Congress, defense, and the deficit: an analysis of the FY 1996 budget process in the 104th Congress

Abstract

The FY 1996 federal budget process has been distinguished by a series of unprecedented 'firsts'. The 104th Congress, the first Republican-led Congress in over 40 years, promised to produce a federal budget for FY 1996 that would incorporate significant changes in fiscal policy. Congress intended to balance the budget and eliminate the deficit by 2002, and proposed substantial cuts in entitlement spending in order to accomplish this. Additionally, Congress intended to cut taxes and increase funding for defense. Although the majority party believed that balancing the budget was possible, most students of the federal budget process considered it improbable given the competing objectives and political sensitivities surrounding the methods proposed to achieve this goal. This thesis describes how Congress attempted to achieve its objectives, and evaluates the impact of such an unprecendented economic plan on specific elements of the federal budget. Congress did pass a budget resolution, reconciliation package, and several appropriation bills that reflected a zero deficit by 2002. However, two Continuing Resolutions were required as Congress and the President continued negotiations after reaching an impasse on the FY 1996 federal budget.