1. Alberta, Legislative Assembly of Alberta, Alberta Hansard at 516 (13 March 1995).
2. For a good historical examination of Canada's ongoing budgetary concerns, see, J.P. Feehan, "The Federal Debt" in S.D. Phillips, ed., How Ottawa Spends 1995-96: Mid-Life Crises (Ottawa: Carleton University Press, 1995) 31 [hereinafter Feehan].
3. Although Canada had a significant national debt following World War II, it was actually able to run a budgetary surplus for much of the early 1950s as the debt was reduced to more manageable levels. From the mid-1960s until the first oil shock in 1973, Canada ran budget deficits of just under 1 percent of GDP. Moreover, with the economy continuing to expand, the federal debt-to-GDP ratio declined during the early 1970s.
In 1975, the federal government introduced automatic indexation to transfer payments and personal income tax. This increased commitment to social programs came at a time when the economy was also experiencing a severe recession following the oil shock. As a result, the federal debt steadily increased so that by 1979 the federal deficit was 3 1/2 times larger than the total budget in 1951.
The power of compounding took over during the 1980s and 1990s with the debt increasing over seven times from the already significant figure in 1979. T. Carmichael, "Background Paper - A Personal Reflection on Deficits and Debt" in Office of the Auditor General of Canada, Deficits and Debt: Proceedings of the Colloquium (Ottawa: 1993) 27.
Today, as a result of 25 consecutive years of deficit financing, the federal debt stands at over $550 billion and, notwithstanding attempts to reduce the national deficit, continues to rise. Department of Finance, The Economic and Fiscal Update (Ottawa: 6 December 1995) at 29 [hereinafter Fiscal Update].
4. It should be noted, however, that there is not universal agreement on the extent to which the deficit is damaging nor on its impact to the Canadian economy. There are those who contend that claims regarding the harm inflicted by the debt are exaggerated and that deficit reduction is actually being used primarily as a means of effecting social policies such as eliminating social programs. See, e.g., J. Loxley, "Balanced Budget Legislation or Bad Budget Legislation? (Economic policy in Canadian provinces)" Canadian Dimension (1 December 1995) 19
Conversely, there are commentators who argue that the current situation is actually far worse than is generally perceived. For example, Robin Richardson points out that when unfunded liabilities such as the Canada Pension Plan (CPP) are added to the national debt figure, the debt-to-GDP ratio nearly doubles. Feehan, supra, note 2 at 38-9.
5. Although balanced budget legislation may be new to Canada and derided by some as a "fad", it has been a budgetary consideration for a considerable period of time. In fact, in modern times its rise as a serious fiscal consideration coincided with the introduction of the modern budgetary process of government preparing periodic estimates of anticipated expenses and submitting such estimates to legislatures for approval and authorization of funding. For an interesting look at the historical origins of balanced budget legislation, see, C.C. Webber, "Development of Ideas About Balanced Budgets" in A. Wildavsky, How To Limit Government Spending (Berkeley: University of California Press, 1980) 163; or see, S.E. Stark and E.S. Goldman, "Controlling Legislative Shortsightedness: The Effectiveness of Constitutional Debt Limitations" (1991) Wisc. L. Rev. 1301.
6. There are presently six balanced budget statutes in force or tabled for adoption in Canada. In addition, during the election campaign of 1995, then candidate (now Premier of Ontario) Mike Harris pledged that "Certainly within our first term of office...we intend to pass meaningful legislation to prevent any future governments from running deficits...". R. Brennan, "Liberals, Tories Want to Outlaw Deficits" The [Windsor] Star (4 April 1995) A3 [hereinafter Harris].
Note, however, that there has not been unanimous acceptance of the balanced budget legislative approach. For example, Paul Martin, the current federal finance minister has steadfastly refused to adopt such an approach arguing that balanced budget legislation limits the choices available to duly elected governments and encourages "ingenious politicians and bureaucrats to spend time looking for ways to get around the rules through accounting hocus-pocus and subterfuges of various kinds". R. Carrick, "Balanced Budget Legislation Draws Criticism from Martin" The [Windsor] Star (2 September 1995) H8.
