Is the Gramm-Rudman-Hollings Balanced Budget Act Working?
https://archives.nbclearn.com/portal/site/k-12/browse/?cuecard=41331
General Information
Source:
Creator:
NBC Today Show
Bryant Gumbel
Resource Type:
Copyright:
Event Date:
Air/Publish Date:
10/16/1989
10/16/1989
Copyright Date:
Clip Length
Video News Report
NBCUniversal Media,
LLC.
1989
00:02:50
Description
The Gramm-Rudman-Hollings Balanced Budget and Emergency Deficit Control Act of 1985 was
designed to cut the budget deficit by providing automatic spending cuts, called "sequesters," if the deficit
exceeded certain fixed targets. By 1989, not only has the legislation failed to cut deficits, but one of its
key architects, Senator Ernest Hollings, has become a vocal critic of it. In 1990, the act would be revised
to change its focus from deficit reduction to controlling federal spending.
Keywords
Federal budget, Budget deficit, deficit reduction, Budget cuts, legislation, Gramm Rudman Hollings Bill,
Pete Domenici, Democrats, Republicans, deficit reduction bill, Deficit reduction legislation, Office of
Management and Budget
Citation
© 2008-2015 NBCUniversal Media, LLC. All Rights Reserved.
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MLA
"Is the Gramm-Rudman-Hollings Balanced Budget Act Working?" Bryant Gumbel, correspondent. NBC
Today Show. NBCUniversal Media. 16 Oct. 1989. NBC Learn. Web. 26 March 2015
APA
Gumbel, B. (Reporter). 1989, October 16. Is the Gramm-Rudman-Hollings Balanced Budget Act
Working? [Television series episode]. NBC Today Show. Retrieved from
https://archives.nbclearn.com/portal/site/k-12/browse/?cuecard=41331
CHICAGO MANUAL OF STYLE
"Is the Gramm-Rudman-Hollings Balanced Budget Act Working?" NBC Today Show, New York, NY:
NBC Universal, 10/16/1989. Accessed Thu Mar 26 2015 from NBC Learn:
https://archives.nbclearn.com/portal/site/k-12/browse/?cuecard=41331
Transcript
Is the Gramm-Rudman-Hollings Balanced Budget Act Working?
BRYANT GUMBEL, anchoring:
In the absence of a deficit reduction bill, $16.2 billion dollars in budget cuts will be affected at midnight,
as mandated by the Gramm Rudman Hollings Bill. But hold your applause, because not only will those
cuts be rescinded once the reduction bill is adopted, but Gramm Rudman Hollings isn’t the budget
weapon its creators once hoped it would be. In fact it’s been so abused that South Carolina Senator Ernest
Hollings even wants a divorce from the bill that carries his name. Senator Hollings in Washington, good
morning.
Sen. ERNEST HOLLINGS (D – South Carolina): Good morning, sir.
GUMBEL: The reductions you once envisioned are not being realized, is the problem with the law or
those who are playing a fiscal shell game around it?
HOLLINGS: The problem is with all of us. We’ve been playing a fiscal shell game around it. Now I don’t
agree that we aught to just let the $16 billion go in, because what we really do is allow those programs in
health and education research to suffer. But overall instead of $16 billion, everyone knows it ought to be
around $50 billion. We’re playing a game.
GUMBLE: Well I was going to say, how much of difference would it make if the deficit projections of the
congressional budget office were used instead of those of the office of management and budget?
HOLLINGS: It’d be that $50 billion; they projected last month a $41 billion deficit, and then we repealed
catastrophic, that’s another five, and then we had $5 billion of off-budget FSLIC bonds that go from ’89
over to ’90, so we’re already up to 151.
GUMBLE: So would it help if the cuts mandated by the bill were more frightening, or more of a
motivation act?
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HOLLINGS: No, it would be more truthful, that’s all. If we had really cut the full amount, but what we
are cutting is real and I think that’s a better procedure rather than just allowing it to happening.
GUMBLE: Not everyone feels Gramm Rudman Hollings is a total bust of course. Among the dissent is
Senator Pete Domenici, ranking Republican on the Senate Budget Committee. Good morning, Senator.
Sen. PETE DOMENICI (R – New Mexico): Good morning.
GUMBLE: You said you’d think this bill – that Gramm Rudman Hollings – is working, why?
DOMENICI: Well, the deficit, when it reached its peak before Gramm Rudman was in effect, it was about
$220 billion. If we didn’t have these very strange times, everybody would think it’s a miracle to bring the
deficit down over a hundred billion dollars in about two years – two years and six months. So I think it is
working. There’s a lot of gimmickry, but I submit to you that if you didn’t have Gramm Rudman
Hollings, the gimmickry wouldn’t be used, it would just spend more money. The reason for the
gimmickry is because they want to find ways to play around with Gramm Rudman and spend more
money. It isn’t perfect, but I submit until somebody comes up with something better, it is keeping the
pressure on.
GUMBLE: For the sake of argument, your critics could easily counter that, wait a minute, for two years it
took it down because nobody could easily find their loopholes around it, but since they found the
gimmicks we’ve seen the deficit go up the past two years so it can’t be working.
DOMENICI: They found the gimmicks before, they found a few new ones, but there’s been gimmicks
around forever, and I’m not advocating that they’re good, all I’m saying is unless and until we find
something, perhaps a constitutional amendment for a balanced budget or the like, with each year we’re
bringing it down, we ought to bring it down more and if we need to modify the act we ought to.
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