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Gramm Rudman: Stopping the Overdrafts
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10578 |
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Section : |
CURRENT ISSUES
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| Issue
Date : |
2 / 1986 |
1,448 Words |
| Author
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Dan Mitchell
Dan Mitchell is a doctoral candidate in the field of economics
at George Mason University, Fairfax, Virginia. |
Perhaps the most important piece of legislation produced in 1985 was the Gramm-Rudman Hollings deficit reduction bill. More widely known as simply Gramm-Rudman, the new law mandates systematic reductions in the deficit leading to a balanced budget by 1991.
With the exception of its primary backers, Gramm-Rudman was not hailed as great, or even good, legislation. President Reagan's support was only tentative; the White House worried about possible defense cutbacks. Many senators and representatives called it the least worst alternative. Political commentators have called the bill "Washington at its worst."
If Gramm-Rudman is so unpopular, why did it pass? The figures on the deficit answer this question best. Yearly budget deficits of $200 billion have aroused critical attention and concern from almost all shades of the political spectrum. The national debt, the accumulation of past deficits, recently topped $2 trillion. The sheer magnitude of the figures involved made it impossible for Congress to ignore the situation, yet, prior to Gramm-Rudman, no seriously considered proposals were introduced to address the budget crisis.
Senators Phil Gramm (R-Texas), Warren Rudman (R-New Hampshire), and Ernest "Fritz" Hollings (D-South Carolina) broke the congressional paralysis in October by introducing their bill. The key provision of Gramm-Rudman automatically cuts spending from non-exempted categories if Congress fails to produce a budget meeting deficit reduction targets. The initial proposal was very broad. Social Security and interest on the national debt were the only major parts of the budget protected. Liberals in the House of
... (1991 of 8858 Characters)
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