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The Congressional budget process,aggregate spending,and statutory budget rules
Institution:1. Enzyme and Bioconversion Unit, National School of Engineering of Sfax, 3038, Sfax, Tunisia;2. Laboratory of Alimentary Analyses, National School of Engineering of Sfax, Tunisia;3. Institute of Food Science, Technology and Nutrition (ICTAN-CSIC), Madrid, Spain;1. Department of Chemistry and Biotechnology, Tottori University, Tottori 680-8552, Japan;2. Research Center for Bioscience and Technology, Tottori University, Tottori 680-8553, Japan;1. School of Food Science and Technology, Jiangnan University, Wuxi 214122, China;2. State Key Laboratory of Dairy Biotechnology, Technology Center of Bright Dairy and Food Co. Ltd., Shanghai 200436, China;1. Department of Biotechnology, Chosun University, Gwangju 501-759, Republic of Korea;2. Department of Alternative Medicine, Gwangju University, Gwangju 503-703, Republic of Korea;3. Central Department of Zoology, Tribhuvan University, Kirtipur, Kathmandu, Nepal;1. Department of Crystal Chemistry and Crystal Physics, Faculty of Chemistry, Jagiellonian University in Kraków, Ingardena 3, 30-060 Kraków, Poland;2. Department of Physical Biochemistry, Faculty of Biochemistry, Biophysics and Biotechnology, Jagiellonian University in Kraków, Gronostajowa 7, 30-387 Kraków, Poland;3. Jerzy Haber Institute of Catalysis and Surface Chemistry, Polish Academy of Sciences, Niezapominajek 8, 30-239 Kraków, Poland
Abstract:This paper compares the Congressional budget process (instituted in 1974) and the piecemeal appropriations process that preceded it. Previous theoretical analysis using spatial models of legislator preferences finds no systematic difference in relative spending levels under the two regimes. This paper instead uses a model of interest group lobbying. A legislature determines spending on a national public good and on subsidies to sector-specific interest groups. In the “appropriations process,” the Appropriations Committee proposes a budget that, because of interest group influence, involves overspending on subsidies. In the “budget process,” the Budget Committee proposes an aggregate level of spending (the budget resolution); then, the Appropriations Committee proposes a budget. A free rider problem among the interest groups inhibits the lobbying of the Budget Committee to increase the aggregate budget. If each group is sufficiently small, it takes the budget resolution as given, and lobbies the Appropriations Committee. Aggregate spending is lower and social welfare is higher under the budget process; however, provision of the national public good is suboptimal. The paper also analyzes statutory budget rules that limit spending levels, but can be revised by a simple majority vote. Here, the free rider problem prevents the groups from securing the required changes to budget rules.
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