Budget Figures Research Articles

1984 Presidential election: issues of relevance to child and adolescent health.

Editor's Note:On November 6, 1984, we will go to the polls to elect a President. Even a casual analysis of the philosophies of the two major party candidates reveals significant differences in their positions concerning the nature, scope, and purpose of government; and these differences are reflected in their approaches toward a number of issues related to child and adolescent health. Several weeks ago, the Journal staff contacted the national campaign headquarters of the two candidates and requested assistance with the preparation of an article comparing the positions of the candidates on some issues of relevance to our readers. Both headquarters were very cooperative, and their assistance is appreciated.A concerted effort was made to ensure that the narrative expressing the views of Mr. Mondale and Mr. Reagan is accurate, objective, and fair. No information contained in the article was drawn from supplementary sources such as newspapers, magazines, or electronic media.Virtually all of the narrative is taken verbatim from materials provided by the two campaign headquarters; so the accuracy of any statistical data, budget figures, or other information presented as fact is the responsibility of the provider. Because the materials obtained from the two headquarters were provided in a variety of formats, the views of the candidates on the issues are stated in the first person to maintain uniformity of style; but it should be noted clearly that the article is not based upon personal interviews. While the article does not provide a comprehensive comparison of the political views of the two candidates, it does help to clarify their positions on selected issues of relevance to our readers. To this extent, we hope that it is helpful.

Congress busy with variety of key bills

Congress managed to cram a lot of activity into its brief session between the Democratic and Republican national conventions. Appropriation bills were being passed right and left. Rewrites of major environmental laws, once irrevocably mired in dispute, got new leases on life, as did a number of patent bills. On the money front, Congress cleared a fiscal 1985 appropriation of $124 million for the National Bureau of Standards. That budget figure is an increase of 7% over current funding levels, but 2% less than the Administration had requested. The House, on the other hand, approved a funding level of $4.8 billion for the National Institutes of Health—14% more than current levels and 12% more than requested. The Senate shortly will be voting on a $5.1 billion NIH funding bill. The Department of Energy's fossil R&D program would get $260 million under a House-passed appropriations bill, including $26 million earmarked for basic industry research ...

BUDGET AUDITING IN GOVERNMENTAL ORGANISATIONS FINANCED BY TAXATION

There is some a priori support in the literature for using budgets as external financial reports, both before the financial year and afterwards. There is also some support for having these budgets audited. A questionnaire was sent to six hypothesised user groups in two local authority areas to determine whether there was empirical support for the a priori positions. The responses revealed wide support for making budget figures publicly available, both before and after the fmancial year. Support for auditing these budgets came only from external user groups (excluding members of parliament).

The Myth of the Annual Budget

Rarely do those who live through profound social change appreciate its significance. Traditional modes of thinking interfere with perceptions of reality. Predictions are often confounded in the complexities and uncertainties of the onrush of events. Such is now the predicament of public administrators caught in the throes of the federal budget crisis. Events have moved so swiftly that it is difficult to gain a sense of perspective, much less predict future direction. Where critics once worried about defects in the budget process, today they are more concerned about the possibility that the budget process itself may collapse. Three major explanations have been advanced for the current crisis in federal budgeting. One holds that the budget mechanism requires constant maintenance to perform properly. The current crisis has been precipitated from long-term neglect of essential maintenance. Once the required adjustments are made, the budget process will work smoothly again. Another contends that the disruption of underlying conventions has so heightened political conflict that the budget process has been overstrained. If budget policies were modified to reduce political conflict and conventions were followed, then the current crisis would pass. The third explanation maintains that government has become too big. The budget process cannot handle the load placed on it. A reduction in the size of the federal budget would restore effective budgeting. Although these explanations approach the federal budget crisis from different directions, they seem agreed that the budget process is fundamentally sound and that what needs to be done is to restore the principles on which it rests. In fact, there is good reason to believe that the problems underlying the federal budget are of such an unprecedented nature that the principles themselves are inappropriate and should be changed. Their solutions ignore the changing context of budgeting that makes traditional principles inadequate, even outmoded. What is now required is a fundamental rethinking of the basic principles, particularly the concept of the annual budget itself. Without such a reassessment the budget process will continue to be dominated by inconsistencies and contradictions. The principles of annual choice are denied in the reality of complex flows of funds which overlap from year to year.' Control is the watchword, uncontrollability the refrain. Most appropriations are passed after the start of the fiscal year,2 and at its end billions of dollars are reported in unobligated balances.3 Budget unity is contradicted by the large sums of money allocated and spent outside the budget. Each element of the budget process-resolutions, authorizations, appropriations, reconciliation-requires elaborate explanation to reconcile textbook precepts with actual practice. Budget figures, once fairly stable and reliable quantities, evaporate in successive and competing assumptions and estimates. As the budget crisis deepens, budgetary concepts come to resemble myths, while the urgent issues of budgetary adaptation to a changing context remain ignored.

