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63 IRET Policy Bulletin 1 (1994)

handle is hein.taxfoundation/iretpbul0022 and id is 1 raw text is: June 20, 1994 '0 -No. 63 BUDGET PROCESS REFORM The federal budget remains a chief concern of policy makers in Washington. Despite the massive tax increases in the deficit reduction efforts of 1990 and 1993, budget deficits are projected to be very large and to grow well into the next century. Proposals abound for a further major expansion of the role of government via health care reform and other mandates on business. Consequently, taxpayers should concern themselves with the federal budget and the federal budget process. Concern over the budget cannot be restricted to concern over the deficit. It is essential to focus as well on the size of government and on the amount of regulation the government imposes on the private sector. Past actions taken to controil the budget deficit and the size offedera outlays have clearly been inadequate. Past actions taken to control the budget deficit and the size of federal outlays have clearly been inadequate. The Congressional Budget and Impoundment Control Act of 1974 was supposed to bring order to the budget process, but it was followed by an explosion of federal outlays and a rise in the share of the economy controlled by government. The Gramm-Rudman-Hollings Act of 1985 (GRH) imposed deficit reduction targets, and succeeded in slowing the growth of spending for several years. The Act was gutted, however, when its spending restraint became too unpopular with the Congress and the President. GRH was altered and superseded by the Omnibus Budget Reconciliation Act of 1990, which increased taxes and has allowed a further ratcheting up of spending in real terms and as a share of the economy. Today, outlays are at near record levels as a share of Gross Domestic Product, and taxes remain above historical rates and act as a drag on economic recovery. (See graph on page 2.) Institute for IRET is a non-profit, tax exempt 501(c)3 economic policy research and educational Research organization devoted to informing the public about policies that will promote on the economic growth and efficient operation of the market economy. Economics of 1730 K Street, N.W., Suite 910 * Washington, D.C. 20006 Taxation (202) 463-1400 * Fax (202) 463-6199 e Internet www.iret.org