89-440: The Budget Control Act of 2011 ( Pub. L. 112–25 (text) (PDF) , S. 365 , 125 Stat. 240 , enacted August 2, 2011 ) is a federal statute enacted by the 112th United States Congress and signed into law by US President Barack Obama on August 2, 2011. The Act brought conclusion to the 2011 US debt-ceiling crisis . The law involves the introduction of several complex mechanisms, such as creation of
178-540: A Forbes magazine blog, "when government spending is slashed, jobs are lost and consumer demand falls." In analyzing the specific bill that emerged, the Economic Policy Institute stated, "The spending cuts in 2013 and the failure to continue two key supports to the economy (the payroll tax holiday and emergency unemployment benefits for the long term unemployed) could lead to roughly 1.8 million fewer jobs in 2013, relative to current budget policy." Most of
267-689: A planned economy . With the distractions of the Watergate scandal and the budget deficit relatively small, however, most criticisms were sidelined until the administration of Jimmy Carter . During Carter's presidency, the term " stagflation " enjoyed widespread use as the economy stagnated even among increased inflation rates. This economic situation had been previously unheard of in the United States where increasing prices and wages had generally been seen during times of economic growth. Republicans began to make much mention of " Democratic deficits" and proposed
356-644: A slip law and in the United States Statutes at Large after receiving the act. Thereafter, the changes are published in the United States Code . Through the process of judicial review , an act of Congress that violates the Constitution may be declared unconstitutional by the courts. A judicial declaration that an act of Congress is unconstitutional does not remove the act from the Statutes at Large or
445-489: A supermajority requirement on tax increases. The Budget Control Act of 2011 , which resolved the debt-ceiling crisis, required Congress to vote on a balanced-budget amendment in the near future. In addition, it stated that once a balanced budget amendment was sent to the states, the debt ceiling would be automatically increased by 1.5 trillion (this would be in addition to the initial debt limit increase of 2.1 trillion (from 14.294 to 16.394 trillion)). On November 18, 2011,
534-549: A 15-year period. On May 4, 1936, Representative Harold Knutson ( R - Minnesota ) introduced House Joint Resolution 579, resolution in support of a Constitutional Amendment that would have placed a per capita ceiling on the federal debt in peacetime. Article V of the Constitution specifies that if the legislatures of two-thirds of the states apply to Congress for a constitutional amendment by means of an amendment-proposing convention, then Congress must call that convention. A total of 44 states have submitted applications for
623-515: A balanced budget amendment would not reduce economic output variability in the United States, and 53% agreed that it would not substantially decrease the borrowing costs of the federal government. Economist and public choice scholar James Buchanan was a prominent advocate for a balanced budget amendment. In U.S. politics, Republicans tend to advocate for balanced budget amendments, whereas Democrats oppose them. Lobbying organizations supporting
712-502: A balanced budget amendment, at some time in the past. However, they were not outstanding simultaneously as some have expired or been rescinded. As of 27 December 2016, there were 28 outstanding applications according to the Balance Budget Amendment Task Force which advocates for such an amendment. On 24 February 2017, Wyoming became the 29th state to call for a convention to pass a balanced budget amendment. Unlike
801-454: A balanced budget but without specifying which unpopular tax increases or spending cuts they would support to reach that goal. For example, Robert Bixby of the anti-deficit Concord Coalition called the amendment "an avoidance device." Economist Dean Baker has noted that if the federal government were to run budget surpluses with the US still experiencing a large trade deficit, the economy would, in
890-557: A balanced budget provision. This applies to both the federal government and the Länder (German states). From 2016 onwards, the federal government was forbidden to run a structural deficit of more than 0.35% of GDP. Since 2020, the states have not been permitted to run any structural deficit at all. The Basic Law permits an exception to be made for emergencies such as a natural disaster or severe economic crisis. The Federal government also used off-budget funds ( Sondervermögen ) to circumvent
979-457: A body could not be limited to its ostensible purpose and could largely rewrite the Constitution, perhaps removing or reducing the Bill of Rights, a fear that backers described as being totally groundless, since any proposed changes would still have to be approved by three-quarters of the states, which would presumably doom any attempt to end basic constitutional freedoms. Detractors also noted that there
