28 Apr 2022


Efforts to Reduce the Budget Deficit

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Budget deficits have been a common phenomenon in the United States for decades. Despite the efforts by the congress to reduce the budget deficits, the desirable results are yet to be achieved. In the 1985, one of the measures to reduce the budget deficits was through the enactment of the Balanced Budget and Emergency Deficit Control Act (Darrell, 1990). One of the measures was to reduce the discretionary spending by the federal government. Currently, the Congress reduces the budget deficits through legislation, especially using the Budget Control Act of 2011. The following discussion will also demonstrate whether the proposed budget control measures have been effective. 

As aforementioned, the Congress played an imperative role in 1985 as far as the reduction of the budget deficits was concerned. The goal was to ensure that there was a balance between the Gross National Product (GDP) and the estimated budget. The United States had witnessed an increase in budget deficits, a phenomenon that was attributed to the high spending by the federal government and the lack of effective budgetary legislations. As a result, the Congress enacted the Balanced Budget and Emergency Deficit Control Act. The law allowed the Congress to set annual budgetary targets. Failure to agree on such estimates led to an automatic cut in the discretionary spending (Darrell, 1990). The cuts were mostly on defense and the Department of Veteran Affairs. Despite the measures by the Congress, the budget deficits did not decrease by any significant margin. This was attributed by the ineffectiveness of the existing laws, the economy, and increased spending on peace and security programs within and outside the United States. For instance, the military spending in the United States has been high for decades due to the need to respond to security issues, in countries such as Iraq and Afghanistan. Additionally, the economic recession leads to jobs losses, which affects revenue. Therefore, the Congress had to make new legislations that have a holistic approach to the reduction of budget deficits. 

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Currently, the Congress has made significant gains as far as the reduction of budget deficit is concerned. The congress enacted the Budget Control Act (2011) with an aim of reducing government spending and supporting projects that help the economy generate more income. The current approach by the congress has been more effective compared to the previous measures. This is because the government is not just looking at the reduction in spending, but also on how to generate more income. The growth in the economy assists in the generation of more revenue. Some of the measures taken include the reduction in spending on the overseas contingency operations (OCO), cuts on federal government spending (discretionary spending), and fostering effective responses to economic recession. 

The Budget Control Act 2011 has seen a decrease in government spending, though still not to the lowest desired levels (Center for American Progress, 2013). For instance, the discretionary spending has fallen to below 7% of the GDP compared to over 12% in the past decades (Labonte, 2014). Generally, though, it is expected that the nondiscretionary spending, especially on health will continue rising. The Medicaid and Medicare costs continue to rise, which will lead to a rise in budgetary allocations (Labonte, 2014). However, the situation will not be as worse as it was decades ago. The reason is that the United States government has played a significant role in addressing the economic challenges. In 2007/2008 global economic recession, the unemployment level was almost 10%. Currently, the unemployment is less than 6%, which demonstrates that the county has a robust economy. With the country increasing its revenue, a slight increase in spending will not have significant adverse effects on the economy. Therefore, while the Congress has not fully achieved its objectives, it has been able to significantly reduce the budget deficits. 


Center for American Progress (2013). The Deficit Reduction We Have Achieved So Far retrieved from https://www.americanprogress.org/issues/budget/news/2013/01/08/49137/the-deficit-reduction-we-have-achieved-so-far/

Darrell, M. (1990)." Gramm-Rudman-Hollings and the Politics of Deficit Reduction ," Annals of the American Academy of Political and Social Science 499 90-100. http://www.jstor.org/stable/1045820

Labonte, M. (2014). Reducing the Budget Deficit: Overview of Policy Issues , retrieved from https://www.fas.org/sgp/crs/misc/R43680.pdf

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