An Examination of the Impact of Budget Reform on Arizona and Oklahoma Appropriations

Government reform shifts from using the budget as a control mechanism to focusing on how the budget can leverage planning and management tools that emphasize results. This research investigates reform at the state level. First, has the emphasis in the appropriations format changed from a control to more of a planning or performance orientation? Second, what factors explain any change in the level of control exercised through the appropriations process? Through multiple regression analysis, this research finds that Arizona, a reform state, is more likely to have reduced appropriations format control than Oklahoma, a nonreform state. Also, an elected agency head, the number of changes in the head of the agency, the level of reliance on the general fund, and the format received in a prior year are predictors of change.     

THE OBLIGATION TO SPEND: Presidential Impoundment of Congressional Appropriations

Abstract. A recent major controversy has arisen over the habitual impoundment (a term herein defined) of Congressional appropriations by the President through the O. M. B. President Nixon, who made unprecedentedly frequent resort to the practice, claimed both constitutional and statutory authority as well as citing historical precedent. These claims are successively examined, and almost wholly rejected (as indeed they already have been by the federal courts). Rather, impoundment appears as a device whereby President Nixon substituted his own legislative priorities for those of the Congress. The latter therefore strictly limited the practice by statute and sought, as a counterpoise, to improve its own budgetary procedures. This recent reform is in turn evaluated, and the balance of responsibility as between President and Congress in this fiscal area is weighed.     

The OMB Budget Examiner and The Congressional Budget Process

This is the second of a two-part retrospective on the evolving role of the OMB budget examiner. The examiner has become more active in negotiations with the legislative branch and tracking the legislative status of various fiscal measures. A new central budget management system was created to monitor appropriation bills. The OMB budget examiner has also been increasingly used to provide information for advocacy purposes before Congress and the public. The institutional effect on OMB of these changing roles is examined and suggestions for organizational reform are made.     

Incremental Thinking: "Congressional Debate on the Budget and Accounting Act of 1921 (Excerpts)"

Editors' Note : The Congressional Budget Act of 1974 was designed to improve the budget-making process of the national legislature. Although this new process has been in use for less than a decade, proposals for a constitutional amendment to limit the budget powers of the federal government are advancing through Congress. In assessing the potential and problems of budget reform, it would be wise to recall the expectations that animated the introduction of presidential budgeting more than 60 years ago. The following excerpts from the October 1919 debate in the House of Representatives on the legislation that ultimately became the Budget and Accounting Act of 1921 have a contemporary ring. The problems are not new, and one wonders whether the solutions are as easy as some claim.     

The first decade of the Congressional Budget Act: Legislative imitation and adaptation in budgeting

The influence of institutions on budgetary behavior at the federal level is the subject of this article, which examines the Congressional Budget Act of 1974. While its impact on budgetary priorities and growth seems modest at best, the Act has had a substantial impact on the process of budgetary decisionmaking, the nature of budgetary debate, and the budgetary strategies employed within Congress. These new and generally dysfunctional forms of congessional budgetary behavior are consequences of a budgetary reform that attempted to transfer many of the resource allocation procedures of the Executive branch to a legislative context. The transfer of many Executive branch budgetary procedures has led to the appearance within Congress of budgetary behavior previously confined largely to the Executive branch. The article also discusses attempts to render the congressional budget process more compatible with the legislative environment, analyzing the modifications in the original budget process that have been effected and proposed in recent years.Earlier versions of this article were delivered at the Workshop on Budgetary Control in the Public Sector, Brussels, Belgium, October 13–14, 1983, the meetings of the Association for Public Policy Analysis and Management, October, 1983, and the meetings of the American Political Science Association, September, 1983. Allen Schick, Robert X. Browning, Alex Hicks, Robert Strauss, John R. Hibbings, Evelyn Brodkin, and Rod Kiewiet provided helpful comments, and Pamela Reyner provided secretarial assistance. All remaining deficiencies are the responsibilities of the authors.     

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.     

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.     

Budget Process Reform: Waiting for Godot

The unraveling of the budget process described by Irene Rubin will have extraordinary consequences for the long-term budget outlook facing the nation. The retirement of the baby boom generation will prompt unprecedented and unsustainable structural fiscal imbalances for decades to come. Early policy action on the spending and revenue sides of the budget is critical to avert fiscal and economic crisis and to phase in changes in order to avoid precipitous and politically perilous actions in the future. Yet such actions constitute what amounts to a politically unnatural act, as one generation of political leaders is asked to make sacrifices in current policies benefiting future generations. Budget process reforms can serve to highlight the salience of these issues and help deal with the significant political hurdles faced by decision makers in making these intertemporal budgeting trade-offs. Ironically, the need for budget rules and processes has intensified as policy makers have become more vulnerable to polarized political parties, ever more watchful media, and mobilized interest groups. Budget rules and processes can help policy makers cope by protecting their ability to make the hard choices that will be necessary. The pressures for budget process reform will accelerate as the current financial crisis increases near-term budgetary pressures, promoting greater alignment between near-term and long-term fiscal problems.     

