Formation of Fiscal Policy: The Experience of the Past Twenty-Five Years

[...]With fiscal affairs apparently in order—at least in the shortrun—and with some perspective on the past twenty-five years’economic performance, we are in a position to ask how well thebudget process has worked to produce a coherent andresponsive fiscal policy, particularly given the importantchanges in the U.S. economy over the period.It is with these economic changes that I begin in the nextsection, discussing the consequences for tax and expenditurepolicies. I then turn to a more complete discussion of how thestate of the federal budget has changed over the past twentyfiveyears. Next, I discuss how these changes in the budget haveled to changes in budget procedures, and what impact thesechanges in the budget process have had. Finally, I review wherewe are, and how well the short-term budget surplus reflects thelonger run state of U.S. fiscal policy.[...]