Inflation-Induced Distortions in Government and Private Saving Statistics

PROBABLY the single most important statistic measuring the impact of government fiscal policy on the economy is the magnitude of the government surplus or deficit. Justifiably or not, this single figure has taken on such importance that the Congressional Budget and Impoundment Control Act of 1974 established a process whereby the Congress is forced to consider overall receipts and outlays and commit itself under a binding resolution to these totals. Because of the importance of the budget figure, economists have continually sought to modify the raw data to better assess the impact of the government on aggregate demand. A major breakthrough was the concept of the FullEmployment Surplus, which was popularized by the Council of Economic Advisers in their 1962 report, although its roots go back to World War II. I This concept recognized that due to the endogeneity of expenditures and particularly tax receipts, the actual budget deficit or surplus, uncorrected for the level of output, gives a biased indication of the stance of fiscal policy. Although the concept of the full employment surplus was an improvement, dissatisfaction with the single summary statistic remained. Several economists have experimented with different weights on the components of taxes and spending, recognizing the differential spending propensities out of the different sources of income.2 This approach has not been successful due to the difficulty of reaching a consensus on a weighting scheme. Another problem with the full employment surplus was the failure to adjust for changing price levels or rates of inflation. Fixed nominal income tax brackets, specific taxes, and taxes on nominal interest and capital gains all suggest that the impact of the budget should allow for the behavior of price level variables.3 Although standardization to an exogenous level of potential output seems plausible (given growth or frictional unemployment), there is no normal price level associated with any given level of output. Furthermore, with the breakdown of the Phillip's Curve relationship in recent years, there appears to be no rate of inflation associated with a full employment level of output. This paper attempts to demonstrate that price level changes are important for measuring fiscal impact apart from any attempt to determine what price level behavior would exist at full employment. Since the deficit is equivalent to the amount of government bonds sold to the public,4 analysis of the impact of the supply of bonds is incomplete without allowing for changes in the real value of the debt caused by inflation or deflation. Real value accrual accounting, which is making considerable headway in private sector accounts, can also be employed in the public sector.5 A redefinition of the deficit along these lines can be integrated easily with the full employment surplus or any variant definition to yield a better measure of fiscal impact. Section II of this paper presents a brief theoretical discussion of real value accrual accounting. Section III Received for publication April 4, 1977. Revision accepted for publication April 28, 1978. * University of Pennsylvania. I would like to thank Milton Friedman, Ben McCallum, and the members of the University of Chicago's and University of Virginia's Money and Banking Workshops for their helpful comments on earlier versions of this work. Steve Thompson provided valuable research assistance and computer programming. 1 Initial references to the concept were Ruml and Sonne (1944), Committee for Economic Development (1947), and Friedman (1948). For an excellent discussion of the concept, see Okun and Teeters (1970). 2 In particular see Gramlich (1966), Musgrave (1964), Okun and Teeters (1970), and Hymans and Wernette (1970). Warren Smith in Okun and Teeters (1970) gives yet another impact statistic. 3 See Committee for Economic Development (1947), Gramlich (1968) and Okun and Teeters (1970) for attempts at price level standardization. 4 For simplicity it is assumed throughout this paper that the money supply is held constant. One can alternatively regard the profits (seigniorage) from steady-state monetary expansion as tax revenue, so that monetary financing is considered only as an inflationary tax on real cash balances. 5 For an excellent summary of purchasing-power accrual accounting as applied to the corporate sector, see Shoven and Bulow (1975, 1976).

Evaluating an in‐house or bought‐in service

The Beecham Pharmaceuticals Research Division (BPRD) is that part of Beecham Group concerned with research into ethical products, that is, into drugs which only can be obtained on prescription. The Research Division has a staff of about 1,000. The Information Services Unit serves these staff with their information needs and to do this there are twelve information scientists, four librarians and sixteen assistants. The information budget for salaries, materials, services, etc., totals several hundred thousand pounds. The service offers current awareness via an in‐house bulletin; conventional retrospective searching plus the use of Derwent systems and on‐line searching of the Lockheed, BLAISE and SDC data bases; in‐house documentation via a Master File and WLN chemical structure indexes. The budget figure is quite large but in the pharmaceutical industry information budgets of £1m per annum are known.