Performance and Accountability: Budget Reform in New Zealand

Since 1984, New Zealand has made major changes in public sector management. This article describes the perceived problems with the previous New Zealand system and discusses the reforms designed to address these problems. The changes attempt to increase efficiency by: (1) separating commercial functions from other government operations; (2) strengthening lines of ministerial and executive accountability; and (3) designing budget and financial management systems to improve measurement of public sector performance. This last reform includes shifting from an input to an output-based system, changing from cash to accrual accounting, and creating different forms of appropriations for different types of government activities. While it is too early to assess whether the reforms are successful, we note potential problems.     

Budget Reform Proposals in the NPR Report1

A new round of budget process changes began on September 7, 1993, when Vice President Al Gore released the National Performance Review (NPR) report. The report recommended major revisions in the structure and processes of the federal government. A number of these proposals would alter a broad range of budgetary procedures followed by the president and Congress, borrowing in some cases from the states. This article analyzes seven areas of budget proposals contained in the NPR report, analyzes their benefits and drawbacks, and makes general observations about their likely impact on executive-legislative relations.     

Budget Reform in Malaysia and Australia Compared

The study, using the recent contrasting experience of budget reform in Malaysia and Australia, inquires why quite similar changes were attempted in different socio-economic and fiscal settings. It explains why their implementation differed and identifies the factors that shaped, sustained, or impeded the respective efforts.
Three basic themes emerge. First, political and administrative will are necessary requirements for the success of any budget reform effort. Second, the more correspondent the bureaucratic culture is with the culture upon which the new budget system is premised, the more easily change occurs. Third, a model of reform predicated upon the assumption of fiscal restraint cannot effectively function in a climate of fiscal relaxation. Malaysia adapted its budget model from the Australian system. As the Australian model suited the paradigm of expenditure restraint, the adapted model proved less workable against the Malaysian climate of fiscal relaxation.     

Incrementalism in Appropriations: Small Aggregation,Big Changes

U.S. federal budget dynamics, as a major attribute of the legislative and bureaucratic decision‐making processes, increasingly calls into question the scholarly focus on incrementalism. What constitutes a “small” change is largely unspecified in previous research that has also been unable to assess incrementalism across multiple levels of aggregation. Using a unique budgetary database, this article analyzes whether budgetary changes are in fact “small” at different levels of aggregation. Surprisingly, a low proportion of changes are small by any logical standard. During most years, more than one‐fifth of budgetary changes are greater than 50 percent, and nearly half are more than 10 percent. The level of aggregation is also important for assessing whether political variables influence incrementalism. A salient finding: change in party control reflects greater influence within micro‐level budget decisions, while divided government manifests more impact on aggregate‐level budget decisions.     

Deficits, Soft Budget Constraints and Bailouts: Budgeting after the Norwegian Hospital Reform

In the 1990s, the Norwegian hospital sector was characterized by soft budgetary constraints and increasing budget deficits. This was one of the main antecedents of the 2002 hospital reform, where the central state took over ownership of the hospitals from the counties. Arguably, the centralization of ownership, financing and production would harden the budget constraints and increase the budgetary discipline. This analysis shows that this has not been accomplished. Instead, the production has been far above what was planned, and the deficits higher than ever. Two stages of the post-reform budget processes are analyzed: first, the stage where the central state set the budgets and sends signals of budgetary rules (whether the state sends signals of soft or hard budget constraints), and second, how the central state handled deficits in the hospital sector as they emerged (whether the hospitals was bailed out or not). The conclusion is that the central state neither set a hard budget constraint nor managed to stay firm as deficits turned up. It is argued that three mechanisms explain the prevailing problems of managing the hospital sector: uncertainty of the hospitals' financial situation during the transition phase; minority governments; and specific features related to the organization of the budgetary process in parliament.     

Congressional Voting on Term Limits

Between 1990 and 1995,twenty-three states unilaterally imposedterm limits on their own delegations toCongress. In 1995 the House ofRepresentatives defeated a constitutionalamendment that would have limited the termsfor all of Congress. Only weeks later, theSupreme Court struck down the individualstate laws. In 1997 the House againbrought the issue to a vote, which alsofailed. This paper models congressionalvoting on term limits with a simple gamewithin an interest-group theory withlegislators as imperfect agents ofconstituents. The game foremost predictsthat members from term-limited states wouldbe more likely to support term limits inthe first vote but no more likely on thesecond vote. The empirical section employsprobit, multinomial logit, and orderedprobit maximum likelihood estimations toconfirm the stated hypotheses. Among otherresults, in particular both the joint andconditional probability of a `yea' on thefirst vote and a subsequent `nay' on thesecond vote is higher for members fromstates that had unilaterally self-imposedterm limits. The results are robust tomodel specification, estimator, andalternative sampling. Implications areproposed in the concluding comments.