Rudolph G. Penner

The Hard Road to Fiscal Responsibility

The paper describes the current fiscal problems of the United States showing that without significant changes in revenue and spending policies, the country is headed for a sovereign debt crisis similar to that afflicting countries in Southern Europe. Numerous committees and commissions have offered policy options that would stabilize the debt–GDP ratio in the long run. The proposals of the Presidents National Commission on Fiscal Responsibility and Reform and the Bipartisan Policy Centers Deficit Reduction Task Force are described in detail. Elected politicians have not been enthusiastic about the work of these bodies. Only the House has passed a budget that would stabilize the debt and that proposal is analyzed as is the presidents response. The paper goes on to describe the Budget Control Act that was passed after the debt limit debate in the summer of 2011.

When Budgeting Was Easier: Eisenhower and the 1960 Budget

The paper looks back to time when budgeting was easier and budget outcomes were superior. Although it is impossible to replicate the past exactly, there are certain characteristics of past budgets that might be emulated. The paper focuses on Eisenhowers battles to balance the 1960 budget. The task was not easy and the result had to be bipartisan since Democrats had significant majorities in the House and Senate. But budgeting was less difficult than it is today, because almost all spending was controlled by annual appropriations, and popular, rapidly growing entitlements for the elderly were very much less important. The presidents budget was also much more prestigious and influential. Approaches to gaining more control over entitlements are explored as is the more difficult task of restoring the influence of the presidents budget.