Abstract
The proper duration of legislation has become highly controversial as a result of the enactment of many temporary tax laws during the George W. Bush Administration. The prevailing view is that inclusion of an expiration date or sunset feature in legislation permits the cost of the legislation to be misrepresented and allows its proponents to escape the discipline intended by the congressional budget process. Under this view, fiscal discipline is preserved through enactment of so-called legislation.This Article challenges that view and shows that, barring estimation error, the legislative process accounts completely for the costs of legislation but not permanent legislation. Consequently, enactment of temporary-effect rather than permanent legislation would promote political accountability and may result in greater fiscal restraint. In addition, when temporary-effect legislation expires, the cost of any extension is fully taken into account in the legislative process. Extension of such legislation, therefore, competes with, and potentially displaces, adoption of other legislation. By contrast, the cost of continuing permanent programs largely disappears in the legislative process and therefore continuation of such programs produces little or no crowding-out effect. This Article also addresses whether other features of the legislative process can overcome the problems associated with the budget accounting of permanent legislation, and responds to criticisms of temporary-effect legislation.
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