The Federal Budget: Politics, Policy, Process.(Brief Article)

Schick, Allen with the assistance of Felix LoStracco

Washington, DC: Brookings Institution Press, 2000, 307 pp.

Rowan Miranda, Ph.D., is Director of Research and Consulting at GFOA.

Allen Schick's book on the federal budget is the most comprehensive work available on the subject today. Schick is the author of many of the classic works on budgeting and associated with some of the major attempts at federal budget reform. Although the book is exclusively focused at the federal level, the content should he relevant to those interested in understanding and improving budgeting at any level of government.

The evolution of federal budgeting differs substantially from the state and local level. While budget reform at the state and local level was well underway in the late 19th century, it had yet to catch on at the federal level. For one thing, with no income tax, the federal budget was still relatively simple and to the extent there was any systematic federal budgeting it was related to the use of surplus funds generated by tariffs.

While state and local governments were consumed by reforming the budget through better analytical tools and techniques, the reform efforts at the federal level have focused more on rules and procedures especially as they relate to the balance of power between Congress and the President. Schick identifies three main periods in this evolution, which are described below.

Legislative Dominance (1789-1921). The Constitution of the United States provides scant detail on how budgeting is to be carried out. This is somewhat excusable considering the modern concept of the budget had yet to be developed. To the extent the Constitution made provisions, it primarily placed power in the hands of Congress. Before federal agencies or the President could spend any money, authorization would have to be provided by Congress. Congress also constrained government agencies by making detailed appropriations although the degree of detail varied year to year. Over time, two committees--the House Ways and Means and the Senate Finance Committee--controlled spending and revenue legislation. Appropriations were made for one-year periods and legislation creating programs was generally separated from legislation that provided resources to programs. Although the Constitution did not require it, balanced budgets were the norms with occasional deficits that arose during wars and disappeared shortly after them.