The Retraction of Policy Benefits across US Federal Agencies: Programmatic Cutbacks and Executive Control of US Federal Grant Retrenchments

• Published date: 01 July 2022
• Author: George A. Krause,Matthew Zarit
• Date: 01 July 2022
• DOI: http://doi.org/10.1111/puar.13310

682 Public Administration Review • July | A ugus t 202 2

Abstract: This study analyzes an important and overlooked aspect of cutback budgeting affecting US federal

agencies − reductions to existing US federal grant awards. Because presidents face incentives for both executive

accountability and effective administration, we predict that public agencies which are more responsive to

presidential goals, as well as those led by more capable agency heads, shall experience less severe grant retrenchments.

Statistical analysis of approximately 745,000 grant retrenchments for the 1988–2008 period reveals that the

distribution of these programmatic cutbacks is consistent with enhancing executive accountability, while also

favoring policy effectiveness. Agencies led by chief executives with considerable managerial-specific expertise are

associated with only increased reductions in grant retrenchments for small programmatic cuts to existing grants.

These findings illustrate how presidents’ strategy of executive administration seeks to limit programmatic cutbacks

for more responsive federal agencies, and also for public organizations whose leaders exhibit higher levels of policy-

specific expertise.

Evidence for Practice

• Grant retrenchments are both a common and regular source of budgetary cutbacks implemented by US

federal agencies.

• Presidents have both formal and informal levers to shape the allocation of grant retrenchments for purpose of

both executive accountability and effective bureaucratic leadership.

• The allocation of grant retrenchments reflects presidents’ desire to enhance executive branch coordination by

limiting downstream administrative problems for those agencies deemed responsive to administration policy

objectives at the expense of less politically responsive agencies.

• The managerial skills of bureaucratic leaders has little bearing on the allocation of programmatic cutbacks to

their own agencies.

• The organizational complexity of federal agencies can mitigate large-scale grant retrenchments.

Many federal agencies face the daunting task

of administering programmatic cutbacks

to beneficiaries of US federal grant awards.

These grant retrenchments involve rescinding a

portion of these pre-existing funding commitments.

In legal terms, grant retrenchments constitute

“any change in Federal Government’s financial

obligation or contingent liability in existing assistance

transaction” (FAADS Users’ Guide for Fiscal Year 2008:

9).1 Grant retrenchments are of vital interest for

students of governance since nearly 25 percent of all

US federal discretionary grants awarded are partially

rescinded while the grant remains operable, excluding

the elimination of unspent surplus funds.

Figure1 displays grant retrenchments from a sample

of 17 major US federal agencies that constitute

almost 66 percent of all grant retrenchment activities

during the 1988–2008 period. Unlike other forms

The Retraction of Policy Benefits across US Federal Agencies:

Programmatic Cutbacks and Executive Control of US Federal

Grant Retrenchments

George A. Krause Matthew Zarit

University of Georgia Slippery Rock University

Earlier versions of this paper were presented at the 2020 annual

meetings of the Southern Political Science Association, San

Juan, Puerto Rico, January 9–11, the 2018 annual meetings of

the American Political Science Association, Boston, MA, August

30–September 2, the 2018 annual meetings of the Midwest

Political Science Association, Chicago, IL, April 5–8, Empirical

Study of Agency Policymaking Conference, LaFollette School of

Public Affairs, University of Wisconsin-Madison, March 23, 2018,

and the 2018 annual meetings of the Southern Political Science

Association, Hyatt Regency Hotel, New Orleans, Louisiana,

January 4–6. We thank Will Howell, Karen Hult, Bert Rockman,

Chuck Shipan, Joel Sievert, Phil Waggoner, and the anonymous

PAR referees for helpful comments at various stages of this

project. We also thank Doug Kriner for generously providing

his matching codes for congressional districts and counties in

his published research with Andrew Reeves. We also gratefully

acknowledge Anne Joseph O’Connell for her contributions to

the joint work with the lead author in the creation of these

bureaucratic leader latent trait measures employed in this study.

Data replication file materials for this article can be obtained from

the first author’s (George A. Krause) Harvard Dataverse page

(https://doi.org/10.7910/DVN/AIICA1).

Research Article

Matthew Zarit is an instructor in

the Political Science and Nonprofit

Management, Empowerment and Diversity

Studies departments at Slippery Rock

University. His research focuses on how

organizational hierarchy and outside forces

influence decision-making in bureaucracies.

He is the recipient of the 2019 George C.

Edwards III Dissertation Award for the best

dissertation in presidency research from the

American Political Science Association.

Email: matthew.zarit@sru.edu

George A. Krause is the Alumni

Foundation Distinguished Professor of

Public Administration in the Department

of Public Administration and Policy at

the University of Georgia. His public

administration research program primarily

focuses on issues of governance, executive

administration, and both the development

and application of organizational theories

applied to the study of governmental

institutions. He is the recipient of the 2012

Herbert A. Simon Award for Significant

Scholarly Contributions to the Scientific

Study of Bureaucracy.

Email: gkrause@uga.edu

Public Administration Review,

Vol. 82, Iss. 4, pp. 682–691. © 2020 by

The American Society for Public Administration.

DOI: 10.1111/puar.13310.