Budget Reconciliation:

Issues Concerning the 1990 Reconciliation Act

AIMD-95-3: Published: Oct 7, 1994. Publicly Released: Oct 7, 1994.

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Pursuant to a congressional request, GAO reviewed how the budget reconciliation process affects deficit reduction, focusing on: (1) the disparity between projected and actual deficit reductions; (2) whether the 38 individual Omnibus Budget Reconciliation Act (OBRA) provisions achieved their goals in reducing the deficit; and (3) whether the Congressional Budget Office (CBO) and other agencies met their roles and responsibilities in the OBRA 1990 reconciliation process.

GAO found that: (1) deficits have been greater than projected primarily because of worse than anticipated economic conditions; (2) slower than expected economic growth between fiscal years 1991 and 1993 caused federal revenues to decline and spending to increase more than anticipated; (3) OBRA policies to reduce mandatory program spending and increase user fee collections were effective in reducing the deficit below what it could have been; (4) CBO supplied Congress with accurate estimates and the executive branch agencies implemented OBRA provisions promptly; (5) agency officials believe that while 32 of 38 OBRA 1990 provisions were effective in reducing the deficit, the remaining six provisions did not affect the deficit; (6) agencies could not precisely determine the impact of individual reconciliation provisions; (7) although deficits did not drop to the levels expected when OBRA 1990 was enacted, Congress had the authority to enact changes in individual mandatory programs to reduce the deficit at any time; and (8) there is no procedure that automatically compares the deficit with projected reductions.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: Separate legislative proposals to establish periodic lookback procedures with respect to deficit reduction progress were offered but defeated on the floor of the House and the Senate during the summer of 1997. A motion to consider the lookback proposal offered by Senators Brownback and Kohl on June 27, 1997 as an amendment to the revenue reconciliation bill received 57 votes, failing to get the required 60 votes to waive Section 313(b)(1)(A) of the Congressional Budget Act. A different but related budget enforcement measure, H.R. 2003, was offered but rejected on the House floor on July 23, 1997 by a vote of 81-347. No further action is anticipated.

    Matter: Congress may wish to consider a new process under which it is periodically prompted to look back at progress in reducing the deficit. Such a lookback would compare the current CBO deficit projections to those projected at the time of a prior deficit reduction agreement or the most recent reconciliation legislation and analyze the reasons for differences. For differences exceeding a predetermined amount, Congress would decide explicitly--by voting--whether to accept the slippage or act to bring the deficit path closer to the original goal by recouping some or all of this slippage.

 

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