1 DRAFT: 10/22/2015 PUBP 741 – 002: Syllabus U.S. Financial Policy, Processes and Procedures School of Policy, Government and International Affairs – George Mason University Spring 2016 Class Time: Thursday: 7:20pm – 10:00pm Class Location: Arlington Campus, Founders Hall, Room 311 Instructor: Barry Clendenin Home Phone: 703-437-5197 Cell Phone: 703-395-3373 E-Mail: [email protected][email protected]Office Hours and Location: Room 656, Founders Hall, Thursday (5pm-7pm) and by appointment. Helen McManus: Librarian for Public Policy and Public & International Affairs Email: [email protected]Course Objectives This course will consider spending and taxing policies, processes and procedures at the Federal, State and local governments. Debates over the size of the federal budget, annual deficits and the long-term national debt regularly receive steady attention from the Congress, the Administration, analysts in think tanks 1 and in press reports. Annual federal deficits have declined from $1.086 trillion in FY 2012 to $439 billion in FY 2015; the national debt has continued to increase. 2 The debates leading to a Federal Government 1 Michael Greenstone, et al., 15 Ways to Rethink the Federal Budget, The Hamilton Project, (Washington, D.C.: Brookings Institution, February 2013). http://www.brookings.edu/~/media/Research/Files/Papers/2013/02/thp%20budget%20papers/THP_15WaysRethi nkFedDeficit_F2.pdf ; http://www.bloomberg.com/news/2013-02-27/15-budget-ideas-that-are-better-than- sequester-plan.html 2 Committee for a Responsible Federal Budget, “FY 2015 Deficit Falls to $439 Billion, but Debt Continues to Rise,” Bottom Line blog, October 18, 2015. http://crfb.org/document/fy-2015-deficit-falls-435-billion-debt-continues-rise Joint Statement of Treasury Secretary and OMB Director, October 15, 2015. http://www.treasury.gov/press- center/press-releases/Pages/jl0213.aspx Congressional Budget Office, “Monthly Budget Review for September 2015,” October 7, 2015. https://www.cbo.gov/publication/50878?utm_source=feedblitz&utm_medium=FeedBlitzEmail&utm_content=812 526&utm_campaign=Hourly_2015-10-07_18%3a00
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DRAFT: 10/22/2015
PUBP 741 – 002: Syllabus
U.S. Financial Policy, Processes and Procedures
School of Policy, Government and International Affairs – George Mason University
Spring 2016
Class Time: Thursday: 7:20pm – 10:00pm
Class Location: Arlington Campus, Founders Hall, Room 311
This course will consider spending and taxing policies, processes and procedures at the Federal, State and
local governments. Debates over the size of the federal budget, annual deficits and the long-term national
debt regularly receive steady attention from the Congress, the Administration, analysts in think tanks1 and
in press reports. Annual federal deficits have declined from $1.086 trillion in FY 2012 to $439 billion in
FY 2015; the national debt has continued to increase.2 The debates leading to a Federal Government
1 Michael Greenstone, et al., 15 Ways to Rethink the Federal Budget, The Hamilton Project, (Washington, D.C.:
Brookings Institution, February 2013). http://www.brookings.edu/~/media/Research/Files/Papers/2013/02/thp%20budget%20papers/THP_15WaysRethinkFedDeficit_F2.pdf ; http://www.bloomberg.com/news/2013-02-27/15-budget-ideas-that-are-better-than-sequester-plan.html 2 Committee for a Responsible Federal Budget, “FY 2015 Deficit Falls to $439 Billion, but Debt Continues to Rise,”
Bottom Line blog, October 18, 2015. http://crfb.org/document/fy-2015-deficit-falls-435-billion-debt-continues-rise Joint Statement of Treasury Secretary and OMB Director, October 15, 2015. http://www.treasury.gov/press-center/press-releases/Pages/jl0213.aspx Congressional Budget Office, “Monthly Budget Review for September 2015,” October 7, 2015. https://www.cbo.gov/publication/50878?utm_source=feedblitz&utm_medium=FeedBlitzEmail&utm_content=812526&utm_campaign=Hourly_2015-10-07_18%3a00
4 Steve Holland, “Obama signs increase in U.S. Debt ceiling,” Reuters, February 15,
2014.http://www.reuters.com/article/2014/02/16/us-usa-debt-obama-idUSBREA1E11D20140216 ; U.S. Department of the Treasury, “Debt Limit.” http://www.treasury.gov/initiatives/Pages/debtlimit.aspx ; Fix the Debt, “Impending ‘Fiscal Speed Bumps’ 2015-2016,” December 23, 2014. http://www.fixthedebt.org/blog/the-budget-battles-ahead_1#.VJnxNQDA ; Congressional Budget Office, “Federal Debt and the Statutory Limit, October 2015,” October 14, 2015. https://www.cbo.gov/publication/50888?utm_source=feedblitz&utm_medium=FeedBlitzEmail&utm_content=812526&utm_campaign=Hourly_%272015-10-14_15%3a00%3a00%27 ; Daniel Watson, “There is Only One Solution to the Debt Limit,” Treasury Notes, October 16, 2015. http://www.treasury.gov/connect/blog/Pages/one-solution-debt-limit.aspx 5 Committee for a Responsible Federal Budget, “Happy Fiscal New Year! 15 Numbers from FY 2015,” September
