Presidential Leadership and the Reform of Fiscal Policy: Learning from Reagan&Apos;S Role in Tra 86

62 Pages Posted: 10 Jul 2007 Last revised: 4 Jan 2021

See all articles by Robert P. Inman

Robert P. Inman

University of Pennsylvania - Finance Department; National Bureau of Economic Research (NBER)

Date Written: July 1993

Abstract

The institutions of federal fiscal-policy making seem incapable of confronting the central domestic issues of the day. This paper presents a model of congressional decision-making in which legislators' incentives are contrary to fiscal efficiency. In such an environment, a "strong" president may be able to lead congress away from inefficient budgets. The paper specifies a model of what constitutes a strong president, namely a president with resources to build congressional coalitions and a credible veto to force "all-or-nothing" choices between reform and the inefficient status quo. President Reagan's role in the passage of the Tax Reform Act of 1986 is detailed in the light of this model; the analysis reveals the role of executive resources and the importance of the veto strategy to major fiscal reform.

Suggested Citation

Inman, Robert P., Presidential Leadership and the Reform of Fiscal Policy: Learning from Reagan&Apos;S Role in Tra 86 (July 1993). NBER Working Paper No. w4395, Available at SSRN: https://ssrn.com/abstract=480222

Robert P. Inman (Contact Author)

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