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The Congressional Budget Process in an Era of Surpluses

Published online by Cambridge University Press:  02 September 2013

Andrew J. Taylor
Andrew J. Taylor*
Affiliation:
North Carolina State University
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Extract

How the federal government's fiscal health has improved! As recently as 1992, the United States experienced its largest ever current-dollar annual unified budget deficit of $290 billion. At the close of its last fiscal year, on September 30 1999, the nation's government recorded a budget surplus of $124 billion. More significantly, the Congressional Budget Office (CBO) has projected healthy on—budget surpluses—that is, no money will have to be taken out of the Social Security trust fund and revenues will still exceed expenditures—well into the second decade of the new century.

The causes of this turnaround are well understood. The record-long economic expansion of the 1990s has boosted revenues dramatically, the end of the Cold War lowered the demand for defense spending, and the budget legislation of 1990, 1993, and 1997 generally cut spending and raised taxes (Parks 2000; Schick 2000).

What Washington does with the extra money depends greatly on electoral outcomes over the coming years. Congressional Republicans—along with their party's presidential candidate, Texas Governor George W. Bush—have promised tax cuts, while Democrats have called for higher levels of domestic discretionary spending. But there are areas of agreement. Both parties wish to protect the Social Security trust fund in a so-called “lock box” and both have expressed their commitment to pay off the publicly-held debt. It is likely, therefore, that future incarnations of divided government might protect the surplus by producing a default fiscal policy based primarily on these two proposals.

Type
Research Article
Information
PS: Political Science & Politics , Volume 33 , Issue 3 , September 2000 , pp. 575 - 580
Copyright
Copyright © The American Political Science Association 2000

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Footnotes

*

This article was written during my year in Washington as the American Political Science Association's William A. Steiger Congressional Fellow. Many individuals helped shape my thinking about the subject and I would like to express my gratitude to the most influential of them here. Peter Sperry, Doug Bandow, Bob Reischauer, Michael Boskin, Stan Collender, Allen Schick, Jim Thurber, Jim Saturno, and Hank Cox assisted me as I listened to and talked with them. On the Hill, I benefited greatly from hanging around the House Budget Committee and interacting with a number of members and staff, especially Rep. Christopher Shays (R-CT), Chairman John Kasich (R-OH), and, on the other side of the aisle, Rep. David Price (D-NC) and Ranking Member John Spratt (D-SC). Shays' chief of staff, Peter Carson, and the committee's staff director, Wayne Struble, also provided insightful analysis. Jeff Biggs did a superb job helping me best exploit my opportunity on the Hill. In addition, Charlie Coe of N.C. State and Charlie Perusse of the North Carolina Legislature's Fiscal Research Division have taught me much about state budgets. Despite all the help, the usual caveat applies.

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