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Government Bureaucracy

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David Smock

on 2 February 2018

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Transcript of Government Bureaucracy

Government Bureaucracy
Passing direct legislation to change rules or regulations or limit bureaucratic activity.

Alter or threatening to alter the bureau’s budget.

Conducting investigations that publicize unpopular decisions, rules, or expenditures by bureaus.

Making formal complaints to the bureaucracy.

Congressional Restraints
Appointing political nominees to oversight positions in the executive branch.
Authorize "reorganization" of agencies
Budget requests that increase, decrease, or eliminate agency spending.
Vetoing legislation that funds unwanted programs and agencies.

Presidential Constraints
Complaints about excessive regulation:
Increased cost to businesses and consumers
Hampering innovation and productivity
Reduction of competition due to oversight in licensing and business start-up
Controls introduced do not take into consideration cost-benefit trade offs.

Deregulation threatens to diminish politicians’ power and eliminate bureaucratic jobs.

Forces industries to become competitive and diminishes the role of interest-group lobbyists.

Deregulation and Regulation

Capital gains – profits from the sale of stocks, bonds, real estate, etc. are currently taxed at only 15%.
Less than half of the top marginal rate on earned income.
"carried interest" - income for fund managers

Social Security taxes are regressive – they capture a larger share of the income of lower-income workers.
Imposed on the first $106,800 of wage income
Not levied against nonwage income (interest, dividends, rents, profit from sale of stock, etc.)

Tax Politics
Entitlement Spending

Occasionally this process fails: the time period allowed has passed without agreement on appropriations or a new continuing resolution.
President Clinton v. Republican controlled Congress over FY 1996 budget.
Shutdowns have only been partial, affecting “nonessential” government employees.

Continuing Resolutions and Government Shutdowns
13 appropriations bills go through specialized appropriations subcommittees.
Agency and department leaders testify, lobbying activity is heavy.
Reconciliation bill reconciles the amounts set by the budget resolution and the amounts set by the appropriations committees.

Congressional Consideration

President’s budget sent initially to the House and Senate budget committees, who draft a budget resolution for Congress.
Congressional Budget Office reviews recommendations.
Resolution should be passed by late spring, guiding the House and Senate appropriations committees in writing appropriations acts.
Usually 13 separate appropriations acts each year.
Supposed to pass before October 1.

Congressional Consideration

The Presidential Budget

Constitutional Basis of Executive Authority
Constitutional Basis of
Executive Authority
The Growth in Executive Departments

Government Size and Cost
Falls to professional bureaucrats to create actual rules/regulations, ie. Implementation/execution
Organized Expertise

The Bureaucracy

Decisions by executive agencies can be appealed to federal courts.

Federal courts can issue injunctions to executive agencies before they institute their rules, regulations, projects, or programs.

the most powerful check on the Bureaucracy

Judicial Constraints

Presidential Constraints
Congressional Constraints
Judicial Constraints
Citizen constraints

Controlling the Bureaucracy: Checks and Balances
Paid for by businesses, employees, and consumers.
Estimated to be about $1.75 trillion in 2012,
12% of the GDP

Roughly $5600 per person, per year

Many regulations clearly provide benefits to the health, safety, and well-being of the masses.
benefits may be about equal to the costs

The Hidden Costs of Regulation

Tax Politics

Federal income tax is highly progressive – captures a larger share of the income of higher-income workers.

Tax Politics

Tax Politics
Federal government finances itself through
Individual income taxes – 45-47%
Social Security payroll taxes – 35-36%
Corporate taxes – 12%

Tax Politics
Balancing the Budget
Presidential Vetoes of Appropriations Bills

Kennedy created the National Aeronautics and Space Administration.

Carter created the Department of Education to emphasize educational matters.

Reagan campaigned on a promise to eliminate the Departments of Education and Energy, however was forced to drop this plan. Created the Department of Veterans Affairs.

George W. Bush first created the Office of Homeland Security, then requested Congress create a new Department of Homeland Security with direct responsibility over 22 agencies.

Constitutional Basis of Executive Authority
The Growth in Executive Departments

Bureaucracy is often source of most legislation being considered by Congress (80% originates in Exec. Branch)
Laws that allow agencies to expand in size, authority, and money.
“The Bureaucracy” becomes its own center of power

