Making "Common Sense" of Federal Budgeting

Abstract

Budgeting is a ubiquitous, frequently controversial, and almost always dissatisfying aspect of government. Because it Influences so many decisions and provokes so much debate, budgeting attracts study from a wide variety of perspectives, ranging from welfare economics to public choice, public administration, political science, and political anthropology. Federal budgeting has been especially controversial over the past two decades of partisan war over the unbalanced budget. These battles have provoked a great deal of explanation (Drew, 1996; Gilmour, 1990; Haas, 1990; Hager and Pianin, 1997; Makin and Ornstein, 1994; Maraniss and Weisskopf, 1996; Penner and Abramson, 1988; Schick, 1990; Steuerle, 1991; White and Wildavsky, 1991; Woodward 1994). As a participant in the explanatory effort, have been struck by the extent to which public debate and attitudes seem to proceed not from the insights of academic fields but from a different set of perspectives. The distinction is most evident in attitudes towards budget balance. Although there are macroeconomic arguments for balancing the federal budget, the discipline of economics provides no basis for saying that the difference between and, say, a deficit of one half of one percent of the gross domestic product is very significant. Yet balance per se has great political meaning. James D. Savage (1988) has described the roots of the balanced budget ideal in American politics. His argument about the political values and interests the ideal has served can explain who chooses to manipulate the appeal, but it cannot fully explain the attraction of the balanced budget ideal for apolitical, inattentive citizens. Instead, budget and other values tend to be based on simple principles, such as, I have to my budget so the government should, too. This is a commonsense understanding it operates by considering government budgeting as if it were something closer to everyday experience for most people (thus, common and sensible). Unfortunately, application of what passes for commonsense about federal budgeting almost inevitably leads to disappointment. Governments do not budget the way citizens think individuals or families or business firms do or should. Ironically, only part of the misunderstanding is because government is different; the rest is because the standards applied to government budgeting are not followed *in everyday life, either. This essay will highlight some points about budgeting, especially federal budgeting that are revealed by making the comparison with financial planning for individuals or households carefully, rather dun casually. Both causal explanations and normative conclusions follow from the analysis. My goals am to show that federal budgeting is less alien than it may often seem, to offer a new perspective on some common arguments in academic as well as citizen discourse, and to provide an example that may be used for further discussion of both budgeting and other subjects in public administration. The first section compares budgeting for an individual (or any unit with only one relevant decision maker) and a representative government.(1) One theme involves how individuals' interests aggregate into collective decisions. The common argument that intense minorities force excessive spending by demanding it at the expense of inattentive majorities is basically wrong. But a less common argument about the natural inconsistency of collective as opposed to individual choice provides a basic explanation of the difficulty of deficit reduction. A second theme involves whether standards based on the experience of individuals either make sense for government or can convince individuals to support government action. Will show why the common argument that people must sacrifice for deficit reduction for our grandchildren should not be expected to convince rational individuals to pay. …