Furthermore, some analysts argue that legislative rules are unnecessary given the power of the financial markets to exert influence over government policy. See, e.g., R.D. Kneebone, "Deficits and Debt in Canada: Some Lessons from Recent History" (1994) 20 (2) Can. Public Policy 152. However, Marcel Cote takes the opposite approach, arguing that "despite all the rhetoric, financial markets are not reliable allies: they make too much of their living selling government debt...". M. Cote, "Coping with the Canadian Public Debt Crisis" in Office of the Auditor General of Canada, Deficits and Debt: Proceedings of the Colloquium (Ottawa, 1993) 9 at 14 [hereinafter Cote].
7. See, e.g., "Martin Should Put it in Writing" Fin. Post (16 January 1996) 16; D. Francis, "The Most Serious Threat Our Nation Faces is the Debt" Fin. Post (6 April 1996) 21; R. Scowen, "It's Time for Quebec to Have its Own Balanced-Budget Legislation" [Montreal] Gazette (25 March 1995) C3 [hereinafter Scowen].
8. Library of Parliament Research Branch, Fiscal Rules for the Control of Government (Background Paper 358E) by M.G. Wrobel (Ottawa: Background Paper, November 1993)[hereinafter Wrobel].
9. For example, the chief economist of the Royal Bank of Canada recently called for the enactment of legislation mandating balanced budgets, to be monitored by a watchdog agency. G. McIntosh, "Bank Wants Legislation to Balance Budgets: Watchdog Agency Needed to Monitor Government, It Says" [Ottawa] Citizen (28 February 1997) D8.
10. For example, in a 1995 study, Robin
Richardson of the Fraser Institute argued for debt-elimination laws
for all levels of government. N. Nankivell, "Should Ottawa Now
Consider Legislated Debt Reduction?: We are Spending Well Beyond our
Means" Fin. Post (7 October 1995) 20. Similarly, in a study
published by the C.D. Howe Institute, Herbert G. Grubel argued for a
constitutional amendment mandating a balanced budget at the
federal level. H.G. Grubel, "Constitutional Limits on Government
Spending Deficits and Levels in Canada" in H.G. Grubel, D.D. Purvis,
and W.M. Scarth, Limits to Government: Controlling Deficits and
Debt in Canada (Winnipeg: C.D. Howe Institute, 1992) 1.
Furthermore, the Canadian Taxpayers Federation, a national
organization concerned with "tax fairness" issues, has also joined
the call for balanced budget legislation arguing that "[w]ithout a
comprehensive law which includes strict enforcement mechanisms and
financial penalties against politicians who break their commitments,
targets and plans...are worthless". T. Lanigan, "A Law to Limit B.C.
Politicians' Tax and Spend Powers" [Vancouver] Sun (22
November 1995) A19.
12. Balanced budget legislation has been enacted in Alberta, Manitoba, New Brunswick, Saskatchewan, and the Northwest Territories. Quebec tabled a balanced budget statute on 15 May 1996 and is scheduled to pursue passage of the legislation during its upcoming legislative session.
13. Alberta and Nova Scotia enacted spending limitation legislation.
15. As discussed in Part IV, there has been considerable analysis and discussion on balanced budget legislation in the United States where a constitutional balanced budget amendment has numerous advocates and where some form of balanced budget legislation is common at the state level. However, given the differences between the Canadian parliamentary system and the U.S. system, as well as the differences in budgetary processes, U.S. analysis is not entirely applicable in a Canadian context.
16. A. Effinger, "Do Deficits Matter?: Many Nations Yet to Reap Rewards of Fiscal Prudence" [Montreal] Gazette (31 October 1996) D2.
17. It should be noted that several Canadian provinces, including Alberta, Saskatchewan, Newfoundland, Prince Edward Island, New Brunswick, Manitoba and British Columbia, have balanced, or claim to have balanced their budgets for the 1996 or 1997 fiscal periods. Given the newness of balanced budget legislation, the extent to which it may have impacted the provinces' fiscal performance is difficult to gauge. D. Martin, "Hallelujah!: The Deficit is Dead" The [Calgary] Herald (22 February 1996) A15.
18. Then-premier Vander Zalm, proclaimed that B.C.'s version of a balanced budget statute was "the greatest achievement by any government in this province's history or this country's history". British Columbia, British Columbia Debates of the Legislative Assembly at 12162 (23 May 1991) [hereinafter Vander Zalm].
