Bowsher v. Synar

The Balanced Budget and Emergency Deficit Control Act, signed into law by President Ronald Reagan on 12 December 1985, is better know as the Gramm-Rudman-Hollings Act, so named for its Senate cosponsors Phil Gramm, Warren Rudman, and Ernest "Fritz" Hollings. For years both political parties, but particularly Republicans, had expressed concern over the growing federal budget deficit. The act, whose purpose was to eliminate the deficit, represented a compromise agreement between the two parties.

Accordingly, the act established a "maximum deficit amount" for federal spending. Starting in 1986 and continuing to 1991, the size of that maximum would gradually taper down to zero. If the deficit exceeded its maximum as established for a given year, the act called for across-the-board cuts in spending, half of which would come from defense programs, the other half from non-defense programs. The determination of those budget reductions would be made separately by the Office of Management and Budget (OMB), a unit of the executive branch, and the Congressional Budget Office (CBO), a part of the legislative branch. Each of these agencies would present their findings to the comptroller general, who would make recommendations to the president.