Which of the following correctly describes the factors that contributed to the change in the federal budget deficit between 1990 and 1998?
A) President George H. W. Bush and Congress cut federal taxes in 1990, which helped in Bush's reelection campaign in 1992 and contributed to a continually rising budget deficit during the 1990s.
B) Federal taxes were cut again by President Bill Clinton in 1993, which further contributed to a continually rising budget deficit during the 1990s.
C) Accelerated growth in federal outlays triggered the rapid expansion of the federal workforce between 1990 and 1998, which further contributed to a continually rising budget deficit during the 1990s.
D) Taxes were raised, spending was cut, productivity rose, consumer spending increased, the stock market was the strongest in history, and the country experienced a short-lived budget surplus.
E) Defense and international programs were identified as the only two areas of potential spending cuts.

Question

Quizplus · Accepted Answer

The factors that contributed to the change in the federal budget deficit between 1990 and 1998 are described in option D. Taxes were raised, spending was cut, productivity rose, consumer spending increased, the stock market was the strongest in history, and the country experienced a short-lived budget surplus. This was largely due to the budgetary discipline imposed by the Omnibus Budget Reconciliation Act of 1993, which was signed into law by President Bill Clinton. This act raised taxes on the wealthiest Americans, cut spending, and included entitlement reforms. As a result of these measures, the federal budget deficit declined throughout the 1990s, leading to a brief budget surplus in 1998.

Which of the Following Correctly Describes the Factors That Contributed