Basing Budget Baselines

58 Pages Posted: 1 May 2015

See all articles by David Kamin

David Kamin

New York University School of Law

Date Written: April 30, 2015

Abstract

Measuring the cost of legislation or even projecting the course of the federal budget requires defining a budget baseline — a starting point capturing the current state of the budget. Budget baselines underlie most measures employed in federal budget debates and enforcement rules. Yet, despite their widespread use, budget baselines engender considerable confusion and abuse.

For instance, when temporary tax breaks are enacted, they are officially estimated to cost far less than they likely will, because of a loophole in federal budget baseline rules. Then, later efforts to extend the tax cuts are counted as increasing deficits when, in fact, by more reasonable metrics, they do nothing of the sort and might even reduce deficits.

In response to such problems and the relative lack of scholarly attention, this article seeks to ground budget baselines in a theoretical framework and then apply this framework to some of the leading debates involving baselines. For example, after presenting this new framework for understanding budget baselines, the article proposes a way to fix the official baseline so that temporary tax cuts no longer appear less expensive than they really are and extensions no longer appear more expensive. This article also uses this framework to describe why the long-term fiscal shortfall is smaller than it is often depicted and why a long-term budget metric now under consideration should be rejected.

Thus, by arriving at a better understanding of budget baselines, this article helps to inform a number of key fiscal debates, as well as to make recommendations for how to improve budget measures going forward.

Keywords: baseline, budgeting, legal change, legislation

Suggested Citation

Kamin, David, Basing Budget Baselines (April 30, 2015). William & Mary Law Review, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2594464

David Kamin (Contact Author)

New York University School of Law ( email )

40 Washington Square South
New York, NY 10012-1099
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
73
Abstract Views
1,106
Rank
580,727
PlumX Metrics