Balanced Budget Amendment Research Articles

Mark O. Hatfield: Oregon Statesman. By Richard W. Etulain

Richard W. Etulain, a well-known historian of the American West, offers a short, readable, and sympathetic biography of Mark O. Hatfield, long-time U.S. Senator from Oregon. He is best remembered today as a Republican Senator who opposed the Vietnam War in the 1960s, supported the nuclear freeze movement in the 1980s, and voted against the Gulf War and the Balanced Budget Amendment in the 1990s. In his thirty plus career in the Senate, he seemed more in line with liberal Democratic Senators, George McGovern (S.D.), Frank Church (Id.), and Edward Kennedy (Mass.). At the same time, Hatfield was a deeply devout Evangelical Christian and good friends with Rev. Billy Graham, who pushed Nixon to put him on the presidential ticket in 1968. The strength of Etulain’s biography is that he captures the frenetic energy Hatfield brought to his rise in state and national politics. Etulian devotes four of the five chapters to Hatfield’s emergence as a political force in Oregon. Hatfield’s followed a natural political trajectory, beginning with his election to the state legislative assembly in 1950, then election to the Secretary of State, followed by two successful terms as governor from 1959–67, before winning election to the U.S. Senate, where he served the next thirty years.

On "Storm Clouds on the Horizon: The 3 Perils of Unconstrained Academic Growth in Physical Therapist Education." Deusinger SS, Landers MR. Phys Ther. 2022;102:pzac046. https://doi.org/10.1093/ptj/pzac046.

We wholeheartedly agree with Deusinger and Landers1 that the current proliferation of new doctor of physical therapy (DPT) programs will likely lead to damaging consequences for the collective enterprise of academic physical therapy as well as for the students and patients it exists to serve. We do, however, believe that their forecast of “storm clouds on the horizon” is insufficiently severe. Instead, we would argue that, to borrow a phrase from Game of Thrones,2 “Winter is coming.” The unsustainable proliferation of new DPT programs in a marketplace in which demand cannot possibly keep up with supply is a classic example of an economic bubble. Eventually and inevitably, bubbles burst. Indeed, we have seen this occur before in physical therapist professional education. From 1989 to 2002, the number of physical therapist education programs in the United States increased by 75% (from 118 to 205).3 That bubble burst in the late 1990s, partly as the result of the passage of the ``Balanced Budget Amendment'' by the Republican-controlled US Congress in 1997, which led to drastic reimbursement cutbacks and reductions in jobs for physical therapists.4 The results were not pretty. The applicant pool plummeted by 74%, from an average of 342 applicants per program in 1995 to 88 in 2002.3 Total enrollment in US physical therapist education programs dropped by 30% from 1997 to 2003.3 Many programs were unable to fill their classes. Total enrollment did not recover until 2009; average applications per program, not until 2011.3 Those were hard years for physical therapy academic programs – for faculty, for students, and, most of all, for graduates.

Apple Trees for Firewood: James Buchanan’s Case for a Balanced Budget Amendment in the Context of U.S. Fiscal Policy

Throughout his academic career James Buchanan was deeply concerned about the proclivity of constitutional democracies to go into debt. He feared that the process of accumulating public debt would increase the tax burden on individuals to an extent that would eventually be fiscally unsustainable and subversive for liberty. This paper uses the example of the U.S. to illustrate, in concrete terms rather than abstract modeling, that Buchanan seems vindicated by the facts. To sideline him as a doomsayer and dismiss his balanced budget policy proposal out of hand would be inappropriate.

Editor's Letter

Editor's Letter

Neoliberalism and Law: The Case of the Constitutional Balanced-Budget Amendment

This Article discusses the significance of law in neoliberal theory and practice. Prefaced by a brief look at the role that law plays in the theories of the ordo- and neoliberal thinkers Franz Böhm and Friedrich August von Hayek, the subsequent chapters focus on the work of James Buchanan and his brand of neoliberalism, which combines constitutional economics public choice theory. Buchanan's core demand is a balanced-budget amendment to the constitution. The following Sections examine this measure in its various aspects before the final section switches to the world of “actually existing neoliberalism” with a discussion of the various reforms of the economic governance structure of the European Union in recent years, particularly the “Fiscal Compact”, which amounts to the real world equivalent of a balanced-budget amendment.

Fiscal Policy and Budget Balancing: The European Experience

The European Union’s constitutional balanced-budget amendment, the Stability and Growth Pact (SGP), dictates that EU member states keep their budget deficits within three percent of GDP and that government debt be kept at or below 60 percent of GDP. After 20 years, unintended consequences of the SGP have created a contractionary fiscal-policy bias that prioritizes budget-balancing over reductions in spending and unemployment. For Americans, this a valuable lesson, as it shows what budget-balancing mechanisms not to use.

Reopening the Case for a Balanced Budget Amendment

Congress has expressed interest, one way or the other, in a balanced-budget requirement for the past six decades. Yet despite numerous attempts, the legislative body has never passed a constitutional balanced-budget amendment. Most of the analysis of why we don’t yet have a constitutional amendment has been focused on the legal and political aspects of the issue. Less time and effort has been spent on economic analysis. This paper discusses how a balanced-budget requirement would change federal fiscal policy and thereby to some degree the federal government's role in the economy. The paper proposes an evaluation method for the impact that balanced-budget requirements have on the economy.

