Federal Budget Policy (January 2017)

  • Howell E. Jackson (Harvard University)

Federal Budget Policy
Professor Howell E. Jackson
Harvard Law School
January 2017
Class Meeting Times:M-F, 9:30 am to 11:45 am 
Room: Hauser 104
Office Hours: Fridays, 3:00 pm to 5:00 pm (or by appointment)
Contact Information: Howell E. Jackson (hjackson@law.harvard.edu), Griswold 510
Assistant: Lauren Semrau (lsemrau@law.harvard.edu),Griswold 5 South

Introduction        

The goal of this course is to introduce students to the law and practice of budgeting in the United States. We will start with an exploration of the basic structure of the federal budget process, including the President's budget and congressional budgeting procedures that are supposed to govern federal spending. We will then examine in greater detail the roles of all three branches of federal government in setting budget policy in the United States, discussing government shut-downs, debt ceiling crises, and ongoing debates over budget reforms and fiscal challenges. The course will also take up the budgeting of entitlements, federal credit programs, and infrastructure spending.  Depending on student interest, we also spend class time on military spending and federal-state relations in budget policy.    

The class will meet for twelve sessions, starting on Tuesday, January 3rd, and continuing through Thursday, January 19th. Class will run from 9:30 am until roughly 11:45 am, allowing for two hours of class time and (typically) a short break.  There will be no class on MLK Day, Monday, January 16th.  On two days, we will have luncheon speakers:  Former CBO director and current HKS Dean Douglas Elmendorf will give a luncheon talk on Friday, January 6th, and James Musser, who has for many years been a senior congressional aide working on budget issues and most recently senior adviser to Representative Tom Price, Chairman of the House Committee on the Budget, will give a luncheon talk on Thursday, January 12th.    Luncheon talks will run from noon to 1:00 pm and box lunches will be provided.    

Students interested in doing research on budget policy can sign up to write research papers in the Spring Term extension of the course. Research paper topics should be arranged with permission of the instructor and can address a wide range of issues related to budget policy, focusing on issues of current interest, including proposals for reforming budget policy. A list of illustrative research topics appears below.    

Readings for the course will consist of a combination of distributed materials, postings on the course's Canvas website, via the H2O link (https://opencasebook.org/casebooks/25610-federal-budget-policy-january-2017/), and readings from Fiscal Challenges: An Interdisciplinary Approach to Budget Policy (2008) (Elizabeth Garrett, et al. eds.).  For additional background, Allen Schick: The Federal Budget: Politics, Policy and Process (3rd ed. 2007) is a useful reference. Both books should be available at the Harvard Coop. Copies will also be on reserve for the course in Langdell Library. From time to time, students will also be asked to review selections from the Harvard Law School Briefing Papers on Federal Budget Policy (avail. at http://scholar.harvard.edu/briefingpapers). These briefing papers are primarily the work of Harvard students enrolled in earlier versions of this course, and are illustrative of the kinds of research papers students might undertake in the Spring Term.    

A final source of background materials for the course are two interactive documents:  2015 Federal Budget Calendar” and 2016 Federal Budget Calendar.  Both documents are posted on H20 and they include extensive links to press accounts and official publications related to budget matters over the past two years. 

3 Part II. Congressional Budgeting 3 Part II. Congressional Budgeting

3.1 Class Four -- Friday, January 6th, 2017 3.1 Class Four -- Friday, January 6th, 2017

In today's class, we will continue our discussion of Congressional budgeting procedures, focusing on various techniques that have been introduced over the years to facilitate budgeting in the face of political constraints. Please read the student briefing papers on the budget reconciliation process and the use of continuing resolutions. Then choose one of the other two briefing papers to read - either on the use of earmarks or the use of appropriations riders. Team Assignments: Teams A & D: Put together a few powerpoint slides summarizing and assessing the budget process reforms proposed by the CRFB's 2015 paper on a "better budget process." Teams I & K: Put togeher a similar set of slides focusing on what you consider to be the most promising reforms included in the 2014 Heritage Foundation paper. Teams E & H -- Put together a similar set of slides with respect to the budget reforms set forth in recent working papers of the majority staff of the House Committee on the Budget. These papers are posted as background readings for our luncheon speaker on January 12th. For background, we’ve included two papers on budget reform proposals, one from the Heritage Foundation and a second from the Committee for a Responsible Budget.

