Statutory Budget Controls in Effect Between 1985 and 2002

Megan Suzanne Lynch
Analyst on Congress and the Legislative Process

Between 1985 and 2002, several statutory budget controls were enacted to reduce the budget deficit. Chief among these were the Balanced Budget and Emergency Deficit Control Act of 1985 and the Budget Enforcement Act of 1990. The mechanisms included in these acts sought to supplement and modify the existing budget process, and also added statutory budget controls, in some cases seeking to require future deficit reduction legislation, and in some cases seeking to preserve deficit reduction achieved in accompanying legislation.

The Balanced Budget and Emergency Deficit Control Act of 1985, known as the Gramm- Rudman-Hollings Act, was passed during a period of growing deficits, as part of legislation to increase the debt limit. The act did not include legislation that reduced the deficit, but instead established a statutory requirement for the gradual reduction and elimination of budget deficits over a six-year period. The act specified annual deficit limits and set forth a specific process for the cancellation of spending by executive order, known as a sequester order, to enforce the annual deficit limit in the event that compliance was not achieved through legislation. The deficit targets and timetable were modified and extended in the Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987.

The Budget Enforcement Act of 1990 was enacted as part of a budget reconciliation bill that reduced the deficit. The act replaced the focus on deficit targets under Gramm-Rudman-Hollings with a two-pronged procedural approach to budgetary enforcement: (1) the implementation of pay-as-you-go (PAYGO) procedures to control new direct spending and revenue legislation and (2) discretionary spending limits to control the level of discretionary spending. In contrast to Gramm-Rudman-Hollings, these budget control mechanisms sought to preserve the deficit reduction achieved in the accompanying legislation rather than force subsequent legislation. As originally enacted, these mechanisms were to be in force for a period of five years, but they were modified and extended twice. In 1993, they were extended through 1998 in the Omnibus Budget Reconciliation Act of 1993, and in 1997, they were extended through 2002 in the Budget Enforcement Act of 1997.


Date of Report: July 1, 2011
Number of Pages: 15
Order Number: R41901
Price: $29.95

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