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The influence of the gramm-rudman-hollings act on federal budgetary outcomes, 1986-1989

Listed author(s):
  • Sung Deuk Hahm
  • Mark S. Kamlet
  • David C. Mowery
  • Tsai-Tsu Su
Registered author(s):

    This article analyzes the impact of the Gramm-Rudman-Hollings (GRH) Act on federal budgetary and fiscal outcomes. Rather than portraying it as a two-on federal budgetary and fiscal outcomes. Rather than portraying it as a two-party game between Congress and the president, each with monolithic policy preferences, we view GRH as a multiparty negotiation game among advocates of different programs and agencies. In this game, agencies subject to sequestration and their congressional advocates have an incentive to reach a budget accord, while those exempt from sequestration do not. Consistent with this argument, we find that GRH has restrained outlays for nonexempt programs and that exempt programs have, if anything, experienced more rapid growth. Overall, GRH is estimated to have restrained outlays by $59 billion by fiscal 1989, and to have restrained outlays more effectively after the 1987 modifications in the Act. The Gramm-Rudman-Hollings Act signals another phase in the decade-long struggle between the White House and Congress over public spending priorities. Our final counterfactual analysis suggests that GRH partially returned federal fiscal and budgetary relationships and priorities to those that prevailed before Reagan.

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    Article provided by John Wiley & Sons, Ltd. in its journal Journal of Policy Analysis and Management.

    Volume (Year): 11 (1992)
    Issue (Month): 2 ()
    Pages: 207-234

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    Handle: RePEc:wly:jpamgt:v:11:y:1992:i:2:p:207-234
    DOI: 10.2307/3325365
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    1. T. S. Breusch & A. R. Pagan, 1980. "The Lagrange Multiplier Test and its Applications to Model Specification in Econometrics," Review of Economic Studies, Oxford University Press, vol. 47(1), pages 239-253.
    2. Preston J. Miller, 1989. "Gramm-Rudman-Hollings' hold on budget policy: losing its grip?," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Win, pages 11-21.
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