Budget Deficits: Causes, Effects and Some Remedial Options (CRS Report for Congress)
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| Release Date |
July 15, 1985 |
| Report Number |
IB84005 |
| Authors |
David Grinnell and William Cox, Office of Senior Specialists |
| Source Agency |
Congressional Research Service |
Summary:
In 1981 Congress enacted extensive changes in taxing and spending policiesthat supporters of these changes expected to generate sufficient revenues,despite a series of tax rate cuts, to balance the budget by FY84. After theonset of recession in early 1982, however, the Reagan Administration'sprojections showed widening budget deficits, which culminated in an actualFY83 deficit of $195.4 billion. Despite enactment of the Tax Equity andFiscal Responsibility Act of 1982, and, more recently, the Deficit ReductionAct of 1984, large deficits are expected to persist, even under continuedfavorable economic conditions, unless Federal taxing and spending policiesare altered dramatically.How did this unprecedented situation come about? What consequences doesit have for the Nation? What remedial actions could be taken? Thesequestions are addressed in this brief.
