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The goal of this course is to introduce students to the law and practice of budgeting in the United States. At the beginning of the semester, students will be introduced to 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 explore 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. We will then examine the budgeting of entitlements and infrastructure spending, plus state budgeting practices as well as federal-state relations in budget policy. One class will focus on military spending.
Students interested in writing a research paper on budget policy can sign up for an additional credit in the Spring term. For these students, the course will continue for four to six two-hour sessions. In addition to covering additional topics, these sessions will include several meetings at which students will present and receive comments on drafts of their research papers. Research paper topics will 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. Students interested in writing more extensive papers on related topics for additional credit are welcome to do so.
Readings for the course will consist of a combination of distributed materials, postings on the course's Canvas website, via the H2O link, and readings from Fiscal Challenges: An Interdisciplinary Approach to Budget Policy (2008) (Elizabeth Garrett, et al. eds.), and Allen Schick: The Federal Budget: Politics, Policy and Process (3rd ed. 2007). Both books are recommended for the course and should be available at the Harvard Coop. Copies should 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://www.law.harvard.edu/faculty/hjackson/budget.php). These briefing papers are primarily the work of HLS students enrolled in earlier versions of this course, and are illustrative of the kinds of research papers that students participating in the Spring term extension of the course will be expected to produce.
An interactive document titled 2015 Federal Budget Calendar is posted to H20 and offers extensive links to press accounts about budget matters in the past year.
Edit playlist item notes below to have a mix of public & private notes, or:MAKE ALL NOTES PUBLIC (10/10 playlist item notes are public) MAKE ALL NOTES PRIVATE (0/10 playlist item notes are private)
|2||Show/Hide More||Preliminary List of Federal Budget Policy Research Topics for Spring 2016|
|4||Show/Hide More||Part I. Introduction to Federal Budget Process and Policy|
|4.1||Show/Hide More||Class One -- Monday, January 4th, 2016|
We will begin our first class with a discussion of the Committee for a Responsible Federal Budget's “Stabilize the Debt” exercise, an interactive game in which players try to make policy choices that will get the debt below 60 percent of GDP by 2024. Before you start the exercise, read over the Summary and Chapter 1 of the Congressional Budget Office's 2015 Update to get a quick overview of the major elements of the federal budget. Please do the CFRB's exercise yourself; print out your solution, and be ready to discuss and defend your plan in class.
As further core reading for our initial class, please review the materials on FEMA Recoupment from Hurricane Sandy and then look over the CBO Update from August 2015, focusing on the Summary.
You should also skim the version of the U.S. Constitution, which has been edited town to highlight the provisions related to fiscal policy.
Then please read Chapter 2 of Allen Schick's “The Federal Budget” as an introduction to the evolution of the budgeting process from the founding to the present.
Background readings (optional for most students, though one member of each team with a written assignment for each class should read each item): Excerpts from Aaron Widavsky's 1964 classic, “The Politics of the Budget Process,” are included for reference as an illustration of the budget process prior to the 1970s. Additionally, a recent student briefing paper, ““The History of the Congressional Appropriations Process, 1789-2014,” is included for reference.
|4.1.2||Show/Hide More||Constitution of the United States, Bill of Rights, and Amendments- edited for Federal Budget Policy|
|4.1.4||Show/Hide More||Dispute Over FEMA Sandy Recoupment|
|5||Show/Hide More||Part II. Congressional Budgeting|
|5.1||Show/Hide More||Class Two -- Tuesday, January 5th, 2016|
This class is an introduction to the modern budget process that began with the 1974 Congressional Budget and Impoundment Control Act. The “Seven Year Budget War” between Presidents Johnson and Nixon and Congress culminated in the watershed 1974 statute that introduced the present-day budget process. The first reading, excerpts from Allen Schick's “Seven Year Budget Wars,” chronicles the battles between the executive and legislative branches that led to the 1974 Budget Act. The second reading, Train v. City of New York, 420 U.S. 35 (1975), addresses the legality of President Nixon's decision to “impound” certain spending. Finally, please read Chapter One of “Fiscal Challenges,” “The Congressional Budget Process” by William Dauster, as an overview of the aftermath of the 1974 Budget Act and the modern-day budget calendar.
