Thursday, March 23, 2006
Howell Jackson (Harvard) presents Counting the Ways: The Structure of Federal Spending at NYU today as part of its Colloquium on Tax Policy and Public Finance series conducted by Alan Auerbach and Daniel Shaviro. Here is the Introduction:
As this conference volume aspires to be inter-disciplinary, let me declare at the outset the disciplinary boundary I propose to straddle: Budget Policy and Accounting. In the realm of budget policy, numbers are important. The size of the deficit, the level of public debt, and a handful of ratios, all have great political salience in budgeting decisions. When the CBO issues a report or the President unveils his annual budget proposal, these actions are immediately evaluated by reference to key budgetary measures. These measures are based on particular accounting principles, most of which were developed decades ago with minor adjustments over time. Accounting principles are not, however, immutable. Other principles apply in other jurisdictions and indeed different principles are applied in assembling the Financial Reports of the U.S. Government, to which neither the general public nor budget experts pay much attention. The question I explore in this paper is whether we should consider moving towards different methods of accounting to in form public debate over federal budget policy.
The structure of my analysis is straightforward. First, I review the key measures of fiscal performance that currently frame federal budget policy, examining both the content of these measures themselves and the principal reasons why these measures are thought to be relevant to public understanding of fiscal matters. I then identify several aspects of our federal government’s fiscal affairs that are not captured in these standard measures. Most of the areas I discuss are currently reported in the Financial Reports of the U.S. Government, though some appear only as supplementary materials and not in the principal statements of financial condition. In many cases, the information omitted for our traditional budgetary aggregates is material, and its omission compromises the integrity of public debate over fiscal decisions. I conclude with some preliminary thoughts about the implications of my critique of traditional budgetary measures and then suggest a general framework that should inform the rules of accounting for federal budget policy.
The Colloquium will be held in Room 120 of Furman Hall from 4:00 - 6:00 p.m. EST. Although the public is invited to attend, due to heightened security throughout NYU Law, please contact Rosemary Simon so she can provide the Guard's desk with your name.