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43-730: The Congressional Accountability Act was passed by vote of 98–1 in the Senate and 390–0 in the House. The law was the first plank in the Contract with America , the Republican Party agenda for the 1994 Congressional elections. The act was amended by the passage of the Office of Compliance Administrative and Technical Corrections Act of 2015 .( H.R. 1213 , Pub. L.   114–6 (text) (PDF) ) The CAA applies twelve specific laws to

86-461: A budget deficit to a balanced budget decreases interest rates, increases investment, shrinks trade deficits and helps the economy grow faster in the longer term. Other economists, especially (but not limited to) those associated with Modern Monetary Theory (MMT), downplay the need for balanced budgets among countries that have the power to issue their own currency, and argue that government spending helps boost productivity, innovation and savings in

129-482: A government employment program called a ' jobs guarantee '. This is based on the view that a government deficit creates a 'private sector surplus' by increasing incomes and creating savings. In the United States, the fiscal conservatism movement believes that balanced budgets are an important goal. Every state other than Vermont has a balanced budget amendment , providing some form of ban on deficits, while

172-518: A higher level of public debt . The deficit spending , that is the growth of public spending without an equal amount of monetary entrance into the State Treasury, is always a less efficient political choice in order to speed up the GNP. However, the balanced budget is made smaller when resulting changes in the interest rate change investment spending and money demand and when resulting changes in

215-529: A majority of both houses of Congress for the first time since 1953, and some parts of the Contract were enacted. Most elements did not pass Congress, while others were vetoed by, or substantially altered in negotiations with President Bill Clinton , who would sarcastically refer to it as the "Contract on America" implying that the Republicans' legislative package was akin to an organized-crime "hit" on

258-1101: A procedural vote against the amendment to bring it up again in the future), March 2, 1995, two-thirds required. An anti-crime package including stronger truth in sentencing , "good faith" exclusionary rule exemptions (H.R.666 Exclusionary Rule Reform Act, passed US House Roll Call 289–142 February 8, 1995), death penalty provisions (H.R.729 Effective Death Penalty Act, passed US House Roll Call 297–132 February 8, 1995; similar provisions enacted under S. 735 [1] , April 24, 1996), funding prison construction (H.R.667 Violent Criminal Incarceration Act, passed US House Roll Call 265–156 February 10, 1995, rc#117) and additional law enforcement (H.R.728 Local Government Law Enforcement Block Grants Act, passed US House Roll Call 238–192 February 14, 1995). An act to discourage illegitimacy and teen pregnancy by reforming and cutting cash welfare and related programs. This would be achieved by prohibiting welfare to mothers under 18 years of age, denying increased Aid to Families with Dependent Children (AFDC) for additional children while on welfare, and enacting

301-565: A single bill in the Contract, its provisions ultimately made it to the House Floor as four bills: An amendment to the Constitution that would have imposed 12-year term limits on members of Congress (i.e. six terms for representatives, two terms for senators). H.J.Res. 73 rejected by the House 227–204 (a constitutional amendment requires a two-thirds majority, not a simple majority), March 29, 1995; RC #277 . Other sections of

344-621: A two-years-and-out provision with work requirements to promote individual responsibility. H.R.4, the Family Self-Sufficiency Act , included provisions giving food vouchers to unwed mothers under 18 in lieu of cash AFDC benefits, denying cash AFDC benefits for additional children to people on AFDC, requiring recipients to participate in work programs after two years on AFDC, complete termination of AFDC payments after five years, and suspending driver and professional licenses of people who fail to pay child support. H.R.4, passed by

387-526: Is exogenous physical investment and NX is net exports . Using the first equation in the second one yields the following solution for Y: and taking differences of the variables and setting Δ I = Δ N X = 0 {\displaystyle \Delta I=\Delta NX=0} and Δ T = Δ G , {\displaystyle \Delta T=\Delta G,} we have Then dividing through by Δ G {\displaystyle \Delta G} gives

