Gramm-Rudman-Hollings Balanced Budget Act

The Gramm-Rudman-Hollings Balanced Budget and Emergency Deficit Control Act of 1985 (title II, s December 12, 1985, , ) and Budget and Emergency Deficit Control Reaffirmation Act of 1987 (title I, Sept. 29, 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."

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 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; however, even these budgets were not balanced when including "off-budget" spending.

See also

• Budget deficit