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The Guide to the Federal Budget: Fiscal 1990.

The Guide to the Federal Budget: Fiscal 1990. Stanley E. Collender. The Urban Institute Press, $14.95 How many tricks are tucked away in the budget process? Quite a few, it seems, after reading Collender's instructive book. We have come a long way from the days when the only important distinction was between authorizations (a vague commitment to spend money) and appropriations (actually empowering agencies to write checks). It is now also generally recognized that cuts must be discussed against the background of "baseline" budgets - that is, budgets adjusted upward for inflation. And with the introduction of reconciliation, sequestration, and impoundment, the budget process begins to resemble, more than anything else, a bad fairy tale of big government run amok.

It all started when the Prince and his wife, Snow White-Prince, decided to get their first joint checking account. Since Grumpy didn't have enough gold ore to meet the minimum balance for an interest-bearing account, Snow and the Prince made him a signatory to their own account. That gave Grumpy limited budget authority - he deposited his money, but when he wanted to make a withdrawal, he had to check it with Snow and the Prince. The other dwarves knew a good thing when they saw it, and soon there were six more names on the checks.

Since the Prince wasn't very good with numbers, he turned the management of the account over to Snow. Now when Dopey wanted to buy a new pickax on credit, she'd authorize $100 for the pickax and appropriate $20 each year for five years to make the payments on it.

Unfortunately, so many people were now depositing and withdrawing on the account that when checks began to bounce, Snow realized that even she no longer had any clear idea of where all the money was going. In desperation, she tallied up their combined income, made her best guess as to next year's income, and divided the total up among the dwarves. She didn't care what they each bought, so long as their projected expenditures came in under her allotments. Of course they never did. When each went over his limit, Snow had to take the proposed expenditures and cut them back until they matched revenues. Now the dwarves were overestimating how much they were going to spend because their projections were bound to get cut back. And since Snow hated to disappoint all those cute little miners, she more than once made he income estimates way too optimistic.

Pretty soon, strange and wonderful numbers began to show up in the "income" column - like the sale of the castle, which of course never took place. As time went on, the budget projections meant less and less. There was a $100 billion annual deficit, a $1 trillion total deficit, and it took a 179-page book by a Director of Federal Budget Policy for Price Waterhouse just to explain how the whole system worked. It was a good book - and very readable. But the process was still a fairy tale.
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Author:Martin, Nicholas
Publication:Washington Monthly
Article Type:Book Review
Date:Jul 1, 1989
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