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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://h2o.law.harvard.edu/playlists/51703), 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.
Edit playlist item notes below to have a mix of public & private notes, or:MAKE ALL NOTES PUBLIC (8/8 playlist item notes are public) MAKE ALL NOTES PRIVATE (0/8 playlist item notes are private)
|1||Show/Hide More||Calendar of 2015 and 2016 Budget Years|
|2||Show/Hide More||Part I. Introduction to Federal Budget Process and Policy|
|2.1||Show/Hide More||Class One -- Tuesday, January 3rd, 2017|
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
August 2016 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. Why was it so difficult to correct what seems clearly to have government errors here?
You should also skim the version of the U.S. Constitution, which has been edited town to highlight the provisions related to fiscal policy.
Background readings (optional): 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.
|2.1.2||Show/Hide More||Constitution of the United States, Bill of Rights, and Amendments- edited for Federal Budget Policy|
|2.1.4||Show/Hide More||Dispute Over FEMA Sandy Recoupment|
|3||Show/Hide More||Part II. Congressional Budgeting|
|3.1||Show/Hide More||Class Four -- Monday, January 8th, 2018|
[Note: This assignment was originally scheduled for Friday, January 5th.]
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 over quickly the four briefing papers posted below and consider how the topics covered in these papers related to the congressional budget procedures that were presented in the Dauster chapter and that we have been discussing this week.
Team Assignments: Four team (A, B, E & H) will be responsible for reviewing in detail one particular briefing paper. Each team should be prepared to explain the topic to the class and offer its assessment as to whether the practice in question enhances or detracts from the federal budget process. Teams A: Reconciliation; Team B: Continuing Resolutions; Team E: Earmarks; and Team H: Appropriations Riders.
|3.2||Show/Hide More||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?
|4||Show/Hide More||Part III. Presidential Spending Powers|
|4.1||Show/Hide More||Class Five -- Monday, January 9, 2016|
In today's class, we will begin our discussion of presidential spending powers. To introduce the topic, please read over Chapter Five (The President's Budget). You should also take a few minutes to explore the most recent presidential budget, which the Obama Administration produced in February 2016. See https://www.whitehouse.gov/omb/budget. After review these preliminary materials, our class discussion will focus on 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 Four and a legislative tool of continuing significance.)
Team Assignment: (Teams A & E): Please prepare a few powerpoint slides evaluating the relative merits of Professor Stith’s and Professor Sidak’s arguments.
Two additional recent articles on presidential budgeting and financial reporting by Pasachoff and Harris are posted for background reading only.
|4.2||Show/Hide More||Class Six-- Tuesday, January 10, 2016|
In 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 is explored in some 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 B & F):
Please prepare a few powerpoint slides 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. For background reading, Briefing Papers Number 12 and Number 60 explores another area in which executive actions can trigger federal spending without direct congressional oversight.
Finally, as further background, Briefing Paper No. 3 explores the use of line item vetos at the State Level.
|4.3||Show/Hide More||Class Seven-- Wednesday, January 11, 2017|
Today we will take up examples of budgetary emergencies. The first is the problem of government shut-downs, a topic explore in Briefing Paper No. 10.
Our second topic is the debt ceiling. Here start your readings 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 CG): Please prepare a short presentation 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?
As background material, I have attached a set of readings related to DC funding litigation and also a briefing paper on the Federal Credit Reform Act of 1990.
|4.4||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.
|4.4.4||Show/Hide More||Reform Proposals from the Majority Staff of the House Budget Committee (2016)|
|5||Show/Hide More||Part IV. Inter-Government Interactions and State Budgeting|
|5.1||Show/Hide More||Class Nine -- January 13, 2017|
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. One by Wallis and Weingast and the other by David Super.
Team Assignment: (Teams I & J): The principal readings for this class offer different visions of optimal (or at least possible) fiscal relationships across different levels of government. Please create a short powerpoint presentation summarizing the essence of these two approaches? Please also consider which of these approaches you find more compelling or insightful.
For additional background, two related briefing papers are included: one on the Unfunded Mandates Act and another on NFIB v. Sebelius, which deals with conditional spending. Attached solely for those who many be interested is another briefing paper on State and Municipal Bankruptcies, a topic alluded to in the Wallis & Weingast chapter.
|6||Show/Hide More||Part V. Budgeting For Entitlements and Other Benefit Programs|
|6.1||Show/Hide More||Class Ten: January 17, 2017|
|6.2||Show/Hide More||Class Eleven-- January 18, 2017|
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 review the CFRB's Social Security “Reformer” website and devise your own solution to problems facing Social Security: http://crfb.org/socialsecurityreformer/. As background to this exercise, you should consult the CBO's December 2016 report on Options for Reducing the Deficit, in the relevant pages of chapter two, which deals with mandatory spending programs.
Prior to class, please come up with a solution to the Social Security exercise and be prepared to explain and defend your solution in class.
As time permits, we may touch upon health care reform. In that regard, a briefing paper on Bending the Cost Curve is attached. This paper focuses on the role of cost estimates in the passage of the ACA and related matters.
As further background, another chapter from Fiscal Challenges is included: this one on government accounting for entitlement programs and other activities.
|7||Show/Hide More||Part VI. Judicial Power of the Purse|
|7.1||Show/Hide More||Class Twelve -- January 19, 2017|
In our final session, we consider the role of the judiciary in the budgetary process.
To set the stage, we will take a quick look at the Supreme Court's relatively recent decision in United States v. Bormes (2012), exploring a somewhat technical issue of statutory interpretation, but one that reflects on the Court's approach to litigation presenting claims against the United States.
We will then explore more generally 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.
Next, 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.
Finally, if time permits, we may touch upon the materials included on claims regarding Social Security Benefits.
(For those interested in further background on the Missouri v. Jenkin's litigation, a briefing paper on the subject is available at http://www.law.harvard.edu/faculty/hjackson/CourtOrderSpending_24.pdf. A separate briefing paper on Sovereign Immunity is available at http://www.law.harvard.edu/faculty/hjackson/FedSovereign_21.pdf.)
|7.1.3||Show/Hide More||Missouri v. Jenkins, 495 U.S. 33 (1990) (Jenkins II), edited for Federal Budget Policy|
|7.1.4||Show/Hide More||Missouri v. Jenkins, 515 U.S. 70 (1995) (Jenkins III)|
|7.1.5||Show/Hide More||Collection of Recent Readings on Social Security Disability|
|8||Show/Hide More||Final Individual Written Assignment and Background Materials|
December 22, 2016
Howell E. Jackson
James S. Reid, Jr. Professor of Law
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