The Budget Control Act of 1974 is the most misnamed congressional act in American history. Far from “controlling” anything, its passage caused the federal budget process to spin out of control. In the six years preceding the act, with the Vietnam War raging, annual deficits averaged $11.3 billion. In the first six years after the Budget Control Act, with the war over, they averaged $54 billion.
What happened? The Budget Control Act cut the president out of the budget process by removing his political leverage, leaving Congress in near-total control of the budget. Congressmen have a strong incentive to bring home the bacon, both to their voters and, increasingly, to their donors. Logrolling—you vote for my project and I’ll vote for yours—is, all too often, how Congress works.
Before 1920, there was no unified budget process. Executive departments simply submitted their budget requests directly to Congress. What kept spending under control was a strong political consensus across both parties that the budget should be balanced if at all possible. That idea only began to erode in the 1960s, with a misuse of Keynesian theory.
Author(s): John Steele Gordon
Publication Date: 19 February 2021
Publication Site: City Journal