Budget and Accounting Act 42 Stat. 20 (1921)

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Among the aims of the reform movement of the early twentieth century was the creation of neutral processes and agencies to perform public functions, substituting administration for politics in the delivery of government services. One key reform was the introduction of the federal budget. Proposed by President william howard taft's Commission on Economy and Efficiency, enactment of a federal budget law was delayed by world war i. When Congress finally passed a bill in 1920, President woodrow wilson, although a longtime advocate of a budget system, vetoed it rather than submit to its limitation of his removal power. A virtually identical bill was passed the following year and signed into law by President Warren Harding, who called it "the greatest reformation in governmental practice since the beginning of the Republic."

Under the act, the President alone was responsible for submitting to Congress each year a statement of the condition of the treasury, the estimated revenues and expenditures of the government for the year, and proposals for meeting revenue needs. The act created the Bureau of the Budget, to receive, compile, and criticize the estimates and requests of the various departments, and the General Accounting Office, to audit the government's fiscal activities.

The Budget and Accounting Act caused a major change in the balance of power within the government, giving the President, rather than Congress, effective control over government spending. The act provided the machinery through which, during the middle third of the twentieth century, the national executive managed the whole economy.

Dennis J. Mahoney

(see also: Budget Process.)


Marini, John 1978 The Politics of Budget Control: An Analysis of the Impact of Centralized Administration on the Separation of Powers. Unpublished Ph.D. dissertation, Claremont Graduate School.