The evolution of the Federal budget process

The federal budget process is a compilation of many rules and procedures, enacted primarily over the past century. Initially neutral as to budget outcome, that process, by the mid-1980s, had evolved to emphasize reducing the deficit. And the budget enforcement procedures put in place to control deficits, combined with robust economic growth, helped to produce historic budget surpluses by the end of 1990s. But in 2001, the economy slowed significantly. The budgetary effects of that slowdown, of the terrorist attacks of September 11, 2001, and other factors, brought a return of the deficit in 2002 – ironically, just as the budget enforcement framework put in place to control deficits expired. Now, lawmakers face the question of what new framework should take its place. This article discusses the evolution of federal budgeting, emphasizing the major characteristics of each period and what factors drove reform efforts at each stage.