1. "Robust Economic Figures Indicate Threat of Inflation," Wall Street Journal, July 11, 1988, p. 22. [BACK]

2. Tom Kenworthy, "Hill Sees Opportunity for Progress on Deficit: Market's Dive Yields Wave of Responsibility," Washington Post, October 31, 1987, p. A9. [BACK]

3. Anne Swardson, "House Chaos Provided a Day to Remember," Washington Post, October 31, 1987, p. A9. [BACK]

4. Jeffrey H. Birnbaum, "White House, Top Capitol Hill Democrats Remain Far Apart on Deficit-Curb Plans," Wall Street Journal, October 29, 1987, p. 7. [BACK]

5. See Joseph White, "The Continuing Resolution: A Crazy Way to Govern?" Brookings Review 6, no. 3 (Summer 1988): 28-35. [BACK]

6. George Gallup, Jr., and Alec Gallup, "Deficit is top issue among the electorate," Oakland Tribune, November 6, 1988, p. A6. [BACK]

7. Paul Blustein, "Fractious budget commission at impasse as deadline nears," Oakland Tribune, November 6, 1988, p. A6. [BACK]

8. Report of the National Economic Commission (Washington, D.C.: U.S. Government Printing Office, March 1, 1989). The Republicans were joined by former Rep. Thomas Ashley (D-Ohio), one of President Bush's two appointees, who though he had a fairly liberal record in the House was a close friend of George Bush. Therefore, theirs constituted the Majority Report. [BACK]

9. Ibid., pp. 13, 36, 50, 56. [BACK]

10. David Rapp, "Negotiators Agree on Outlines of Fiscal 1990 Plan," Congressional Quarterly Weekly Report, April 15, 1989, pp. 804-5. See also Elizabeth Wehr, "Budget Plan Entails Tax Bill, but Details Are up in Air," in ibid., p. 806; David Rapp, "Bipartisan Pact Lets Everyone Be A Winner—For Now," Congressional Quarterly Weekly Report, April 22, 1989, pp. 880-82; and especially Democratic Study Group, "The FY 1990 Budget Resolution," Fact Sheet no. 101-3 (mimeo), May 1, 1989. The negotiators were Foley, Darman, Panetta, Sasser, Secretary of the Treasury Nicholas F. Brady, and the ranking minority members of the budget committees, Rep. Bill Frenzel and Sen. Pete Domenici. [BACK]

11. See the speech given by Representative Hamilton during debate on the budget resolution, Congressional Record, May 3, 1989, pp. H1553-H1556, especially H1553. [BACK]

12. Democratic Study Group, "FY1990 Budget Resolution," p. 4. [BACK]

13. $5.7 billion in asset sales, but specifically not President Bush's proposals to sell the Elk Hill Naval Petroleum Reserve and federal power marketing administrations; $1.2 billion in extra user fees and offsetting collections from administrative improvements and sale of the right to make chlorofluorocarbons; $850 million from paying some farm costs in FY89 instead of FY90; $477 million from writing off all food stamps not cashed in previous years as an outlay savings in FY90 (??); $496 million from legislation allowing sales of some VA loans; and $2,120 billion from taking the Post Office and a farm credit agency off budget. [BACK]

14. Maintaining Medicare Part B premiums at 25 percent of program cost; extending National Flood Insurance Fund and VA loan origination fees; and not providing the judicial and legislative branch pay raises that Congress had already rejected. [BACK]

15. Senator Bentsen didn't even attend the announcement of the agreement; see David Rapp, "Negotiators Agree." Representative Rostenkowski showed his skepticism on the House floor; see Congressional Record, May 3, 1989, p. 1533. [BACK]

16. David Rapp, "Negotiators Agree." [BACK]

17. Panetta in Congressional Record, May 3, 1989, pp. 1523-24. [BACK]

18. Congressional Record, May 3, 1989, p. H1519. [BACK]

19. This had become, by 1989, the major argument by academic economists for deficit reduction. Indeed, "the crisis," Charles Schultze of Brookings frequently remarked, "is that there is no crisis." He and others therefore feared politicians might ignore the costs to long-term growth from using national savings to finance government consumption. The difficulty is that the consequences of increased savings through reduced deficits are rather murky. CBO reported that running a 2 percent budget surplus after FY93, rather than a balanced budget, would reduce personal consumption for five to ten years, but by the year 2040 would raise personal consumption by between 2 and 14 percent. Neither the scale nor the certainty of benefit involved seems, to us, a convincing argument for an extra $100 billion in policy change now. See Congressional Budget Office, The Economic and Budget Outlook: Fiscal Years 1990-1994 (Washington, D.C.: U.S. Government Printing Office, January 1989), pp. 93-95. [BACK]

20. Ibid., pp. xv, 41, 57. [BACK]

21. This estimate is based on the figures in Table II-4 in ibid., p. 51, for the effect of one percentage-point less real growth. [BACK]

22. Ibid., Table II-3, p. 47. [BACK]