Stanford University

Conference Report: Comparative Budget Policy: Lessons for Reform in the United States [May 2014]

Conference Report: Comparative Budget Policy: Lessons for Reform in the United States [May 2014]

On May 8-9, 2014, the Program on American Democracy in Comparative Perspective at Stanford University hosted a workshop on comparative budget policy. The aim of the workshop was to bring together academics and policymakers from the United States and abroad to understand, and devise ways to improve, American budgetary politics. Representatives from the World Bank, the International Monetary Fund, and the Organisation for Economic Co-operation and Development spoke about ways to assess the American budgeting framework in comparative perspective, using benchmarks and indices of best practices. Practitioners and political officials from Japan, Canada, Australia, and Italy spoke about budgetary disputes and solutions in their countries. 
 
Policymakers and lawyers from the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO) in the United States reflected on the challenges they faced while in office, and on the potential for meaningful procedural changes to the budget process. Finally, a group of interdisciplinary scholars from history, political science, law, and public policy provided context and analytical frameworks for understanding budgetary politics.

The motivation for the workshop stems from the observation that the United States government routinely fails in one of its foremost tasks: to create, and to pass, budgets. Congress often fails to devise a budget—in many years, it passes Continuing Resolutions to extend the previous year’s budget, punting difficult decisions about which federal programs to cut, maintain, or grow. Even worse, the failure of the President and Congress to reach agreement on the budget has led to 18 government shutdowns since 1978, while shutdowns have remained rare in other advanced democracies.

In 2013, budget negotiations in Congress stalled multiple times as Republicans and Democrats failed to agree on a host of political issues, including the debt ceiling, funding of the Affordable Care and Patient Protection Act, and tax rates. These negotiations resulted in budget sequestration of many federal programs, and threatened to reduce the United States credit rating. As the fiscal year deadline of October 1 approached, both chambers of Congress tried to pass budget legislation to fund the government. Economists and experts predicted that failing to meet the deadline would have significant consequences, including a potential default on government debt. Despite these dire warnings, however, the parties failed to reach agreement, culminating in a 16- day shutdown of the federal government from October 1-16, 2014.

The objective of this workshop was to think through the causes of, and solutions to, ineffective budgetary politics and policy-making. This report begins by describing the politics of budgeting in the United States, and situates our procedural and political anomalies in the comparative context of budgetary politics around the world. The next section examines a range of suggestions to improve budgeting, from technical and procedural changes to broader institutional reforms. The report concludes by discussing the limitations of proposed reforms, and by thinking realistically about how to mobilize support for improved budgeting outcomes.

 

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