20, 2015. http://crfb.org/document/happy-fiscal-new-year-15-numbers-fy-2015 6 Committee for a Responsible Federal Budget, “Fiscal Speed Bumps: Challenges, Risks, and Opportunities,” Bottom
Line blog, January 8, 2015. http://crfb.org/document/fiscal-speed-bumps-challenges-risks-and-opportunities; Committee for a Responsible Federal Budget, The Gathering Storm: Fiscal Clouds Amass This Fall,” Bottom Line blog, August 20, 2015. http://crfb.org/sites/default/files/the_gathering_storm_-_fiscal_clouds_amass_this_fall.pdf 7 David Wessel, Red Ink: Inside the High Stakes of the Federal Budget (New York: Crown Business, 2012), p.70.
control the future. In trying to impose their agendas on the future, they deprive today’s generation and
those to come of the right to determine their own futures.”8
We will analyze the formal and informal processes for budget development, the multiple ways decisions
might be made about funding levels and other policy changes, and we will assess the role of budget
execution, including financial plans (apportionments), financial statements, audits, the relationship of
budget policy to the legislative process, the role of the Government Accountability Office and inspectors
general. We will look across the history of regulations, performance measurements and other such
management tools and critically examine how or whether such tools have actually been used in budget
decision-making and how analysts can determine their value for assessing financial options and achieving
decisions.
Class members will gain experience in devising and applying the questions that analysts might ask of
those proposing a budget, including recognizing the continued use of budget gimmicks9 by both the
Executive and Legislative branches at all levels of government, and follow the management and oversight
of a budget once enacted. Likewise, the class will assess the views of those who believe there is no
current deficit or long-term debt issues confronting the U.S. Government.10
Budgets often have a separate language of terms and concepts and sometimes the terms differ as well
when comparing budget development by legislatures and the executive branch.11
We will gain an
improved understanding of these terms, underscore the value of knowing how to apply budget and
financing rules, including scoring procedures and study how these terms and their application are used
daily by management and budget analysts at all levels of government. Applying new information and
skills will be enhanced especially through the drafting of brief in-class memoranda.
In addition to budget formulation and budget execution, we will assess taxing policies that affect funding
decisions. As part of investigating tax policies, we will take a look, for example, at the use of tax
8 Eugene Steuerle, Dead Men Ruing: How to Restore Fiscal Freedom and Rescue our Future (New York: The Century
Foundation Press, 2014). 9 Committee for a Responsible Federal Budget, “Everything You Need to Know about Budget Gimmicks, in 8
Charts,” Bottom Line blog, February 11, 2014. http://crfb.org/blogs/everything-you-need-know-about-budget-gimmicks-8-charts ; CRFB, “On Highways and VA, Congress Continues Piling Up Debt,” Bottom Line blog, August 1, 2014. http://crfb.org/document/highways-and-va-congress-continues-piling-debt; CRFB,“Budget Gimmicks in the Cromnibus Bill,” Bottom Line blog, December 10, 2014. http://crfb.org/blogs/budget-gimmicks-cromnibus-bill 10
Committee for a Responsible Federal Budget, “Actually, Paul, the Debt is Still a Problem,” Bottom Line blog, July 25, 2014. http://crfb.org/blogs/actually-paul-debt-still-problem; Howard Gleckman, “Gale and DeLong Debate: Is the Budget Deficit Even a Problem?” TPC TaxVox, January 13, 2015. http://taxvox.taxpolicycenter.org/2015/01/13/gale-delong-debate-budget-deficit-even-problem/?utm_source=iContact&utm_medium=email&utm_campaign=Daily%20Deduction&utm_content=DD+1%2F14%2F15 11 Congressional Budget Office, A Guide to Style and Usage, December 19, 2013.
expenditures, sometimes referred to as “spending in disguise.”12
We will use case studies to bring greater
clarity to all of our class discussions. For example, we will look at the special case of Medicaid, a $492
billion (FY 2014 estimate) Federal/State financed health entitlement first enacted in 1965, which apart
from education, often puts the greatest financial pressure annually on all State governments. Medicaid
plays a central role in the health reform act’s goal of expanding coverage to uninsured citizens starting in
January 2014.13
Federal spending for Medicaid jumped by nearly 16 percent ($49 billion) in FY 2015. 14
Along with gaining an overall understanding of budget and financial management processes, concepts and
applications, we will evaluate the competing views of whether policy drives the budget or whether budget
and other financial considerations ultimately drive policy.
