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Gramm-Rudman-Hollings Act

Subject History

Place Northern America » United States of America

DOI: 10.1111/b.9781577180999.1997.x


(12 December 1985) This law set a timetable for eliminating the federal budget deficit by 1991. It would force reductions in the deficit by equal amounts every year until the budget was balanced. If Congress and the president could not agree on spending cuts or tax increases to meet the ceilings, then the president could impose an automatic, across-the-board sequestration in all areas but entitlement programs. (On 7 July 1987, the Supreme Court ruled that one aspect of the deficit reduction procedures violated the separation of executive and legislative powers, but because the law included alternative procedures for making spending cuts, it continued in operation.) The law nevertheless failed to close the deficit because it was riddled with loopholes allowing leaders to avoid the automatic spending cuts. The budget was not balanced in fiscal year 1991, but rather ran a deficit of $268 billion. The law's failure led President William C linton to propose a heavy tax increase when he took office. ... log in or subscribe to read full text

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