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

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

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.

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

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

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

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

8. Ibid., p. 1097.

9. Ibid.

10. Rauch, "In Uncharted Waters."

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

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

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

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

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.

16. Jeffrey H. Birnbaum, "Senate Tax Bill Is Seen Passing Before Friday," Wall Street Journal, June 17, 1986, p. 3.

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

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

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

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

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

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.

23. "Supreme Court's Gramm-Rudman Opinion."

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

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

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

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

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

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.

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.

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

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

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

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.

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.

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.

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.

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

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.

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

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

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.

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

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

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.

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

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

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.

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

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

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

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

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.

54. "When the bull turned."

55. Ibid.

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

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

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

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

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

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

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

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

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

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.

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.

67. Ibid., pp. 135-36.

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.

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.

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

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.

72. Authors' estimates from John Palmer's work tables.

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

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.

75. Ibid., pp. 8-9.

76. Minarik and Penner, "Fiscal Choices," p. 289.