1. Congressional Budget Office, "Reducing the Deficit: Spending and Revenue Options," Report to the Senate and House Committees on the Budget—Part II, March 1986, pp. 4-7 [BACK]

2. Stephen Gettinger, "Reagan Budget Projects $143.6 Billion Deficit," Congressional Quarterly Weekly Report, February 8, 1985, p. 246. [BACK]

3. The Reagan administration wanted to eliminate or phase out the following programs: air service subsidies to communities for service lost through deregulation; Agency for International Development housing guarantees—phase out beginning in 1987; Agricultural Stabilization and Conservation Service cost-sharing; Amtrak—end in 1987; Appalachian Regional Commission; Carl Perkins scholarships for high school graduates interested in teaching; categorical aid to migrant health centers, black-lung clinics, and family-planning clinics, to be wrapped into a block grant program; coastal zone management state grant program; college housing loans—phase out beginning in 1987; commercial fishing industry assistance; Community Services Block Grant; crop insurance subsidies—phase out by 1991; Economic Development Administration; energy conservation grants and state energy planning and extension programs; Environmental Protection Agency loans for asbestos removal; Federal Housing Administration—develop proposals in 1987 to turn agency over to private sector; Farmers Home Administration housing and rural aid programs, wrapped into the Department of Housing and Urban Development (HUD); GI enhanced recruitment bill (PL 98-525); graduate education programs, including fellowships for women and minorities and for law and public service students; HUD grants for rental housing development and rehabilitation, rental rehabilitation loans, and new subsidized housing construction; immigrant education; Impact Aid Part B for schools serving U.S. employees' children; Interstate Commerce Commission; Legal Services Corporation; library aid, for public library research and librarian training; Justice Department grants for juvenile justice, state and local aid; Mariel Cubans and regional information sharing system programs—turned over to states to run with no federal funding; maritime subsidies—ship construction loan guarantees, aid to six state maritime schools, research and development (after 1987), and the cargo preference requirement included in the 1985 farm bill (PL 99-198); National Sea Grant college program; Postal Service subsidy; Public Health Service training grants; railroad rehabilitation loans—phase out beginning in 1987; rail service assistance to states; revenue sharing—end in 1987; Rural Electrification Administration; Soil Conservation Service programs on private lands, including the small watershed program; Small Business Administration credit assistance programs; State Student Incentive Grants; Tennessee Valley Authority regional economic programs; Urban Development Action Grants; U.S. Travel and Tourism Administration; waste treatment construction grants—phase out by 1990; Work Incentive Program (WIN) for adults receiving benefits under Aid to Families with Dependent Children. [BACK]

4. Stephen H. Wildstron, Richard Fly, and Ronald Grover, "The Budget Has a Fighting Chance," Business Week, February 17, 1986, pp. 30-32. [BACK]

5. Jonathan Rauch, "In Uncharted Waters," National Journal, February 8, 1986, pp. 312-17. [BACK]

6. Pamela Fessler, "Reagan's Economic Forecast Attacked as Excessively Rosy," Congressional Quarterly Weekly Report, February 8, 1986, p. 283. [BACK]

7. Jonathan Rauch, "Zero-Sum Budget Game," National Journal, May 10, 1986, p. 1099. [BACK]

8. Ibid., p. 1097. [BACK]

9. Ibid. [BACK]

10. Rauch, "In Uncharted Waters." [BACK]

11. Stephen Gettinger, "House OKs Democratic Budget for Fiscal 1987," Congressional Quarterly Weekly Report, May 17, 1986, pp. 1079-80. [BACK]

12. Lee Walczak, Stephen H. Wildstrom, Richard Fly et al., "Is a Tax Hike Coming?" Business Week, February 3, 1986, pp. 48-53. [BACK]

13. Stephen Gettinger, "Budget Panel Uses New Taxes to Cut Deficit," Congressional Quarterly Weekly Report, May 10, 1986, pp. 1061, 1063-64. [BACK]

14. "Senate, House Committee FY 1987 Budget Resolutions," Congressional Quarterly Weekly Report, May 10, 1986, p. 1062. [BACK]

15. Gettinger, "House OKs Democratic Budget"; Stephen Gettinger, "The Making of the Democrats' Budget: A New Conservative-Liberal Coalition," Congressional Quarterly Weekly Report, May 17, 1986, pp. 1080-81. [BACK]

17. David Rogers, "Conferees May Limit Defense Outlays Until Revenues in '87 Budget Are Raised," Wall Street Journal, June 11, 1986, p. 22. [BACK]

18. David Shribman, "Conferees Consider New '87 Budget Plan Limiting Defense Cuts, Adding Revenues," Wall Street Journal, June 16, 1986, p. 41. [BACK]

19. Ronald Grover, "Showdown Time for Gramm-Rudman," Business Week, January 10, 1986, p. 22. [BACK]

20. Elizabeth Wehr, "Court Strikes Down Core of Gramm-Rudman," Congressional Quarterly Weekly Report, July 12, 1986, p. 1559, 1562-63. [BACK]