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#17328449091641068-611: A broader fiscal consolidation plan that stabilizes the government's debt dynamics anytime soon." (The United States Department of the Treasury pointed out an error of $ 2 trillion in Standard & Poor's calculation of the ten-year deficit reduction under the Act, and commented, "The magnitude of this mistake – and the haste with which S&P changed its principal rationale for action when presented with this error – raise fundamental questions about
1157-409: A business cycle. In 2019, this goal was temporarily lowered to 0.33% of GDP. The overall debt must not be above 35% of GDP. This rule includes all levels of government, including local authorities. After years of rising deficits and debt in the 1990s, Switzerland's citizens adopted the debt brake as a constitutional amendment in 2001. The rule was implemented starting in 2003. It states that each year,
1246-418: A compulsory trigger that would go into effect if another agreement was not made on tax increases and/or budget cuts equal to or greater than the debt ceiling increase by a future date. Ultimately, the intent of the sequester was to secure the commitment of both sides to future negotiation by means of an enforcement mechanism that would be unpalatable to Republicans and Democrats alike. President Obama agreed to
1335-479: A convenient target for opponents of all stripes, who blamed it for government failing to meet perceived needs, for not abolishing the deficit, and anything else that might be wrong with government. When it began to affect popular programs and was partially overturned in the courts, it was first amended to postpone the strength of its effects until later years, and then repealed in its entirety. President George H. W. Bush, in part to help ensure Congressional support for
1424-505: A legal tender. I know that to pay all proper expenses within the year would, in a case of war, be hard on us. But not so hard as ten wars instead of one. For wars could be reduced in that proportion; besides that, the State governments would be free to lend their credit in borrowing quotas. (Although Jefferson made a point of seeking a balanced budget during the early years of his administration, he seems to have later reversed himself in purchasing
1513-556: A majority, then be either signed into law by the president of the United States , be left unsigned for ten days (excluding Sundays) while Congress remains in session, or, if vetoed by the president, receive a congressional override from 2 ⁄ 3 of both houses. In the United States, acts of Congress are designated as either public laws , relating to the general public, or private laws , relating to specific institutions or individuals. Since 1957, all Acts of Congress have been designated as "Public Law X–Y" or "Private Law X–Y", where X
1602-447: A qualified parliamentary majority approved, but recent changes have made this spending count as normal expenditures. Every U.S. state other than Vermont has some form of balanced budget provision that applies to its operating budget. The precise form of this provision varies from state to state. Indiana has a state debt prohibition with an exception for "temporary and casual deficits," but no balanced budget requirement. The governor
1691-592: A strict balanced budget amendment would have adverse effects. In times of recession, deficit spending has significant benefits, whereas spending cuts by governments aggravate and lengthen recessions. In 2003, approximately 90% of the members of the American Economic Association agreed with the statement, "If the federal budget is to be balanced, it should be done over the course of the business cycle , rather than yearly." Weighted by confidence, 99% of U.S. economists surveyed by IGM in 2017 agreed that
1780-552: A substitute with the Democratic president and US Senate. Passage of the Budget Control Act of 2011 was not enough to avert, three days later, Standard & Poor's downgrading the nation's credit rating for the first time in the firm's history, from "AAA" (highest) to "AA+" (second highest). They said they were "pessimistic about the capacity of Congress and the administration to be able to leverage their agreement this week into
1869-465: A vote of 269–161. 174 Republicans and 95 Democrats voted for it, while 66 Republicans and 95 Democrats voted against it. House Speaker Boehner then announced that he got " 98% of what I wanted " in the deal. The Senate passed the Act on August 2, 2011, by a vote of 74–26. 6 Democrats and 19 Republicans voted against it. President Obama signed the bill shortly after it was passed by the Senate. In doing so,
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#17328449091641958-599: Is hoped that an independent cost-cutting board created by the Patient Protection and Affordable Care Act will begin to reduce per capita health spending once it is implemented in 2014. The debate on the bill was driven by the Republicans' insistence on spending cuts as their condition for agreeing to raise the debt ceiling. This raised concern because of the relationship between aggregate demand and unemployment; as Patrick Lunsford, Senior Editor of insideARM.com stated in