Team Assignment (Teams B, F & J): Please write a short (3-5 page) memorandum describing how the 1974 Budget Act addresses the problems underlying the Seven Year Budget Wars.
Background readings: Chapters 5 and 6 of Schick's “The Federal Budget” are assigned for further details on the roles of the President and Congress in modern budgeting . Copies of the book are available in the Cop and on reserve in Langdell Library. The Center for Budget and Policy Priorities, a left-leaning budget think tank, also puts out an excellent “Policy Basics” overview of the annual budget process, which is available below.
|5.2||Show/Hide More||Class Three -- Wednesday, January 6, 2016|
In today’s class, we will continue our discussion of the evolution of congressional procedures since 1974. As part of our discussion, we will focus our attention on the The Gramm-Rudman-Hollings Act, which is explored in Kate Stith, Our Fiscal Constitution, 76 Cal. L. Rev. 593 (1988), and also the subject of the Supreme Court's Decision in Bowshar v. Synar, 478 U.S. 714 (1986). As you review these materials, consider how you would evaluate the Gramm-Rudman-Hollings Act as a matter of public policy. Why did the Supreme Court find aspects of the legislation to be unconstitutional?
One of the principal innovations of the Gramm-Rudman-Hollings Act was a process known as sequestration. As recounted in the Dews & McConnell briefing paper on Sequestration and the Budget Control Act of 2011, this procedure has been adapted over time and remains a part of modern budget practice.
Team Assignment (Teams C, G, I & K): Please write a short (3-5 page) memorandum comparing the 2011 Budget Act sequestration procedures with those originally in the Gramm-Rudman-Hollings Act. How would you evaluate the changes?
For background reading, the Baron and McCaffrey chapter from Fiscal Challenges attempts to test the theoretical underpinnings of the “Starve the Beast” strategy that is sometimes said to underlying measures like Gramm-Rudman-Hollings. Fiscal Challenges is available in the Coop and on reserve in Langdell Library. How compelling is the strategy as well as the Baron/McCaffrey assessment?
|5.3||Show/Hide More||Class Four -- Thursday, January 7th, 2016|
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?
For a practical application of baseline projections, please review Part 1 of the CBO's 2015 Long-Term Budget Outlook. What does the CBO believe the budget will look like in 50 years, and what types of assumptions must it make to reach these projections?
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? Part 7 of the CBO's 2015 Long-Term Budget Outlook discusses the assumptions that the Office must make today in order to project spending and revenue out to 2040. (Part 7 can be accessed through the link to Part I of the report, assigned above as part of today's core readings.)
|5.3.3||Show/Hide More||Congressional Budget Office, 2015 Long-Term Budget Outlook, Part 2 (June 2015)|
|5.4||Show/Hide More||Class Five -- Friday, January 8th, 2016|
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 Assignment: (Teams A, D, E & H) Write a short (3-5 page) memorandum explaining which, if any, of the reform proposals discussed in the background readings you would endorse based on our discussions over the past week.
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.
|6||Show/Hide More||Part III. Presidential Spending Powers|
|6.1||Show/Hide More||Class Six -- Monday, January 11, 2016|
In today's class, we will begin our discussion of presidential spending powers by discussing a debate between Professors Stith and Sidak over the power of the purse. (The Boland Amendment, which figures heavily into the Stith and Sidak debate, is an example of an appropriations rider, a topic explored in a briefing paper assigned as optional reading for Class Five and a legislative tool of continuing significance.)
In today's class, we will also dig into the specific example of executive spending during government shutdowns, as explored in Puja Seam & Brad Shron, “Government Shutdowns” (May 4, 2005) (Briefing Paper No. 10) – please read pages 18-37 and 40-44.
Team Assignment: (Teams A, E & I): Please write a short (3-5 page) memorandum evaluating the relative merits of Professor Stith’s and Professor Sidak’s arguments.
