Edwards Chapter Thirteen

Edwards Chapter Thirteen - Unit 8 Edwards and Wayne:...

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Unit 8 Edwards and Wayne: Chapter 13- Budgetary and Economic Policy Making 1. The Federal Budget a. Forecasts revenue and expenditure estimates for the government b. The Early Years i. A presidential budget has been required since 1921 ii. Before this departments and agencies went directly to Congress for appropriations iii. Budget and Accounting Act of 1921 1. Made the president responsible for an annual budget for the executive branch 2. Established bureau to handle this 3. General Accountability Office was created to help Congress oversee the expenditure of the budget c. Franklin Roosevelt and the Increase in Government Spending i. The Great Depression increased demands for government intervention in the economy ii. Roosevelt responded with programs iii. Following WWII programs and spending expanded even more but economic growth helped pay for it iv. Since the 1970s entitlement programs have taken up an increasing portion of the budget v. Salaries must also be paid and supplies for the government purchased vi. Presidents who want to decrease spending have little leeway to do it vii.Constituencies have organized to protect their benefits 1. I.E. AARP 2. Reduces the options available to change policy viii. The involvement of interest groups has made it harder for Congress and the President to use the budget to control spending d. The Reagan Revolution i. Reagan reordered national priorities and used the budget to achieve policy goals ii. Differing budget priorities, policy proposals and partisan politics have characterized budget battles between the President and Congress since the 1980s iii. Congress tried passing legislation in 1985 to control and eliminate the deficit but it largely failed e. In the 1990s Congress was pressured to fix the problem i. Budget Enforcement Act of 1990 1. Put limits on discretionary spending
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2. Also set spending targets ii. PAYGO provision forced Congress to pay for programs by finding savings in other programs iii. Deficits still continued f. Clinton and the Politics of a Balanced Budget i. Clinton helped pass The Omnibus Budget Reconciliation Act of 1993 1. Lowered spending but kept tax increases relatively low ii. Increased revenue from economic growth eventually helped turn the deficit into a surplus iii. In 1995 and 1996 the government was forced to shut down iv. Clinton turned public opinion against the Republicans and a balanced budget was passed in 1997 v. Surplus occurred a year later g. The End of Budget Surpluses i. Bush came in with budget surplus but was quickly turned into a deficit with lower taxes and wars 1. Increased farm subsidies and Medicare benefits contributed also ii. Obama promised to reduce deficits but said spending was important to revitalize the economy h. Presidents are constrained by previous commitments, existing legislation and campaign promises i. Also subject to constituency pressure and fluctuations in the economy ii. Negotiation and compromise define the relationship between the
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This note was uploaded on 12/20/2010 for the course PSC 116 taught by Professor Forrestmaltzman during the Fall '08 term at GWU.

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Edwards Chapter Thirteen - Unit 8 Edwards and Wayne:...

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