Gramm–Rudman–Hollings Balanced Budget Act

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Gramm–Rudman–Hollings Balanced Budget Act
Great Seal of the United States
Other short titles Gramm-Rudman-Hollings Deficit Reduction Act of 1985
Long title A joint resolution increasing the statutory limit on the public debt.
Nicknames Balanced Budget and Emergency Deficit Control Act of 1985
Enacted by the 99th United States Congress
Effective December 12, 1985
Citations
Public Law 99-177
Statutes at Large 99 Stat. 1037
Codification
Acts amended Congressional Budget and Impoundment Control Act of 1974
Titles amended 2 U.S.C.: Congress
U.S.C. sections amended 2 U.S.C. ch. 20 § 901
Legislative history
Major amendments

The Gramm-Rudman-Hollings Balanced Budget and Emergency Deficit Control Act of 1985[1] and the Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987[2] (both often known as Gramm-Rudman) were, according to U.S. Senator Phil Gramm of Texas, "the first binding constraint imposed on federal spending, and its spending caps have become part of every subsequent U.S. budget. Together with a rapidly growing economy it produced the first balanced federal budget in a quarter of a century."[this quote needs a citation]

The Acts were named after Senators Phil Gramm (R-Texas), Warren Rudman (R-New Hampshire) and Ernest Hollings (D-South Carolina) who were their chief sponsors.

Provisions of Acts[edit]

The term "budget sequestration" was first used to describe a section of the Gramm-Rudman-Hollings Deficit Reduction Act of 1985.

The Acts aimed to cut the United States federal budget deficit, which at the time, in dollar term, was the largest in history. The Acts provided for automatic spending cuts ("cancellation of budgetary resources", called "sequestration") if the total discretionary appropriations in various categories exceed in a fiscal year the budget spending thresholds.[3] That is, if Congress enacts appropriation bills providing for discretionary outlays in each fiscal year that exceed the budget totals, unless Congress passes another budget resolution increasing the budget amount, an across-the-board spending cut in discretionary expenditure is automatically triggered on these categories, affecting all departments and programs by an equal percentage. The amount exceeding the limit is held back by the Treasury and not transferred to the agencies specified in the appropriation bills.[4]

Under the 1985 Act, allowable deficit levels were calculated for the eventual elimination of the federal deficit. If the budget exceeded the allowable deficit, across-the-board cuts were required. Directors of the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO) were required to report to the Comptroller General regarding their recommendations for how much must be cut. The Comptroller General then evaluated these reports, made his own conclusion, and gave a recommendation to the President, who was then required to issue an order effecting the reductions required by the Comptroller General unless Congress made the required cuts by other ways within a specified amount of time.

The Comptroller General is nominated by the President from a list of three people recommended by the presiding officers of the House and Senate. He is removable only by impeachment or a joint resolution of Congress, which requires majority votes in both houses and is subject to a Presidential veto. Congress can give a number of reasons for this removal, including "inefficiency," "neglect of duty," or "malfeasance."

Passage of law[edit]

The House passed the 1985 bill by a vote of 271-154 and the Senate by 61-31, and President Ronald Reagan signed the bill on December 12, 1985.[5]

On August 12, 1986, Representative Dan Rostenkowski introduced the Balanced Budget and Emergency Deficit Control Reaffirmation Act. The Senate passed the bill with two amendments by a vote of 36-35, and the House approved the Senate's first amendment by voice vote but rejected the second amendment. The Senate rescinded that amendment by voice vote and President Reagan signed the bill on August 21.[6]

Legacy[edit]

The process for determining the amount of the automatic cuts was found unconstitutional in the case of Bowsher v. Synar, (478 U.S. 714 (1986)) as an unconstitutional usurpation of executive power by Congress because the Comptroller General's function under the Act is the "very essence" of execution of the laws, which is beyond the power of a legislative body. It was noted: "Once Congress passes legislation, it can influence only its execution by passing new laws or through impeachment."

Congress enacted a reworked version of the law in the 1987 Act.[7] Gramm-Rudman failed, however, to prevent large budget deficits.

The Budget Enforcement Act of 1990 supplanted the fixed deficit targets, which replaced sequestration with a PAYGO system, which was in effect until 2002.

Balanced budgets did not actually emerge until the late 1990s when budget surpluses (not accounting for liabilities to the Social Security Trust Fund) emerged.[citation needed]

See also[edit]

References[edit]

  1. ^ 99th Congress, S.1702, Pub.L. 99–177, title II, December 12, 1985, 99 Stat. 1038
  2. ^ Pub.L. 100–119, title I, Sept. 29, 1987, 101 Stat. 754, 2 U.S.C. § 900
  3. ^ 2 U.S.C. § 900 - Statement of budget enforcement through sequestration; definitions
  4. ^ "A Glossary of Political Economy Terms". Department of Political Science, Auburn University. 2005. Retrieved November 6, 2012. 
  5. ^ "Bill Summary & Status, 99th Congress (1985 - 1986), H.J.RES.372, All Congressional Actions". THOMAS. Library of Congress. Retrieved December 17, 2010. 
  6. ^ "H.R.5395, All Congressional Actions". THOMAS. Library of Congress. Retrieved December 17, 2010. 
  7. ^ "H.J.RES.324 All Congressional Actions". THOMAS. Library of Congress. Retrieved December 17, 2010. 

Further reading[edit]