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In Pursuit of Full Employment

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A History (and Future) of the Budget Process in the United States

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Abstract

The government and the economy became seen as inseparable by many policymakers by the 1960s. Full employment and stable prices were the principal economic objectives of the period and acted as a driving force behind new legislation, including the Great Society programs. The Office of Management and Budget had become central to not only executing financial plans but also overseeing the management of agencies. President Nixon would push the powers amassed during the last fifty years too far and Congress responded by introducing significant reforms to the budget process. However, economic policy would remain consistent and the budget process reforms would only place Congress in a formal role within the executive budget process still driven by the presidency.

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Notes

  1. 1.

    Percival Flack Brundage, The Bureau of the Budget (New York, NY: Praeger Publishers, 1970).

  2. 2.

    Between 1951 and 1961, outlays for national defense averaged 59.4 percent of total outlays. Office of Management and Budget, Historical Table 3.1.

  3. 3.

    Cooke and Katzen, “The Public Debt.”

  4. 4.

    Ibid.

  5. 5.

    Mr. George, Mr. Maloney, Mr. Townsend, Mr. Barkley, Mr. Mead speaking, 76th Cong., 1st sess., Congressional Record , July 27–28, 31, 1939.

  6. 6.

    Charles L. Schultze, “Is There a Bias Toward Excess in U.S. Government Budgets or Deficits?” The Journal of Economic Perspectives 6, no. 2 (1992): 25–43. (Schultze 1992) observed that “Voters are very loathe to support a general tax increase to raise federal civilian spending; but they will forgo a tax cut when defense spending declines as a way of reallocating the resources to civilian programs.”

  7. 7.

    Congressional Record , 79th Cong., 2nd sess., March 11, 1946.

  8. 8.

    Harry S. Truman, “Special Message to the Congress Presenting a 21-Point Program for the Reconversion Period” (1945), The American Presidency Project, https://www.presidency.ucsb.edu/documents/special-message-the-congress-presenting-21-point-program-for-the-reconversion-period

  9. 9.

    Jacob L. Mosak, “National Budgets and National Policy,” The American Economic Review 36, no. 1 (1946): 20–43.

  10. 10.

    Kennon and Rogers, The Committee on Ways and Means : A Bicentennial History.

  11. 11.

    Wesley A. Dierberger, “Revenue Act of 1948,” ed. Paul A. Walkin and Marcus Manoff, Indiana Law Journal 25, no. 3 (1950): 416–419.

  12. 12.

    Kennon and Rogers, The Committee on Ways and Means : A Bicentennial History.

  13. 13.

    Ibid.

  14. 14.

    Ibid.

  15. 15.

    George D. Webster, “Taxpayer Relief: The Revenue Act of 1951,” Virginia Law Review 37, no. 8 (1951): 1039–1081.

  16. 16.

    U.S. Congress, An Act for the establishment of the Commission on Organization of the Executive Branch of the Government , July 7, 1947, Public Law 80–1.

  17. 17.

    Congressional Quarterly, “Hoover Commission Reports” CQ Almanac 1955, 11th edition (Washington DC: Congressional Quarterly, 1956).

  18. 18.

    Frederick C. Mills and Clarence D. Long, The Statistical Agencies of the Federal Government: A Report to the Commission on Organization of the Executive Branch of the Government , Research Staff of the National Bureau of Economic Research (New York, NY: National Bureau of Economic Research, Inc., 1949).

  19. 19.

    Ferrel Heady, “The Reports of the Hoover Commission,” The Review of Politics 11, no. 3 (Cambridge: Cambridge University Press, 1949).

  20. 20.

    U.S. Congress Senate Committee on Government Operations, Organizing for national Security. Hearings before the Subcommittee on National Policy Machinery of the Committee on Government Operations, United States Senate (Washington, DC: U.S. Government Printing Office, 1961).

  21. 21.

    Ferrel Heady, “The Reports of the Hoover Commission.”

  22. 22.

    Erle Cato, “Accrued Cost, not ‘Accrued Expenditures’ is the Answer for Government,” The Accounting Review 34, no. 3 (1959): 392–398.

  23. 23.

    Ibid.

  24. 24.

    U.S. Congress Senate Committee on Government Operations, “Financial Management in the Federal Government: A Comprehensive Analysis of Existing and Proposed Legislation Including Financial Management Improvements Made on a Government-Wide Basis,” US Senate, 87th Cong., 1st sess., Document 11 (1961).

  25. 25.

    Ippolito , Why Budgets Matter : Budget Policy and American Politics.

  26. 26.

    Ibid.

  27. 27.

    Herbert Stein, The Fiscal Revolution in America: Policy in Pursuit of Reality (Washington, DC: The AEI Press, 1996). Stein discusses the Eisenhower economic agenda, including its moderation, which was a point noticed at the time by economist John Kenneth Galbraith.

