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

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  • Sung Deuk Hahm
  • Mark S. Kamlet
  • David C. Mowery
  • Tsai-Tsu Su

Abstract

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.

Suggested Citation

  • Sung Deuk Hahm & Mark S. Kamlet & David C. Mowery & Tsai-Tsu Su, 1992. "The influence of the gramm-rudman-hollings act on federal budgetary outcomes, 1986-1989," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 11(2), pages 207-234.
    • Handle: RePEc:wly:jpamgt:v:11:y:1992:i:2:p:207-234
    DOI: 10.2307/3325365
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    References listed on IDEAS

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    1. Allen Schick, 1986. "Crisis in the Budget Process: Exercising Political Choice," Books, American Enterprise Institute, number 920153, September.
    2. Kamlet, Mark S. & Mowery, David C. & Su, Tsai-Tsu, 1988. "Upsetting National Priorities: The Reagan Administration's Budgetary Strategy," American Political Science Review, Cambridge University Press, vol. 82(4), pages 1293-1307, December.
    3. T. S. Breusch & A. R. Pagan, 1980. "The Lagrange Multiplier Test and its Applications to Model Specification in Econometrics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 47(1), pages 239-253.
    4. Fischer, Gregory W. & Kamlet, Mark S., 1984. "Explaining Presidential Priorities: The Competing Aspiration Levels Model of Macrobudgetary Decision Making," American Political Science Review, Cambridge University Press, vol. 78(2), pages 356-371, June.
    5. Preston J. Miller, 1989. "Gramm-Rudman-Hollings' hold on budget policy: losing its grip?," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 13(Win), pages 11-21.
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    Cited by:

    1. Gebhard Kirchgassner, 2002. "The effects of fiscal institutions on public finance: a survey of the empirical evidence," Chapters, in: Stanley L. Winer & Hirofumi Shibata (ed.), Political Economy and Public Finance, chapter 9, Edward Elgar Publishing.
    2. Glenn Follette & Byron F. Lutz, 2012. "Fiscal rules, what does the American experience tell us?," Finance and Economics Discussion Series 2012-38, Board of Governors of the Federal Reserve System (U.S.).

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