19. In debating Alberta's first foray into balanced budget legislation, one opposition MLA described the legislation as "a Bill that accomplishes nothing". Alberta, Legislative Assembly of Alberta, Alberta Hansard at 1620 (24 June 1992) [hereinafter Mitchell].
20. The eleven include three separate pieces of legislation enacted by Alberta, legislation enacted by the federal government and by governments in British Columbia, Saskatchewan, Manitoba, Nova Scotia, New Brunswick, and the Northwest Territories, and legislation tabled but not yet enacted in Quebec.
21. For example, although the Nova Scotia
legislation is better characterized as spending control legislation,
when introduced, the government suggested that the legislation was,
in fact, balanced budget legislation. S. Thorne, "Nova Scotia
Promises Law to Balance Budgets" Fin. Post (7 April 1993)
6.
Furthermore, it should be noted that some of the statutes in question
also regulate issues such as tax increases and debt retirement.
However, for the purposes of this article only those provisions
pertaining to government spending and deficit reduction are assessed.
22. For references to numerous works on the topic, see, Part IV.A, infra.
23. Although this part is limited to constitutional and public choice rationales for balanced budget legislation, other normative arguments, such as the need for institutional responsibility, intergenerational equity, and economic prudence, could also be raised. For further details on these arguments, see, T. P. Seto, "Drafting a Federal Balanced Budget Amendment That Does What It Is Supposed To Do (And No More)" (1997) 106 Yale L.J. 1449.
24. J. Elster, Ulysses and the Sirens (Cambridge: University Press, 1979) at 90.
26. S. Holmes, "Precommitment and the Paradox of Democracy" in J. Elster and R. Slagstad, eds., Constitutionalism and Democracy (Cambridge: University Press, 1988) 195 at 226.
28. P.W. Hogg, Constitutional Law Of Canada, 3rd ed. (Toronto: Carswell, 1992) at 307 [hereinafter Hogg].
30. Reference Re Canada Assistance Plan, (1991) 83 D.L.R. (4th) 297 [hereinafter CAP Reference].
32. For recent analysis of manner and form requirements, see, R. Elliot, "Rethinking Manner and Form: From Parliamentary Sovereignty to Constitutional Values" (1991) 29 Osgoode Hall L.J. 215; K. Swinton, "Challenging the Validity of an Act of Parliament: The Effect of Enrolment and Parliamentary Privilege" (1976) 14 Osgoode Hall L.J. 345; and W.E. Conklin, "Pickin and Its Applicability to Canada" (1975) 25 U.T.L.J. 193.
33. CAP Reference, supra, note 30 at 322-23.
34. However, Professor Hogg notes that even where a statutory provision looks like a manner and form restriction, it may in fact be one of four other kinds of laws. These include a provision that restricts the substance of future legislation, which is ineffective; a provision that is "directory" rather than "mandatory"; a provision that is regarded as a rule of interpretation, which would be displaced by any clear statutory indication to the contrary; and a provision that is regarded as an "internal" rule of parliamentary procedure, which would not invalidate another statute. Hogg, supra, note 28 at 313-14.
35. D. C. Mueller, Public Choice II (Cambridge: University Press, 1989) at 179 [hereinafter Mueller].
38. A. Coyne, "Bouchard, Clark Forced to Eat Their Words on Deficit Cuts; Politicians Caught in a Lie a Poignant Sight" [Edmonton] Journal (2 November 1996) A15.
39. Mueller, supra, note 35 at 268.
42. Spending Control Act, S.C. 1992, c. 19 [hereinafter SCA].
43. SCA, s. 2. The definitional section provided that "emergency" included an urgent and critical situation caused by drought, earthquake, fire, flood, storm, act of intimidation or coercion, threat to the security of Canada, real or imminent use of force or violence, war, armed conflict, accident or other occurrence that is so severe as to constitute a matter of serious national concern.
47. Bill C-130, An Act to amend the Spending Control Act, 3d Sess., 34th Parliament, 1991-93. The Progressive Conservatives lost power before the bill could be enacted.
48. Canada, House of Commons, Budget Plan Including Supplementary Information and Notices of Ways and Means Motions, at 135-7 (6 March 1996).