A Balanced Budget Amendment: What Can We Learn From State Experience?

On its current course, United States fiscal policy threatens to hobble the nation's prospects for economic growth. Economic theory suggests that an important source of the problem is the government's ability to purchase services for current voters with taxes levied on future generations. A balanced budget requirement, by internalizing both the costs and benefits of government services, would therefore seem to be a natural solution. In this testimony, I summarize the scope of the fiscal problem and then review state-level evidence to consider the ways that a federal balanced budget amendment might impact the nation's fiscal and economic future.

The Balanced Budget Amendment: Not Ready for Prime Time

Bruce Bartlett is a former Treasury deputy assistant secretary for economic policy. His new book, The Benefit and the Burden, will be published by Simon & Schuster in 2012.

Divine Operating System

This Foreword to a Tennessee Law Review symposium on the implications of a federal constitutional convention surveys a number of proposals for reining in the growth of federal government power and spending, ranging from the creation of a new house of Congress with the sole power to repeal bills, to more mundane proposals such as a balanced budget amendment and term limits.

A Simple Coase-Like Mechanism that Transfers Control of Government Spending Levels from Politicians to Voters

Elected representatives have little incentive to pursue the interests of those electing them once they are elected. This well-known principle-agent problem leads, in a variety of theories of government, to nonoptimally large levels of government expenditure. An implication is that budgetary rules are seen as necessary to constrain politicians’ tax and spending behavior. Popular among such constraints are various Balanced Budget Amendment proposals. These approaches, however, are shown here to have serious limitations, including failure to address the central concern of spending level. An alternative approach is advanced here that relies on a Coase-like mechanism that transfers control of government spending to the voter. Prisoner's dilemma incentives and political competition are seen to be critical to the superiority of the present mechanism to approaches requiring budget balance.

Lessons for California from the History of Fiscal Constitutions

THE CALIFORNIA Journal of Politics & Policy Volume 2, Issue 3 Lessons for California from the History of Fiscal Constitutions Isabel Rodriguez-Tejedo University of Navarra John Joseph Wallis University of Maryland Abstract California continues to undergo a series of budget crises. This paper examines the evolution of fiscal provisions in state constitutions over time, as well as in Califor- nia. The evolution of fiscal provisions across the states shows an evolution from debt restrictions to balanced budget amendments to rainy day funds and tax and expenditure limits. California shows the same pattern. We suggest that many of the constitutional changes are responses to the previous constitutional change, which is why a definite pattern emerges. We end by suggesting that California return to the intent of the original 1849 debt restriction and require voters to actually raise taxes when they authorize new borrowing. Keywords: constitutions, state government, fiscal constitutions, debt limitations, balanced budget, rainy day funds, TELs www.bepress.com/cjpp

An Implementable Institutional Reform that Transfers Control of Government Spending Levels from Politicians to Voters

Elected representatives have little incentive to pursue the interests of those electing them once they are elected. This well-known principle-agent problem leads, in a variety of theories of government, to non-optimally large levels of government expenditure. An implication is that budgetary rules are seen as necessary to constrain politicians' tax and spending behavior. Popular among such constraints are various Balanced Budget Amendment proposals. These approaches, however, are shown here to have serious limitations, including failure to address the central concern of spending level. An alternative approach is advanced here that relies on a Coase-like mechanism that transfers control of government spending to the voter. Prisoner's dilemma incentives and political competition are seen to be critical to the superiority of the present mechanism to approaches requiring budget balance.

The Balanced-Budget Amendment: Panacea or Cop-Out?

The Balanced-Budget Amendment: Panacea or Cop-Out?

The Partisan Foundations of Balanced Budget Politics

The historical image of the Republican Party as a party strongly supporting the balanced budget norm has come under increasing scrutiny as many prominent Republicans, including President George W. Bush, have overtly argued that tax cuts should be a higher priority than deficit reduction. Have the Democrats truly surpassed the Republicans as being better advocates for deficit reduction, however? To determine partisan support for balancing the budget, I analyze balanced budget amendment votes in Congress since 1982, the “Fiscal Responsibility” vote scores given to members of Congress by the Concord Coalition, and the relationship between party control of the White House and the size of the deficit. Findings suggest mixed evidence to support both Democratic and Republican claims to be the party most likely to back deficit reduction. While evidence from the legislative branch implies that Republicans are competitive with the Democrats in regards to deficit reduction, the story from the executive branch suggests that Democrats have done a much better job of reigning in budget deficits. As a result, the leadership of the White House in regards to balancing the budget appears to be more important than ever.

The Parties' Flip-Flops on Deficit Spending: Economics or Politics?

