Word: fallback
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...Under a fallback provision in the law, written in anticipation of a negative Supreme Court ruling, the Office of Management and Budget and the Congressional Budget Office will still make the initial calculations of how much federal spending must be reduced to meet the deficit reduction targets. But then, instead of having the Comptroller General make the final calculations, a joint House-Senate committee must do so and then submit its work to Congress for approval...
...bill contains a fallback provision thatallows Congress to vote on a deficit-reductionpackage if the automatic feature was invalidated,and there is some speculation that Congress maycontinue to use Gramm-Rudman as an unofficialbudget guideline, experts said...
...straight yes-or-no vote within one week. Congress could reject the resolution, or the President could veto it, but they would still be under pressure to cut spending lest they be accused of dereliction of duty by permitting the deficit to go on growing. Said Rudman: "The fallback procedure, I believe, will work--not with the certainty of the original (automatic) provision, but it will work." Said House Democratic Whip Thomas Foley: "Gramm-Rudman may rule from the grave...
...Supreme Court agrees, what then? Congress wrote a fallback provision into the act: spending cuts sufficient to meet the deficit targets would be calculated and voted into effect by a joint resolution of Congress, subject to presidential veto. The big catch: it was precisely the inability of President and Congress to agree on any plan that would dramatically reduce deficits that drove them to support Gramm-Rudman in the first place...
Despite the fallback late last week, the Dow is up 66 points, or 5.5%, so far in 1985. That is a stunning contrast to 1984, when the Dow dropped 47 points, or 3.7% for the whole year. Many Wall Streeters now believe that 1984 may have been only a temporary pause in a bull market that began in August...