COST ESTIMATING—A CRUCIAL FUNCTION OF THE SHIP ACQUISITION PROCESS

ABSTRACTThe purpose of this paper is several fold: a) to identify the important roles of cost estimating in the ship acquisition process, b) to explain the complexity of estimating the costs of naval ships, and c) to identify existing and potential problems with estimations of budget costs and to propose solutions to these problems.Recommendations to improve the Navy's cost estimating effectiveness by building a data base from actual return costs, developing and utilizing parametric cost models, continuously updating and validating cost estimating models, planning budget submittals to occur after all major characteristics are determined, staffing the cost estimating function with numbers and quality of personnel commensurate with the importance of its role, organizing with a higher costing authority responsible for setting policy. Recommendations are also made to integrate total ship program estimates with “satellite” cost estimating offices in the various engineering organizations responsible for performing detailed estimates, to budget with integrity by submitting only budget figures consistent with the cost estimates, and to exercise stringent change control once the budgetary cost constraint is set by allowing only those changes which correct engineering deficiencies or which are compensated in costs by other changes.

The Rise of the Arts on the American Campus

THE RISE OF THE ARTS ON THE AMERICAN CAMPUS by Jack Morrison. New York: McGraw-Hill Book Company, 1973, xx + 221 pp., $8.95. In 1971 Dr. Jack Morrison, formerly dean of fine arts at Ohio University and presently associate director of the Arts in Education program, The JDR 3rd Fund, presented an illuminating report at the annual meeting of the International Council of Fine Arts Deans, in which he analyzed statistical material supplied by the administrative officers of 56 of the 91 members of the Council. This indicated enormous variations among fine arts programs in institutions of higher education, but seemed to confirm many people's feeling that there has indeed been a significant increase in the demand for training at the university level in all of the major fields in the arts, and that, on the whole, universities and colleges have attempted to meet this need. Dr. Morrison has now completed a much more detailed study of a much smaller group of institutions, and the report he has now issued through the Carnegie Commission on Higher Education is full of important information which needs careful consideration. He selected seventeen institutions of the most widely varying types, from such giants as Pennsylvania State University and New York University to small colleges like Antioch and Bennington. There was an equally wide geographic spread, from Harvard to Pasadena, from Dartmouth to Jackson State. It is meaningless to compute averages from the utterly variable figures which emerge from such a statistical study, but a wealth of specific information is here spread before us. A questionnaire gathered information about seven areas: architecture, dance, film, music, theatre, writing, and the visual arts. It records the dates when these programs appeared in their respective institutions and gives us the number of majors, class enrollments, and degrees granted for the five-year period 1966-71. It records the amount of space which has been allocated to these fields, the capital investment in buildings for the fine arts, total budget figures, and the number of faculty members. An ingenious series of questions attempts to determine the support or resistance to the arts on campus, relationships with the central administration and boards of control, and with the local community. I think it was a mistake not to include also the total enrollment of each school, as it is important to know the proportion of students in the arts in relationship with the entire institutional dimensions.

Analysis of Health Sector Budget of Nepal

Primarily, health sector connects two segments - medicine and public health, where medicine deals with individual patients and public health with the population health. Budget enables both the disciplines to function effectively. The Interim Constitution of Nepal, 2007 has adapted the inspiration of federalism and declared the provision of basic health care services free of cost as a fundamental right, which needs strengthening under foreseen federalism. An observational retrospective cohort study, aiming at examining the health sector budget allocation and outcome, was done. Authors gathered health budget figures (2001 to 2013) and facts published from authentic sources. Googling was done for further information. The keywords for search used were: fiscal federalism, health care, public health, health budget, health financing, external development partner, bilateral and multilateral partners and healthcare accessibility. The search was limited to English and Nepali-language report, articles and news published. Budget required to meet the population's need is still limited in Nepal. The health sector budget could not achieve even gainful results due to mismatch in policy and policy implementation despite of political commitment. Since Nepal is transforming towards federalism, an increased complexity under federated system is foreseeable, particularly in the face of changed political scenario and its players. It should have clear goals, financing policy and strict implementation plans for budget execution, task performance and achieving results as per planning. Additionally, collection of revenue, risk pooling and purchasing of services should be better integrated between central government and federated states to horn effectiveness and efficiency.