Books and Materials
** David Wessel, Red Ink: Inside the High Stakes Politics of the Federal Budget (New York: Crown
Business, 2012) {Required}
** Robert D. Lee, et al, Public Budgeting Systems. Ninth Edition (Burlington, Massachusetts: Jones and
Bartlett Publishers, 2013) {Recommended}
**Allen Schick, The Federal Budget: Politics, Policy, Process (Washington, D.C.: Brookings Institution
Press, 2007) {Required} {Also available as an E-Book in the GMU Arlington Library}
**C. Eugene Steuerle, Dead Men Ruling: How to Restore Fiscal Freedom and Rescue our Future (New
York: The Century Press Foundation, 2014) {Required}
Additional sources cited in the syllabus footnotes are included as background information or for
potential use in the preparation of the two class policy memoranda assignments described late in
the Class Syllabus.
Learning Outcomes
An increased understanding of budget and financial systems, terms and their application in
analyses and policy development.
An expanded understanding of tax policy, with special attention to tax expenditures.
12
Donald Marron, “Spending in Disguise, National Affairs, Summer 2011. http://www.taxpolicycenter.org/UploadedPDF/1001542-Spending-In-Disguise-Marron.pdf 13
Kaiser Family Foundation, Kaiser Commission on Medicaid and the Uninsured, “The Medicaid Program at a Glance,” March 2013. http://www.kff.org/medicaid/upload/7235-06.pdf; HHS/CMS, National Health Expenditure Data. http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsProjected.html 14
CBO, Monthly Budget Review for September 2015. October 7, 2015. https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/50878-MBR.pdf
An expanded exposure to and understanding of the federal budget’s history, key players, related
political process and major components, with special attention to entitlements policies and
financing.
A greater appreciation of budget rhetoric, budget estimates and budget presentations.
An opportunity to improve critical appraisal skills for analyzing public policy questions.
An opportunity to strengthen written and oral presentations and improve the clarity and
organization of policy analyses.
A sharpened ability to respond effectively and efficiently to the time and information constraints
regularly encountered in policy work.
Grading
Class Participation and seven short (30 minute) in-class one page analytic memoranda 25%
Policy Memorandum #1 and Presentation {Two-person teams} 20%
Policy Memorandum #2 and Presentation {Individual or Two-person teams} 25%
Final Exam 30%
Requirements
1. Class Participation and in-class memoranda15
: The class will emphasize full and collegial
participation by all of its members. Students should anticipate receiving seven in-class short
written assignments in addition to preparing two policy/decision memoranda. The in-class
memoranda will be assigned in the classes as noted on the Syllabus and will be based primarily
on the class readings or discussions of the readings or contemporary events on budget or broader
financial policies and procedures. We will use these exercises to underscore the value of
developing the skills for quick and substantive responses to unexpected analytic requests,
including the ability to look ahead and around corners.
As part of each class, students will be expected to report briefly from time to time on
current class-related topics from contemporary sources, including, but not limited to, the New
York Times, Wall Street Journal, Washington Post, National Journal, The Hill, the National
Governors Association http://www.nga.org/cms/home.html , the National Association of State
Budget Officers http://thenew.nasbo.org/ ,the National Conference of State Legislatures
http://www.ncsl.org/, Fairfax County, Virginia http://www.fairfaxcounty.gov/ ;Arlington
County, Virginia http://www.arlingtonva.us/, and advance questions for class consideration.
2. Two Policy Memoranda and Presentations: For the two policy memoranda, the instructor will be
looking for papers written in an active voice with a beginning, middle and end, and with the
recommendations based on research, analysis and facts. I have always found The Elements of
Style, 3rd Edition and subsequent editions (New York: McMillan Publishing Co., 1979) by
15
Vickie Elmer, “The Complete Guide to Writing Office Memos,” Government Executive, December 6, 2013. http://www.govexec.com/excellence/promising-practices/2013/12/complete-guide-writing-office-memos/75062/?oref=govexec_today_nl
William Strunk and E.B. White to be a valuable and constant companion when putting pen to
paper; William Zinsser’s On Writing Well, 30th Anniversary Edition (New York: HarperCollins,
2006) is a second useful guide.16
Policy Memorandum #1 – Groups of two class members.