For reference, as an overview of the mechanics of Executive powers, see Schick, The Federal Budget: Chapter Ten: Managing Federal Expenditures, which we will take up in further depth during Tuesday's class.
|6.2||Show/Hide More||Class Seven -- Tuesday, January 12, 2016|
Today's class will focus primarily on the student loan exercise. Start by reading the exercise itself and then work through background materials included in the student debt exercise playlist. Please read the background materials for this problem carefully. All students enrolled in the course should submit a 1000 word reaction paper on this exercise by 8:00 am of the morning of January 12th. In preparation for working on this reaction paper, you should read the briefing paper on federal credit programs.
Additional background materials on accounting presentations are also included, but these are optional and will be discussed later in the course in any event. You do not need to read these materials in order to complete the student loan exercise.
|18.104.22.168||Show/Hide More||Lockhart v. United States, 546 U.S. 142 (2005), edited for Federal Budget Policy|
|22.214.171.124||Show/Hide More||Astrue v. Ratliff, 130 S.Ct. 2521 (2010), editted for Federal Budget Policy|
|126.96.36.199.1||Show/Hide More||Dispute Over FEMA Sandy Recoupment|
|188.8.131.52.2||Show/Hide More||Fujioka & Kypriotakis, Briefing Paper on Recognizing Credit Adjustments from Compromise, Waiver and Other Actions of Government Agents (2014) - Read Pages 17-30|
|184.108.40.206||Show/Hide More||Question Two - Budgetary Treatment of Loan Forgiveness|
|220.127.116.11.1||Show/Hide More||Fujioka & Kypriotakis, Briefing Paper on Recognizing Credit Adjustments from Compromise, Waiver and Other Actions of Government Agents (2014) - Read Pages 17-30|
|18.104.22.168||Show/Hide More||Question Three - Stopping Administrative Offset|
|22.214.171.124||Show/Hide More||Question Four - Budgetary Treatment of Stopping Administrative Offset|
|126.96.36.199.3||Show/Hide More||Fujioka & Kypriotakis, Briefing Paper on Recognizing Credit Adjustments from Compromise, Waiver and Other Actions of Government Agents (2014) - Read Pages 17-30|
|6.3||Show/Hide More||Class Eight-- Wednesday, January 13, 2016|
In today's class, we will continue our discussion of Presidential spending powers, sIn today's class, we will continue our discussion of Presidential spending powers, starting first with the topic of line item vetos, which came before the Supreme Court in Clinton v. City of New York 524 U.S. 417 (1998). We will then review the topic of reprogramming, which was touched upon in Chapter Ten of Schick, The Federal Budget, and is explored in more detail in Takeshi Fujitani & Jared Shirck, “Executive Spending Powers: The Capacity to Reprogram, Rescind, and Impound” (May 3, 2005) (Briefing Paper No. 8).
Team Assignment (Teams BFJ): Please write a short (3-5 page) memorandum assessing whether the practices for reprogramming comport with the constitutional standards articulated in the Clinton v. City of New York decision as well as other separation-of-powers cases we’ve encountered in this course.
tarting first with the topic of line item vetos, which came before the Supreme Court in Clinton v. City of New York 524 U.S. 417 (1998). We will then review the topic of reprogramming, which was touched upon in Chapter Ten of Schick, The Federal Budget, and is explored in more detail in Takeshi Fujitani & Jared Shirck, “Executive Spending Powers: The Capacity to Reprogram, Rescind, and Impound” (May 3, 2005) (Briefing Paper No. 8).
For additional background on Executive spending powers, see two additional briefing papers included as reference for today's class. Focus especial on the first of these papers.