2047-564: Is made by the third method, the presiding officer of the house that last reconsidered the act promulgates it. Under the United States Constitution , if the president does not return a bill or resolution to Congress with objections before the time limit expires, then the bill automatically becomes an act; however, if the Congress is adjourned at the end of this period, then the bill dies and cannot be reconsidered (see pocket veto ). If
2136-583: Is never breached, Poland has a self-imposed debt threshold of 55% of GDP, and the government must take action to balance the budget once this level is exceeded. In 2013, the Slovenian parliament approved a balanced budget amendment to the constitution that came into force in 2015. In 2011, the Spanish Parliament proposed a law amending the Spanish Constitution to require a balanced budget at both
2225-456: Is no balanced budget provision in the U.S. Constitution , so the federal government is not required to have a balanced budget and Congress usually does not pass one. Several proposed amendments to the U.S. Constitution would require a balanced budget. Most of these proposed amendments allow a supermajority to waive the requirement of a balanced budget in times of war , national emergency , or recession . The Articles of Confederation and
2314-424: Is no way of knowing ahead of time whether the budget would end up unbalanced in any fiscal year before that fiscal year is over. While the Congress may be mandated by the amendment only to pass balanced budgets, this could be easily circumvented by inflating revenue projections or routing spending through off-budget channels. Balanced-budget amendment proposals often contain an exemption for emergencies such as being in
2403-609: Is not legally required to submit a balanced budget, the legislature is not required to approve appropriations that are within available revenue, and the state is not required to end the year in balance. An unusual variant is the Oregon kicker , which bans surpluses of more than 2% of revenue by refunding the money to the taxpayers. State balanced budget requirements do not apply to state capital budgets, which generally allow states to use their debt capacity to finance long-term expenditures such as transportation and other infrastructure. There
2492-409: Is partly because the cuts due to the act will not reduce federal spending in contemporary dollars, but rather reduce the year-to-year increases in spending from what had previously been anticipated. Even with the slowdown, both federal spending and the debt were still projected to grow faster than the U.S. economy, due to the cost curve effects of health care, which the act does not address. However, it
2581-410: Is sometimes used in informal speech to indicate something for which getting permission is burdensome. For example, "It takes an act of Congress to get a building permit in this town." An act adopted by simple majorities in both houses of Congress is promulgated , or given the force of law, in one of the following ways: The president promulgates acts of Congress made by the first two methods. If an act
2670-403: Is substantial agreement among economists that strict annual balanced budget amendments have harmful near-term economic effects. In times of recession, deficit spending has significant benefits, whereas spending cuts by governments aggravate and lengthen recessions. To prevent that, most balanced-budget provisions make an exception for times of war, national emergency, or recession, or allow
2759-454: Is the number of the Congress and Y refers to the sequential order of the bill (when it was enacted). For example, P. L. 111–5 ( American Recovery and Reinvestment Act of 2009 ) was the fifth enacted public law of the 111th United States Congress . Public laws are also often abbreviated as Pub. L. No. X–Y. When the legislation of those two kinds are proposed, it is called public bill and private bill respectively. The word "act", as used in
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2848-543: The 1992 presidential election . Perot made the deficit, and his plans to eliminate it, the major issue of his campaign, along with his protectionist plans to reduce and then eliminate the trade deficit . Many supporters of the Balanced Budget Amendment flocked to the Perot camp. Despite winning a substantial number of popular votes, Perot failed to carry a single state (zero electoral votes). He eventually faded from
2937-440: The 2011 US debt ceiling crisis , some Republicans supported a bill that would avert the crisis by raising the debt ceiling , but with an increase that would not take effect until a balanced-budget amendment was approved by both houses of Congress and submitted to the states. In addition to balancing the budget, it would also impose a constitutional limit on federal spending as a percentage of gross domestic product and would set
