Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987
The Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987 (BBEDCRA 1987) (Pub. L. 100-119) amended the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA) (Pub. L. 99-177) when parts of that Act were ruled unconstitutional by U.S. Supreme Court in Bowsher v. Synar (1986).
When enacted in 1985, BBEDCA set annual Maximum Deficit Amounts, which were limits on progressively lower allowable deficits. These were designed to prompt Congressional action to enact deficit reducing legislation, since if the levels were exceeded, existing law would force automatic across-the-board spending cuts. This process of automatic spending cuts was known as “sequestration.” The original method by which sequestration operated involved the Congressional Budget Office (CBO) and the White House Office of Management and Budget (OMB) providing an accounting of suggested cuts to Government Accountability Office (GAO). GAO is a legislative branch support agency and had the authority to order the spending reductions.
In Bowsher v. Synar (1986), the United States Supreme Court ruled the 1985 law unconstitutional on the basis that it violated the separation of powers. The court ruling asserted: “The powers vested in the Comptroller General under” the law “violate the Constitution’s command that Congress play no direct role in the execution of the laws.” It further stated that “the Comptroller General has been improperly assigned executive powers” and “the Act’s provisions give him, not the President, the ultimate authority in determining what budget cuts are to be made. By placing the responsibility for execution of the Act in the hands of an officer who is subject to removal only by itself, Congress, in effect, has retained control over the Act’s execution, and has unconstitutionally intruded into the executive function.”
Congress responded by amending BBEDCA and transferred the sequestration enforcement responsibility to OMB. BBEDCRA 1987 law was signed by President Reagan on September 29, 1987. By moving the responsibility to OMB, the law satisfied the Supreme Court’s ruling that only the executive branch could execute the spending reductions. BBEDCRA 1987 also increased the public debt limit and reset the Maximum Deficit Amounts, delaying the requirement for erasing the deficit by two years.
Maximum Deficit Amounts as a method by which to force Congressional action proved to be unsuccessful, and the entire procedure was replaced by the Budget Enforcement Act of 1990.