Public Administration’s role in Budgeting

1772 words (7 pages) Business Assignment

14th Oct 2020 Business Assignment Reference this

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Americans have unlimited amount of wants and needs, with a limited amount of resources, this creates a major issue in our country. It is difficult for one person to balance their finances, a small business can be extremely difficult in some cases. There is no argument that balancing a budget for an entire nation is a task that is nearly impossible. No one should discredit the hard work by our government and highly intelligent president’s administration on their accomplishments on our national budget. Taking a close look at the process of how our country’s economy has gotten to where it is today by observing the federal Budget and judging if certain changes were beneficial can be effective. All American citizens not just legislators need to look back in history and study tactics that worked and did not work for balancing the federal budget.

Take the findings from the research, try to adjust for modern day issues and reapply working tactics. Take the efforts that failed, study the environment and remind ourselves as to why these tactics did not work. Breaking the history of the budget down into decades and observing the administration in office at the time might help outline where things went wrong or right, the ladder being a lot more common. Taking a look at the ethics being used by that administration to understand their values will help us better evaluate the situation and work environment. Ethics will play a huge role in whether the budget is focused on social funding or discretionary funding.Eisenhower and Clinton were the only two presidents able to keep the federal government out of a deficit for a fiscal year. World events, economic status and a few other outlying factors are to blame for major changes in the budget. Understanding these outlying factors are key to understanding policies and outcome of these policies. Here is a Chart with the deficit and GDP averages for each president. The Public Administration in America is set up very much like a bureaucracy, this works great with each department with specialized task but becomes a real issue when it comes to fighting over funding. Bureaucracy are said to work like a machine but the U.S. Fiscal budget is way to complex for a Machine to handle.

The Budget, Ethics aside 

In 1990 Bush made a budget adjustment agreement that put the budget on a more satisfactory long run path. Since Bush was vice president for eight years for Reagan when he took over as president he has no problem showing off this massive military that he helped build. This resulted in Bush being more effective with foreign policies then with dealing with the economic problems and the ever-rising deficit. Bush wanted to improve relations with the Soviet Union so he signs the Strategic Arms Reduction Treaty, it seemed beneficial for both countries to be able to decrease the amount of money they were spending on defense.

Bush’s lack of immediate changes to the economy resulted in the economy going into a recession. Especially after promising to not to raise taxes or implement any sort of new tax. This resulted in him losing in the campaign for reelection in 1993. Bush lost to the governor of Arkansas Bill Clinton with an elector vote 370 to 168. Clinton was the first democrat president in over 12 years. Clinton right off the back comes in with an aggressive tax reform and a budget proposal that would cut the deficit by five-hundred billion in five years and reduce spending by 255 billion. There was a major tax increase for the wealthiest 1.2% of Americans. The majority of Republican congressional members had connections or represented the 1.2% of wealthiest Americans and strongly opposed Clinton’s tax reform. Clinton also really wanted to shift the majority of the budget from unnecessary military spending to social welfare and efficiency. Efficiency is one of the foundations and main goals of public administration. One of the founding fathers of Principles of the scientific management Fredrick Taylor harped on it. After tons and tons of research Taylor determined there was one best way to complete a task. This idea is called Taylorism.