Policy Memorandum #2 – Individual presentations or in Groups of two class members.
The Two Policy Memoranda should total 3 pages, be double-spaced and include footnotes and a
bibliography. Please use The Chicago Manual of Style17
format for footnotes and prepare the memoranda
in at least 12 point font on standard 8.5 x 11 inch paper. From your assigned readings or from your
readings of sources outside the class, please select two topics that remain unresolved issues (there are
many such issues surrounding U.S. financial policies).
Class members will prepare two memoranda for an Executive Branch, Legislative Branch, State
or local government decision maker that include (1) a short statement and explanation of the
issue, including why the decision needs to made; (2) an assessment of the pros and cons,
including the views of stakeholders on both sides of the issue; and (3) a recommendation based
on the merits.
Please approach the memoranda as staff analysts for a policy official who because of time
constraints will have to rely on your judgment and recommendation(s).
Depending on the topic selected, sometimes a chart or graph can make the case more clearly than
words. The memoranda should be a quality product and give the policy official a sense of a firm
handshake and a steady voice. The proposed policy memoranda topics and a brief outline of your
approach will be due at Class Number 4 (#1) on February 11th and at Class Number 9 (#2) on
March 17th.
The topic for Policy Memorandum #1 should cover a budget (funding) issue and is due at the
beginning of Class Number 10 on March 24th; Policy Memorandum #2 should address a revenue
(taxing or other revenue sources) issue and is due at the beginning of Class Number 13 on April
14th. Please bring one copy of each memorandum to the Class and send the instructor an
electronic version.
16
http://www.amazon.com/s/?ie=UTF8&keywords=strunk+white+elements&tag=googhydr-20&index=aps&hvadid=4308710477&ref=pd_sl_7p023cvw8_b ; http://www.amazon.com/Writing-Well-30th-Anniversary-Nonfiction/dp/0060891548/ref=pd_sim_b_1 See also Greg Mankiw’s blog on “How to Write Well,” October 7, 2006. http://gregmankiw.blogspot.com/2006/10/how-to-write-well.html 17
The Chicago Manual of Style Online: http://www.chicagomanualofstyle.org/home.html
v. Schick, The Federal Budget, Chapter 5, “The President’s Budget,” pp. 84-117;
Chapter 6, “The Congressional Budget Process,” pp. 118-161. {Arlington Library
E-Book}; CRFB, “The President's Budget in 8 Charts (FY2016 Edition),” Bottom
Line blog, February 12, 2015. http://crfb.org/blogs/presidents-budget-8-charts-
fy2016-edition
18
Jessica Tollestrup, Continuing Resolutions: Overview of Components and Recent Practices, Congressional Research Service, July 16, 2015. https://www.fas.org/sgp/crs/misc/R42647.pdf
c. Papers: In-Class short turn-around analysis memorandum #4 {30 minutes}
6. February 25
a. Topic: Revenue Sources and the Financing of Government Activities19
“Among our problems is a failure of economic language. We lack the words and concepts to describe
observable reality… Whatever the cause, we are in unfamiliar territory. Some years ago, I coined the
clunky phrase “affluent deprivation” to describe our condition. By any historical measure, we are — and
will remain — a rich society. Hence, the affluence. But we may feel poorer, “deprived,” because the
economy no longer satisfies broad private and public wants, including an expectation of economic stability.
Getting the right words to match reality is hard. Secular stagnation is a warning. In the 1930s, it seemed a
plausible theory backed by ample evidence. After World War II, it was destroyed by events: a population
explosion (the “baby boom”), a new frontier (suburbia), and new technologies (television, jet travel,
computers). There was no stagnation. Just the opposite.”{Robert Samuelson, “Times have changed, and our
economic vocabulary can’t keep up,” Washington Post, December 1, 2013.}20
19
Shai Akabas, Brian Collins, Steve Bell, “Debt Limit Analysis,” October 14, 2015. http://bipartisanpolicy.org/library/debt-limit/?_cldee=YmFycnljMkB2ZXJpem9uLm5ldA%3d%3d&utm_source=ClickDimensions&utm_medium=email&utm_campaign=Project%20Update%20%7C%20Economic%20Policy 20
i. Congressional Budget Office, CBO’s Economic Forecasting Record: 2013 Update,
January 17, 2013. http://www.cbo.gov/publication/43846
21
vii. Robert Samuelson, “Budget Policy as Prayer,” Washington Post, July 20, 2014. http://www.washingtonpost.com/opinions/robert-samuelson-budget-policy-as-prayer/2014/07/20/f4a0ddb2-0edb-11e4-8c9a-923ecc0c7d23_story.html