor. These increases came at a time when state budgets werealready under recession-induced stresses. In addition, 1991brought new pressures for Medicaid spending from the courtsand closer federal scrutiny and control over revenues used forthe program's state "match." Yet the Medicaid picture is farfrom bleak. Diversity, innovation, and an emerging stale policyrole also characterize the program in ways that epitomize thestrengths and weaknesses of the American intergovernmental system.     

Beyond the One-Dimensional University: A Marcusean Critique of Outcomes Assessment

Abstract

In August 2013, US president Barack Obama announced a plan to link federal financial aid to college performance. This plan, it is argued, will allow students, parents, and federal lenders to avoid paying tuition for an ultimately meaningless credential. It identifies relevant educational outcomes as rates of graduation, the earnings of graduates, and the attainment of advanced degrees after graduation. The president’s plan is part of a much larger trend toward “accountability” and “transparency” in education, an important feature of which is the proliferation of the language and programs related to assessment of student learning outcomes. In this essay, I show that outcomes assessment is a form of “one-dimensional thought” as this concept is developed in One-Dimensional Man and that it suffers from the defects identified by Marcuse there. Outcomes assessment, therefore, codifies ways of thinking about education that undermine its role in the development of liberated forms of consciousness and emancipatory praxis.     

Repairing the Crack in New Orleans' Black Vote: VRA's Results Test Nullifies "Gerryduck"

In 1982, Section 2 of the U.S. Voting Rights Act was amendedto allow plaintiffs to prevail in voting rights litigation ifthey demonstrate that a challenged law or practice has a discriminatoryresult. One of the first applications of this new statutoryprovision invalidated a congressional districting plan for theNew Orleans metropolitan area, a plan that had divided the city'sblack population virtually in half. This article reviews boththe making and the unmaking of that plan, derisively known asthe "gerryduck." Although the judicial action invalidating thisexercise in racial cartography demonstrates the potential importanceof this new section of the VRA as a legal weapon against minorityvote dilution, the results test provides federal judges withenormous discretion, and the application of the test may thereforebe quite capricious.     

State Fiscal Strategies for the 1990s: Balancing Budgets in a Recession

The fiscal crunch facing many states in FY 1991 has its rootsin the recession, federal mandates, election-year politics,and rapid growth in spending for Medicaid and corrections. Southernand midwestern states that made drastic cuts in response tothe 1981–1982 recession have fared relatively well, butstates in the Northeast have faced tax increases, layoffs, cutsin services, and prolonged conflict over state budgets. Althoughthe tax revolt has not led to appreciably lower taxes, it hasmade raising taxes more difficult, and has heralded a shiftto "boutique government," which may create further fiscal problemsin the long run. State tax increases and spending cutbacks mayalso delay recovery from the recession.     

The KwaZulu/Natal Indaba: A Federalist Proposal for South Africa

In Durban, South Africa, delegates from South Africa's politicalcenter proposed a federal solution to apartheid. Called theKwaZulu/Natal "Indaba," the plan proposes to merge two hithertosegregated jurisdictions and to bring majority rule to at leastone province of South Africa. The system envisioned by the planincludes a bicameral legislature, a consociational cabinet,proportional representation, minority veto over certain legislation,a segmented representative chamber, and enforcement of a comprehensiveBill of Rights. The "KwaNatal" plan also calls for a substantialdevolution of power, including the right of the provincial legislatureto repeal acts of Parliament that invade areas of provincialcompetence. This determination to extend local, multiracialautonomy put Natal officials on a collision course with thecentral government at Pretoria, which is trying to eliminatethe elected provincial governments.     

