Rewriting the Fiscal Constitution: The Case of Gramm-Rudman-Hollings

Abstract

Because the Constitution's fiscal provisions are not self-executing, federal budget processes have been shaped largely by an implicit 'fiscal constitution" composed of framework statutes and legislative and administrative practice. This Article contends that the ambition of the Gramm-Rudman- Hollings Act (GRH) was radically to redesign this constitution by creating an extralegislative mechanism ("sequestration") to enforce statutorily prescribed deficit limits. Professor Stith demonstrates how GRH alters several aspects of traditionalp ractice: It makes the annual budget deficit the driving concern of the legislative budget process, it makes the timing of outlays critically important to appropriations decisions, and it encourages greater participation by Congress in line-item allocation of appropriations. GRH does not, however, directly constrain spending in over half of the budget, which it exempts from sequestration. Moreover, there is an inherent limit to the effectiveness of sequestration as a deficit-reduction strategy. As the threat of sequestration becomes greater, the plausibility of the threat decreases because Congress can always repeal, amend, or suspend GRI. Professor Stith concludes that GRH is a constitutionally permissible way to constrain deficit growth, but it is neither a fundamental reordering of our fiscal processes nor a "solution" to the persistent deficit problem.