GRAMM-RUDMAN-HOLLINGS ACT (1985), officially the Balanced Budget and Emergency Deficit Control Act, was championed by Republican U.S. Senators Philip Gramm of Texas and Warren Rudman of New Hampshire, and Democratic U.S. Senator Ernest Hollings of South Carolina. Passage of this bipartisan legislation was spurred by concern over large and growing federal deficits during the 1980s and the inability of Congress and the administration to raise taxes or cut spending sufficiently to resolve the problem. The act specified a schedule of gradually declining deficit targets leading to a balanced budget in 1991. It also specified that if the administration and Congress were unable to reach agreement on a budget deficit that came within $10 billion of the targets specified in the bill, automatic and across-the-board spending reductions would be implemented in all programs except social security, interest payments on the national debt, and certain low-income entitlements.
In the years following passage of the bill, Congress revised the deficit reduction schedule and the target year for balancing the federal budget. The most significant revision occurred in 1990, when Congress, faced with a deficit of $110 billion, enacted the Budget Enforcement Act, which cut the deficit substantially, made the deficit targets more flexible, and extended the target date for balancing the budget until 1995. The Omnibus Budget Reconciliation Act of 1993 established new limits on discretionary government spending for fiscal years 1996 through 1998.
In 1998 the budget deficit was eliminated and the federal government ran a surplus for the first time in more than a quarter of a century. Despite the balanced budgets of the late 1990s, federal deficits remain a major issue in American politics, particularly in light of the impending retirement of the baby-boom generation in the early twenty-first century.
Congressional Budget Office. The Economic and Budget Outlook: Fiscal Years 1995–1999. Washington, D.C.: Government Printing Office, 1994.
Hahm, Sung Deuk, et al. "The Influence of Gramm-Rudman-Hollings Act on Federal Budgetary Outcomes, 1986–1989." Journal of Policy Analysis and Management 11 (1992): 207–234.
Masters, Nicholas A. The Congressional Budget Process. Washington, D.C.: U.S. Government Printing Office, 1993.
Michael H.Spiro/a. g.