21. "Supreme Court's Gramm-Rudman Opinion," Congressional Quarterly Weekly Report, July 12, 1986, p. 1581-83. [BACK]

22. Elder Witt, "Court Sees Fatal Gramm-Rudman Flaw in Power Given to Comptroller General," Congressional Quarterly Weekly Report, July 12, 1986, pp. 1560-61. [BACK]

23. "Supreme Court's Gramm-Rudman Opinion." [BACK]

24. Jonathan Fuerbringer, "Congress Ratifies Spending Cuts," New York Times, July 18, 1986, p. A1. [BACK]

25. Paul Blustein, "White House Raises Deficit Projection For 1986 but Sees Improvement in 1987," Wall Street Journal, August 7, 1986, p. 3. [BACK]

26. Elizabeth Wehr, "Gramm-Rudman Repair Effort Stumbles on Mistrust of OMB," Congressional Quarterly Weekly Report, July 26, 1986, p. 1682. [BACK]

27. David Rogers, "Senate Acts to Change Gramm-Rudman Law to Allow Automatic Spending Cuts," Wall Street Journal, July 31, 1986, p. 12. [BACK]

28. Stephen Gettinger, "Gramm-Rudman Deficit Target Is in Sight," Congressional Quarterly Weekly Report, August 23, 1986, pp. 1943-46. [BACK]

29. Ibid. The major differences between CBO and OMB estimates came from accounting for pay raises and estimates of entitlements. OMB assumed that the Department of Agriculture would not make $5.1 billion of advance price supports in spring 1987 and that spend-out rates for defense would be $5.2 billion slower than CBO thought. [BACK]

30. Paul Blustein, "Report Shows 1987 Budget Must Shrink By $9.4 Billion to Avoid Automatic Cuts," Wall Street Journal, August 20, 1986, p. 5; Symposium on Budget Balance, discussion by Dr. Rudolph Penner, director of CBO, January 9-11, 1986, pp. 10-31. [BACK]

31. Richard E. Cohen, "Tax Plum Fueling Budget Fight," National Journal, August 30, 1986, pp. 2068-69. [BACK]

32. Inside the Administration, August 14, 1986, pp. 1-2. [BACK]

33. David Shribman, "Across-the-Board Cuts Called Unlikely As Gramm-Rudman Process Is Launched," Wall Street Journal, September 12, 1986, p. 21. [BACK]

34. Memo to Committee for a Responsible Federal Budget, as reported in that committee's memorandum/newsletter to board and members, September 19, 1986. This memorandum/newsletter is mailed periodically to Board and Members of the Committee. [BACK]

35. Presidential spokesman Larry Speakes quoted in Jonathan Fuerbringer, "Reagan Threatens Veto of Spending Bills for 1987," New York Times, September 17, 1986, p. A22. [BACK]

36. Jeffrey H. Birnbaum and John E. Yang, "Ways and Means Panel Balks at Raising Taxes to Meet Gramm-Rudman Targets," Wall Street Journal, September 17, 1986, p. 3. [BACK]

37. Federal Budget Report, September 9, 1986, pp. 3-4; Jonathan Fuerbringer, "Accord is Tentatively Reached on Cutting Deficit," New York Times, September 19, 1986, p. A30. [BACK]

38. Jonathan Fuerbringer, "Senate Approves $13.3 Billion Plan to Cut '87 Deficit," New York Times, September 20, 1986, p. 1. [BACK]

39. What Jack Brooks called "gimmickry of the worst kind" included a new $1.83 billion customs fee (illegal under the General Agreement on Tariff and Trade because it far exceeded the cost of collection), better enforcement by the IRS, and a $1 billion across-the-board cut to be taken equally from domestic and defense programs. These provisions were ostensibly large enough to compensate for expansion of medicaid coverage and a drop in the previously scheduled increase in medicare deductibles. Jonathan Fuerbringer, "House, 309 to 106, Votes Plan to Cut Deficit $15 Billion," New York Times, September 25, 1986, pp. 1, B11. [BACK]

40. David Rogers, "House Clears $562 Billion Spending Bill; Reagan's Budget for Military Is Slashed," Wall Street Journal, September 26, 1986, p. 16. [BACK]

41. Helen Dewar, "Big Agenda for Congress' Final Days," Oakland Tribune, October 12, 1986, p. A3. [BACK]

42. David Rogers, "House Votes $576 Billion Spending Bill To Fund U.S. for the Rest of Fiscal 1987," Wall Street Journal, October 16, 1986, pp. 2, 26; Inside the Administration, "Congress Gives Reagan Nearly All He Sought in Continuing Resolutions," October 23, 1986, p. 11. [BACK]

43. David Rogers, "Senate Votes $576 Billion Spending Bill But GOP Seeks to Strip Two Provisions," Wall Street Journal, October 17, 1986, p. 3. [BACK]

