Here are the most well-known omnibus budget acts, listed in chronological order.
Omnibus Budget Reconciliation Act of 1981
The Omnibus Budget Reconciliation Act of 1981 is also "called Gramm-Latta II" for short. Congress combined it with the Economic Recovery Tax Act of 1981 and President Reagan's first budget for Fiscal Year 1982.
The ERTA 1981 was also called the "Kemp-Roth Tax Cut." It cut the top income tax rate from 70% to 50%.
Consolidated Omnibus Budget Reconciliation Act
The Consolidated Omnibus Budget Reconciliation Act is also called the Omnibus Budget Reconciliation Act of 1986. COBRA was signed in 1985 but went into effect in 1986.
It requires companies with 20 or more employees to give workers and their families so called COBRA coverage to extend health insurance. Employees have the option of continuing with the same company-sponsored health plan if the employee:
- Is laid off
- Has their hours reduced
The employee, as well as the employee's spouse and any dependents, can continue the plan for 18 months.
If the employee becomes eligible for Medicare, gets divorced or separated, or dies, the employee's family is eligible for 36 months of coverage.
Children who lose their dependent status can sign up for 36 months of coverage.
The employer doesn't have to continue its contribution at the same rate. Most companies reduce their subsidies. That’s why COBRA insurance premiums are so expensive. The employee pays most of the cost.
In 2021, all households who purchase insurance through the exchanges will qualify for subsidized health insurance, even if their income would have been too high previously. These subsidies were temporarily increased under the American Rescue Plan, which was passed in response to the COVID-19 pandemic.
Omnibus Budget Reconciliation Act of 1987
The Omnibus Budget Reconciliation Act of 1987 set annual spending-reduction targets enforced by sequestration. It corrected the Balanced Budget and Emergency Deficit Control Act of 1985.
That Act had assigned enforcement of sequestration to the Comptroller General, a Congressional Office. The U.S. Supreme Court ruled in Bowsher vs. Synar in 1986 that it was unconstitutional for Congress to enforce its own laws.
The Omnibus Act of 1987 moved that function to the Executive Branch, where it belonged. It also increased the debt limit and delayed the deadline for passing a balanced budget by two years. It was superseded by the Budget Enforcement Act of 1990.
OBRA 1987 worked in tandem with the Tax Reform Act of 1986 to fight stagflation. TRA 1986 cut corporate taxes to 40%. It eliminated $30 billion in loopholes.
Combined, OBRA 1987 and TRA 1986 are called "Gramm-Rudman-Hollings" or the "Gramm-Rudman Act."
Omnibus Budget Reconciliation Act of 1989
The Omnibus Budget Reconciliation Act of 1989 changed Medicare's "reasonable charge" method of reimbursing physicians, replacing it with a fee schedule.
Omnibus Budget Reconciliation Act of 1990
President George H.W. Bush worked with Congress to pass this law to cap discretionary spending, including defense. It required that any new entitlement benefits or tax cuts be offset in other areas. This concept is called “pay-as-you-go” or "PayGo."
The Act also raised taxes, which violated Bush's campaign promise, "Read my lips: No new taxes." This prevented him from being re-elected. The Act expired in 2002.
Omnibus Budget Reconciliation Act of 1993
The Omnibus Budget Reconciliation Act of 1993 is also called the "Deficit Reduction Act." It was President Clinton's first budget. It raised the top income tax rate from 31% to 36% for those earning more than $115,000. It raised the top rate to 39.6% for incomes above $250,000.
OBRA 1993 increased the corporate income tax from 34% to 36% for corporations with incomes over $10 million. It also ended some corporate subsidies and taxed Social Security benefits for high-income earners and created the earned income tax credit for incomes under $30,000.