3026-464: The Gulf War , agreed to turn back on a campaign promise of no tax increases , reportedly in part because he saw disaffection from his conservative base due to the looming deficit. In his rhetoric to defend the idea of a balanced budget amendment, Bush likened the U.S. government to a household. Deficit spending continued but was no longer much of an issue until the presidential bid of Ross Perot during
3115-840: The presidency of Andrew Jackson since its inception the United States federal government has always been in debt. Gross debt includes both public debt and Intragovernmental holdings —money borrowed from federal funds such as Medicare and Social Security . Fiscal years 1940–2009 GDP figures are derived from 2010 Office of Management and Budget figures which contained revisions of prior year figures due to significant changes from prior GDP measurements. Fiscal years 1950-2010 GDP measurements are derived from December 2010 Bureau of Economic Analysis figures which also tend to be subject to revision. The two measures in Fiscal Years 1980, 1990 and 2000-2007 diverge only slightly. Deficit spending resumed under Richard Nixon , who had become president by
3204-451: The $ 900 billion in the first tranche of cuts occur in future years and so will not remove significant aggregate demand from the economy in the current and following year. Only $ 25 billion in federal discretionary spending is required to be removed for 2012. Regarding the across-the-board cuts, these will take effect on January 2, 2013, unless the Republicans in the US House can agree on
3293-584: The 1998 budget year, during his second term, the federal government ran a yearly budget surplus through FY 2001. During the Clinton administration, there was an official surplus of $ 419 billion during fiscal years 1998, 1999, 2000, and 2001. However, it has been argued that this official balanced budget only constituted a surplus in the public debt (or on-budget ), in which the Treasury Department borrowed increased tax revenue from intragovernmental debt (namely
3382-422: The Balanced Budget Amendment as a cure. During this time period, many liberal Democrats began to call for a Balanced Budget Amendment, including Governor Jerry Brown of California , who ran for president against Carter in 1980, and then-Congressman Paul Simon , who, upon his election to the U.S. Senate, would write the version of the amendment that came closest to passing. The 1980 presidential election gave
3471-513: The Congressional Joint Select Committee on Deficit Reduction (sometimes called the "super committee"), options for a balanced budget amendment , and automatic budget sequestration . Debt ceiling: Deficit reduction: Balanced Budget Amendment: Other provisions: The bill was the final chance in a series of proposals to resolve the 2011 United States debt-ceiling crisis , which featured bitter divisions between
3560-480: The Constitution was amended in 2008 to include the objective of balancing the public sector accounts. In 2012, France passed a new law (2012–1403), creating the independent High Council of Public Finances , giving it the responsibility to report on the sustainability and deviation from planned targets of public spending. In 2009, Germany 's constitution was amended to introduce the Schuldenbremse ("debt brake") ,
3649-570: The Constitution, a procedure which has never happened under the Constitution; the Constitution itself was created by the original constitutional convention of 1787 . Much of this effort was initially organized by the National Taxpayers Union and its president at the time, George Snyder , a former Majority Leader of the Maryland State Senate. Many people were appalled at the concept; some constitutional scholars suggested that such
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3738-609: The Federal Debt total. In 1995, the Republican-led Congress immediately engaged in a battle with President Clinton culminating in a vetoed budget and a brief shutdown of the Federal government . Despite negotiations disagreement remained on the pace of spending cuts. Ultimately Republican concessions differed little from what was attainable without shutdown. One provision of their " Contract with America " campaign document,
3827-488: The House of Representatives voted down a balanced-budget amendment that would not have imposed a supermajority requirement on tax increases. House Rules Committee chair David Dreier (R-CA), who had voted for the amendment in 1995, announced that he had changed his mind about the need to amend the Constitution, in light of the success in balancing the budget in the late 1990s. There is substantial agreement among economists that
3916-576: The Louisiana Territory . He made no exception for war, but rather saw the requirement of maintaining a balanced budget as a salutary deterrent.) The issue of the federal debt was next addressed by the Constitution within Section 4 of the Fourteenth Amendment (proposed on June 13, 1866, and ratified on July 9, 1868): One of the earliest Balanced Budget Amendment proposals presented in Congress
4005-544: The Marine Corps. Similarly, only 42 of 147 heavy-lift CH-53E Super Stallion helicopters are airworthy. The start of the sequestration was delayed from January 2, 2013, to March 1, 2013, by the American Taxpayer Relief Act of 2012 , which was passed by both houses of Congress on January 1, 2013, as a partial resolution to the fiscal cliff crisis . The bill also lowered the sequestration cap for 2014 to offset
