Congress, the Deficit, and Budget Reconciliation

President Clinton's veto of the 1995 reconciliation bill, the largest and most ambitious such legislation ever passed by Congress, was the first time a reconciliation bill was ever rejected by a president. It was also the first reconciliation bill in two decades to include a tax reduction rather than a tax increase. The fate of this bill, and its scope and contents, suggest the need to assess the evolution of reconciliation within the congressional budget process. In the early 1980s, Congress altered budget reconciliation procedures, putting in place a powerful new capability for deficit reduction. Reconciliation became the primary means within the budget process of restraining entitlement spending and increasing taxes as part of congressional efforts to reduce the deficit. Gramm-Rudman-Hollings magnified certain problems Congress encountered in using reconciliation to control entitlements, producing increased pressure to cut discretionary spending. While the Budget Enforcement Act of 1990 included new authority to use reconciliation to restrain entitlements, congressional spending priorities combined with the Peace Dividend to maintain the relative sanctuary entitlement programs have enjoyed. The limits of reconciliation as a deficit reduction tool, both in terms of increasing revenues and curtailing entitlements, are detailed. The inherent procedural advantages accorded to entitlements are contrasted with the treatment of discretionary programs, explaining in part the widening gulf between these two categories of spending. Congress has attempted, without success, to find alternatives to reconciliation. The failure of the seven-year, deficit-eliminating reconciliation bill of 1995 may indicate that certain Limits on the use of reconciliation may have been reached.     

(Non)equivalence in a federalism: Dual tax shares, flypaper effects and Leviathan

Among the best-known theorems of fiscal federalism is the presumed allocative and distributive equivalence between a lump-sum grant to a collectivity and a set of lump sum grants to the members of a collectivity. Interestingly, the simple elegance of the theorem is at odds with observed behavior. Grants to governments produce greater public spending than does tax reduction. Explanations of this "flypaper effect" range from misspecified econometric modeling to presumed behavior based on fiscal illusion. In this paper we show that theoretical equivalence exists in a model that recognizes only one tax share, the citizen voter's local tax share. When the model is expanded to include voters' federal tax shares as well as local taxes, non-equivalence and the flypaper effect become the rule, not the exception.     

Adolescence terminable and interminable: When does adolescence end?

The question of when adolescence ends and young adulthood begins is considered. Throughout, it is addressed in terms of the theory of broad and narrow socialization, which emphasizes the cultural context of development. The question is approached from cognitive, emotional, and behavioral perspectives, then from the perspective of role transitions (such as marriage and parenthood). The idea of an extended path from adolescence to adulthood is discussed, and the concept of emerging adulthood is presented. It is suggested that in most non-Western cultures the entrance to adulthood is socially defined and marked by a social event, usually marriage. In the contemporary West, however, where there is a strong emphasis on independence and individualism, the entrance to adulthood is defined and marked individually. Consequently, it is likely to be based on the achievement of residential and financial independence as well as on the attainment of cognitive self-sufficiency, emotional self-reliance, and behavioral self-control. Thus in the contemporary West the passage from adolescence to young adulthood is a process that is gradual and may take many years.This research was funded partly by an institutional training grant from the National Institute of Mental Health 5T32 MH14668-14, for the Clinical Research Training Program in Adolescence, jointly sponsored by the Department of Psychiatry at Northwestern University and the Committee on Human Development at the University of Chicago.Received Ph.D. from University of Virginia, Research interests include adolescent reckless behavior, adolescents' uses of media, and the transition to adulthood.Research interests include the transition to adulthood and development in young adulthood.     

The Budget Enforcement Act in 1991: Isometric Budgeting

The immediate effect of the Budget Enforcement Act (BEA) of 1990 was to cancel a pending $110 billion sequester and to change the Gramm-Rudman-Hollings deficit targets. These and other changes allowed Congress and the administration to escape responsibility for increases in the deficit if discretionary spending was kept within the caps and no new entitlement programs or revenue enhancements were added. This assumption and others relating to the empowerment of the Appropriations Committees and the new authority of the OMB are explored in this article.     

Credit enhancement of municipal debt

Abstract: The municipal bond bank (mbb) innovation began in Canada in 1956 and in the United States in 1970. This paper concentrates on why mbbs exist, their characteristics, where they work best, and how they compare with other municipal debt credit enhancement techniques. It concludes with a discussion of the future role these organizations will have in providing long-term capital funding to municipalities in Canada and the United States. Sommaire: Le principe de la Banque d'obligations municipales (BOM) fut introduit en 1956, au Canada et, en 1970, aux États-Unis. Cet article explore la raison d'être des BOMS, leurs caractéristiques, leurs conditions de succés maximum et les compare à d'autres techniques pour rehausser le crédit de la dette municipale. L'article se termine par une discussion sur le rôle que ces organisations auront à l'avenir dam le financement capital à long terme des municipalités au Canada et aux États-Unis.     

Power,throne, and rank

Richard Hoggart has spent all his working life teaching English literature and involved in different ways with cultural studies. He is the author of the seminal book The Uses of Literacyand most recently of Townscape with Figures: Farnham—reviewed in this issue of SOCIETY.