Bureaucratic Expansionism

By definition: refers to the bulk of executive branch of government, federal, state, or local level.
In government, focuses on civil servants and political appointees.
The Bureaucracy
Federal bureaucracy is a major base of power in the U.S.
Not very responsive to public pressure
Largely independent of other branches
Members formulate and implement public policy
Congress and the president do not have the time nor expertise to master policy details
The president, Congress, and courts can restrain the bureaucracy, yet rarely reverse administrative decisions.
1883 Pendelton Civil Service Reform Act established that membership would be based on experience and merit.
Rather than handing out jobs to reward political support.
High turnover was disruptive to the function of government.
The Bureaucracy
Elected officials do not have the time, energy, or expertise to handle details of policy making.
Laws they pass are often broad, ambiguous or symbolic
Individual bureaucrats’ narrow expertise combined create an organized base of power, difficult to control.
All governments combined spend about 40% of the U.S. GDP.
Federal government accounts for about 29%,
state and local together account for another 11%.
Only 2 departments of the bureaucracy have ever been eliminated; has only been added to
The Cabinet has slowly expanded over time
Article II, Section 2 gives the president authority over the federal bureaucracy.
1) Constitution gives the formal power to
appoint all secretaries, undersecretaries, and
deputy secretaries, and most bureau chiefs.
President appoints about 2,500 people.
Approx. 600 are policy-making positions.
2) President has the power to reorganize the federal bureaucracy, subject to congressional veto.
subject to Congressional veto.
3) Exercises formal control over the budget.
OMB - largest agency in the Executive Office of the President.
Prepares the budget for the president to submit to Congress.
Reviews, reduces, and approves estimates submitted by departments and agencies.
Requests for congressional appropriations
must clear the OMB first.
Recommends changes to promote efficiency and economy.
3 areas of formal power
Process starts with the President and the OMB to prepare the annual federal budget to submit to Congress.
But no federal monies can be spent without or until congressional appropriation.
Preparation begins more than a year before the start of the fiscal year for which the budget is intended.
OMB considers requests by all departments and agencies, adjusting them to fit the president’s overall policy goals.

Continuing resolution authorizes government agencies to keep spending money for a specified period at the same level as the previous fiscal year.
Development of procedures and activities to carry out policies legislated by Congress.
Translate laws into operational rules and regulations, and allocate resources.
Bureaucrats can delay the development of a new law, or act quickly and forcefully in making new regulations.

-- Interest groups have a stake and actively seek
to influence the bureaucracy.
Relies on the development of formal rules for implementing legislation.

These have the effect of law.

Congress can amend or repeal a regulation by passing new legislation and obtaining the president’s signature.
Regulatory agencies and commissions are heavily engaged in adjudication.

Decisions about whether a person or firm is failing to comply with laws or regulations and what penalties or corrective action applies.

Resemble the court system
Presidents can veto an appropriations bill, but not specific provisions.
Vetoes occur very rarely, the threat of a veto can help the president assert his agenda.
Presidents have fought for the line-item veto, though the U.S. Supreme Court held it to be unconstitutional.
the 2015 budget
Over 60% of all federal spending – items determined by past decisions of Congress that represent commitments in future budgets.
-- Social Security, Medicare, etc.
Added to entitlements, “mandatory” spending, and national defense leaves about 12% of the budget for “nondefense discretionary” spending.
“Capping entitlements” is seen as the only way to reign in future federal spending.
will meet with resistance by older, more politically active population & powerful interest groups (ex.: AARP)
Annual deficits put the U.S. government over $17 trillion in debt.
Owed to banks, insurance companies, investment firms, and anyone else who buys U.S. government bonds.
International investors own about 20% of the debt.
China = 7.6%
2013 interest payments on the debt amounted to $223 bil
6% of government expenditures
For four years in the 1990’s, the government actually incurred surpluses.
Code of Federal Regulations
The Federal Register (the daily newspaper of the Federal government) is a legal newspaper published every business day by the National Archives and Records Administration (NARA).

The Federal Register contains:
Federal Agency Regulations
Proposed Rules and Public Notices
Executive Orders
Other Presidential Documents
The Code of Federal Regulations (CFR) is an annual codification of the general and permanent rules published in the Federal Register by the executive departments and agencies of the Federal Government.
Citizen constraints
"Sunshine Laws"
create transparency regarding public meetings, etc.
FOIA - Freedom of Information Act
citizens can request/demand info & documentation of agency actions
Privacy Act (1974)
citizens can request agency files held on them
How the Bureaucracy tries to "outmaneuver" the President
1) Screen out information from the president that conflicts with your objectives (BUT never play politics with "security")
2) Tell the president only what is necessary to persuade him of the corrctness of your own position
3) Present your own policy option in the middle of two other obviously unworkable alternatives to give the president the illusion of choice.
4) If the president selects the "wrong" policy anyhow, demand full authority to deal with the undesirable consequences, which are sure to arise.
5) Always predict the consequences of not adopting your policy in terms of worst case scenarios and dire consequences.
6) If the president chooses your policy, urge immediate action; if he selcts another policy, agree in principle but argue "now is not the time".
7) If the opposition to your policy appears strong, leak damaging information to supporters in the press or Congress and let opposition build.
8) Fully implement orders that result from the selection your policy recommendation; circumvent or delay those that do not.
9) Limit the issues that go to the president. Only bring up those that are favorable to your position or that he will favor.
10) Never oppose the president's policy in such extreme terms that you lose his trust. Live to argue another day.
"The Ten Commandments of Bureaucratic Infighting"
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