4094-608: The Obama Administration, released a report stating that sequestration is a bad policy, and that Congress can and should take action to avoid it by passing a comprehensive and balanced deficit reduction package. After several months of denying that they could or would plan for the implementation of sequestration cuts, the Department of Defense finally began such planning in December 2012, with less than one month to go. The nature of
4183-673: The Perpetual Union had granted to the Continental Congress the power And, with this as a model Article I, Section 8, Clause 2 of the Constitution grants to the United States Congress the power At the time that the Constitution came into effect, the United States had a significant debt, primarily associated with the Revolutionary War . There were differences within and between the major political coalitions over
4272-422: The Senate but was defeated in the House of Representatives, falling 46 votes short of the 2/3 majority needed. The amendment's backers, far from despairing, said that it was needed more than ever. They began a plan to make an "end run" around Congress, for the U.S. Constitution also allows two-thirds of state legislatures to petition for a convention to be called for the purpose of writing proposed amendments to
4361-620: The Senate to block it failed 45–52, so the increase was approved. On November 18, 2011, the Balanced Budget Amendment failed to advance in the House: 261–165, 23 votes short of the needed 2/3 majority. On December 14, 2011, two proposed Balanced Budget Amendments failed in the Senate, 21–79 and 47–53. On November 21, 2011, the Joint Select Committee on Deficit Reduction announced that it was not able to advance any legislation to
4450-735: The Social Security Trust Fund), thus adding more interest on Treasury bonds. In effect, the four year alleged 'surplus' was only in public debt holdings, while the National Debt Outstanding increased every fiscal year, the lowest being a $ 17.9 billion deficit in FY2000. Meanwhile, Government Sponsored Enterprises (GSEs) such as GNMA, FNMA and FHLMC continued to borrow and spend an extra $ 543.6 billion over and above their previous 3 years. GSE debt instruments are classified as US Government Securities, but are not officially part of
4539-472: The United States Code; rather, it prevents the act from being enforced. However, the act as published in annotated codes and legal databases is marked with annotations indicating that it is no longer good law. Balanced Budget Amendment A balanced budget amendment or debt brake is a constitutional rule requiring that a state cannot spend more than its income. It requires a balance between
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#17328449091644628-452: The absence of economic bubbles , shrink and experience rising unemployment. Without significant devaluation of the US dollar, he has stated, the federal government necessarily has to run budget deficits to offset trade deficits or there will be high unemployment. It has been argued that such amendment would likely be unenforceable. Among other reasons, the standard budgetary process in the United States operates with projected figures. There
4717-493: The balanced budget amendment include: Balanced Budget Amendment Task Force , the American Legislative Exchange Council , and Citizens for Self-Governance . The Center for Budget and Policy Priorities has argued that constitutional balanced budget amendment would pose serious risks. The amendment has been called "political posturing" because its proponents use it to position themselves as supporters of
4806-612: The billions of dollars in cuts that would be required in January 2013 unless U.S. law is changed prior to January 2, 2013. Some companies have publicly stated that they would not send out the required notices, based on White House assurances, despite no change to the underlying Federal law. In October 2012, Lockheed Martin announced that they would not send out Worker Adjustment and Retraining Notification Act letters in 2012 in anticipation of sequestration cuts. Additionally, in September 2012,
4895-534: The brainchild of Newt Gingrich who would later become Speaker of the House , called for a balanced-budget amendment. In 1995, such an amendment passed the House of Representatives and came within one vote of passing the Senate. In his final State of the Union address, Clinton said the United States should continue to balance its books and pay off the debt. A recession, tax cuts and increases in military and other spending have eliminated late 1990s-era surpluses. Both
4984-459: The brake rule. The debt brake has been criticized for low flexibility. In 2011, Italian Prime Minister Silvio Berlusconi promised to balance the budget by 2013, and a balanced budget amendment to the Constitution of Italy was added in 2012 with an overwhelming parliamentary majority, under the following Monti government. Under the amended Constitution, deficit spending can still take place in
