Actually called the Gramm-Rudman-Hollings Act

Passed on December 11, 1985, the act set a series of targets for eliminating the federal budget deficit by October 1, 1990. It set a provision whereby if Congress and the President failed to agree on voluntary spending reductions, the law called for automatic cuts of the necessary percentage from each item in the budget. One half-of the cuts were to come from domestic spending and one-half from defense spending

On July 7, 1986, the Supreme court struck down the automatic-cut provision, on the ground that the act improperly delegated authority to the controller-general, an agent of congress designated to implement the cuts. Congress restored the automatic cuts in 1987, avoiding constitutional problems by assigning the power to make the cuts to the President and the director of the Office of Management and Budget.

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