430-491: Is a budget that has no budget deficit, but could possibly have a budget surplus . A cyclically balanced budget is a budget that is not necessarily balanced year-to-year but is balanced over the economic cycle , running a surplus in boom years and running a deficit in lean years, with these offsetting over time. Balanced budgets and the associated topic of budget deficits are a contentious point within academic economics and within politics. Some economists argue that moving from

473-431: Is a country which: Because such a country can issue its own currency, it can never run out of that currency and does not need to increase revenues in order to increase expenditure. Thus, the only constraint on expenditures is the inflation which it may generate if the economy is making full use of its capital and labour.. MMT advocates therefore argue for that budget deficits should be used to achieve full employment through

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516-399: Is a school of thought founded by economist Bill Mitchell and Hedge Fund Manager Warren Mosler , and has since been further developed by economists such as Stephanie Kelton and Randle Wary. MMT advocates argue that a balanced budget is not required in the short term, or over the course of the business cycle in countries with monetary sovereignty , defined as follows: A monetary sovereign

559-434: Is positive, and the induced second and subsequent rounds of spending are also positive, giving a positive result for the balanced budget multiplier. In general, and in the absence of induced changes in interest rates and the price level, a change in the balanced budget will change aggregate demand by an amount equal to the change in spending. Let the consumption function be: The goods market equilibrium equation is: where I

602-573: The 104th Congress assembled in January 1995, the Republican majority sought to implement the Contract. In some cases (e.g. The National Security Restoration Act and The Personal Responsibility Act ), the proposed bills were accomplished by a single act analogous to that which had been proposed in the Contract; in other cases (e.g. The Job Creation and Wage Enhancement Act ), a proposed bill's provisions were split up across multiple acts. Most of

645-504: The American Enterprise Institute , praised the Contract, calling it the main reason for the Republican victory in 1994", in part because it "nationalized the election". Balanced budget A balanced budget (particularly that of a government ) is a budget in which revenues are equal to expenditures. Thus, neither a budget deficit nor a budget surplus exists (the accounts "balance"). More generally, it

688-469: The Austrian school of economics . Budget deficits are argued to be necessary by some within post-Keynesian economics , notably the chartalist school: Budget deficits can be calculated by subtracting the total planned expenditure from the total available budget. This will then show either a budget deficit (a negative difference) or a budget surplus (a positive difference). Modern Monetary Theory (MMT)

731-561: The Oregon kicker bans surpluses of greater than 2% of revenue. The Colorado Taxpayer Bill of Rights (the TABOR amendment) also bans surpluses and requires the state to refund taxpayers in event of a budget surplus. The last time that the budget was balanced or had a surplus was the 2001 United States federal budget . Numerous sources have stated that as of 2023, a balanced budget is no longer possible without massive reductions in spending by

774-585: The Private Securities Litigation Reform Act , was enacted in 1995 when Congress overrode Clinton's veto. A package of measures to act as small-business incentives: capital-gains cuts and indexation, neutral cost recovery, risk assessment/cost-benefit analysis, strengthening the Regulatory Flexibility Act and unfunded mandate reform to create jobs and raise worker wages. Although this was listed as

817-627: The golf of governing America and leadership. Republicans interviewed by Garrett when the Contract was being compiled said it was meant to be a political document of easy goals, not a governing document, with one senior aide explaining, "We don't care if the Senate passes any of the items in the contract. It would be preferable, but it's not necessary. If the freshmen do everything the contract says, they'll be in excellent shape for 1996". In 2014, business and finance writer John Steele Gordon , writing in The American , an online magazine published by

860-440: The libertarian Cato Institute , stated, "the combined budgets of the 95 major programs that the Contract with America promised to eliminate have increased by 13%." Some observers cite the Contract with America as having helped secure a decisive victory for the Republicans in the 1994 elections; others dispute this role, noting its late introduction into the campaign. Whatever the role of the Contract, Republicans were elected to

903-409: The private sector . Mainstream economics mainly advocates a cyclic balanced budget, arguing from the perspective of Keynesian economics that permitting the deficit to vary provides the economy with an automatic stabilizer —budget deficits provide fiscal stimulus in lean times, while budget surpluses provide restraint in boom times. Keynesian economics does not advocate for fiscal stimulus when

