Budget Enforcement Act of 1990

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The Budget Enforcement Act of 1990 (BEA) (Pub.L. 101–508, title XIII; 104 Stat. 1388-573; codified as amended at scattered sections of 2 U.S.C. & 15 U.S.C. § 1022) was enacted by the United States Congress as title XIII of the Omnibus Budget Reconciliation Act of 1990 to enforce the deficit reduction accomplished by that law by extending and revising the federal budget control procedures originally enacted by the Gramm–Rudman–Hollings Balanced Budget Act. The BEA created two new budget control processes: a set of caps on annually-appropriated discretionary spending, and a "pay-as-you-go" or "PAYGO" process for entitlements and taxes.

Legislative History[edit]

The predecessor to the BEA, Gramm-Rudman-Hollings, was originally enacted in 1985 and set overall deficit targets as a way to force Congress to enact future deficit reduction. If these deficit targets were not met, President was required issue a sequestration order to automatically reduce discretionary spending. In October 1990, the President's Office of Management and Budget projected a budget deficit for fiscal year 1991 that exceeded the statutory target; if Congress did not enact a deficit reduction plan, sequestration would have cut discretionary spending by about one-third.[1]

In November 1990, Congress and President George H.W. Bush agreed to a bipartisan deficit reduction deal that would achieve roughly $500 billion in savings over five years through a combination of spending cuts and tax increases.[1][2] These savings were enacted through the Omnibus Budget Reconciliation Act of 1990 and enforced by the budget procedures contained in Title XIII, the BEA.

Provisions[edit]

Unlike Gramm-Rudman-Hollings, which set overall deficit targets, the BEA implemented separate budget control controls for different areas of the budget. Specifically, the BEA

  • Introduced caps on discretionary spending, thus limiting the amount of funds Congress could provide in annual appropriations bills. Members of Congress could enforce these caps while a bill was under consideration by raising a point of order. If the caps were breached through enacted legislation, they would be enforced by a Presidential sequester order that would cut discretionary spending across the board.
  • Introduced statutory "pay-as-you-go" or PAYGO procedures to govern new legislation that impacted direct spending and/or revenues. PAYGO required that any new spending increase or tax cut be offset by spending cuts or tax increases elsewhere. The Office of Management and Budget would track such legislation throughout the fiscal year on a PAYGO scorecard, and if such spending increases and tax cuts were not completely offset, the President would issue a sequestration order that would cut non-exempt direct spending programs.
  • Extended and revised the deficit targets from Gramm-Rudman-Hollings, allowing for revisions to the deficit targets to reflect changes in the economy, ensuring that sequestration would not be triggered unless Congress breached the discretionary spending caps or violated PAYGO.[3]

The following excerpt from the Congressional Research Service Summary described the BEA in greater detail:[4]

Title XIII: Budget Enforcement - Budget Enforcement Act of 1990 - Subtitle A: Amendments to the Balanced Budget and Emergency Deficit Control Act of 1985 and Related Amendments - Part I: Amendments to the Balanced Budget and Emergency Deficit Control Act of 1985 - Amends the Balanced Budget and Emergency Deficit Control Act of 1985 (Gramm-Rudman-Hollings Act) to provide for the enforcement of the deficit reduction assumed in House Concurrent Resolution 310 (101st Congress) and the deficit targets for FY 1991 through 1995. Requires enforcement to be implemented through sequestration applied in the following order: (1) discretionary spending levels assumed in such resolution; (2) the requirement that legislation increasing spending or decreasing revenues be on a pay-as-you-go basis; and (3) the deficit targets specially set forth in the Congressional Budget and Impoundment Control Act of 1974.

Authorizes the President to invoke sequestration within 15 calendar days after the Congress ends a session to eliminate a budget-year breach within any category. Establishes a procedure for within-session sequestration. Sets forth the methods of adjusting discretionary spending limits.

Sets forth sequestration procedures to enforce pay-as-you-go requirements and deficit targets.

Rescinds the FY 1991 sequester and restores the sequestered amounts.

Revises the timetable for sequestration reports and orders.

Suspends sequestration procedures in the event of war or low growth.

Subsequent Legislation[edit]

The BEA was extended by the Omnibus Reconciliation Act of 1993, and again by the Balanced Budget Act of 1997.[5] It expired in 2002, but the Democratic Majority adopted some of its principles, known as PAYGO, or Pay-As-You-Go, in their rules during the 110th Congress. This was passed as H. RES. 6[6] on January 4, 2007.[7] Statutory PAYGO was reinstated by the Statutory Pay-As-You-Go Act of 2010, which Barack Obama signed on February 12, 2010.[8] Discretionary spending caps, as well as deficit reduction targets, were reintroduced by the Budget Control Act of 2011.[9]

Further reading[edit]

References[edit]

  1. ^ a b Megan Suzanne Lynch, Statutory Budget Controls in Effect Between 1985 and 2002, Congressional Research Service, R41901 (2011), https://fas.org/sgp/crs/misc/R41901.pdf.
  2. ^ "A Budget Deal That Did Reduce the Deficit". The Fiscal Times. Retrieved 2018-05-23. 
  3. ^ Megan Suzanne Lynch, Statutory Budget Controls in Effect Between 1985 and 2002, Congressional Research Service, R41901 (2011), https://fas.org/sgp/crs/misc/R41901.pdf.
  4. ^ https://www.congress.gov/bill/101st-congress/house-bill/5835Public Law No: 101-508 CRS Summary
  5. ^ Megan Suzanne Lynch, Statutory Budget Controls in Effect Between 1985 and 2002, Congressional Research Service, R41901 (2011), https://fas.org/sgp/crs/misc/R41901.pdf.
  6. ^ "Archived copy" (PDF). Archived from the original (PDF) on 2010-10-28. Retrieved 2010-12-31.  110th Congress 1st Session H. RES. 6 Adopting the Rules of the House of Representatives for the One Hundred Tenth Congress.
  7. ^ House Adopts Pay-as-You-Go Rules - washingtonpost.com
  8. ^ "Archived copy" (PDF). Archived from the original (PDF) on 2010-08-04. Retrieved 2010-08-28. 
  9. ^ Megan S. Lynch, Sequestration as a Budget Enforcement Process: Frequently Asked Questions, R42972, Congressional Research Service (2015), https://fas.org/sgp/crs/misc/R42972.pdf.