49. Fiscal Update, supra, note 3.
50. For example, Professor Douglas Hartle testified before the Finance Standing Committee that the spending control program was little more than a public relations exercise given the loopholes the government had provided for itself. Canada, House of Commons, Standing Committee on Finance, "Consideration of the Proposed Spending Control Act", Issue No. 26 at 16 (26 November 1991).
51. The Act also required the government to annually disclose its compliance with the Act. SCA, s. 6. This provision was properly adhered to by both the Conservative and Liberal governments during the effective period of the Act.
52. Spending Control Act, S.A. 1992, c. S-21.7 [hereinafter Spending Control Act].
53. The Spending Control Act was repealed as a consequence of the enactment of the Deficit Elimination Act.
54. Alberta, Legislative Assembly of Alberta, Alberta Hansard at 1615 (24 June 1992).
56. Spending Control Act, s. 1(d).
57. Spending Control Act, s. 2.
58. Spending Control Act, s. 4.
59. Spending Control Act, s. 6.
60. Alberta, Legislative Assembly of Alberta, Alberta Hansard at 2656 (10 May 1993).
61. An Act Respecting the Reduction and Control of Operating and Capital Expenditures of the Province, S.N.S. 1993, c. 4 [hereinafter ECA].
62. Nova Scotia, House of Assembly, Debates and Proceedings at 2694 (18 November 1993).
63. Capital expenditures are defined as total capital expenditures. ECA, s. 3.
64. ECA, ss. 5 & 6. Furthermore, s. 8 permits an exception to the capital expenditure provision by allowing for a decrease of only 4 percent in two of the Act's first three years.
66. Taxpayer Protection Act, S.B.C. 1991, c. 6 [hereinafter TPA].
67. Although beyond the scope of this article, it should be noted that the taxation component of the legislation instituted a three year tax freeze on some, but not all, provincial taxes.
68. Vander Zalm, supra, note 18.
69. British Columbia, British Columbia Debates of the Legislative Assembly at 794 (15 April 1992).
70. Taxpayer Protection Repeal Act, S.B.C. 1992, c. 23.
75. Deficit Elimination Act, S.A. 1993, c. D-6.5 [hereinafter DEA].
76. Alberta, Legislative Assembly of Alberta, Alberta Hansard at 2788 (14 May 1993).
77. Alberta, Legislative Assembly of Alberta, Alberta Hansard at 2653 (10 May 1993).
84. "Emergency or disaster" were not, however, defined by the legislation. DEA, s. 6.
86. Bill 202, Deficit Elimination Amendment Act,1993 [hereinafter DEAA].
87. Alberta, Legislative Assembly of Alberta, Alberta Hansard at 35 (2 September 1993).
88. Alberta, Legislative Assembly of Alberta, Alberta Hansard at 269 (15 September 1993).
90. An Act Respecting the Balancing of the Ordinary Expenditures and Ordinary Revenues of the Province, S.N.B. 1993, c. B-0.1 [hereinafter NBBBL].
91. It should be noted, however, that this was not always the case. When the legislation was first introduced to the provincial legislature, the government spoke in terms of "requiring" a balanced budget. New Brunswick, Journals of the House of Assembly of the Province of New Brunswick at 4876 (8 December 1992).
93. The NBBBL contemplated extension of the Act as it provided for an indefinite number of "subsequent fiscal periods" of four years each. NBBBL, s. 1.
97. Balanced Budget and Debt Retirement Act, S.A. 1995, c. B-0.5 [hereinafter BBDRA].
98. Alberta, Legislative Assembly of Alberta, Alberta Hansard at 514 (13 March 1995).
99. See, e.g., "Alberta and its Deficit", The Globe and Mail (26 June 1996) A24.
100. BBDRA, s. 2. Note that "expenditures" and "revenues" are defined as all expenditures and revenues of the government, without exception. BBDRA, s. 1.
102. Though, as noted above, this too is subject to debate.
103. Although beyond the scope of this article, the rise in popularity of debt repayment legislation raises several issues of concern. In particular, while the logic behind deficit reduction can be readily appreciated, one wonders whether zero debt is a similarly appropriate goal. Further, the extent to which debt repayment should be legislatively tied to a prescribed schedule rather than rise and fall in accordance with general economic performance has not been conclusively addressed.
