Omnibus Budget Reconciliation Act of 1987

Omnibus Budget Reconciliation Act of 1987 was a significant piece of legislation passed by the United States Congress and signed into law by Ronald Reagan on December 22, 1987. The Act was a comprehensive budget reconciliation bill that aimed to reduce the federal budget deficit, as mandated by the Gramm-Rudman-Hollings Balanced Budget Act. It built upon the principles established by the Congressional Budget and Impoundment Control Act of 1974 and was influenced by the work of the National Commission on Social Security Reform, led by Alan Greenspan. The Act's provisions were shaped by the recommendations of the National Economic Commission, which was established by Tip O'Neill and Bob Dole.

● Introduction

The Omnibus Budget Reconciliation Act of 1987 was part of a broader effort to address the growing federal budget deficit, which had become a major concern for policymakers, including Federal Reserve Chairman Paul Volcker and Senate Budget Committee Chairman Pete Domenici. The Act's introduction was preceded by a series of budget negotiations between the Democratic Party and the Republican Party, facilitated by key figures such as House Speaker Jim Wright and Senate Majority Leader Robert Byrd. The negotiations were influenced by the work of the Congressional Budget Office, led by Rudolph Penner, and the Office of Management and Budget, directed by Joseph Wright. The Act's passage was also shaped by the recommendations of the National Association of Governors, led by Bill Clinton, and the National Conference of State Legislatures.

● Legislative History

The legislative history of the Omnibus Budget Reconciliation Act of 1987 was marked by intense negotiations between the House of Representatives and the Senate. The bill was introduced in the House by Representative William Gray and in the Senate by Senator Lawton Chiles. The legislation was influenced by the work of the House Budget Committee, chaired by William Gray, and the Senate Budget Committee, chaired by Pete Domenici. Key lawmakers, including Representative Dan Rostenkowski and Senator Bob Packwood, played important roles in shaping the bill's provisions, which were also informed by the recommendations of the Joint Committee on Taxation and the General Accounting Office. The bill's passage was facilitated by the support of key organizations, such as the American Medical Association and the National Education Association.

● Provisions

The Omnibus Budget Reconciliation Act of 1987 contained a wide range of provisions aimed at reducing the federal budget deficit. The Act included measures to increase taxes, such as the Superfund tax, and to reduce spending on programs like Medicare and Medicaid. The legislation also made significant changes to the Internal Revenue Code, including the creation of the Alternative Minimum Tax. Additionally, the Act included provisions related to Social Security, including an increase in the Social Security tax rate, as recommended by the National Commission on Social Security Reform. The Act's provisions were influenced by the work of the Social Security Administration, led by Dorcas Hardy, and the Medicare Payment Advisory Commission, established by Wilbur Cohen.

● Impact and Aftermath

The Omnibus Budget Reconciliation Act of 1987 had a significant impact on the federal budget and the economy. The Act's tax increases and spending reductions helped to reduce the federal budget deficit, which had been a major concern for policymakers, including Federal Reserve Chairman Alan Greenspan. The legislation also had important implications for key programs like Medicare and Medicaid, which were influenced by the work of the Health Care Financing Administration, led by Carolyne Davis. The Act's provisions related to Social Security helped to ensure the long-term solvency of the program, as recommended by the National Commission on Social Security Reform. The Act's impact was also felt by key organizations, such as the American Hospital Association and the National Association of Social Workers.

● Key Amendments

The Omnibus Budget Reconciliation Act of 1987 included several key amendments to existing laws. The Act amended the Internal Revenue Code to include the Alternative Minimum Tax, which was designed to ensure that corporations and high-income individuals paid a minimum amount of tax. The legislation also amended the Social Security Act to increase the Social Security tax rate and to make other changes to the program, as recommended by the National Commission on Social Security Reform. Additionally, the Act amended the Medicare and Medicaid programs to reduce spending and improve efficiency, as recommended by the Medicare Payment Advisory Commission. The Act's amendments were influenced by the work of key lawmakers, including Representative Fortney Stark and Senator George Mitchell, and were shaped by the recommendations of the Joint Committee on Taxation and the General Accounting Office.

Category:United States federal budget legislation