44. David Rogers, "Fiscal '87 Budget of $576 Billion Signed Into Law," Wall Street Journal, October 20, 1986, pp. 3, 14. [BACK]

45. David Rogers, "Senate Rejects Amendment Designating More Economic Aid for the Philippines," Wall Street Journal, September 30, 1986, p. 7. Eventually the Senate provided some aid; see Congressional Quarterly Almanac (Washington, D.C.: Congressional Quarterly, Inc. 1986), pp. 392-93. [BACK]

46. Jonathan Rauch, "Playing the Budget Game Under New Rules," National Journal, April 12, 1986, p. 898. [BACK]

47. "Budget Cutting is Still Lonely Work," Congressional Quarterly Weekly Report, August 16, 1986, p. 1933. [BACK]

48. Richard E. Cohen, "House Democracy," National Journal, October 18, 1986, p. 2532. Namely, the dismay at the resuscitation of revenue sharing by Gray and Domenici at a breakfast for The Committee for a Responsible Federal Budget, September 8, 1986. [BACK]

49. Inside the Administration, November 6, 1986, pp. 1, 7. [BACK]

50. Susan Bentzer et al., "Is the Party Almost Over?" Newsweek, October 26, 1987, p. 50. [BACK]

51. "Extraordinary Butchery," The Economist, October 24, 1987, pp. 75-76. [BACK]

52. "As Time Goes By," in ibid., p. 77. [BACK]

53. "When the bull turned," The Economist, October 24, 1987, pp. 11-12. For a typical menu of causes, see Larry Martz et al., "After the Meltdown of '87," Newsweek, November 2, 1987, pp. 14-20. [BACK]

54. "When the bull turned." [BACK]

55. Ibid. [BACK]

56. Martz et al., "After the Meltdown of '87." [BACK]

57. See Bill Powell et al., "Averting a Crisis: What Can Be Done?" Newsweek, November 9, 1987, pp. 32-37. [BACK]

58. Robert J. Samuelson, "The United States Can't Solve the Crisis By Itself," Newsweek, November 9, 1987, pp. 38-39. [BACK]

59. See Dick Kirschten, "White House Notebook," National Journal, November 28, 1987, pp. 3046-47. [BACK]

60. Elizabeth Wehr and John R. Crawford, "Cordial Talks on Deficit Belie Hardball Politics," Congressional Quarterly Weekly Report, October 31, 1987, p. 2652. [BACK]

61. "America's budget mouse," The Economist, November 28, 1987, p. 12. [BACK]

62. Lawrence J. Haas, "Chorus of Bronx Cheers for Budget Pact," National Journal, November 28, 1987, p. 3048. [BACK]

63. Conversations with Susan Rasky, reporter for the New York Times. [BACK]

64. Lawrence J. Haas, "Promises to Keep," National Journal, April 2, 1988, pp. 859-67. [BACK]

65. Congressional Budget Office, The Economic and Budget Outlook: Fiscal Years 1989-1993, A Report to the Senate and House Committees on the Budget (Washington, D.C.: U.S. Government Printing Office, February 1988), p. 50. [BACK]

66. Congressional Budget Office, Reducing the Deficit: Spending and Revenue Options, a Report to the Senate and House Committees on the Budget—Part II (Washington, D.C.: U.S. Government Printing Office, March 1988), pp. 44-45. [BACK]

67. Ibid., pp. 135-36. [BACK]

68. For discussion of the importance of VAT, see Harold Wilensky, The Welfare State and Inequality (Berkeley: University of California Press, 1975); Henry J. Aaron, "The Value-Added Tax, Sorting Through the Practical and Political Problem," The Brookings Review, Summer 1988, pp. 10-16; Aaron Wildavsky, "The Unanticipated Consequences of the 1984 Presidential Election," Tax Notes 24, no. 2 (July 9, 1984), pp. 193-200. [BACK]

69. Joseph J. Minarik and Rudolph G. Penner, "Fiscal Choices," in Isabel V. Sawhill, ed., Challenge to Leadership (Washington, D.C.: Urban Institute, 1988), pp. 279-316; quote on p. 290. [BACK]

70. The reader may consult the annual CBO baseline reports, and August/ September updates, for further data. [BACK]

71. Palmer did his calculations for "Should We Worry About the Deficit?" by John Palmer and Stephanie Gould, The Washington Monthly, May 1986, pp. 43-46. We are working from background tables and drafts that he kindly provided. [BACK]

72. Authors' estimates from John Palmer's work tables. [BACK]

73. Congressional Budget Office, Economic and Budget Outlook, Tables II-7 and G-5, G-6. [BACK]

74. Henry J. Aaron, Harvey Galper, Joseph A. Pechman, George L. Perry, Alice M. Rivlin, Charles L. Schultze, Economic Choices 1987 (Washington, D.C.: Brookings Institution, 1986), p. 4. [BACK]

75. Ibid., pp. 8-9. [BACK]

76. Minarik and Penner, "Fiscal Choices," p. 289. [BACK]