104. K. McKenzie and R. Kneebone, "The Logic - and the Law - of the Klein Debt Decision: Alberta Law Requires the Premier to put that $1.1 Billion Surplus Against the Debt. So Does Prudence" [Vancouver] Sun (26 June 1996) A13.
105. Deficit Elimination Act, S.N.W.T. 1995, c. 22 [hereinafter NWDEA].
106. Northwest Territories, Legislative
Assembly, Sessional Statement (13 December 1995)
107. Northwest Territories, Legislative
Assembly, Budget Address (2 May 1996)
113. A "deemed contravention" occurs where the deficit targets prescribed by the Act are not achieved. NWDEA, s. 5(2).
115. "N.W.T. To Eliminate Deficit" [Vancouver] Sun (28 January 1997) A3.
116. An Act to Maintain Fiscal Stability and Integrity in the Administration of the Finances of the Province of Saskatchewan, S.S. 1995, c. B-0.01 [hereinafter BBA].
117. Saskatchewan, Legislative Assembly, Debates and Proceedings at 2480 (18 May 1995).
122. In the event that such a set of circumstances transpires, the Act requires the government to present a special report identifying the events or circumstances and the financial implications of the events or circumstances. Note, however, that none of these terms are defined by the Act. BBA, s. 4(2).
126. The Balanced Budget, Debt Repayment and Taxpayer Protection and Consequential Amendments Act, S.M. 1995, [hereinafter BBTPA].
127. Manitoba, Legislative Assembly of Manitoba, Manitoba Hansard at 951 (15 March 1995).
132. MLA Wowchuk argued that "I think we could see the ministers actually punishing the poor and cutting programs in order to keep their budget in line just so they would not lose their salaries." Although that might not be the most politically astute course of action, Wowchuk's point of the potential for conflict of interest is a good one. Manitoba, Legislative Assembly of Manitoba, Manitoba Hansard at 3652 (4 October 1995).
133. See, e.g., L. Gunter, "Manitoba Tories Pull Off Major Economic Revolution" The [Edmonton] Journal (9 November 1995) at A18; R. Richardson, "Manitoba Leads on Balanced Budgets: Proposed Law Would be the Strongest in Canada" Fin. Post (31 August 1995) 9.
134. Section 5 of the Act provides only for audited financial statements to be released within six months of the completion of a fiscal year. Moreover, Section 6 of the Act mandates reports on compliance with the Act in the third quarter of the fiscal year. BBTPA, ss. 5 & 6.
135. A proposed amendment to the BBTPA, which would have created an exception to the balanced budget requirement in the event that:
was defeated by a voice vote in the Legislative Assembly. Manitoba, Legislative Assembly of Manitoba, Manitoba Hansard at 4318-9 (27 October 1995).
136. Bill 3, An Act Respecting the Elimination of the Deficit and a Balanced Budget, 2d Sess., 35th Leg. Quebec,1996 [hereinafter Quebec Bill].
138. S. Scott, "Law to Require Balanced Budget by 2000: But Loophole Allows Extension for Recession, Cut in Transfer Payments" [Montreal] Gazette (10 May 1996) A8.
139. D. MacPherson, "Anti-Deficit Law a Sham: Allows $1 Billion 'Margin of Error'" [Montreal] Gazette (16 October 1996) B3.
142. Quebec Bill, s. 8. It is interesting to note that if a surplus is achieved in a fiscal year, the government may exceed subsequent deficit targets by an equivalent amount. Quebec Bill, s. 9.
143. "Disaster" is not defined by the Act.
146. Although the comparative analysis conducted herein is limited to the three jurisdictions discussed, they are not the only jurisdictions to experiment with some form of balanced budget legislation. For example, Article 110 (1) of Germany's Constitution provides that "[t]he budget has to be balanced as regards revenue and expenditure". However, Article 115 allows for some flexibility in this regard as it provides that a balanced budget is defined as one where expenditures do not exceed the sum of revenues plus net borrowing for investment purposes. Moreover, Germany has also enacted legislation that grants the government greater discretion in running budgetary deficits. U.S. General Accounting Office (GAO), Deficit Reduction: Experiences of Other Nations (Washington: GAO/AIMD-95-30, December 1994) at 129-30 [hereinafter GAO].