Planning for Rational Organization of Urban Health Services

* Health Services Administrator, The City of New York. appropriated by the City Council and Board of Estimates. The figures do not include payments made under Title 18 to hospitals and other providers, nor do they include grant funds paid to the Health Services Administration or related agencies. Furthermore, the city's payments to its employees for health insurance and workman's compensation, totaling $62,500,000, are carried in separate budgets. Earlier, Mayor Lindsay had announced a capital construction budget for the Health Services Administration totaling over $500,000,000 for the next five years. Health Services Administration projects were given the highest priority in the city's capital budget. These budget figures illustrate the magnitude of public funds now available for delivering health services in New York City. About 50 per cent of the expense budget will be spent by city agencies, and the remainder by voluntary bodies and private providers, to secure care for the 45 to 50 per cent of the population of New York City unable to pay the full cost of treatment.

A Numerical Method of Inferring the Budget History of a Glacier from its Advance and Retreat

AbstractThe paper considers how to calculate the budget history of a glacier from the historical record of its advance and retreat. The linearized differential equations developed in previous papers are used to compute a series of coefficients g(n). The g(n) operate directly on a record of annually spaced observations of the position of the glacier terminus, to give the time variation of net budget. The g(n) are calculated for South Cascade Glacier, Washington, U.S.A. and for Storglaciären, Kebnekaise, Sweden, and are applied to the terminus records of these two glaciers. The results indicate that the figures for the retreat during individual years are not sufficiently reliable to deduce annual net budget changes with confidence. But the coarser features of the terminus records give net budget figures that agree well with the 9 yr. or 10 yr. means of recent observations. The theory extends the generalized budget record of Storglaciären back by several decades. and shows an increase in net budget in the 1930’s that is not immediately apparent in the terminus record.

A Numerical Method of Inferring the Budget History of a Glacier from its Advance and Retreat

AbstractThe paper considers how to calculate the budget history of a glacier from the historical record of its advance and retreat. The linearized differential equations developed in previous papers are used to compute a series of coefficientsg(n). Theg(n) operate directly on a record of annually spaced observations of the position of the glacier terminus, to give the time variation of net budget. Theg(n) are calculated for South Cascade Glacier, Washington, U.S.A. and for Storglaciären, Kebnekaise, Sweden, and are applied to the terminus records of these two glaciers. The results indicate that the figures for the retreat during individual years are not sufficiently reliable to deduce annual net budget changes with confidence. But the coarser features of the terminus records give net budget figures that agree well with the 9 yr. or 10 yr. means of recent observations. The theory extends the generalized budget record of Storglaciären back by several decades. and shows an increase in net budget in the 1930’s that is not immediately apparent in the terminus record.

A Synthesis of Federal Accounts

C URRENT controversy among economists on systems for recording and classifying Government transactions has focused largely on the choice between the Cash Budget on the one hand and the income and product account on the other; the Administrative Budget seems to have few friends in the profession. A good part of the controversy over budget concepts appears to exist mainly because the major types of Federal economic influence are not being distinguished sharply enough in discussion of the currently available measures of Government activities. In particular, GNPdeficit advocates look for the income and spending effects of Federal transactions, while the Cash Budget defenders seem to be looking principally for liquidity and financial market effects. Lending effects, meanwhile, have been largely left out of the discussion; they are usually mentioned only as an intrusive element of the cash deficit relative to income and spending effects. When lending is recognized as a separate and, at times, sizable force in the economy, and when the spending vs. liquidity distinction is kept in mind, we begin to have a basis for deciding which of the Federal budget figures to use in any particular discussion. What is proposed here is a framework within which each of the budget concepts can be integrated but still distinguished, permitting whatever focus of discussion is desired without foreclosing on the benefits of alternative perspectives. The framework is an adaptation of the account for the Federal Government sector in the Flow of Funds national accounting system developed at the Federal Reserve, and now available on a quarterly, seasonally adjusted basis. This adaptation is based on the following premises: first, no single number can possibly tell all or even very much about Federal economic influences, and we need a set of several figures even to begin to see a picture. Second, the accrual version of Federal transactions in income and product accounts tells more of non-financial influences than the cash version. Third, Federal financial transactionsboth lending and borrowing-are important channels through which the Government can and does influence economic developments and should be included explicitly in any accounting of Government activities. Fourth, lending is different from both borrowing and spending in influence and cannot reasonably be combined with either. Fifth, however, simplicity of presentation is essential if any new version of Government accounting is to achieve fairly widespread use. The form shown in the attached chart tries to meet the preferences and objectives stated above. It delineates in a minimum number of lines the major types of Governmental activities as they affect distinctively different types of economic activity: payments for goods and services and for transfers, receipts from tax revenues, Government lending, Government borrowing from the banking system, and borrowing from the public. A. The upper panel of the chart shows the Government's direct contribution to the spending stream and the amount it taps from this stream through taxes. Changes in the gross size and composition of both spending and revenues are at least as important for economic analysis as a net deficit or surplus on any accounting basis and deserve separate reporting. The figures plotted are those in the national income account, that is, they are the accrual version of Government spending and receipts. It would be definitely desirable, if space permitted, to distinguish spending for goods and services from transfer payments and to distinguish personal from business taxes, but as a * Views expressed here are those of the authors, and do not necessarily reflect the views of the Board of Governors of the Federal Reserve System. ressed here are those of the authors, an do sa il reflect the views of the Board of Governors