|6.3.1||Show/Hide More||Clinton v. City of New York, 524 U.S. 714 (1998), edited for Federal Budget Policy|
|6.3.3||Show/Hide More||Briefing Papers for Reference for Jan. 13, 2016|
Stacy Anderson & Blake Roberts, “Capacity To Commit in the Absence of Legislation: Takings, Winstar, FTCA, & the Court of Claims”(May 2005) (Briefing Paper No. 12) (http://www.law.harvard.edu/faculty/hjackson/CapacitytoCommitt_12.pdf)
Bob Allen & Sarah Miller, “The Constitutionality of Executive Spending Powers” (May 10, 2008) (Briefing Paper No. 38) (http://www.law.harvard.edu/faculty/hjackson/ConstitutionalityOfExecutive_38.pdf)
|6.4||Show/Hide More||Class Nine-- Thursday, January 14, 2016|
Today we will take up debt ceiling, starting first with Michael W. McConnell, The Origins of the Fiscal Constitution & Howell E. Jackson, The 2011 Debt Ceiling Crisis Revisited, from Is U.S. Government Debt Different (2012). You should also read over pages 18-62 of Jeremy Kreisberg & Kelley O'Mara, The 2011 Debt Limit Impasse: Treasury's Actions & The Counterfactual – What Might have Happened if the National Debt Hit the Satutory Limit (September 4, 2012) (Briefing Paper No. 41).
Team Assignment (Teams CGK): Please write a short (3-5 page) memorandum assessing whether the next Secretary of the Treasury should invest effort in a contingency plan to prioritize federal expenditures in a more rational manner should another debt ceiling crisis occur during the next presidential administration. Assuming the Department were to develop such a contingency plan, what system of prioritization should plan follow?
A student briefing paper on the “Gold Clause Cases” and their implications for government borrowing today is also included as background reading.
|7.1||Show/Hide More||Class Ten -- January 15, 2016 new|
Today we consider the role of the judiciary in the budgetary process.
We will first discuss the ability of courts to intervene in the budgetary process, including the threshold question of which parties have standing to challenge budget decisions, and the role of the “political question” doctrine. A student briefing paper on the role of the standing and political question doctrines in budget jurisprudence is included as reference.
Then, we will consider the courts' authority to direct the budget decisions of state and local governments. Please read the selection from Missouri v. Jenkins (1990) (“Jenkins II”). As part of the process of court-ordered desegregation of the Kansas City, Missouri school system, a federal district court in Missouri ordered a local tax increase in order to fund the costs of desegregation. In a 5-4 decision, the Supreme Court held that the district court could not raise taxes directly, but court order to local government to do so; Justice Kennedy authored a fervent dissent that claimed that the majority's decision violated federalism and separation-of-powers principles. The desegregation saga in Kansas City went on: Five years later, the Supreme Court heard a challenge to a federal district court's order, which had directed the State of Missouri to raise teacher salaries and fund remedial programs as part of the same desegregation process (“Jenkins III”). Another 5-4 decision resulted, but this time, the Court held that courts do not have the authority to order such spending increases. The text Jenkins III is included below as background.
Team Assignment (Teams DH): Please write a short memorandum (3-5 pages) considering whether the Supreme Court’s decision in the two Missouri v. Jenkins cases are consistent or inconsistent.
Finally, we will discuss recent litigation regarding the budget of the District of Columbia. Congress still has oversight over Washington, DC's local budget, but in a 2012 referendum, DC voters overwhelmingly approved a “budget autonomy” law. Please read the brief materials on the DC litigation below; the district court's decision explains the history of Congress' oversight of the DC budget and the District's efforts to increase local control of budget decisions.
|7.1.2||Show/Hide More||Missouri v. Jenkins, 495 U.S. 33 (1990) (Jenkins II), edited for Federal Budget Policy|
|7.1.3||Show/Hide More||Missouri v. Jenkins, 515 U.S. 70 (1995) (Jenkins III)|
|7.1.4||Show/Hide More||District of Columbia Budget Litigation Materials|
|188.8.131.52||DC Fund Case of March 2016|
|8||Show/Hide More||Part V. National Security and the Budget|
|8.1||Show/Hide More||Class Eight -- Thursday, January 12, 2017|
We will focus in today’s class on budget issues related to defense and national security. Please read the “War Budgeting Strategies” briefing paper, which contrasts budgeting strategies for the first Gulf War to budgeting during the early years of military interventions into Afghanistan and Iraq in the early 2000s. We will then turn to a paper focusing on more recent DoD issues, focusing on the “two tiered” defense budget (normal appropriations and “Overseas Contingency Operations” budget). The final reading for today’s class, which can be considered background, focuses on financial management at the DOD.
