Irene Rubin's work looks at the reactions of federal agencies to the pressure of balancing the budget, from the election of Ronald Reagan as president in 1981 to the advent of federal budget surpluses beginning in 1998. The work focuses on cuts in federal expenditures and the resulting effects these cuts had on federal agencies. The key question Rubin asks is: Did Washington prioritize wisely, “trimming the herds” in a rational and efficient manner, or was it “eating the seed corn” by cutting what was politically easy to cut without any regard to the effectiveness of the cuts?

Until the late 1990s, the literature on the federal budget process had been extremely pessimistic regarding the ability of the federal government to produce balanced budgets. Deficit reduction became the gospel within the beltway, and public opinion seemed to concur that reducing the deficit should be a priority. When Bob Dole proposed a major tax reduction after winning the Republican presidential nomination in 1996, for example, his proposals were met with general skepticism and failed to be a vote winner because they were linked to the Reagan tax cuts of 1981, which led to massive budget deficits.

What changed to make seemingly unavoidable budget deficits turn into large government-produced budget surpluses at the end of the twentieth century? As Rubin argues, “the goal of a balanced budget is fundamentally a political one, not an economic or technical one” (p. 2). Once federal policymakers had determined that deficits had gotten out of hand, significant spending cuts were in order. The question became where to cut spending. According to Rubin, this became problematic because the federal government did not necessarily do a very good job of prioritizing expenditure reductions.

The author argues that the federal government was able to produce budget surpluses by cutting where it was politically easy to do so, even if this was not the most efficient way to reduce expenditures, because some agencies (such as the Bureau of Labor Statistics and the General Accounting Office) unquestionably were forced to lower degrees of performance. Rubin makes a compelling argument in this respect. Balancing the budget did hinder the performance of the federal government, at least to some degree. The downsizing of the department of Housing and Urban Development (HUD), for example, did not bring about efficiencies. Instead, she claims that the pressure for survival made the agency more vulnerable to interest groups, fragmenting the mission of the agency.

In trying to balance the budget, therefore, policymakers may have gone overboard, without looking at the consequences of budget cuts. The goal of balancing the budget may have overwhelmed other important government priorities. As Rubin contends, balancing the budget needs to be combined with flexibility to allow for a response to changing needs or to downturns in the economy.

This is not to say that the spending cuts are always detrimental. Revenue reductions are potentially an important check on government as the nation's priorities change. A positive aspect of spending cuts, Rubin asserts, is agency responsiveness—revenue reductions force agencies to respond. While the agencies that she studied had difficulty adapting to lower staffing levels, for the most part they succeeded. Overall, however, budget cuts tended to be implemented in a haphazard fashion that undermined the mission of the agencies.

Rubin's focus is on the expenditure side of the balanced budget equation, not the revenue side. In this regard, she is similar to other critics of the federal budget process, such as Aaron Wildavsky (The New Politics of the Budgetary Process, 2d ed., 1992), Allen Schick (The Capacity to Budget, 1990), and Dennis Ippolito (Congressional Spending, 1981), who place the blame for skyrocketing deficits on the inability of the federal government to curtail spending. But one can just as easily argue that it is the inability of the federal government to tax enough that makes balancing the budget difficult. In particular, the declining progressivity of federal taxation may make it more difficult for the federal government to get the required revenue to balance the budget. Since the end of World War II, the federal tax system has become substantially less progressive, as the corporate income tax has declined while payroll taxes have increased and the progressivity of federal income taxes has been reduced.

The tax side of the budget, therefore, should be considered equal to the spending side of the budget in its political and economic importance. Undoubtedly, the spending cuts that Rubin studies played a role in the reduction of the large federal budget deficits of the 1980s and early 1990s. Spending reductions, however, did not account for most of the reduction of the federal budget deficit. Overall spending outlays by the federal government continued to increase at a greater rate than the rate of inflation throughout the 1990s. The primary reason for the elimination of the budget deficit was the ability of the federal government to dramatically increase revenues. The combination of tax increases and a strong economy led to a windfall of revenues for the federal treasury. After it became law, the 1993 Budget Reconciliation Bill, which raised the top income tax bracket from 31% to 39.6%, was extraordinarily successful at bringing in more revenue. Spending cuts were important but secondary to revenue increases in the reduction of the budget deficit. In this regard, Rubin may overestimate the role of spending cuts (especially the cuts that she analyzes in her work) in eliminating the federal budget deficit at the end of the 1990s.

Overall, Balancing the Federal Budget is an interesting and unique approach to the study of federal budgeting and an outstanding contribution to the field. Although the degree to which spending cuts were responsible for balancing the budget can be debated, spending cuts did play a role in balancing the budget, and these reductions had an important impact on government performance.