The 1974 U.S. Budget—Past,Present,and Future

Abstract

This paper argues that the bleak budgetary outlook in the United States is not unexpected and will be difficult to change. Present conservative fiscal policy has substantial economic merit and widespread political support. The President has presented a reasonably consistent political and economic philosophy to which viable alternatives have yet to be offered. Backing up his budget with threats of vetoes and impoundments, the President is polarizing a power struggle with Congress which overshadows substantive issues. The nearly $4 billion increase in federal health outlays, in conjunction with major cuts in hospital construction, mental health, research, manpower, and health services planning and delivery, highlights the mortgaging of the budget by uncontrollable expenditures for pensions, Medicare, interest, etc. Acceptance of a crisis in health care is no longer a basis for developing federal health policy, which now contemplates a limited federal role and reliance upon states and the marketplace. But the federal budgetary situation will worsen as Medicare and Medicaid contribute to a situation of ever-rising prices unconstrained by rational organization.