Not long ago, Republicans were trying to pass a balanced budget amendment to the constitution. Democrats were skeptical, overwhelmingly Keynesian, and believed that deficit spending had ended the Great Depression. Under Rubinomics the positions began to switch: Democrats became the defenders of fiscal orthodoxy. Now Bush has cut taxes for the rich and caused huge deficits. Is the flip-flop just politics?

Taxation and Public Finance: A Philosophical and Ethical Approach

This paper applies philosophical and ethical concepts to the disciplines of taxation and public finance. It discusses various characteristics and attributes of the various forms of taxation, including whether taxation is voluntary or coercive, whether high rates or low rates are preferable from a variety of perspectives, the ability to pay and the cost benefit principles, uniform and discriminatory rates, tax administration, whether taxes should be visible or hidden, whether taxes should be earmarked or placed into the general fund, distortions to the economy that result from taxation, the effect of taxation on competitiveness and economic growth, tax complexity, vagueness, stability and frequently changing rules, the effect of taxation on behavior and incentives, and the effects on social harmony. Section III discusses the pros and cons of the various forms of taxation. There are separate discussions of the individual income tax, the corporate income tax, property taxation, the value added tax, retail consumption taxes, excise taxes, estate, inheritance and gift taxes, the social security tax, tariffs, inflation as a form of taxation, user fees, lotteries, and capital gains taxation. Part IV discusses the need to limit taxation and discusses various methods that have been advocated to achieve this goal, including a balanced budget amendment, the line-item veto, a supermajority requirement, the referendum, sunset provisions, stating an upper limit in the constitution and privatization.

Outcomes of rehabilitation services for nursing home residents

Murray PK, Singer M, Dawson NV, Thomas CL, Cebul RD. Outcomes of rehabilitation services for nursing home residents. Arch Phys Med Rehabil 2003;84:1129–36. Objective: To examine survival and community discharge outcomes related to rehabilitation services among patients admitted to nursing homes before the implementation of the Balanced Budget Amendment of 1997. Design: Retrospective cohort. Setting: A total of 945 Medicaid-certified nursing homes in Ohio. Participants: A total of 11,150 patients admitted for the first time to a nursing home from 1994 to 1996. Interventions: Not applicable. Main Outcome Measures: Community discharge and survival rates among patients who did or did not receive rehabilitation services, using multivariable techniques to adjust for patients’ propensity to receive rehabilitation and for other potential confounders. In secondary analyses, we also examined dose-response effects and analyzed the effects of rehabilitation when patients were divided into 5 diagnostic groups (stroke, hip fracture, congestive heart failure, chronic lung disease, other). Results: Rehabilitation was provided to 58% of the patients and was associated with higher community discharge rates (relative risk=1.48; 95% confidence interval [CI], 1.40–1.57) and a lower hazard of death (hazard ratio=.81; 95% CI, .75–.88). Dose-response effects were observed for both outcomes ( P<.001) among patients receiving rehabilitation. Rehabilitation was associated with improved community discharge rates in each of the 5 diagnostic groups. Conclusions: New reimbursement policies that discourage the provision of rehabilitation services may have adverse effects on patients, their families, and societal costs of care.

Panel Discussion: Promoting Better National Institutions: The Role of the IMF

What do we mean by institutions? The generality of the word cries out for a definition. But I am not going to attempt it. A narrow interpretation would consist of only specific legal bodies or procedural mechanisms. Examples include regulatory agencies, such as securities and exchange commissions, standards-setting bodies (e.g., for accounting), and what are sometimes called “commitment devices” (currency boards (CBs), guarantees of central bank independence, balanced budget amendments, the Stability and Growth Pact, etc.). A broad definition would include everything about a society that is more detailed than the basic theoretical model in a graduate economics textbook: from the existence of efficiency wages and a six-month gold futures market, to culture. The notion of institutional quality that has become common in the growth literature lies at an intermediate level of generality, and pertains to property rights and rule of law. I am happy to accept that usage. But, before I turn to it, I want to flag the wide variety of issues that could be termed institutional, and to observe that they may not necessarily all be correlated. For example, democracy is on many people’s list. But the commitment devices I named (currency boards, independent central banks, stability pact), are

Development criteria for academic leadership in anesthesiology: have they changed?

T he issues facing chairs of academic anesthesiology departments have changed quite dramatically over the past decade (1,2). The rapidly changing health care environment has placed academic anesthesiology departments at significant financial risk and dramatically impacted the recruitment of residents and faculty (1–3). Chairs of academic anesthesia departments have thus been faced with unprecedented challenges over the last decade that have forced increased dependence on clinical productivity from faculty (2,3). The impact of this increased pressure on the ability of academic physicians to pursue their primary missions of teaching, research, and academic career development is not well documented. We surveyed chairs of American academic anesthesiology departments and deans of American medical schools to evaluate the impact of the last decade on the selection criteria for academic chairs of anesthesiology. Traditional criteria, such as teaching experience and peer-reviewed research, as well as potential new criteria, such as formal business education, were evaluated. We also inquired about the availability of nonclinical time for potential chairs to pursue academic goals. The purpose of this study was to determine if the criteria for chairmanship of American academic anesthesiology departments have changed in light of the evolving health care environment.