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Efforts to Reduce Budget Deficit

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The aim of this paper is to highlight on actions that the congress takes to reduce budget deficit since 1985. This process of deficit reduction refers to economic policy debates, spending, taxation and proposals designed to diminish the federal budget shortage. The process involves government agencies such as the Congressional Budget Office, US Treasury Department, Management and budget, and Government Accountability Office GAO reports that shows finance challenges, which the federal government encounters.

Thesis Statement

The purpose of this essay reveals efforts used by the congress to reduce deficits in the US economy. In response to this situation, the efforts used to reduce the budget deficit involve strategies, which involve policy choices about taxation, spending, policies designed to reduce unemployment, and increase economic growth.

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This context of framework is applicable in reducing the budget deficit. For instance, there is need to promote employment and economic growth as an effort of reducing deficit. An economy that is fast growing reduces budget deficit in a way that it leads to higher employment. In addition, tax revenues bring down safety net spending, which leads to a lower debt to GDP ratio. The other tactic to aid reduce budget deficit is to enhance equitable tradeoffs.  It is evident that majority of budget choices leads to win-lose returns, which reflects the manner in which the government divides its revenues. This implies the divided revenues benefits some sections while others incur costs (Keith, 2008).    

The next aspect that assists the congress in reducing budget deficits is considering the short and long term issues and their perspectives. The initial long term deficit drivers include; the aging population and health care cost inflation. On the other hand, the primary short time drivers include spending policy choices, tax and unemployment (Boucher, 2011).  To solve the deficit issue, the congress initiates efforts to facilitate economic growth among other measures to avoid this situation in future. The other effort is to limit increase in future spending; this is through preventing increases via freezes. For instance, the annual growth rates in the top three categories expenditure that involves defense, health care, and social security since 2001 are above the economic growth rate.

The other effort is that the government needs to invest productively because; some form of spending fall under the category of investments that lower deficits in future. For instance, there is need to switch to infrastructure, R&D investments or education because; it enhances competition among US workers, and make products competitive hence; generates a revenue stream that reduces future deficits.

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The efforts to reduce the budget deficit from 1985 to 2002 reveal that the congress enacted various statutory controls of budget to reduce budget deficit. First there was the Balanced Budget, and Emergency Deficit control Act that took place in 1985. The action, which followed, was the 1990 budget enforcement Act. The purpose of the 1985 act was to increase the limits of debts because; the congress passed it during duration of growing deficits. This act was to eliminate budget deficits over a period of six years. The Control Reaffirmation Act of 1987 and 1993 became extended to the 2002 Budget Enactment Act of 1997.


Through these Acts, the congress implemented budget and reform process, which requires new programs be funded by reducing spending rate or raising taxes. This will lead to a balanced budget ideal which will involve down payment on debts. This will also grant flexibility within the government in terms of budgeting and limiting deficits that will be efficient in stabilizing the economy.  In 2011, majority of congress in the house voted for deficit reduction, and took action to avoid it through passing a comprehensive, and a balanced deficit to reduce the package. Finally, in 2013, the congress advocated for tax cut extension, which incorporated high taxes and lower spending to reduce its massive debt. 

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