The Budget Enforcement Act of 1990 (BEA) (, title XIII; ; codified as amended at scattered sections of 2

U.S.C. In the law of the United States, the Code of Laws of the United States of America (variously abbreviated to Code of Laws of the United States, United States Code, U.S. Code, U.S.C., or USC) is the official compilation and codification of the ...

& ) was enacted by the

United States Congress The United States Congress is the legislature of the federal government of the United States. It is bicameral, composed of a lower body, the House of Representatives, and an upper body, the Senate. It meets in the U.S. Capitol in Washing ...

as title XIII of the

Omnibus Budget Reconciliation Act of 1990 The Omnibus Budget Reconciliation Act of 1990 (OBRA-90; ) is a United States statute enacted pursuant to the budget reconciliation process to reduce the United States federal budget deficit. The Act included the Budget Enforcement Act of 1990 whic ...

, to enforce the deficit reduction accomplished by that law by revising the federal budget control procedures originally enacted by the

Gramm–Rudman–Hollings Balanced Budget Act The Gramm–Rudman–Hollings Balanced Budget and Emergency Deficit Control Act of 1985 and the Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987 (both often known as Gramm–Rudman) were the first binding spending constrain ...

. The BEA created two new budget control processes: a set of caps on annually-appropriated

discretionary spending In American public finance, discretionary spending is government spending implemented through an appropriations bill. This spending is an optional part of fiscal policy, in contrast to social programs for which funding is mandatory and determine ...

, and a "pay-as-you-go" or "

PAYGO PAYGO (Pay As You GO) is the practice in the United States of financing expenditures with funds that are currently available rather than borrowed. Budgeting The PAYGO compels new spending or tax changes not to add to the federal debt. Not to be co ...

" process for entitlements and taxes.

Legislative history

The predecessor to the BEA, Gramm-Rudman-Hollings, was originally enacted in 1985 and set overall deficit targets as a way to force Congress to enact future deficit reduction. If these deficit targets were not met, the president was required issue a sequestration order to automatically reduce discretionary spending. However, policymakers achieved these targets by using overly optimistic budget projections and other budget gimmicks, and Gramm-Rudman-Hollings was eventually viewed by policymakers as contributing to, rather than solving, the problem of rising deficits. By October 1990, the president's

Office of Management and Budget The Office of Management and Budget (OMB) is the largest office within the Executive Office of the President of the United States (EOP). OMB's most prominent function is to produce the president's budget, but it also examines agency programs, pol ...

projected a budget deficit for

fiscal year A fiscal year (or financial year, or sometimes budget year) is used in government accounting, which varies between countries, and for budget purposes. It is also used for financial reporting by businesses and other organizations. Laws in many ...

1991 that exceeded the statutory target; if Congress did not enact a deficit reduction plan, sequestration would have cut discretionary spending by about one-third.Megan Suzanne Lynch, ''Statutory Budget Controls in Effect Between 1985 and 2002'', Congressional Research Service, R41901 (2011), https://fas.org/sgp/crs/misc/R41901.pdf. In November 1990, Congress and President

George H.W. Bush George Herbert Walker BushSince around 2000, he has been usually called George H. W. Bush, Bush Senior, Bush 41 or Bush the Elder to distinguish him from his eldest son, George W. Bush, who served as the 43rd president from 2001 to 2009; p ...

agreed to a bipartisan deficit reduction deal that would achieve roughly $500 billion in savings over five years through a combination of spending cuts and tax increases. These savings were enacted through the

and enforced by the budget procedures contained in Title XIII, the BEA, which was signed into law on November 5, 1990.

Provisions

Unlike Gramm-Rudman-Hollings, which set fixed deficit targets in hopes of encouraging future Congressional action, the BEA implemented budget controls meant to prevent Congress from taking actions that would increase the deficit. Specifically, the BEA *Introduced caps on discretionary spending, thus limiting the amount of funds Congress could provide in annual appropriations bills. Members of Congress could enforce these caps while a bill was under consideration by raising a

point of order In parliamentary procedure, a point of order occurs when someone draws attention to a rules violation in a meeting of a deliberative assembly. Explanation and uses In ''Robert's Rules of Order Newly Revised'' (RONR), a point of order may be rai ...

