Deficit Reductions for Fiscal Year 1989

Compliance With the Balanced Budget and Emergency Deficit Control Act of 1985 Gao ID: AFMD-89-32 November 15, 1988

Pursuant to a legislative requirement, GAO reviewed the Office of Management and Budget's (OMB) reports and the President's orders of August 25 and October 15, 1988, to determine whether they complied with the Balanced Budget and Emergency Deficit Control Act of 1985.

GAO found that: (1) the OMB reports and the President's orders substantially complied with the act's requirements; (2) although OMB may have misapplied the provisions to a few accounts, the errors did not affect the amount of the deficit projected for fiscal year 1989; and (3) there were concerns about the act's constraints on outlay rates, its budget baseline, report-timing requirements, and failure to address the implications of legislation enacted after the final OMB report. GAO believes that the act: (1) is insufficient to achieve the intended deficit reduction objective because three-quarters of the budget is exempt from sequester; and (2) encourages the use of budgetary devices, such as deferring yearend paydays to the following fiscal year and selling government assets, which will only compound the deficit problem.



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