5073-407: The budget cuts have had the most significant impact on Operations and Maintenance (O&M) accounts, particularly for the training and readiness of combat units during their "at home" cycle between overseas deployments. For example, as of April 17, 2016, out of 276 F/A-18 Hornet strike fighters in the U.S. Marine Corps inventory, only about 30% are ready to fly, according to statistics provided by
5162-617: The budget must be in balance, adjusted for economic conditions. This adjustment is made by multiplying expenditures by a cyclical factor (the ratio of trend real GDP to expected real GDP), thus either allowing for deficits during recessions or forcing lawmakers to have surpluses during booms. Essentially, the rule calls for structural balance in each year and absolute balance over the course of a business cycle. So if lawmakers want to have expansionary fiscal policy during recessions, they need to pay for it by saving up during good economic times. The rule did initially allow for "extraordinary spending" if
5251-606: The constitutional amendment. Another attempt was made in October 2019, which was also unsuccessful. Local and regional authorities in Denmark are not allowed to run deficits and must always balance their budgets. There is no such rule for the national government, which has no limits on debt beyond the common rules of the European Union. Danish debt is very low in international comparison and stands at 33% of GDP in 2019. Article 34 of
5340-474: The constitutions of most U.S. states , the United States Constitution does not require the United States Congress to pass a balanced budget, one in which the projected income to the government through taxes , fees, fines , and other revenues equals or exceeds the amount proposed to be spent. This has led to deficit spending and the creation of a national debt . Except for a short period during
5429-457: The credibility and integrity of S&P’s ratings action.") S&P has partially disputed this claim of error, arguing that it is not as substantial as the Department of the Treasury is asserting, stating, "In taking a longer term horizon of 10 years, the U.S. net general government debt level with the current assumptions would be $ 20.1 trillion (85% of 2021 GDP). With the original assumptions,
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#17328449091645518-428: The cuts to mandatory spending into 2022 and 2023, and miscellaneous savings elsewhere in the budget. Act of Congress#Public law, private law, designation An act of Congress is a statute enacted by the United States Congress . Acts may apply only to individual entities (called private laws ), or to the general public ( public laws ). For a bill to become an act, the text must pass through both houses with
5607-635: The debt level was projected to be $ 22.1 trillion (93% of 2021 GDP)." They further state that they used a spending inflation rate of only 5 percent in their calculations which is actually lower than the 7 percent spending inflation rate the Budget Control Act of 2011 assumes. While the other two credit rating agencies (Fitch and Moody) kept the U.S. rating at AAA, they did change the rating outlook from "stable" to "negative". A 1988 Federal law requires most United States employers with 100 or more employees to provide sixty- (60) calendar-day advance notification of plant closings and mass layoffs of employees. With
5696-530: The deficit and debt grew to the largest in U.S. history. In fiscal years starting September 30, 2002, and ending September 30, 2004, the deficit increased nearly 50%. By 2008, the last full year of George W. Bush 's presidency, the deficit had almost doubled again, for the first time exceeding $ 1 trillion . As a result, during the administration of President George W. Bush, the gross debt increased from $ 5.7 trillion in January 2001 to $ 10.7 trillion by December 2008, rising from 57.0% of GDP to 74.5% of GDP. By
5785-574: The delegates to represent them, as was the case in 1787. Perhaps motivated by the number of state legislatures calling for such a convention approaching the required two-thirds, and recognizing its inability to make sufficient cuts on its own initiative to balance the budget, Congress responded in 1985 with the Gramm-Rudman-Hollings Act , named for its Senate sponsors, which called for automatic cuts in discretionary spending when certain deficit-reduction targets were not met. This act soon became
5874-566: The end of 2008, a large reduction in tax revenues caused by the Great Recession and the cost of federal stimulus spending began contributing to a rapidly increasing deficit. Responses to the crisis from both the Bush administration—the bank bailouts and economic stimulus of late 2008—and more stimulus spending in the first months of the Obama administration grew the deficit further. By the end of 2009,
