It established a five-year deficit reduction path to a balanced budget, with sequestration if Congress did not meet its deficit targets. The act would later be held unconstitutional by the Supreme Court, be re-enacted and still fail to meet its deficit targets.
The targets were replaced in the Budget Enforcement Act of 1990 with discretionary spending caps, again enforceable by sequestration, but also with new pay-as-you-go budgeting to offset any entitlement benefit increases or tax cuts.
From 1995 to 1996, with Republicans in charge of both chambers for the first time in 40 years, a new budget crisis arose when Clinton stood firm against the GOP’s budget-cutting proposals. Not only were there two government shutdowns that winter when continuing appropriations bills (with strings) were vetoed, but a debt limit breach loomed in November.
Although default was averted into the new year with trust-fund borrowing gimmicks, Congress was forced to act in early February to allow Social Security and other retiree checks to be mailed.
Congress enacted another short-term debt limit extension in early March before a final deal was struck at the end of the month. It involved an increase in the Social Security earnings limit, a small-business regulatory flexibility bill and legislation giving the president line-item veto authority (later declared unconstitutional by the Supreme Court).
A balanced budget constitutional amendment (integral to today’s GOP approach) had earlier passed the House in 1995 but failed by one vote in the Senate.
The lessons of past debt limit “crises” demonstrate just how procedurally innovative and convoluted Congressional fixes can get — even to the point of pushing the Constitution’s envelope.
If these procedural ropes and pulleys seem to set the Capitol Dome spinning, welcome aboard the Washington merry-go-round, where process not only drives the action but often becomes the policy.
Don Wolfensberger is director of the Congress Project at the Woodrow Wilson International Center for Scholars and former staff director of the House Rules Committee.