The complex reality of trust funds in the United States budget contradicts two arguments that are often simplistically advanced by social scientists. One is that precommitments are impossible to sustain through time in democratic politics because any prior law can always be repealed; the other offers the opposite idea that policy inheritances all but eliminate flexibility of choice in the present. My analysis of the experience with trust funds and earmarked taxes in American national budgeting reveals both the limits and possibilities of statutory mechanisms for binding future politicians.

As we have seen, the trust fund device gives a distinctive cast to policymaking. Trust fund financing empowers budget claimants to use the symbolically explosive language of moral rights and often affords designated programs a level of protection from normal processes of fiscal control. But trust funds have historically been weak instruments for prefunding. Government trust funds have compelled politicians to make good on long-term commitments, but they have not actually segregated the economic resources to pay for those commitments. Overall, the trust fund experience suggests that statutory precommitment devices work best when they are used to harness, rather than to override, the natural incentives of officeholders. While devices like trust funds do not rule out future political conflicts, they do shape what the debates are about.