When economic conditions permit, states should accumulate budget reserves adequate to maintain services during recessions.
Deficit-reduction efforts should avoid cuts in programs that serve low- and moderate-income populations.
States should not tie essential spending programs to unstable revenue sources.
The federal government must strive for long-term fiscal balance.
At the federal level, the two categories of budgetary expenditures are entitlement and discretionary spending.
Efforts to reform entitlement spending should recognize the following factors:
Block grants and unfunded mandates are two government budgetary practices that can have significant implications for lower levels of government.
Higher levels of government should provide adequate resources when mandating functions to lower levels of government.
Services should be implemented and operated by the level of government that can most appropriately and efficiently deliver them.
Federal and state governments have tried to change budget rules to control government spending. Budget rules have also been used to impose fiscal discipline.
Tax and spending decisions should be the purview of the legislative branch.