Soviet Budgets after Stalin

THERE have now been two post-Stalin budgets, which in structure and presentation differ so appreciably from their predecessors as to cause acute confusion in the minds of many commentators. The differences have not been explicitly stated in Soviet sources, but can be deduced from them, though the evidence is insufficient for an arithmetically precise account of what has occurred. The objects of the present paper are, first, to examine the budgets for the light they shed on the development of the Soviet economy in the last two years, and, second, to explain as far as possible the changes since Stalin's death in the structure of the budget itself. Obviously, these two aims overlap, since a change in the definition of a budgetary heading affects any conclusions one can draw about or from its magnitude. The I953, and still more the I954, budget sessions of the Supreme Soviet are simultaneously informative and acutely frustrating; there is a substantial volume of new data, but some information is missing, and comparison with previous years is rendered difficult by complex and inadequately explained changes in structure and definition. One new feature is that the Soviet leaders have spoken in the budget debates and in the course of their speeches have given useful economic, political, and information. Under Stalin, the speech of the unchanging Minister of Finance, Zverev, was followed by routine speeches of little interest by persons of medium or lowly rank, while the top party leadership remained in the special seats reserved for them on the platform and said nothing. Malenkov broke with precedent when he addressed the I953 budget session; he spoke again in I954, as did such major personalities as Khrushchev, Kaganovich, and Mikoyan. Since men of this stature, whose speeches were to be reprinted in millions of copies, could not confine themselves merely to repeating the points already made by the relatively less important Zverev, this in itself ensured that the session would be more informative than had been the case under Stalin. Unfortunately, the increasing political importance of the budget session has led to a noticeable decline in what might perhaps be called statistical integrity; before I953, while certain data were from time to time suppressed, the budget figures always appeared to be reasonably reliable; it will be shown that in I953-54 there has been a marked increase in propaganda-statistics. Table i compares the results of the I952 budget, the last of the Stalin era, with the original estimates and provisional results for I953, and with the estimates for I954. Unfortunately, a complete set of comparable figures for all items cannot be reconstructed from official sources, and in certain cases it has been necessary to make deductions from indirect data, of varying degrees of accuracy; these are explained in the notes to the table. One is immediately struck by the very large increase in the unspecified items of both revenue and expenditure from their I952 levels. This reflects the changes in presentation to which reference has already been made; the analysis of the details of these changes will be left to one side for the present, though it must be stressed that they are of quite vital importance to a proper understanding of the budget as a whole. Revenue from turnover tax shows a downward trend, although both the production of taxable commodities and retail trade turnover are rapidly rising. The volume of turnover of state and cooperative trade in I953 was stated to be 2I per cent above that of I952; it is planned to rise by I5 per cent in I954 and reach a level 75 per cent above that of I950. The fall in turnover tax yield is, of course, due to the cuts in retail prices and increases in prices paid by the state to agricultural producers. The I954 estimated yield is below that of I950. Retail prices, according to Mikoyan, are only 25 per cent below I950 levels. In comparing the relative changes in trade turnover and prices, some commentators find it hard to see why turnover tax revenue should be fall-

A Critical Look at the Budget Process

T HE present budget system of the federal government is thirty-three years old. It dates from the Budget and Accounting Act of 1921. General Dawes was the first director of the Bureau of the Budget. At that time the bureau was a part of the Treasury Department, although General Dawes reported directly to the President. The bureau is still very close to the financial branch of the government but acts as a part of the Executive Office of the President. It does not initiate policy but endeavors to carry out the policy decisions of President and Cabinet in reviewing and integrating all programs of the departments. Our budget problems today are much more complex than those faced by General Dawes back in 1921. Perhaps a comparison of budget figures for the fiscal years 1921 and 1954 may be of interest in this connection.

The other side of the budget

AbstractPublilc budgets are generally meaningless to voters. Intelligent contact between govrenment and people has not been established. It remains to translate the budget figures into terms of service, of work to be accomplished as well as things purchased.