The Evolution of Accounting for Receipts in the Federal Budget

This article discusses the fundamental concepts governing budget scorekeeping of federal receipts. It is a companion to a previous article that discussed "offsetting collections," which is income that is recorded as offsets to federal outlays rather than as federal receipts. This article begins by showing the structure of the receipts table in the first presidential budget, which was the 1923 budget, and it provides a chronological discussion of how the budget presentation of receipts has evolved since then. The article then recapitulates the present budget concepts for receipts and lists the five most common challenges to them. It ends with a brief reference to the best sources for data on federal receipts, and two appendices that discuss technical issues that arise in the course of the article.     

The Bush Administration's Proposal for Credit Reform: Background, Analysis, and Policy Issues

Large recent and forecasted federal outlays to cover losses on deposit insurance and federally-assisted credit have increased concern in the executive and legislative branches about potential future liabilities of the federal government. These potential liabilities include federal credit; consequently, this renewed interest in federal credit reform. Credit reform would have to change the budgetary treatment of federal direct loans and federal guaranteed loans. Currently, the unified budget measures the cost of federal credit on a cash flow basis. Critics (including the Bush Administration) maintain that the appropriate budgetary measure of the costs of federal credit is the present value of the subsidies to credit recipients in the fiscal year that the credit is advanced. The Bush Administration's proposal for credit reform is presented in most detail in the Federal Credit Reform Act of 1989 (the Act), which was proposed but not enacted. The Act would have had federal officials estimate credit subsidies based on the equivalent interest rates in private credit markets. These subsidies would have been used to measure the budgetary cost of federal credit and would have required annual appropriations. Two credit revolving funds would have been established in the Treasury to finance credit flows. Many of these credit reform practices were included in the Omnibus Budget Reconciliation Act of 1990 though.     

Work-Family Balance and Job Satisfaction: The Impact of Family-Friendly Policies on Attitudes of Federal Government Employees

We use the 1991 Survey of Federal Government Employees to test a theoretical framework regarding the relationships between work and family demands, family-friendly policies, satisfaction with work-family balance, and job satisfaction for diverse groups of employees with different personal and family needs. We find that a variety of policies widely presumed to be "family friendly" were used to varying degrees by disparate groups of federal employees. The use of such policies had very diverse effects on both employee satisfaction with work-family balance and job satisfaction, within and across various groups of similarly situated employees. The assumptions underlying the provision of family-friendly policies and implications for the organization are examined.     

Ethnic Decentralization and the Challenges of Inclusive Governance in Multiethnic Cities: The Case of Dire Dawa,Ethiopia

Abstract

Ethnic decentralization which could emerge in the form of autonomy and/or federalism has become an important way of responding to the challenges of ethno-nationalist conflicts. Since 1991, Ethiopia has adopted an ethnic federal structure which provides territorial autonomy to its various ethnic groups. This approach to autonomy, however, has brought challenges to multiethnic cities and ethnic borderlands where different ethnic groups coexist. By examining the experience of Dire Dawa, the second largest city in Ethiopia, this article shows how federalism and territorial autonomy by themselves are not enough to address problems of participatory governance in multiethnic cities. The article finally underscores the need for policy innovations that would ensure power-sharing in multiethnic cities.     

Federalism and Segmented Communication in the USSR

Federalism in Soviet state structure, granting nominal equalityin political rights to major nationality groups residing indefined ethnoterritories, perserves to some extent, the culturalidentity of communities defined by common national or religiousheritage. Centralism in party ideological work seeks to integratea heterogeneous population by inculcating loyalty to a transcendentSoviet identity and to prevent mobilization along nationality(or other) social cleavages. Party personnel policy gives mobilityopportunities to national elites within, but rarely across,national republics, while reinforcing Moscow's domination ofparty and government relations with individual republics. Allpublicly disseminated information is subject to party ideologicalcontrols, but communications channels based in federal ethnoterritories,using native-language media, foreign radio broadcasts, and word-of-mouthchannels tend to strengthen the identity of nationality andreligious groups. Religious ties and contacts with members ofthe nationality abroad also counteract ideological centralization.However, segmented communication helps in turn to reinforcepolitical centralism and Russian dominance.