Similarly, Japan's Public Finance Law of 1947, the basic budget law in Japan, originally permitted the government to issue bonds only if the funds were to be used for public works, investment, and governmental loans. This law was amended in 1975, however, to permit special deficit financing bonds. Ibid. at 150-1.
147. For an interesting review of the Canadian budgetary process, see, A.M. Maslove, M.J. Prince, & G.B. Doern, Federal and Provincial Budgeting (Toronto: University of Toronto Press, 1986)[hereinafter Maslove].
149. Notwithstanding the similar deficit history, the differing governing and budgetary approaches should be borne in mind when contrasting the two countries' experiences. For further details on the U.S. budgetary process, see, A. Wildavsky, The New Politics of the Budgetary Process (Berkeley: Harper Collins Publishers, 1988).
150. Advisory Commission on Intergovernmental Relations (ACIR), Fiscal Discipline In The Federal System: National Reform And The Experience Of The States (Washington: 1987) at 3.
152. N. Devins, "Budget Reform and the Balance of Powers" (1990) 31 William and Mary L. Rev. 993 [hereinafter Devins].
153. 2 U.S.C. Sec. 631-642 (1982) [hereinafter 1974 Budget Act].
154. E. Donald Elliott, "Regulating the Deficit After Bowshar v. Synar" (1987) 4 Yale J. on Reg. 317 at 356.
156. Bretton Woods Amendment Act, Pub. L. 95-435, 92 Stat. 1051 (codified as amended in scattered sections of 22 & 31 U.S.C.) [hereinafter BWAA].
158. See, e.g., A. Wildavsky, How To Limit Government Spending (Berkeley: University of California Press, 1980). For an excellent historical review, see, D.E. Kyvig, "Refining or Resisting Modern Government? The Balanced Budget Amendment to the U.S. Constitution" (1995) 28 Akron L. Rev. 97.
159. Deficit Reduction Act of 1984, Pub. L. 98-369, ss. 2101-2102, 98 Stat. 494, 1057 8.
160. The Balanced Budget and Emergency Deficit Control Act of 1985, Pub. L. 99-177, 99 Stat. 1037 (codified as amended in scattered sections of 2, 31, & 42 U.S.C.)[hereinafter GRH 1985].
161. K. Stith, "Rewriting the Fiscal Constitution: The Case of Gramm-Rudman Hollings" (1988) 76 Cal. L. Rev. 593 at 596.
Thomas Schelling refers to the imposition of such penalty clauses as "enforcing rules on oneself". Schelling notes that enforcement rules must make a violation unattractive through the attachment of credible penalties and simultaneously keep a violation from causing the whole enterprise to collapse. T. Schelling, "Enforcing Rules on Oneself" (1985) 1 J.L. Econ. & Org. 357. See also, P.W. Kahn, "Gramm-Rudman and the Capacity of Congress to Control the Future" (1986) 13 Hastings Con. L. Q. 185.
166. Wrobel, supra, note 8 at 9.
167. Bowsher v. Synar, 106 S. Ct. 3181 (1986). For further details on this case, see, E. Richards, "The Gutting of Gramm-Rudman: Implications for Bureaucrats, Budgets, and the Balance of Power" (1987) 22 N.E. L. Rev. 1.
169. The provision at issue directed the Comptroller General to prepare a report to the President and Congress specifying the program-by-program reductions necessary to prevent the prescribed maximum deficit level from being exceeded.
170. The Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987, Pub. L. 100-119, 101 Stat. 754.
171. Budget Enforcement Act of 1990, Pub. L. 101-508, 104 Stat. 1388-573 [hereinafter BEA].
172. For example, a recent attempt to win passage of a constitutional balanced budget amendment in the Senate failed by only one vote. "Politics This Week" The Economist (8 March 1997) 6.
173. J. Cassidy, "Ace in the Hole" 72 (15) New Yorker 36 (10 June 1996) at 37.
174. Line Item Veto Act, Pub. L. No. 104-130, 110 Stat. 1200 (1996).
175. For a good assessment of the merits of the line item veto, see, M.L. Stearns, "The Public Choice Case Against the Item Veto" (1992) 49 Wash. & Lee L. Rev. 385.
176. D.A. Kenyon & K.M. Benker, "Fiscal Discipline: Lessons from the State Experience" 37 Nat. Tax J. 433 [hereinafter Fiscal Discipline].