Team Written Assignments (Teams DH): Please write a short memorandum (three to five pages) assessing how well defense budgeting over the past twenty years have balanced the need for political controls over defense spending with the needs of the military to have stable funding sources and flexibility to address national emergencies.
|8.1.4||Show/Hide More||Reform Proposals from the Majority Staff of the House Budget Committee (2016)|
|9||Show/Hide More||Part VI. Inter-Government Interactions and State Budgeting|
|9.1||Show/Hide More||Class Twelve -- January 20, 2016|
In today’s class, we will explore inter-governmental interactions in budgeting. The two principal readings are chapters from Fiscal Challenges offering institutional perspectives on the subject. Please also read the briefing paper on NFIB v. Sebelius, which deals with conditional spending. For background, several related briefing papers are including discussing the Unfunded Mandates Act and State and Municipal Bankruptcies, a topic alluded to in the Wallis & Weingast chapter.
Team Assignment: (Teams G, H & I): The primary readings for this class offer different visions of optimal (or at least possible) fiscal relationships across different levels of government. Which, if any, of these visions do you find compelling and why?
|10||Show/Hide More||Part VII. Entitlement Reform and Government Accounting Revisited|
|10.1||Show/Hide More||Class Thirteen -- January 21, 2016|
With today's class, we will turn our attention to entitlement reform and related topics. We will begin our discussion with two Supreme Court cases involving Social Security. The first upholding the program's constitutionality and the second dealing with Congress's authority to make benefit changes (and whether taxpayers acquire a property interest in their future Social Security benefits).
We will then discuss briefly Chapter 13 of Fiscal Challenges, in which John Harrison explores New Property, Entrenchment and the Fiscal Constitution.
Next, please take a look at the eight-page portion of the CBO's Long Term Budget Outlook that addresses the long-term future of Social Security. Also, take a look at the CRFB's one-page primer on the Social Security Disability Insurance (SSDI) program, an important and sometimes-overlooked part of the Social Security program.
Finally, please review the CFRB's Social Security “Reformer” website and devise your own solution to problems facing Social Security: http://crfb.org/socialsecurityreformer/.
Team Assignment (Teams B, D,F & J): Please write a short memorandum (3-5 pages), presenting and defending a joint team plan to reform Social Security. The plan should have unanimous approval of group members.
|10.2||Show/Hide More||Class Fourteen -- January 22, 2016|
Today, we will discuss reform of federal health programs, focusing on Medicare.
For an overview of federal health programs, please read Part 2 of the CBO's 2015 Long-Term Outlook, “The Long-Term Outlook for Major Federal Health Care Programs.”
Then, please read the briefing paper on “bending the health care cost curve” and prepare to discuss the pros and cons of various reform ideas.
Finally, please review the press clippings about the 2015 legislation that ended the Sustainable Growth Rate (SGR), a mechanism to control Medicare payments to doctors that had been in place since 1997 (but waived on an annual basis via a “Doc Fix” bill). Notice that the CRFB and Wall Street Journal editorial page, both typically hawkish on budgeting issues, come out on opposite sides of the issue.
For reference, the 2015 Medicare Trustees Report and a briefing paper on entitlement reform in foreign countries are included.
Third Individual Response Paper: Drawing on course readings and class discussions over the past three weeks, please write a short (3-5) page memorandum summarizing your views on the appropriate goals for and reasonable expectations with respect to federal budget policy in the United States. How should our public budgeting decisions be structured to serve the public interest? To the extent that you believe certain aspects of the current system should be reformed, please explain how and why? Please submit your response to Carole Mason by email by 8:00 am on the morning of January 22nd. Good luck.
|10.2.1||Show/Hide More||Congressional Budget Office, 2015 Long-Term Budget Outlook, Part 2 (June 2015)|
|10.2.2||Show/Hide More||Readings on the end of the Sustainable Growth Rate/Doc Fix in 2015 for Jan. 20, 2016|
|10.2.2.3||Show/Hide More||“Hours from Deadline, Bipartisan Medicare Bill Heads to White House," Washington Post (April 14, 2015)|
December 29, 2015
Howell E. Jackson
James S. Reid, Jr. Professor of Law
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