Here is a chart showing how federal budget had has been switching from discretionary spending to mandatory spending. The chart also shows what the budget will look like if the deficit does not get under control. Clinton inherited and massive financial issue in the U.S.  This was the problem Clinton had set out to fix, he actually met very impressive financial goals he had set for the budget in his first year in office. Clinton took office at a rough time as well unemployment was up from the year before, the cost of health care was up twenty percent and the cost of housing had also raised ten percent. All of these things can be major economic threats and not something you want first year as president. Within the first Budget Clinton was about the drop the deficit by 40 Billion dollars in the first year and was able to keep the trend going all eight years he was in office. A more broad but key tactic Clinton used was bettering the middle class. A lot of his policies helped the middle class grow not only by helping social programs and financial safety nets but he made it easier for small businesses to grow and prosper. Also with a healthy middle class the big corporations work better because their smaller customer intensive stores ran and operated more efficiently. Clinton raised the minimum wage from 4.25 to 5.15 which effected over 10 million jobs at the time. Clinton signed the Family and medical leave act which gave employees a 12-week window to unpaid leave for any illness or new born child, this was a huge social benefit for the middle class. Clinton’s new middle-class cuts were very important and the main goal to his new budget deal. He passes a child tax credit bill that gave each family a five-hundred-dollar tax cut per child, this was estimated to be a tax benefit of 16-17 billion dollars. One of the most impressive statistics is in Clinton's time in office he was able to decrease the number of people on welfare by 60 percent. This was mainly responsible for the incentives Clinton had implemented that made business owners want to hire welfare dependent workers and low-income family workers. He supported federal funding for early childhood head start education, so he made preschool free or cheaper for low income families. Clinton also passed legislation aid health care for low income families and children, this was extremely helpful to families in poverty with young kids. Clinton knew improving the middle class would be the best thing for the economy because it would broaden and improve the amount of people paying taxes. Like the economic policy of not taxing business to heavily gives them more room to grow, helping people in poverty as a result boosting the amount of people paying taxes. Clinton used a very pro Rational Model to his budgeting. 

Is the budget a Democracy?

In Bill Clinton's inauguration speech of 1997, he wanted to build a disconnect from the National budget and the people of the United states. He planned to use the federalist system of government by sharing powers with smaller sub national governments (state and local governments). There are a few different types of federalism, but all rely on intergovernmental relationships. For the country to run at an optimal economic level the budget needs to be disrupted in a social equity not just equally. Social, economic and environmental inequities are all inter twinned and have to be accounted for because they can even lead to health inequities. These health inequities can lead to health disparities which can start to affect the whole nation. This an example as to why the budget needs to be so evenly disputed. Having educated communities can help be aware of serious issues like this and help with public decision making. As public decision making improves public budgeting and citizen participation can be improved.

Recommendations

I would recommend making it clear to presidents’ administration that a deficit on the Budget has a negative effect to normal Americans. I think America needs to focus on energy and how we are getting the majority of it, and since we are so dependent on it there needs to be government programs that make sure we are getting oil for the cheapest price and we have plenty of alternative resources, so our country does not instantly go into a panic. I also firmly believe most president have good intentions, so I think there should be some legislation making it more difficult for presidents to change a policy just implemented to prevent each new president from wasting time destroying everything the last president had been working on. I think the most important suggestion I have is for political parties to be more open minded to one another and study the history of the budget to make it clear to people as to why the opposing parties set the policies they have. If you look back in this paper, you can see how both the republican and democrat parties have policies that increase total tax revenue. Both parties have a lot of the same goals just different means of getting there. I think the label of the political parties need to be dropped or less significant given it just separates people and does not focus on implementing the legislation that have the greatest social benefit.

Sources

  • Amadeo, Kimberly.(June 25, 2019) “JFK's Impact on the Minimum Wage, Social Security, and Mental Health.” The Balance Small Business, The Balance, www.thebalance.com/president-john-f-kennedy-s-economic-policies-3305560.
  • Neubauer, Madison. (4 Nov. 2013),  “George H.W. Bush and Economic Policy.” Prezi.com, prezi.com/ceqfr0jhabcz/george-hw-bush-and-economic-policy/.
  • Kastor, Carolyn (10/28/2011) “Power of Progressive Economics: The Clinton Years.” Center for American Progress, www.americanprogress.org/issues/economy/reports/2011/10/28/10405/power-of-progressive-economics-the-clinton-years/.
  • Staff, Investopedia. (30 June 2018,)  “Clintonomics.” Investopedia, Investopedia, www.investopedia.com/terms/c/clintonomics.asp.
  • Staff, Investopedia 22 Apr. 2018. “Reaganomics.” Investopedia, Investopedia, , www.investopedia.com/terms/r/reaganomics.asp.

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