5963-516: The event of emergencies, but only if authorized by a majority of the entire membership in both houses of Parliament. In practice, the term "emergency" has been loosely interpreted, and Parliament has always authorized the borrowing of new debt: because of this, Italy hasn't ever had an actual balanced budget. Poland's constitution (adopted in 1997) caps the public debt at 60% of GDP – the government cannot take on any financial obligations that would cause that limit to be exceeded. To ensure this level
6052-552: The final increase, to $ 16.394 trillion. On January 18, 2012, the House passed a disapproval of the second debt limit increase by a vote of 239–176. The measure failed to pass the Senate and the debt limit was raised accordingly on January 27. The act will not actually reduce the nominal U.S. debt over the 10-year period. But it will reduce the real (inflation adjusted) growth of the debt, by reducing real Federal spending (the amount of spending with inflation included). However, every plan will increase or keep constant nominal spending. That
6141-439: The full Congress, issuing a statement that began with the following: "After months of hard work and intense deliberations, we have come to the conclusion today that it will not be possible to make any bipartisan agreement available to the public before the committee's deadline." In January 2012, the U.S. debt hit the new limit of $ 15.194 trillion and the treasury began using extraordinary measures once again. The President requested
6230-449: The legislature to suspend the rule by a supermajority vote. In November 2011, the Austrian coalition government tried to amend its constitution and introduce a German style Schuldenbremse ("debt brake"). This would have forced the government to reduce its debt level to 60% of gross domestic product (GDP) by 2020. However, the government failed to gain a two-thirds majority in support of
6319-475: The logjam being broken earlier that afternoon was U.S. Vice President Joe Biden 's ability to negotiate with his 25-year Senate colleague, Senate Minority Leader Mitch McConnell . Biden had spent the most time bargaining with Congress on the debt question of anyone in the administration, and McConnell had viewed him as the one most trustworthy. The House passed the Budget Control Act on August 1, 2011, by
6408-401: The national and regional level by 2020. The law states that public debt cannot exceed 60% of GDP, though exceptions would be made in case of a natural catastrophe, economic recession, or other emergencies. The changes will also require the government to stick to EU annual deficit limits of 3% of GDP. The Swedish government is obliged to run a budget surplus of at least 1% of GDP on average over
6497-546: The national debt reached a record $ 11.9 trillion. The Congressional Budget Office estimated in March 2009 that under the Obama administration public debt would rise from 40.8% of GDP in 2008 to 70.1% in 2012. Gross debt did rise to 84.5% of GDP at the end of Fiscal Year 2009 and to 93.5% of GDP at the end of the fiscal year 2010. (Gross debt includes both public debt and intragovernmental holdings – money borrowed from federal funds such as Medicare and Social Security .) During
6586-732: The parties and also pronounced splits within them. Earlier ideas included the Obama-Boehner $ 4 trillion "Grand Bargain", the House Republican Cut, Cap and Balance Act , and the McConnell-Reid "Plan B" fallback. All eventually failed to gain enough general political or specific Congressional support to move into law, as the midnight August 2, 2011, deadline for an unprecedented U.S. sovereign default drew nearer and nearer. The solution came from White House National Economic Council Director Gene Sperling , who, on July 12, 2011, proposed
6675-411: The plan. House Speaker John Boehner expressed reservations, but also agreed. On July 26, 2011, White House Budget Director Jack Lew and White House Legislative Affairs Director Rob Nabors met with Senate Majority Leader Harry Reid to discuss the plan. Reid, like Boehner several days before, was initially opposed to the idea, but was eventually convinced to go along with it, with the understanding that
6764-510: The political scene and when appearances were made, focused more on the trade deficit issue. President Bill Clinton did not support a constitutional amendment, but in his 1992 campaign, he called for balancing the budget through ordinary fiscal policy. He came into office facing a large deficit. Clinton signed into law the Omnibus Budget Reconciliation Act of 1993 , which attacked the deficit by raising taxes. Beginning with
6853-481: The possible liquidation or increase of this debt. As early as 1798, Thomas Jefferson wrote: I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government; I mean an additional article taking from the Federal Government the power of borrowing. I now deny their power of making paper money or anything else
6942-555: The presidency to Republican Ronald Reagan and control of the Senate to the Republicans. With President Reagan's support, passage of the amendment started to seem more possible. On August 4, 1982, the United States Senate introduced and debated Joint Resolution 58, an Amendment to the United States Constitution requiring for each year's Federal budget that "total outlays are no greater than total receipts" without three-fifths majority vote of both houses. Joint Resolution 58 passed in
