Cyclopedia of Congressional Budget Law
Maximum Deficit Amounts
Summary
Maximum Deficit Amounts (MDAs) were established by the Balanced Budget and Emergency Deficit Control Act of 1985 (Pub. L. 99-177) (BBEDCA), and revised by the Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987 (Pub. L. 100-119) (BBEDCRA), then amended and largely replaced by the Budget Enforcement Act of 1990 (Pub. L. 101-508) (BEA 1990). The MDAs were statutorily established limits on the annual deficit, such that outlays were permitted to exceed revenue for a fiscal year only up to that level. Balance, notionally, was to be reached by fiscal year 1991. When provisions of BBEDCA were struck down by the U.S. Supreme Court, BBEDCRA amended that Act, and in doing so reset the MDAs and extended the required balance year to fiscal year 1993.
The MDAs levels eventually expired with last set for fiscal year 1995. The goal of eliminating the deficit had largely been replaced by the conceptual budget approach of deficit management in the form of the Budget Enforcement Act of 1990 (Pub. L. 101-508).
The actual MDA levels and their enforcement were originally bifurcated between separate laws: Section 3 of the Congressional Budget Act of 1974 (Pub. L. 93-344) as part of how “maximum deficit amounts” were defined, while section 253 (BBEDCA) set forth the enforcement procedures..
The BBEDCRA revised MDAs were as follows (in billions of dollars):
| BBEDCA (1985 law) | (BBEDCRA) 1987 revision | |
| Fiscal year: | ||
| 1985 | 171.9 | N/A |
| 1986 | 144 | N/A |
| 1987 | 108 | 144 |
| 1988 | 72 | 136 |
| 1989 | 36 | 100 |
| 1990 | 0 | 64 |
| 1991 | N/A | 28 |
| 1992 | N/A | 0 |
BBEDCA enforced these targets, based on projections of the deficit, through across-the-board cuts on October 15. Such sequestration cancelled non-exempt budgetary resources to achieve outlay savings sufficient to reduce the deficit to the maximum deficit amount. Under section 301(i) of the Congressional Budget Act, budget resolutions were required to meet the maximum deficit amount targets or be subject to a point of order (that requires 60 votes to waive in the Senate and a three-fifths majority to waive in the House).
The Budget Enforcement Act of 1990 (Pub. L. 101-508) amended section 3 (CBA), and transferred the specific MDA elements to a revamped title VI of CBA. section 601 (CBA), which was amended to reflect the enforcement provisions of the Balanced Budget Agreement of 1990 (the “budget summit”).
When President Bill Clinton’s budget was enacted in the form of the Omnibus Budget Reconciliation Act of 1993 (Pub. L. 103-66). It did not amend the MDAs or the enforcement procedures. The Explanatory Statement accompanying the Conference Report on OBRA 1993 included this description of the law at that time:
The Budget Enforcement Act of 1990 revised the deficit targets (maximum deficit amounts). The Act revised the deficit targets for fiscal years 1991 through 1993 and established new targets for fiscal years 1994 and 1995 (the targets for fiscal years 1991 through 1995 were set forth in section 601(a)(1) of the Congressional Budget Act of 1974). The sequestration procedures for enforcing the deficit targets are set forth in section 253 of the [Balanced Budget and Emergency Deficit Control Act of 1985]. Section 253 also provides for the periodic adjustment of the deficit targets. The deficit targets were required to be adjusted for fiscal years 1992 and 1993, and are adjustable at the President’s option for fiscal years 1994 and 1995. The President has chosen to make the 1994 adjustment, and will decide whether or not to adjust the fiscal year 1995 targets next year. Whenever a deficit target is adjusted, it is set at the level consistent with the discretionary spending limits and the pay-as-you-go requirement. Therefore, when adjusted, the deficit target provides no constraint beyond the appropriations caps and payas-you-go requirement, so no deficit sequester can occur.
Though enforcement procedures remain in the current section 253 (BBEDCA), the specific MDA levels in section 601 (CBA) were repealed when title VI of the Congressional Budget Act of 1974 was eliminated by section 10118 of the Budget Enforcement Act of 1997 (Pub. L. 105-33).
See the following for the various incarnations of the MDA levels:
Section 3 (CBA), as Amended by Sec. 201 (BBEDCA)
Section 3 (CBA), as Amended by Sec. 106 (BBEDCRA)
Section 601 (BBEDCA), after enactment of BEA 1990
Section 253 (BBEDCA from Compilation of Laws (1996)
Enforcing Maximum Deficit Amounts
MDAs were enforced through the sequestration process by Presidential order, administered by the Office of Management and Budget. A variation on the procedure, which removed economic and technical and changes effecting actual deficit levels, was enacted by the BEA 1990 as section 253 (BBEDCA). The vestiges of the enforcement mechanism for MDAs remains in section 253 of the Balanced Budget and Emergency Deficit Control Act of 1985 (Pub. L. 99-177), though it is inoperative for its intended purpose.
Revision by the Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987
The Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987 (BBEDCRA 1987) revised the maximum deficit amounts set by BBEDCA those parts of it were struck down as unconstitutional. Congress revised the the law to cure the Supreme Court’s objections and took the opportunity to revise the Maximum Deficit Amounts since otherwise deep automatic spending cuts would have been required to meet them. Section 106 of that Act amended section 3(7) (CBA) and adjusted the enforcement mechanism used to implement the MDAs.
SEC. 106. MAXIMUM DEFICIT AMOUNTS. Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987)
Revision by the Budget Enforcement Act of 1990
The Budget Enforcement Act of 1990, as title XIII of the Omnibus Budget Reconciliation Act of 190, included the following description of the revisions made by that Act:
The Budget Enforcement Act of 1990 revised the deficit targets (maximum deficit amounts). The Act revised the deficit targets for fiscal years 1991 through 1993 and established new targets for fiscal years 1994 and 1995 (the targets for fiscal years 1991 through 1995 were set forth in section 601(a)(1) of the Congressional Budget Act of 1974). The sequestration procedures for enforcing the deficit targets are set forth in section 253 of the [Balanced Budget and Emergency Deficit Control Act of 1985]. Section 253 also provides for the periodic adjustment of the deficit targets. The deficit targets were required to be adjusted for fiscal years 1992 and 1993, and are adjustable at the President’s option for fiscal years 1994 and 1995. The President has chosen to make the 1994 adjustment, and will decide whether or not to adjust the fiscal year 1995 targets next year. Whenever a deficit target is adjusted, it is set at the level consistent with the discretionary spending limits and the pay-as-you-go requirement. Therefore, when adjusted, the deficit target provides no constraint beyond the appropriations caps and pay-as-you-go requirement, so no deficit sequester can occur. Section 605 of the Congressional Budget Act of 1974 establishes a point of order in the Senate against the consideration of any measure that would cause the deficit target for the coming fiscal year to be exceeded. Section 606, in subsections (b) and (c), prohibits the consideration in the House and Senate of a budget resolution recommending a deficit in excess of the applicable deficit target.
Joint Explanatory Statement on the Committee of Conference on OBRA 1993 (H.R. 2264); Committee on the Budget, House of Representatives (H. Rept. 103-66) 103d Congress, 2d Session, Washington D.C. 1993. [Full Report (BCR Link)] [Title IV only (PDF)]
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