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946-552: The American people, intending for the Contract to avoid promises on controversial and divisive matters like abortion and school prayer . Reagan biographer Lou Cannon characterized the Contract as having taken more than half of its text from Ronald Reagan's 1985 State of the Union Address . On the first day of their majority in the House, the Republicans promised to bring up for vote, eight major reforms: During

989-542: The American public. As a blueprint for the policy of the new Congressional majority, authors Micklethwait and Wooldridge argue in The Right Nation that the Contract placed Congress back in the driver's seat of domestic government policy for most of the 104th Congress, and placed the Clinton White House on the defensive. George Mason University law professor David E. Bernstein has argued that

1032-496: The Contract "show[ed] ... that [Congress took] federalism and limited national government seriously", and "undoubtedly made [the Supreme Court decision in] United States v. Lopez more viable". Journalist and senior congressional reporter Major Garrett equated the Contract with a game of miniature golf , "fun, popular, and largely diversionary exercise meant to satisfy middle-class sensibilities", contrasted with

1075-685: The U.S. Congress and its associated agencies, giving various rights to the 30,000 employees in the legislative branch. Due to revelations related to Harvey Weinstein's alleged sexual offenses and other sexual victims , the Congress has been criticized for lack of regular civil rights protections for its workers against sexual harassment by Members . Many have advocated for changes in the Congressional Accountability Act in light of these scandals. Contract with America [REDACTED] The Contract with America

1118-574: The US House 234–199, March 23, 1995, and passed by the US Senate 87–12, September 19, 1995. The Act was vetoed by President Clinton, but the alternative Personal Responsibility and Work Opportunity Reconciliation Act which offered many of the same policies was enacted August 22, 1996. An act to create a $ 500-per-child tax credit, add a tax credit for couples who pay more taxes in aggregate if they are married than if they were single (but keep in place

1161-493: The United States federal government according to the Congressional Budget Office and several independent sources. Extreme spending reductions on numerous entitlements would also not likely be popular, even if such cuts would be sufficient to bring a balanced budget to the United States, "Federal debt will rise from 98 percent of GDP in 2023 to 181 percent in 2053." Following the over-borrowing in both

1204-457: The balanced budget multiplier as This is named the Haavelmo theorem which demonstrates that the balanced budget multiplier rises its maximum value when any increase of the public spending Δ G {\displaystyle \Delta G} is corresponded by an equal increase of the fiscal imposition Δ T {\displaystyle \Delta T} , so as to avoid

1247-655: The bills died in the Senate, except as noted below. An amendment to the Constitution that would require a balanced budget unless sanctioned by a two-thirds vote in both houses of Congress (H.J.Res.1, passed by the US House Roll Call: 300-132 , January 26, 1995, but rejected by the US Senate: Roll Call 65–35 (the amendment was defeated by a single vote, with one Republican opposed, Oregon Republican Senator Mark Hatfield ; Bob Dole cast

1290-578: The chancellor was turning a blind eye to the complexities of a 21st-century economy that demanded governments remain flexible and responsive to changing global events. Since 1980, there have been only six years in which a budget surplus has been delivered: twice when the Conservatives' John Major was Chancellor of the Exchequer, in 1988 and 1989, and four times when Labour's Gordon Brown was Chancellor, in 1998, 1999, 2000 and 2001. Because of

1333-499: The cherished welfare state. Today the goal is 1% over the business cycle, as the retirement pension is no longer considered a government expenditure. In 2015 George Osborne , the Chancellor of the Exchequer , announced that he intended to implement a law whereby the government must deliver a budget surplus if the economy is growing. Academics have criticised this proposal with Cambridge University professor Ha-Joon Chang saying

Congressional Accountability Act of 1995 - Misplaced Pages Continue

1376-420: The concept of Earned Income Splitting ), and creation of American Dream Savings Accounts to provide middle-class tax relief. H.R.1215, passed 246–188, April 5, 1995. An act to prevent U.S. troops from serving under United Nations command unless the president determines it is necessary for the purposes of national security, to cut U.S. payments for UN peacekeeping operations , and to help establish guidelines for

