Cutback Budgeting

The process of cutback budgeting that occurs in an era of retrenchment differs significantly from budgeting in circumstances of revenue growth. Negotiating an agreement on a set of decrements is far more complicated than allocating increments: No one wants to be the first to propose a cut in another constituency's budget, and any coalition formed in support of a given package of cuts is inherently unstable. Still, several conditions appear to facilitate cutback budgeting: an overarching issue that elicits broad support for the total package of decrements; parliamentary procedures that limit voting to either for or against the entire package; and active, aggressive leadership. Whereas incremental budgeting may proceed in a routine and orderly fashion, the cutback process is always likely to involve conflict

Business · Economics · Accounting and Organizational Management

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