About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1 Maynard H. Waterfield, Needed: More Fiscal Responsibility 1 (1983)

handle is hein.tera/needmorer0001 and id is 1 raw text is: TAX FOUNDATION, INCORPORATED WASHINGTON, DC 20009 1875 CONNECTICUT AVENUE NW SPECIAL TELEPHONE (202) 328-4500 Needed: More Fiscal Responsibility By Maynard H. Waterfield in the current national fiscal and economic policy debates, certain facts tend to get blotted out by the windstorms of political rhetoric: * The Federal debt now exceeds $1.3 trillion. * The Federal budget deficit, however measured, currently exceeds $110 billion and may grow even larger. * Since 1970, Federal spending has more than tripled to a total of $728 billion in fiscal year 1982 and is estimated to top $760 billion in fiscal year 1983. * If Federal spending continues to increase at the same average annual rate as it did from 1970 to 1982, expenditures could top the $1 trillion level by fiscal year 1985. As dreary a prospect as this may seem, the problem runs even deeper. It is not just spending which is out of control. The budget system itself is seriously defective and badly in need of repair. The budget does not reveal the full scope of the government's financial transactions. Congressional budget actions, despite recent reforms, continue to be erratic and inefficient. Oversight and audit procedures in general are ineffective, with the result that there is inadequate account- ability. THE BUDGET SYSTEM The budget system basically is composed of four steps, all interrelated and equally important: 1. Budget formulation and presentation. This is the re- sponsibility of the President and Executive Branch. Based on reviews and consultations involving the Office of Manage- ment and Budget, Executive Branch agencies, and other ad- visers, the budget submitted early in each calendar year rep- resents the President's financial plan and sets forth his program proposals and fiscal policy priorities. 2. Action by Congress on the proposed budget. During its item-by-item consideration, Congress can approve, dis- approve, or modify the President's proposals, by eliminating or adding programs or making changes in requested funding levels. It may also affect the budget through actions on rev- enue measures. 3. Execution and implementation of the budget as mod- ified by Congress. This is the responsibility of the President, primarily carried out, at his direction, through the Office of Management and Budget, which controls the distribution of appropriations and other spending authorizations through an apportionment system. 4. Oversight and audit of performance. Some of this re- view and audit is conducted in-house by the Federal agencies, but the principal oversight responsibility lies with the Con- gress and its agent, the General Accounting Office. Over the years each of these steps or processes has de- veloped weaknesses, with the result that efforts to exercise effective control of the budget are seriously impeded. In ad- dition, this lack of control has contributed to the serious erosion of public comprehension of and confidence in budg- etary and fiscal policy. Without public understanding, inter- est, and support, budgetary problems are not likely to be confronted effectively by the political leadership; and without more truth in budgeting, that interest and support will be difficult to develop. BUDGET FORMULATION A ny budget as huge as that of the Federal government- including about 1,100 accounts involving a variety of funding devices and encompassing thousands of programs, projects, and activities-is bound to be extremely complicated. How- ever, the budget put before the Congress and the public each year is more complex than it needs to be. Much more im- portant from the standpoint of the public, it is far less re- vealing than it should be. As large as the published budget totals are, accounting and other techniques camouflage many additional billions of Federal receipt and expenditure dollars. For example, in recent years Congress has acted to establish a number of programs and entities which were placed in an off-budget status. Their receipts and expenditures are ex- cluded from the unified budget totals, but the excess of their outlays over receipts is added to the unified budget deficit in determining how much public debt must be financed each year by borrowing or when adjustment is required in the statutory debt limitation. In fiscal year 1981, these off-budget entities had receipts of $40.9 billion and expenditures totaling $61.9 billion, with a resultant $21 billion deficit. Other very sizable government transactions are included in regular unified budget totals only on a netted out basis, i.e., only the excess of outlays over receipts (or vice versa) is reported in the budget. Called public enterprise and trust revolving funds, a part of their activities is financed through other budget or off-budget accounts. In terms of the flow of funds to and from the public, public enterprise funds had receipts of $32.6 billion and outlays of $63.9 billion in fiscal 1981. On the same basis, trust revolving funds had receipts of $3.3 billion and outlays of $5.4 billion. The unified budget presentation also includes substantial amounts of receipts, in budget parlance called proprietary receipts from the public, which are not counted as budget receipts at all, but instead are offset against certain outlays. This represents a wash transaction, reducing both budget receipt and outlay totals. In fiscal year 1981, such offsetting receipts totaled $32.5 billion. Certain other receipts from non-Federal sources, some- times called contributions, are similarly offset against cer- tain outlays. Although data on such receipts had been pro- vided in recent years by the Office of Management and Budget upon request, such a request for the 1981 total was denied. Copyright 1983 by Tax Foundation, Incorporated, 1875 Connecticut Avenue, N.W., Washington, D.C. 20009 (202) 328-4500

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most