3.1.1. The Budget Reconciliation Process (Briefing Paper No. 35) (2008)

The Budget Reconciliation Process (Briefing Paper No. 35) (2008)

3.1.2. Greg Schmidt & Justin Dews, The Rise of Continuing Resolutions (May 12, 2014)

Greg Schmidt & Justin Dews, The Rise of Continuing Resolutions (May 12, 2014)

3.1.3. Earmarks in the Federal Budget Process (Briefing Paper No. 16) (2008)

Earmarks in the Federal Budget Process (Briefing Paper No. 16) (2008)

3.1.4. Briefing Paper: Jacqueline Lash & Brady Cassis, “The Use and Misuse of Appropriations Riders” (2015)

Briefing Paper: Jacqueline Lash & Brady Cassis, “The Use and Misuse of Appropriations Riders” (2015)

3.1.5. Heritage Foundation, An Analysis of Selected Budget Process Reforms (Apr. 11, 2014)

Heritage Foundation, An Analysis of Selected Budget Process Reforms (Apr. 11, 2014)

3.1.6. CRFB, The Better Budget Process: Improving Focus on the Long Term

CRFB, The Better Budget Process: Improving Focus on the Long Term

3.1.7 Background Readings by Douglas Elmendorf 3.1.7 Background Readings by Douglas Elmendorf

While there is no formal assignment for today's luncheon talk, posted below are several recent speeches by Dean Elmendorf on budget topics, as well as a 2015 conference paper on dynamic scoring.

3.1.7.1. Douglas W. Elmendorf, "Dynamic scoring": Why and How to Include Macroeconomic Effects in Budget Estimates for Legislative Proposals (BPEA Conference Draft of Sept. 10-11, 2015)

Douglas W. Elmendorf, "Dynamic scoring": Why and How to Include Macroeconomic Effects in Budget Estimates for Legislative Proposals (BPEA Conference Draft of Sept. 10-11, 2015)

3.1.7.2. Speech by Douglas Elmendorf on the Future of Entitlement Reform (June 9, 2016)

Speech by Douglas Elmendorf on the Future of Entitlement Reform (June 9, 2016)

3.1.7.3. Sppech by Douglas Elmendorf on Improving US Health Care Policy Through Economic Research (June 14, 2016)

Sppech by Douglas Elmendorf on Improving US Health Care Policy Through Economic Research (June 14, 2016)

3.1.7.4. Speech by Douglas Elmendorf on What Should the Next President and Congress Do? (Dec. 3, 2016)

Speech by Douglas Elmendorf on What Should the Next President and Congress Do? (Dec. 3, 2016)

3.2 Class Three -- Thursday, January 5th, 2017 3.2 Class Three -- Thursday, January 5th, 2017

In today's class, we will first turn our attention to the economics of federal deficits and debt, as well as their measurement. For an introduction to the subject, read pages 141-155 of Fiscal Challenges: Chapter Five: Michael J. Boskin, Economic Perspectives on Federal Deficits and Debt, which describes different ways that policymakers project future deficits and debt. We will then turn to a recent paper by David Kamin that discusses different normative approaches in setting a budget "baseline"; please read the highlighted sections that discuss the purposes of budget baselines, and the different types of budget baselines. (For additional background on issue of dynamic scoring versus static scoring, see the D’Amico Briefing Paper on the topic included as background readings for today’s class.) Individual Assignment: For Today’s class, please write a short memorandum (2-3 pages) assessing the merits of Professor Kamin’s proposal with respect to budgetary baselines. Would you endorse his recommendation? As background readings – in addition to the briefing paper on dynamic versus static scoring mentioned above -- we have included several documents highlighting the complexities of longer-term budget projections. Scan the CBO's 10-year budget projection in 1998, which predicted surpluses through the 2000s. How did intervening geopolitical, legislative, and economic developments undermine the CBO's predictions for future surpluses? Finally, take a look at the Kliesen and Thornton article on CBO projections. What are the implications of their findings for federal budget policy?

3.2.1. Fiscal Challenges: Chapter Five: Michael J. Boskin, Economic Perspectives on Federal Deficits and Debt

Fiscal Challenges: Chapter Five: Michael J. Boskin, Economic Perspectives on Federal Deficits and Debt

3.2.2. David Kamin, Basing Budget Baselines, 57 Wm. & Mary L. Rev. 143 (2015), pp. 146-150, 159-191

David Kamin, Basing Budget Baselines, 57 Wm. & Mary L. Rev. 143 (2015), pp. 146-150, 159-191

3.2.3. Congressional Budget Office, Budget and Economic Outlook, 1999-2008 (Jan. 1998)

Congressional Budget Office, Budget and Economic Outlook, 1999-2008 (Jan. 1998)

3.2.4. Briefing Paper: Zach D’Amico & Jacqueline Lash, “Dynamic Scoring: Challenges and Advantages of Macroeconomic Revenue Estimation and Scoring” (2015)

Briefing Paper: Zach D’Amico & Jacqueline Lash, “Dynamic Scoring: Challenges and Advantages of Macroeconomic Revenue Estimation and Scoring” (2015)

3.2.5. Kliesen & Thornton, How Good Are the Government's Defit and Debt Projections and Should We Care?, Federal Reserve Bank of St. Louis Review, January/February 2012, at 21

Kliesen & Thornton, How Good Are the Government's Defit and Debt Projections and Should We Care?, Federal Reserve Bank of St. Louis Review, January/February 2012, at 21