Gramm–Rudman–Hollings Balanced Budget Act

Balanced Budget and Emergency Deficit Control Act of 1985

Other short titles	Gramm–Rudman–Hollings Deficit Reduction Act of 1985
Long title	A joint resolution increasing the statutory limit on the public debt.
Acronyms (colloquial)	BBEDCA
Nicknames	Gramm–Rudman–Hollings Balanced Budget Act
Enacted by	the 99th United States Congress
Effective	December 12, 1985
Citations
Public law	99-177
Statutes at Large	99 Stat. 1037
Codification
Acts amended	Congressional Budget and Impoundment Control Act of 1974
Titles amended	2 U.S.C.: Congress
U.S.C. sections amended	2 U.S.C. ch. 20 § 901
Legislative history
Introduced in the House as H.J.Res. 372 by Phil Gramm (R–TX), Warren Rudman (R–NH), Ernest Hollings (D–SC) on August 1, 1985 Committee consideration by Senate Finance Passed the House on August 1, 1985 (passed) Passed the Senate on October 10, 1985 (51-37) Reported by the joint conference committee on December 10, 1985; agreed to by the House on December 11, 1985 (271-154) and by the Senate on December 11, 1985 (61-31) Signed into law by President Ronald Reagan on December 12, 1985
Major amendments
Deficit Reduction Act of 2005 Budget Control Act of 2011

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 constraints on the federal budget.

The acts were named after U.S. Senators Phil Gramm (R-Texas), Warren Rudman (R-New Hampshire), and Ernest Hollings (D-South Carolina), who were all their chief sponsors.

The term "budget sequestration" was first used to describe a section of the Gramm–Rudman–Hollings Deficit Reduction Act of 1985.

The Acts aimed to cut the United States federal budget deficit, which at the time, in dollar term, was the largest in history. The Acts provided for automatic spending cuts ("cancellation of budgetary resources", called "sequestration") if the total discretionary appropriations in various categories exceed in a fiscal year the budget spending thresholds. That is, if Congress enacts appropriation bills providing for discretionary outlays in each fiscal year that exceed the budget totals, unless Congress passes another budget resolution increasing the budget amount, an across-the-board spending cut in discretionary expenditure is automatically triggered on these categories, affecting all departments and programs by an equal percentage. The amount exceeding the limit is held back by the Treasury and not transferred to the agencies specified in the appropriation bills.

Under the 1985 Act, allowable deficit levels were calculated for the eventual elimination of the federal deficit. If the budget exceeded the allowable deficit, across-the-board cuts were required. Directors of the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO) were required to report to the Comptroller General regarding their recommendations for how much must be cut. The Comptroller General then evaluated these reports, made his own conclusion, and gave a recommendation to the President, who was then required to issue an order effecting the reductions required by the Comptroller General unless Congress made the required cuts by other ways within a specified amount of time.

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