Budget Deficit in the United States

Budget Deficit in the Federal Budget Process

Meaning of Budget Deficit in the congressional and executive budget processes (GAO source): The amount by which the government’s budget outlays exceed its budget receipts for a given period, usually a fiscal year. (See also Budget Surplus under Surplus.)

Guide to U.S. Federal Deficit (Budget Process)

• Deficit
• Budget Deficit
• Total Deficit

Under the George Bush Administration

Bush administration efforts to gain control over the federal budget deficit, however, were more problematic. One source of the difficulty was the savings and loan crisis. Fraud, mismanagement, lax regulation and economic downturns in certain regions of the United States in the early and mid-1980s led to widespread insolvencies among savings-and-loan institutions. Of more than 3,100 such institutions that existed in the late 1970s, only 2,453 remained as of June 30, 1990. By 1993 the total cost of selling and closing down failed thrifts — whose deposits were guaranteed by the government — was staggering: between $300 and $500 thousand million.

In January 1990 President Bush presented his budget proposal to Congress. Democrats argued that administration budget projections were far too optimistic, and that meeting the deficit reduction law would require tax increases and sharper cuts in defense spending. The budget negotiations dragged on, and by June — in spite of his campaign promise — President Bush told congressional leaders that changing circumstances in the national economy meant that tax increases would have to be part of any overall budget package.

Despite the budget agreement, the combination of economic recession, losses from the savings and loan industry rescue operation, and escalating health-care costs for Medicare and Medicaid offset all the deficit reduction measures and produced a shortfall in 1991 at least as large as the previous year’s. (1)

Budget Deficit in the International Business Landscape

Definition of Budget Deficit in the context of U.S. international business and public trade policy: An excess of expenditure flow over income flow.

Resources

Notes and References

1. ”An Outline of American History”(1994), a publication of the United States Information Agency (USIA). Editor: Howard Cincotta

See Also

• Federal Appropriations
• Entries about the United States Budget Process in the Encyclopedia (including Budget Deficit)
• Public Debt

Further Reading

• Legislatures and the budget process: the myth of fiscal control (J Wehner, 2010)
• Reconcilable Differences?: Congress, the Budget Process, and the Deficit (JB Gilmour, 1990)
• Fiscal institutions and fiscal performance (JM Poterba, J von Hagen, 2008)