Deficit Impact of Reconciliation Legislation Enacted in 1990, 1993, and 1997

Publication Date: August 2005

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Banking and finance

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Abstract:

The budget reconciliation process is an optional procedure that operates as an adjunct to the annual budget resolution process. During the past 25 years, Congress has sent the President 19 reconciliation measures; 16 were signed into law and three were vetoed. During the 1980s and 1990s, reconciliation legislation often reflected Congress's most significant efforts to reduce the deficit through changes in revenue and mandatory spending laws. In recent years, however, reconciliation has been used mainly to reduce revenues.

The FY2006 budget resolution, H.Con.Res. 95, includes reconciliation instructions affecting mandatory spending and revenues. For the first time since 1997, reconciliation is proposed to reduce mandatory spending as part of a deficit-reduction plan. As background on past efforts in this regard, the deficit impact of three major reconciliation acts enacted in the 1990s is briefly summarized.

Over a five-year period, according to Congressional Budget Office, the Omnibus Budget Reconciliation Act of 1990 reduced the deficit by an estimated $482 billion; the Omnibus Budget Reconciliation Act of 1993 reduced the deficit by an estimated $433 billion; and in 1997, the Balanced Budget and the Taxpayer Relief Act together reduced the deficit by an estimated $118 billion. Reductions in mandatory spending were a significant element in the deficit reduction achieved under each act.

This report will be updated as developments warrant.