The Balanced Budget and Emergency Deficit Control Act of 1985

Testimony was given on the potential problems and possible benefits of legislation proposed to balance the budget and control the deficit. While the proposed legislation provides a timetable and formula for achieving a balanced budget by fiscal year 1991, it contains some ambiguities and room for discretionary actions which could trigger automatic cutbacks. Under the proposed legislation, GAO found that: (1) there was ambiguity as to which programs would be indexed directly and which ones would be categorized as controllable; (2) the President's withholding of funds from obligation would not be impoundment messages; (3) de facto unreported impoundment could occur; (4) disputes over the scope and meaning of the legislation could generate a significant amount of litigation and Impoundment Control Act actions; (5) a disproportionate amount of budget cuts would fall upon controllable budget accounts having relatively few prior year contracts and obligations; (6) heavy cuts on these accounts could impair the capacity of some agencies to perform the services expected of them; (7) the degree of flexibility which Congress would have in developing fiscal policy would be limited; and (8) there would be a temptation for agencies to attempt to isolate their programs from possible budget cuts by putting contracts off-limits, entering into contracts with long-term outlays, placing nonindexed programs on an indexed basis, removing programs from the unified budget, and using backdoor spending methods.