Balancing the books on Capitol Hill

Article Abstract:

The impending conflict between President Reagan and the Congress over the 1987 Federal budget is discussed. The President's proposed budget is $1.024 trillion, the largest expenditure ever. The Administration claims that the budget deficit will be $107.8 billion, smaller than the 1986 budget deficit of $170 billion, and in line with the gradual deficit reductions called for by 1985 legislation. It is unlikely that the President's budget will be approved or that the target deficit reduction will be met. The 1987 budget calls for reductions in social services that were rejected by Congress in 1986, and the President's estimations of tax revenues for 1987 are overly optimistic. The Congress may avoid taking he unpopular measures needed to reduce the deficit, and may concentrate instead on creating protectionist measures as a short-term solution to US economic problems.

Public finance, United States. Congress

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Coming to terms with Congress

Article Abstract:

President Bush is attempting to come to terms with the US Congress in the areas of: the deficit; Third World debt; and the savings and loan crisis. Bipartisan consensus is necessitated by the increased Democratic majorities in both houses of Congress. A significant reduction in the deficit hinges on a reform of the budget process, such as the line-item veto. Bush has disagreed with Congress over whether the costs of the savings and loan bailout will be reflected in the budget deficit, favoring its attribution to a distinct body established for the purposes of regulation. Three options available to Bush to eliminate the deficit are: rasing taxes; initiating a special deficit reduction tax for two or three years; or establishing a tradeoff of an increase in gas taxes for a reduction in capital gains with Congress.

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The US budget: just like an old-time movie?

Article Abstract:

The October 1987 stock market crash revealed the failure of the US government to cope with the trade and budget deficits. One problem in the way of reducing government spending is that 80% of the US budget cannot be cut because it is locked into debt repayment, entitlement programs, and long-term contracts. Neither President Reagan nor Congress seem willing to take the politically unpopular action of increasing taxes, preferring to make 'notional' budget cuts that are little more than accounting gimmicks.

Analysis, United States economic conditions, Stock Market Crash, 1987

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