177. For further detail on the state experience with line item vetoes, see, Devins, supra, note 152.
178. It is argued by some that the greater the number of budget bills, the fewer the number of "objectionable" appropriations. This results from the fact that with fewer budget bills, legislators are more likely to accept objectionable appropriations for the overall good of approving the budget. W.M. Crain & J.C. Miller III, "Budget Process and Spending Growth" (1990) 21 William & Mary L. Rev. 1021 at 1025-7.
179. This requirement endeavours to minimize or eliminate the "uncontrollable" portion of the budget, such as permanent entitlements. At least 21 states require that all funds to be appropriated periodically. Ibid. at 1028.
180. 25 states have a constitutional balanced budget requirement. Ibid. at 1029.
181. 19 states have adopted a TEL. D.G. Bails, "The Effectiveness of Tax-Expenditure Limitations: A Re-evaluation" (1990) 49 (2) Am. J. of Econ. & Soc. 223 at 224 [hereinafter Bails].
182. J.V. Hagen, "A Note on the Empirical Effectiveness of Formal Fiscal Restraints" (1991) 44 J. of Pub. Econ. 199.
183. D.R. Kiewiet & K. Szakaly, "Constitutional Limitations on Borrowing: An Analysis of State Bonded Indebtedness" (1996) 12 J. of Law, Econ. & Org. 62.
184. See, e.g., Fiscal Discipline, supra, note 176; Bails, supra, note 181.
185. Bails, supra, note 181 at 235-6.
186. Treaty on European Union (Maastricht Treaty), 7 February 1992 [hereinafter Maastricht Treaty].
187. See, e.g., "Guess Who's Coming to EMU", The Economist (5 October 1996) 47-8; F. Barton, "Focus: Spain Budget Seen Falling Short of Deficit Target" AFX News (30 September 1996); "Italy's Visco Says Gov't Raised Budget Deficit Cuts to Avoid Exclusion From EMU" AFX News (30 September 1996).
188. Maastricht Treaty, Article 104c (1).
189. Maastricht Treaty, Article 104c (2). The specific percentage figures are contained in Article 1 of the Protocol on the Excessive Deficit Procedure, attached to the Maastricht Treaty.
Note, however, that the article provides some degree of flexibility. In particular, the article allows for an exception to be made where a state deficit or debt ratio "is sufficiently diminishing and approaching the [debt or deficit ratio] at a satisfactory pace". "Satisfactory" is not defined and is left to the discretion of the European Commission.
190. Maastricht Treaty, Article 104c (3) - (14).
191. In fact, given the stringent requirements prescribed by the Treaty, several EU countries are reportedly campaigning for a delay in the criteria's implementation. "Can EMU Be Left To Stew" The Economist (8 March 1997) 81 [hereinafter EMU Stew].
192. W. Buiter, G. Corsetti, & N. Roubini, "Excessive Deficits: Sense and Nonsense in the Treaty of Maastricht" (April 1993) 16 Econ. Policy 58 at 62.
193. M.J. Baun, An Imperfect Union: The Maastricht Treaty and the New Politics of European Integration (Boulder: Westview Press, 1996) at 70.
195. "Deficit Cuts, Southern Style" The Wall Street Journal-Europe (4 October 1996) 10.
196. "The Great Escape", The Economist (1 April 1995) 60 [hereinafter Great Escape].
197. Fiscal Responsibility Act 1994, 1994, No. 17 [hereinafter FRA].
199. "Prudent levels" are defined as a ratio of debt-to-GDP of 30 percent in the short term and 20 percent in the long-term, far below those established by the Maastricht Treaty. Great Escape, supra, note 196.
208. The stated goals of spending limitation legislation typically includes capping program spending. Deficit reduction is often perceived as an ancillary goal.
209. The consequences of non-compliance are relatively minor as they often entail an admission of failure to meet a political commitment, an unpalatable but not uncommon event.
210. Although given the difficulty of compliance, some are now campaigning to delay implementation of the criteria. EMU Stew, supra, note 191.
211. Maslove, supra, note 147.
212. A 1994 U.S. study of six countries' experiences with balanced budget legislation concluded that the key role in fiscal policy is not balanced budget requirements, but rather leadership that defines the benefits of deficit reduction and emphasizes themes that find broad public support. GAO, supra, note 146 at 8.