7031-445: The president rejects a bill or resolution while the Congress is in session, a two-thirds vote of both houses of Congress is needed for reconsideration to be successful. Promulgation in the sense of publishing and proclaiming the law is accomplished by the president, or the relevant presiding officer in the case of an overridden veto, delivering the act to the archivist of the United States . The archivist provides for its publication as
7120-430: The president said, "Is this the deal I would have preferred? No. But this compromise does make a serious down payment on the deficit reduction we need, and gives each party a strong incentive to get a balanced plan done before the end of the year." The Budget Control Act immediately raised the debt limit to $ 14.694 trillion. In October 2011, the president requested the $ 500 billion increase, to $ 15.194 trillion. A motion in
7209-785: The projected receipts and expenditures of the government. Balanced-budget provisions have been added to the constitutions of Germany , Hong Kong , Italy , Poland , Slovenia , Spain and Switzerland , among others, as well as to the constitutions of most U.S. states . In the United States , the Republican Party has advocated for the introduction of a balanced budget amendment to the United States Constitution . Balanced budget amendments are defended with arguments that they reduce deficit spending and constrain politicians from making irresponsible short-term spending decisions when they are in office. Research shows that balanced budget amendments lead to greater fiscal discipline. However, there
7298-432: The scheduled sequestration reductions in Federal spending required by the Budget Control Act of 2011 due to take effect on January 2, 2013, several U.S. companies with large Federal contracts began to publicly discuss in the summer of 2012 the required layoffs that would be required to bring their workforce into line with the reductions in Federal spending. A 394-page White House report was issued in mid-September outlining
7387-472: The sequester was intended as an enforcement tool rather than a true budget proposal. On the evening of July 31, 2011, Obama announced that the leaders of both parties in both chambers had reached an agreement that would reduce the deficit and avoid default. The same day, Speaker of the House John Boehner 's office outlined the agreement for House Republicans. One key element in the deal being reached and
7476-462: The state of war. It could be envisioned that the Congress would simply declare the country in a perpetual state of war, year after year, just to avoid the necessity of politically costly spending cuts or tax increases. The Hong Kong Basic Law stipulates that the government must keep “the expenditure within the limits of revenues in drawing up its budget” and “avoid deficits”. Debt to GDP in Hong Kong
7565-483: The term "act of Congress", is a common, not a proper noun . The capitalization of the word "act" (especially when used standing alone to refer to an act mentioned earlier by its full name) is deprecated by some dictionaries and usage authorities. However, the Bluebook requires "Act" to be capitalized when referring to a specific legislative act. The United States Code capitalizes "act". The term "act of Congress"
7654-430: The time that the 1969 surplus was known. Nixon's advisors chose to fight inflation rather than to maintain a balanced budget. Nixon was famously quoted as saying, " We are all Keynesians now ," with regard to the budget deficit that his administration began to accumulate during years of mild recession. He also imposed the first peacetime wage and price controls , mandatory petroleum allotments, and many other features of
7743-479: The two-month delay in 2013. Also, for 2013 only, certain "security" funding such as homeland security and international affairs were included in the sequestration cut in order to lessen the cuts to defense. In December 2013, the Bipartisan Budget Act of 2013 increased the sequestration caps for fiscal years 2014 and 2015 by $ 45 billion and $ 18 billion, respectively, in return for extending the imposition of
7832-415: Was no mechanism in place by which to select delegates to any such convention, meaning that the states might choose to select them in a way which tended to subvert democracy. Backers also produced their own constitutional scholars stating that limiting such a convention was perfectly constitutional, that it could be limited to whatever purpose the states had called it for, and that states would be free to select
7921-402: Was that of Senator Millard Tydings, who introduced Senate Joint Resolution 36, a resolution in support of a Constitutional Amendment that would have taken away some of the flexibility the U.S. Treasury had accrued with respect to debt management by proposing to prohibit appropriations in excess of revenues in the absence of a new debt authorization and require that any new debt be liquidated over
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