The President’s Budget for 2001: Depleted Economic Choices

For government to be able to function and fulfill the role assigned toit, it must collect sufficient resources and allocate and use thoseresources efficiently and effectively. In this regard, any assessmentof the government budget cannot proceed without an implicit recognitionof the integral relationship between revenue and expenditures, the twoprincipal elements of fiscal policy. Thus, the analysis of this paperassesses not only expenditure program but also the revenue program ofthe President’s Budget for 2001. In particular, the President’s budgetproposal is evaluated in terms of two principal objectives of a goodpublic expenditure management: fiscal discipline and strategicallocation of resources.

On the one hand, fiscal discipline requires good revenue forecasts andaggregate expenditure controls. On the other hand, resource allocationis assessed in terms its consistency with policy pronouncements of thegovernment. In particular, resource allocation is appraised withregards to the manner by which government expenditures are programmedacross sectors and categories in order to promote overall economicgrowth and equity.

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