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Gramm Rudman: Stopping the Overdrafts
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10578 |
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CURRENT ISSUES
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2 / 1986 |
1,448 Words |
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Dan Mitchell
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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 Representatives treated the matter somewhat differently. In order to secure House passage, a wide range of welfare programs were exempted from automatic cuts. Major programs such as Food Stamps, Aid to Families with Dependent Children (AFDC), and veterans benefits were added to Social Security as "sacred cows."
The Senate basically accepted the House changes and the bill was signed into law by the president. Interestingly, the bill was not only supported by almost all of the republicans, but nearly half of the Democrats in the Senate voted yes. Senator Edward Kennedy (D-Massachusetts), arousing considerable speculation was among the yes-votes. The bill did not escape hostile attention. Senator Moynihan (D-New York) was one of the harshest critics. He called the bill the worst legislation since the Smoot-Hawley Tariff Act of 1930.
The general consensus on Capital Hill is that Gramm-Rudman is bad legislation, but it will force concrete steps to be made. If only to avoid automatic cuts, Congress will find a way to make up $46 billion shortfall projected for the 1987 budget. Lobbying is already taking place to protect various programs and initiatives. The Defense Department, failing to convince the president to veto the measure, has warned that any serious cuts in their budget will affect the nation's security.
With all the publicity surrounding Gramm-Rudman, it is still unclear exactly what it will mean. Senate Finance Committee chairman, Bob Packwood (R-Oregon), stated that "Nobody . . .can guarantee this bill will work." Gramm-Rudman is supposed to operate in the following way: every year the White House submits a budget to the Congress. Under the new rules, the budget should reflect the
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