Gramm-Rudman-Hollings Balanced Budget Act
Encyclopedia
The Gramm-Rudman-Hollings Balanced Budget and Emergency Deficit Control Act of 1985 (99th Congress, S.1702, , title II, December 12, 1985, ) and Budget and Emergency Deficit Control Reaffirmation Act of 1987 (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." In reality, after passage of this bill the smallest unified budget deficit of the Reagan era was -$155.178 billion in FY88.
Senators Ernest Hollings
(D-South Carolina
), Warren Rudman
(R-New Hampshire
) and Phil Gramm
(R-Texas
) were the chief sponsors. The Acts were aimed at cutting the budget deficit, which at the time was the largest in history. They provided for automatic spending cuts (called "sequesters") if the deficit exceeded a set of fixed deficit targets. The House passed the bill 271-154 and the Senate 61-31, and President Ronald Reagan
signed the bill on December 12, 1985. 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 36-35, and the House approved the Senate's first amendment by voice vote but rejected the second amendment; the Senate receded that amendment by voice vote. President Reagan signed the bill on August 21. The process for determining the amount of the automatic cuts was found unconstitutional in the case of Bowsher v. Synar
, and Congress enacted a reworked version of the law in 1987. Gramm-Rudman failed, however, to prevent large budget deficits. The Budget Enforcement Act of 1990
supplanted the fixed deficit targets.
Balanced budgets did not actually emerge until the late 1990s when budget surpluses (not accounting for liabilities to the Social Security Trust Fund
) emerged.
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
Senator Phil Gramm
Phil Gramm
William Philip "Phil" Gramm is an American economist and politician, who has served as a Democratic Congressman , a Republican Congressman and a Republican Senator from Texas...
of Texas
Texas
Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
, "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." In reality, after passage of this bill the smallest unified budget deficit of the Reagan era was -$155.178 billion in FY88.
Senators Ernest Hollings
Ernest Hollings
Ernest Frederick "Fritz" Hollings served as a Democratic United States Senator from South Carolina from 1966 to 2005, as well as the 106th Governor of South Carolina and Lt. Governor . He served 38 years and 55 days in the Senate, which makes him the 8th-longest-serving Senator in history...
(D-South Carolina
South Carolina
South Carolina is a state in the Deep South of the United States that borders Georgia to the south, North Carolina to the north, and the Atlantic Ocean to the east. Originally part of the Province of Carolina, the Province of South Carolina was one of the 13 colonies that declared independence...
), Warren Rudman
Warren Rudman
Warren Bruce Rudman is an American attorney and Republican politician who served as United States Senator from New Hampshire between 1980 and 1993...
(R-New Hampshire
New Hampshire
New Hampshire is a state in the New England region of the northeastern United States of America. The state was named after the southern English county of Hampshire. It is bordered by Massachusetts to the south, Vermont to the west, Maine and the Atlantic Ocean to the east, and the Canadian...
) and Phil Gramm
Phil Gramm
William Philip "Phil" Gramm is an American economist and politician, who has served as a Democratic Congressman , a Republican Congressman and a Republican Senator from Texas...
(R-Texas
Texas
Texas is the second largest U.S. state by both area and population, and the largest state by area in the contiguous United States.The name, based on the Caddo word "Tejas" meaning "friends" or "allies", was applied by the Spanish to the Caddo themselves and to the region of their settlement in...
) were the chief sponsors. The Acts were aimed at cutting the budget deficit, which at the time was the largest in history. They provided for automatic spending cuts (called "sequesters") if the deficit exceeded a set of fixed deficit targets. The House passed the bill 271-154 and the Senate 61-31, and President Ronald Reagan
Ronald Reagan
Ronald Wilson Reagan was the 40th President of the United States , the 33rd Governor of California and, prior to that, a radio, film and television actor....
signed the bill on December 12, 1985. On August 12, 1986, Representative Dan Rostenkowski
Dan Rostenkowski
Daniel David "Dan" Rostenkowski was a United States Representative from Illinois, serving from 1959 to 1995. Raised in a blue-collar neighborhood on the Northwest Side of Chicago, Rostenkowski rose to become one of the most powerful legislators in Washington. He was a member of the Democratic Party...
introduced the Balanced Budget and Emergency Deficit Control Reaffirmation Act. The Senate passed the bill with two amendments 36-35, and the House approved the Senate's first amendment by voice vote but rejected the second amendment; the Senate receded that amendment by voice vote. President Reagan signed the bill on August 21. The process for determining the amount of the automatic cuts was found unconstitutional in the case of Bowsher v. Synar
Bowsher v. Synar
Bowsher v. Synar, 478 U.S. 714 struck down the Gramm-Rudman-Hollings Act as an unconstitutional usurpation of executive power by Congress because the law empowered Congress to terminate the United States Comptroller General for certain specified reasons, including "inefficiency, 'neglect of duty,'...
, and Congress enacted a reworked version of the law in 1987. Gramm-Rudman failed, however, to prevent large budget deficits. The Budget Enforcement Act of 1990
Budget Enforcement Act of 1990
The Budget Enforcement Act of 1990 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 and revise the budget control process of the Federal Government...
supplanted the fixed deficit targets.
Balanced budgets did not actually emerge until the late 1990s when budget surpluses (not accounting for liabilities to the Social Security Trust Fund
Social Security Trust Fund
In the United States, the Social Security Trust Fund is a fund operated by the Social Security Administration into which are paid contributions from workers and employers under the Social Security system and out of which benefit payments to retirees, survivors, and the disabled, and general...
) emerged.
Further reading
- Library of Congress entry for S.1702, 99th Congress, http://thomas.loc.gov/cgi-bin/bdquery/D?d099:38:./temp/~bd96Vi::|/home/LegislativeData.php?n=BSS;c=99|
- William G. Dauster, Budget Process Law Annotated: 1993 Edition. Washington, D.C.: Government Printing OfficeUnited States Government Printing OfficeThe United States Government Printing Office is an agency of the legislative branch of the United States federal government. The office prints documents produced by and for the federal government, including the Supreme Court, the Congress, the Executive Office of the President, executive...
, 1993. ISBN 0-16-041726-0 - Margaret H. McDermott and Bernard D. Reams, Deficit Control and the Gramm-Rudman-Hollings Act: The Legislative History of the Balanced Budget and Emergency Deficit Control Act of 1985 (P.L. 99-177) (W.S. Hein, 1986).
- Library of Congress: Bill Summary & Status 99th Congress (1985 - 1986) H.J.RES.372 entitled "Balanced Budget and Emergency Deficit Control Act of 1985": http://thomas.loc.gov/cgi-bin/bdquery/z?d099:H.J.RES.372: