Federal Budget and Costing Office

Federal Budget and Costing Office
Formed	22.IV.1760 AN
Preceding agency	Federal Budget Office
Type	Independent fiscal institution
Jurisdiction	Nouvelle Alexandrie
Director	Ingrid Halvorsen
Parent agency	Reports to the Cortes Federales

The Federal Budget and Costing Office, called the Costing Office in the statute that created it, is an independent fiscal institution of Nouvelle Alexandrie. The Costing Office costs the federal budget, prepares an independent estimate of the cost and effect of every major bill before the Cortes Federales, and evaluates the programs of the Federation by their results. It is independent of the Government and reports to the Cortes, and it is nonpartisan: it costs and evaluates the public finances but makes no policy recommendation and advocates no position of its own, leaving the choice of policy to the Cortes.

The Office was established by Article 32 of the General Appropriations and Taxation Act, 1760, the first budget of the 14th Cortes Federales and of the Government of the Federal Accord, and it took effect with the Act on 22.IV.1760 AN. It is one of the two independent bodies of the standing fiscal framework that the 1760 budget put in the place of the temporary debt-brake of the recovery. Where the Federal Debt Review Board reports on the path of the public debt and on compliance with the fiscal rules, the Federal Budget and Costing Office costs the budget and the Government's bills and judges whether the Federation's programs achieve their purpose.

Establishment

The Office was created as part of the fiscal settlement of the General Appropriations and Taxation Act, 1760, the confidence document of the coalition of the Alliance for a Just Nouvelle Alexandrie, the Civic Governance Alliance, and the Federal Consensus Party under Premier Marcos Ferreira Gonçalves. The budget repealed the rigid debt-brake of the recovery Act, whose emergency authorities had expired at the close of 1759 AN, and replaced it with a standing framework under which the Government balances its current budget over the economic cycle and may borrow to finance net public investment. The framework was placed under two independent bodies: the Federal Debt Review Board, continued and extended by the Act, and the Federal Budget and Costing Office, established by it.

Predecessor and fiscal reform

The Office reconstitutes the Federal Budget Office, which the Federal Budget Control and Accountability Act, 1746 had established as an office of the Cortes: a nonpartisan agency, barred by that Act from advocating any policy position, headed by a Director on a fixed term of six years, that gave the chambers independent fiscal analysis and estimated the costs and benefits of the bills before them. The 1760 Act carries that office forward and widens it, adding to the costing of legislation the costing of the whole budget, the referred design of new taxes, and the evaluation of federal programs by their results, while keeping its predecessor's confinement to analysis rather than advocacy.

The reform belongs to a longer line by which the Federation had built the scrutiny of its public finances into standing institutions rather than fixed limits. The Public Debt Management Act of 1716 first governed the management of the federal debt, and the abolition of the national debt ceiling in 1743 AN created the Federal Debt Review Board to watch the debt in a ceiling's place. The Federal Budget Control and Accountability Act, 1746 then created the Federal Budget Office to serve the chambers, and the 1760 budget gathered this work into the standing fiscal framework and its two independent bodies.

Origins in the Federal Accord

The Office gives statutory form to a commitment of the Civic Governance Alliance, which had made evidence-tested government the first of the seven principles of its 1759 AN campaign, K'anchay Yachay or Radiant Knowledge. The party had proposed "a small independent costing office to serve the whole Assembly" and that "every major bill carry an independent note setting out its costs and expected effects." The office would make a standing rule of the scrutiny that Treasury Secretary Tomás Iñiguez had secured bill by bill: the grid-costing and staged review fixed to the Cascade Reactor Deployment Act, 1757, and the published costings and separate disbursement votes attached to the National Resilience Fund Act, 1758. Under the Federal Accord coalition agreement, 1759 the Civic Governance Alliance took the Treasury, and the office it had promised was written into the first budget its Secretary drew up.

The same commitment shaped the budget's most expensive choices. Rather than legislate them at once, the Act referred its two costliest commitments to the Office for design and costing before either is brought forward in a later budget: the taxation of great fortunes, to which the Alliance for a Just Nouvelle Alexandrie was committed, and a universal child wealth account, both to be reported to the Cortes not later than the presentation of the budget for 1761 AN. Of the referral, Vice-Premier Elena Svensson said, "We will not ask the country to trust numbers we have not shown it."

