Balanced Budget Act Of 1997 Flashcards, test questions and answers
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What is Balanced Budget Act Of 1997?
The Balanced Budget Act of 1997 was a piece of legislation passed by the United States Congress that sought to balance the federal budget. It is often referred to as the most significant deficit reduction measure in US history , and it marked an unprecedented shift in fiscal policy for the country. The act included a variety of measures aimed at reducing spending, increasing revenue, and curbing certain entitlements.One of the major components of the Balanced Budget Act was its implementation of Medicaid reforms. These reforms aimed to decrease federal spending on health care while still providing coverage for people who needed it most. This was accomplished through changes to eligibility requirements, cost-sharing arrangements, provider reimbursement rates, and more. Additionally, Medicare Part B premiums were increased under this act so that they would cover approximately 75% of program costs instead of 50%. Another important component included cutting non-defense discretionary spending by nearly $100 billion between 1998 and 2002. This reduced funding for programs such as education and infrastructure development as well as eliminating or consolidating several government agencies such as HUD’s Office of Federal Housing Enterprise Oversight (OFHEO). Finally, there were tax increases implemented under this act that affected both individuals and corporations alike. Individuals saw an increase in their income taxes on higher wage earners (those making over $200k per year) while corporations saw changes to their depreciation schedules which limited deductions allowed when calculating taxable income. In summary, the Balanced Budget Act was a comprehensive package designed to reduce government spending while also raising additional revenues from taxpayers; something unusual during a period where large deficits had become commonplace in America’s financial landscape. Despite facing strong opposition from some quarters initially due mainly to its size and scope; this landmark legislation ultimately proved successful in helping bring down deficits significantly by 1999 – reaching zero just two years later – paving the way for surpluses throughout much of George W Bush’s presidency until 2008 when economic recession forced another change in direction with regards to fiscal policy once again.