Economy Act

The Economy Act of 1933, officially titled the Act of March 20, 1933 (ch. 3, Pub.L. 73–2, 48 Stat. 8, enacted March 20, 1933; 38 U.S.C. § 701), is an Act of Congress that cut the salaries of federal workers and reduced benefit payments to veterans, moves intended to reduce the federal deficit in the United States.

The Economy Act of 1933 is different from the Economy Act of 1932. The Economy Act of 1932 was signed in the final days of the Hoover administration in February 1933. This sometimes leads to confusion between the two pieces of legislation. The Hoover-sponsored bill established the purchasing authority of the federal government and remains in force as of 2009.

As Governor of New York, Franklin D. Roosevelt had campaigned for the Presidency, in part, on a pledge to balance the federal budget. On March 10, 1933, six days after his inauguration, Roosevelt submitted legislation to Congress which would cut $500 million ($8.181 billion in 2009 dollars) from the $3.6 billion federal budget by eliminating government agencies, reducing the pay of civilian and military federal workers (including members of Congress), and slashing veterans' benefits by 50 percent. Veterans benefits constituted a quarter of the federal budget at the time. The Act was written primarily by Lewis Douglas, Roosevelt's Director of the Budget, and Grenville Clark, a private attorney.

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