Over Which Factor In Budget Policy Does Congress Have Little Control?

Ability of the Purse

Historical Highlight

"All Bills for raising Acquirement shall originate in the Business firm of Representatives; but the Senate may suggest or hold with amendments as on other Bills."
— U.S. Constitution, Commodity I, section 7, clause i

"No Money shall be drawn from the Treasury, simply in Consequence of Appropriations made past Police force; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall exist published from fourth dimension to time."
— U.S. Constitution, Commodity I, section 9, clause vii

/tiles/not-collection/i/i_origins_power_purse_approps_lc.xml Epitome courtesy of the Library of Congress The House Appropriations Committee in 1918 featuring (from left to right) future Secretary of Country James F. Byrnes of Due south Carolina, onetime Speaker Joseph Cannon of Illinois, Chairman J. Swagar Sherley of Kentucky, future Speaker Frederick Gillett of Massachusetts, hereafter Secretarial assistant of War James W. Good of Iowa, and future Speaker Joseph Byrns of Tennessee.

Congress—and in item, the Business firm of Representatives—is invested with the "power of the purse," the ability to tax and spend public money for the national government. Massachusetts' Elbridge Gerry said at the Federal Constitutional Convention that the Firm "was more immediately the representatives of the people, and it was a saying that the people ought to concur the bag-strings."

Origins

English history heavily influenced the Ramble framers. The British House of Commons has the sectional right to create taxes and spend that revenue, which is considered the ultimate cheque on royal authority. Indeed, the American colonists' cry of "No taxation without representation!" referred to the injustice of London imposing taxes on them without the benefit of a voice in Parliament.

Constitutional Framing

Contend at the Constitutional Convention centered on two issues. The starting time was to ensure that the executive would not spend money without congressional dominance. The second concerned the roles the House and Senate would play in setting fiscal policy.

At the Convention, the framers considered the extent to which the Senate—like the House of Lords—should be express in its consideration of budget bills. The provision was role of a compromise betwixt the large and small states. Smaller states, which would be over-represented in the Senate, would concede the power to originate money bills to the House, where states with larger populations would take greater control. Speaking in favor of the provision, Benjamin Franklin of Pennsylvania said, "It was a maxim that those who feel, can best judge. This end would . . . be all-time attained, if coin diplomacy were to be bars to the firsthand representatives of the people." The provision in the committee'due south report to the Convention was adopted, five to three, with three states divided on the question. The Convention reconsidered the matter over the class of ii months, simply the provision was finally adopted, ix to two, in September 1787.

The constitutional provision making Congress the ultimate authorization on government spending passed with far less debate. The framers were unanimous that Congress, equally the representatives of the people, should be in control of public funds—non the President or executive branch agencies. This strongly-held belief was rooted in the framers' experiences with England, where the king had wide latitude over spending once the money had been raised.

The Early Appropriations Process

The Showtime Congress (1789–1791) passed the kickoff appropriations act—a mere 13 lines long—a few months after information technology convened. The police force funded the government, including of import pensions for Revolutionary War veterans, with simply $639,000—an amount in the tens of millions in real terms. This simple procedure was short-lived. Over time, nine regular cribbing bills emerged and funded such priorities as pensions, harbors, the post role, and the armed services. These were considered on an annual basis past the late 1850s. The House Committee on Ways and Means, which also had jurisdiction over tax policy, controlled the appropriations process. Just legislation and funding were always kept carve up. Priorities were spelled out in one law and money appropriated for those priorities in some other. This has remained the practice, every bit noun committees design authorization acts and the House and Senate Appropriation Committees fund authorized programs after. Indeed, in that location are laws and parliamentary rules against making new law in appropriation bills, although such rules are periodically waived.

Subsequent Reforms

In 1865, later the Ceremonious War had created a nearly $iii billion national debt and spending exceeded a billion dollars a year, Congress reformed its funding process to handle the authorities'due south new demands. The House separated the Ways and Ways Committee'due south taxing and spending functions. The Appropriations Commission was established to fund programs, while Ways and Means retained jurisdiction on tax policy. Firm leadership and other committees also tried to influence the appropriations procedure, and the lack of coordination over the years led to loftier deficits and the implementation of the federal income tax in 1913. Congress passed the Budget and Bookkeeping Human action in 1921 to address some of the coordination problems it faced funding government programs. This law centralized many of the budgeting functions with the President, who nonetheless has considerable agenda-setting power with the federal upkeep and submits a typhoon budget to Congress at the get-go of every year. The appropriations process has been reformed multiple times since 1921, including notable restructurings with the Congressional Budget and Impoundment Command Act of 1974 and the Gramm–Rudman–Hollings Acts of 1985 and 1987.

For Further Reading

Farrand, Max, ed. The Records of the Federal Convention of 1787. Rev. ed. 4 vols. (New Oasis and London: Yale University Press, 1937).

Garfield, James. "National Appropriations and Misappropriations," North American Review, 270: 572–586.

Kiewiet, D. Roderick and Mathew D. McCubbins. The Logic of Delegation: Congressional Parties and the Appropriations Procedure. (Chicago: The Academy of Chicago Printing, 1991).

Kimmel, Lewis. Federal Budget and Fiscal Policy, 1789–1958. (Washington, D.C.: Brookings Institution, 1959).

Leloup, Lance. The Financial Congress. (Westport, CT: Greenwood, 1980).

Schick, Allen. Congress and Money: Budgeting, Spending and Taxing. (Washington, D.C.: The Urban Plant, 1980).

—. The Federal Upkeep: Politics, Policy, Procedure. (Washington, D.C.: Brookings Institution, 2000).

Selko, Daniel. The Federal Fiscal Organisation. (Washington, D.C.: Brookings Establishment, 1940).

Stewart, Charles H., III. Upkeep Reform Politics: The Design of the Appropriations Process in the House of Representatives, 1865–1921. (New York: Cambridge University Press, 1989).

Wildavsky, Aaron B. Budgeting and Governing. (Piscataway, NJ: Transaction Publishers, 2006).

—. The New Politics of the Budgetary Procedure. fifth ed. (New York: Longman, 2003).