The Office rests on the transparency principle of the Proclamation of Punta Santiago, whose Article 16 provides that the citizen has a right to know the uses to which taxation is put. The Act names the independence of the Federal Budget and Costing Office, together with the quarterly reports of federal disbursement by Region, as giving effect to that right.

Functions

The Office has four standing functions under the Act: to cost the budget, to attach an evidence note to legislation, to carry out the costings referred to it, and to evaluate the Federation's programs.

Costing the budget and legislation

The Office must lay before the Cortes an independent costing of each budget, and it must attach to every major bill before the Cortes an independent note estimating the bill's cost and its effect. The evidence note is the Office's principal instrument in the ordinary business of the Cortes, placing an independent estimate beside each major measure as it is considered.

Referred costings

The Act refers three pieces of design and costing to the Office. Two are the budget's deferred commitments: an annual tax on individual wealth above a high threshold, and a universal child wealth account, an endowment opened for every child at birth and weighted toward children of fewer means. Both are to be designed, costed, and reported to the Cortes not later than the presentation of the budget for 1761 AN. The third is technical and carries no fixed date: the Office is to design the shift of the idle lands tax and the real estate tax toward the assessed value of land rather than of the buildings upon it, and to report to the Cortes.

Evaluation of programs

The Office must evaluate the programs of the Federation by their results and report to the Cortes where a program does not achieve its purpose, in keeping with the Parap Principles. Two of the Act's measures are placed expressly under this evaluation: the rolling review of departmental expenditure, which the Office conducts with the Department of Administrative Coordination and Efficiency over not fewer than three departments each year, and the pilot of sectoral collective bargaining, which may not be continued or made general except on the Office's evaluation of its effect on employment, on wages, and on prices.

Governance and independence

The head of the Office, its Director, is appointed by the Speaker of the Federal Assembly on the recommendation of the Budget and Finances Committee, and holds office for a fixed term of six years. The Director may be removed only by a two-thirds vote of the Federal Assembly for cause. The Office reports to the Cortes and is independent of the Government.

The reconstitution changed the way the Director is chosen. Under the 1746 Act the Director of the Federal Budget Office had been appointed jointly by the Speaker of the Federal Assembly and the Lord President of the Chamber of Peers, removable for cause by resolution of both chambers; the 1760 Act gives the appointment to the Speaker alone, on the recommendation of the Budget and Finances Committee, and the removal to the Federal Assembly.

The fixed term and the protected removal are the Act's guarantees of the Office's independence. They follow the pattern the Act applies to the members of the Federal Debt Review Board, who likewise hold office for a fixed term of six years and may be removed only by a two-thirds vote of the Federal Assembly for cause. The two bodies are constituted by different routes: the Federal Budget and Costing Office is appointed through the Speaker on the recommendation of the Budget and Finances Committee, while the members of the Federal Debt Review Board are nominated by the Premier in consultation with the Leader of the Opposition and confirmed by the Federal Assembly.

Directors

The Office and its predecessor, the Federal Budget Office, have been headed by the following Directors.

Directors of the Federal Budget Office, 1746 AN to 1760 AN

No.	Director	Term	Notes
1	Adèle Marchand	1746 AN to 1752 AN	Inaugural Director, appointed under the Federal Budget Control and Accountability Act, 1746
2	Matthias Renner	1752 AN to 1760 AN	Reappointed 1758 AN; term ended when the office was reconstituted as the Federal Budget and Costing Office

Directors of the Federal Budget and Costing Office, 1760 AN to present

No.	Director	Term	Notes
1	Ingrid Halvorsen	Since 1760 AN	Inaugural Director; appointed by the Speaker of the Federal Assembly on the recommendation of the Budget and Finances Committee

See also

• Federal Budget Office of Nouvelle Alexandrie
• Federal Debt Review Board
• Federal budget of Nouvelle Alexandrie
• General Appropriations and Taxation Act, 1760
• Nouvelle Alexandrie Statistics Bureau