  28. 28.

    Ippolito , Why Budgets Matter : Budget Policy and American Politics.

  29. 29.

    Ronald J. King, Money, Time, and Politics: Investment, Tax Subsidies, and American Democracy (New Haven, CT: Yale University Press, 1993).

  30. 30.

    Ippolito , Why Budgets Matter : Budget Policy and American Politics.

  31. 31.

    Joseph C. Corey and Jason E. Taylor, “‘Oversell and Underperform’: The Impact of the Great Society Economic Programs Upon the City of Detroit, 1964–1968,” Essays in Economic & Business History XXVIII (2010): 73–90.

  32. 32.

    Ippolito , Why Budgets Matter : Budget Policy and American Politics.

  33. 33.

    Ibid.

  34. 34.

    Ibid.

  35. 35.

    U.S. Congress, “Revenue and Expenditure Control Act of 1968: Explanation of the Bill H.R. 15,414 As Agreed to in Conference,” 90th Cong., 2nd sess. (Washington, DC: U.S. Government Printing Office, 1968).

  36. 36.

    Paul E. Junk and Lonnie Nickles, “Federal Participation Certificates,” Nebraska Journal of Economics and Business 9, no. 2 (1970): 21–29.

  37. 37.

    Joseph Scherer, “The Report of the President’s Commission on Budget Concepts: A Review,” Federal Reserve Bank of New York Monthly Review (December 1967): 231–238.

  38. 38.

    President’s Commission on Budget Concepts, Report of the President’s Commission on Budget Concepts (Washington, DC: U.S. Government Printing Office, 1967).

  39. 39.

    Shelley Lynne Tomkin, Inside OMB: Politics and Process in the President’s Budget Office (New York, NY: Routledge, 1998). Tomkin provides a history of OMB and its functionality within the executive branch.

  40. 40.

    “Congress Accepts Four Executive Reorganization Plans,” CQ Almanac, 1970, 26th ed. (Washington, DC: Congressional Quarterly, 1971).

  41. 41.

    Richard Nixon, “Reorganization Plan No. 2 of 1970,” Public Administration Review 30, no. 6 (1970), 611–619.

  42. 42.

    CQ Almanac, 1970, 26th ed., “Congress Accepts Four Executive Reorganization Plans.”

  43. 43.

    Michelle D. Christensen, “The Executive Budget Process Timetable,” CRS Report for Congress RS20152 (Congressional Research Service, December 5, 2012).

  44. 44.

    Allen Schick, “The Congressional Budget Act of 1974 (P.L. 93–344): Legislative History and Analysis,” Congressional Research Service Report 75–94 (Washington, DC: Library of Congress, 1975).

  45. 45.

    Ibid.

  46. 46.

    Ibid.

  47. 47.

    Ibid.

  48. 48.

    Ibid.

  49. 49.

    Richard D. Lyonscot, “Nixon’s Impounding of Billion in Federal Money is Complicated Issue, Abounding in Misconceptions,” The New York Times , October 7, 1973.

  50. 50.

    Ibid.

  51. 51.

    Schick, “The Congressional Budget Act of 1974 (P.L. 93–344): Legislative History and Analysis.”

  52. 52.

    Ibid.

  53. 53.

    Arthur Burns, “Statement by Arthur F. Burns before the Joint Study Committee on Budget Control,” March 6, 1973.

  54. 54.

    Ibid.

  55. 55.

    U.S. Congress Joint Study Committee on Budget Control, Improving Congressional Control Over Budgetary Outlay and Receipt Totals, Interim Report (Washington: U.S. Government Printing Office, 1973).

  56. 56.

    Schick, “The Congressional Budget Act of 1974 (P.L. 93–344): Legislative History and Analysis.”

  57. 57.

    Hubert H. Humphrey, “Testimony by Senator Hubert H. Humphrey Before the Joint Study Committee on Budget Control,” March 6, 1973.

  58. 58.

    Schick, “The Congressional Budget Act of 1974 (P.L. 93–344): Legislative History and Analysis.”

  59. 59.

    Ibid.

  60. 60.

    Ibid.

  61. 61.

    Ibid.

  62. 62.

    Fisher, “The Politics of Impounded Funds.”

  63. 63.

    Ibid.

  64. 64.

    “House Voted to Reform Federal Budget Oversight,” CQ Almanac 1973, 29th ed. (Washington DC: Congressional Quarterly, 1974): 243–252.

  65. 65.

    Ibid.

  66. 66.

    Ibid.

  67. 67.

    Ibid.

  68. 68.

    Ibid.

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    Paul Winfree

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Winfree, P. (2019). In Pursuit of Full Employment. In: A History (and Future) of the Budget Process in the United States. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-30959-6_6

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  • DOI: https://doi.org/10.1007/978-3-030-30959-6_6

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