. If the caps were breached through enacted legislation, they would be enforced by a presidential sequester order that would cut discretionary spending across the board. *Introduced statutory "pay-as-you-go" or PAYGO procedures to govern new legislation that impacted direct spending and/or revenues. PAYGO required that any new spending increase or tax cut be offset by spending cuts or tax increases elsewhere. The

would track such legislation throughout the fiscal year on a PAYGO scorecard, and if such spending increases and tax cuts were not completely offset, the President would issue a sequestration order that would cut non-exempt direct spending programs. *Extended and revised the deficit targets from Gramm-Rudman-Hollings, allowing for revisions to the deficit targets to reflect changes in the economy, ensuring that sequestration would not be triggered unless Congress breached the discretionary spending caps or violated PAYGO.

Subsequent legislation

The BEA was extended by the Omnibus Reconciliation Act of 1993, and again by the

Balanced Budget Act of 1997 The Balanced Budget Act of 1997 () was an omnibus legislative package enacted by the United States Congress, using the budget Reconciliation (U.S. Congress), reconciliation process, and designed to balance the federal budget by 2002. This act wa ...

. It expired in 2002, but the Democratic Majority adopted some of its principles, known as

, or Pay-As-You-Go, in their rules during the

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. This was passed as H. RES. 6 on January 4, 2007. Statutory PAYGO was reinstated by the

Statutory Pay-As-You-Go Act of 2010 The Statutory Pay-As-You-Go Act of 2010, Title I of , is a public law passed by the 111th United States Congress and signed by US President Barack Obama on February 12, 2010. The act reinstated pay-as-you-go budgeting rules used in Congress from 1 ...

, which President

Barack Obama Barack Hussein Obama II ( ; born August 4, 1961) is an American politician who served as the 44th president of the United States from 2009 to 2017. A member of the Democratic Party, Obama was the first African-American president of the U ...

signed on February 12, 2010. Discretionary spending caps, as well as deficit reduction targets, were reintroduced by the

Budget Control Act of 2011 The Budget Control Act of 2011 () is a federal statute enacted by the 112th United States Congress and signed into law by US President Barack Obama on August 2, 2011. The Act brought conclusion to the 2011 US debt-ceiling crisis. The law inv ...

Legacy and impact

The BEA is credited with helping to reduce deficits during the 1990s, and regarded as more successful than its predecessor Gramm-Rudman-Hollings.Congressional Budget Office. (2001). Testimony before the House Budget Committee on Extending the Budget Enforcement Act, June 27, 2001, http://cbo.gov/sites/default/files/cbofiles/ftpdocs/28xx/doc2896/bea-testimony.pdf Then-director of the

Congressional Budget Office The Congressional Budget Office (CBO) is a federal agency within the legislative branch of the United States government that provides budget and economic information to Congress. Inspired by California's Legislative Analyst's Office that manages ...

Robert Reischauer Robert Danton Reischauer (born 1941) is an economist and was one of the two public trustees of the Medicare and Social Security Trust Fund. He is a nationally known expert on the federal budget, health reform, Medicare, and Social Security. Mo ...

, compared the legacy of these two laws in testimony before Congress in 1993, concluding that “budget procedures are much better at enforcing deficit reduction agreements (as the Budget Enforcement Act has done) than at forcing such agreements to be reached." Sequestration was triggered only twice under the BEA, resulting in small discretionary spending cuts in 1991. However, Congress began to weaken the BEA's budget controls when faced with budget surpluses in the late 1990s.

References

External links

Omnibus Budget Reconciliation Act of 1990PDFdetails
titles VI and XIII as amended in the

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br>Statute Compilations collection

Omnibus Budget Reconciliation Act of 1990 details
as enacted in the US Statutes at Large * {{USBill, 101, H., 5835 of the

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(1989-1991) via

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1990 in law Government finances in the United States

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