1419-639: The contract include a proposed Family Reinforcement Act (tax incentives for adoption, strengthening the powers of parents in their children's education, stronger child pornography laws, and elderly dependent care tax credit) and the Senior Citizens Fairness Act (raise the Social Security earnings limit, repeal the 1993 tax hikes on Social Security benefits and provide tax incentives for private long-term care insurance). A November 13, 2000, article by Edward H. Crane , president of

1462-490: The existing government debt is already significant. Alternative currents in the mainstream and branches of heterodox economics argue differently, with some arguing that budget deficits are always harmful, and others arguing that budget deficits are not only beneficial, but also necessary. Schools which often argue against the effectiveness of budget deficits as cyclical tools include the freshwater school of mainstream economics and neoclassical economics more generally, and

1505-426: The first one hundred days of the 104th Congress, the Republicans pledged "to bring to the floor the following [ten] bills, each to be given a full and open debate, each to be given a clear and fair vote, and each to be immediately available for public inspection". The text of the proposed bills was included in the Contract, which was released prior to the election. These bills were not governmental operational reforms, as

1548-525: The first time in 40 years. Many of the Contract's policy ideas originated at The Heritage Foundation , a conservative think tank . The Contract with America was introduced six weeks before the 1994 Congressional election, the first midterm election of President Bill Clinton 's administration , and was signed by all but two of the Republican members of the House and all of the Party's non-incumbent Republican congressional candidates. The contract described

1591-492: The multiplier effect, it is possible to change aggregate demand (Y) keeping a balanced budget. Suppose the government increases its expenditures (G), balancing the increase by an increase in taxes (T). Since only part of the income taken away from households would have actually been spent, the change in consumption expenditure will be smaller than the change in taxes. Therefore, the net change in spending (increased government spending and decreased consumption spending) at this point

1634-551: The plan of the Congressional Representatives, seeking to nationalize the Congressional election. Its provisions represented the view of many conservative Republicans on the issues of reducing the size of government, cutting taxes, and both tort reform and welfare reform . The 1994 elections resulted in Republicans gaining 54 House and 8 U.S. Senate seats, flipping both chambers. The Contract

1677-409: The previous promises were; rather, they represented significant changes to policy. They mainly included a balanced budget requirement, tax cuts for small businesses, families and seniors, term limits for legislators, social security reform, tort reform, and welfare reform. The contract promised to bring to floor debate and votes ten bills that would implement reform of the federal government. When

1720-468: The public and private sector that led to the Swedish banking crisis of the early 1990s and under influence from a series of reports on the future demographic challenges, a wide political consensus developed on fiscal prudence. In the year 2000 this was enshrined in a law that stated a goal of a surplus of 2% over the business cycle, to be used to pay off the public debt and to secure the long-term future for

1763-515: The voluntary integration of former Warsaw Pact nations into NATO . H.R.7, passed 241–181, February 16, 1995. An act to institute " loser pays " laws (H.R.988, passed 232–193, March 7, 1995), limits on punitive damages and weakening of product liability laws to prevent what the bill considered frivolous litigation (H.R.956, passed 265–161, March 10, 1995; passed Senate 61–37, May 11, 1995, vetoed by President Clinton. "H.R.956 - Product Liability Fairness Act of 1995" . Another tort reform bill,

Congressional Accountability Act of 1995 - Misplaced Pages Continue

1806-543: Was a legislative agenda advocated by the Republican Party during the 1994 congressional election campaign. Written by Newt Gingrich and Dick Armey , and in part using text from former President Ronald Reagan 's 1985 State of the Union Address , the Contract detailed the actions the Republicans promised to take if they became the majority party in the United States House of Representatives for

1849-535: Was seen as a triumph by party leaders such as Minority Whip Newt Gingrich , Dick Armey , and the American conservative movement . The Contract's text included a list of eight reforms the Republicans promised to enact, and ten bills they promised to bring to floor debate and votes, if they were made the majority following the election. During the crafting of the Contract, proposals were limited to "60% issues", i.e. legislation that polling showed garnered 60% support of

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