Omnibus Budget Reconciliation Act of 1993
The Omnibus Budget Reconciliation Act of 1993 (or OBRA-93) was federal law that was enacted by the 103rd United States Congress
103rd United States Congress
- House of Representatives :- Leadership :- Senate :* President: Dan Quayle , until January 20, 1993** Al Gore , from January 20, 1993* President pro tempore: Robert Byrd - Majority leadership :* Majority Leader: George Mitchell...

 and signed into law by President Bill Clinton
Bill Clinton
William Jefferson "Bill" Clinton is an American politician who served as the 42nd President of the United States from 1993 to 2001. Inaugurated at age 46, he was the third-youngest president. He took office at the end of the Cold War, and was the first president of the baby boomer generation...

. It has also been referred to, unofficially, as the Deficit Reduction Act of 1993. Part XIII, which dealt with taxes, is also called the Revenue Reconciliation Act of 1993.


  • It created 36 percent and 39.6 income tax rates for individuals in the top 1.2% of the wage earners.
  • It created a 35 percent income tax rate for corporations.
  • The cap on Medicare
    Medicare (United States)
    Medicare is a social insurance program administered by the United States government, providing health insurance coverage to people who are aged 65 and over; to those who are under 65 and are permanently physically disabled or who have a congenital physical disability; or to those who meet other...

     taxes was repealed.
  • Transportation fuels taxes were raised by 4.3 cents per gallon.
  • The taxable portion of Social Security
    Social Security (United States)
    In the United States, Social Security refers to the federal Old-Age, Survivors, and Disability Insurance program.The original Social Security Act and the current version of the Act, as amended encompass several social welfare and social insurance programs...

     benefits was raised.
  • The phase-out of the personal exemption and limit on itemized deduction
    Itemized deduction
    An itemized deduction is an eligible expense that individual taxpayers in the United States can report on their federal income tax returns in order to decrease their taxable income....

    s were permanently extended.
  • Part IV Section 14131: Expansion of the Earned Income Tax Credit and added inflation adjustments


Some alternatives to the bill included a proposal by Senator David Boren (D-OK), which among other things would have kept much of the tax increase on upper-income payers but would have eliminated all energy tax increases while also scaling back the Earned Income Tax Credit
Earned income tax credit
The United States federal earned income tax credit or earned income credit is a refundable tax credit primarily for individuals and families who have low to moderate earned income. Greater tax credit is given to those who also have qualifying children...

. It was endorsed by Bill Cohen (R-ME), Bennett Johnston (D-LA), and John Danforth
John Danforth
John Claggett "Jack" Danforth is a former United States Ambassador to the United Nations and former Republican United States Senator from Missouri. He is an ordained Episcopal priest. Danforth is married to Sally D. Danforth and has five adult children.-Education and early career:Danforth was born...

 (R-MO). Boren's proposal never passed committee.

Another proposal was offered in the House of Representatives
United States House of Representatives
The United States House of Representatives is one of the two Houses of the United States Congress, the bicameral legislature which also includes the Senate.The composition and powers of the House are established in Article One of the Constitution...

 by John Kasich
John Kasich
John Richard Kasich is the 69th and current Governor of Ohio. A member of the Republican Party, he previously served as a member of the United States House of Representatives, representing from 1983 to 2001...

 (R-OH). He sponsored an amendment that
would have reduced the deficit by cutting $355 billion in spending with $129 billion of the cuts coming from entitlement programs (the actual bill cut entitlement spending by only $42 billion). The amendment would have eliminated any tax increases. The amendment failed by a 138-295 vote with many Republicans
Republican Party (United States)
The Republican Party is one of the two major contemporary political parties in the United States, along with the Democratic Party. Founded by anti-slavery expansion activists in 1854, it is often called the GOP . The party's platform generally reflects American conservatism in the U.S...

 voting against the amendment and only six Democrats
Democratic Party (United States)
The Democratic Party is one of two major contemporary political parties in the United States, along with the Republican Party. The party's socially liberal and progressive platform is largely considered center-left in the U.S. political spectrum. The party has the lengthiest record of continuous...

 voting in favor of the amendment.

Legislative history

Ultimately every Republican in Congress voted against the bill, as did a number of Democrats. Vice President
Vice President of the United States
The Vice President of the United States is the holder of a public office created by the United States Constitution. The Vice President, together with the President of the United States, is indirectly elected by the people, through the Electoral College, to a four-year term...

 Al Gore
Al Gore
Albert Arnold "Al" Gore, Jr. served as the 45th Vice President of the United States , under President Bill Clinton. He was the Democratic Party's nominee for President in the 2000 U.S. presidential election....

 broke a tie in the Senate
United States Senate
The United States Senate is the upper house of the bicameral legislature of the United States, and together with the United States House of Representatives comprises the United States Congress. The composition and powers of the Senate are established in Article One of the U.S. Constitution. Each...

 on both the Senate bill and the conference report. The House bill passed 219-213. The House passed the conference report on Thursday, August 5, 1993, by a vote of 218 to 216 (217 Democrats and 1 independent (Sanders
Bernie Sanders
Bernard "Bernie" Sanders is the junior United States Senator from Vermont. He previously represented Vermont's at-large district in the United States House of Representatives...

 (VT-I)) voting in favor; 41 Democrats and 175 Republicans voting against), and the Senate passed the conference report on the last day before their month's vacation, on Friday, August 6, 1993, by a vote of 51 to 50 (50 Democrats plus Vice President Gore voting in favor, 6 Democrats (Lautenberg
Frank Lautenberg
Frank Raleigh Lautenberg is the senior United States Senator from New Jersey and a member of the Democratic Party. Previously, he was the Chairman and Chief Executive Officer of Automatic Data Processing, Inc.-Early life, career, and family:...

 (D-NJ), Bryan
Richard Bryan
Richard Hudson "Dick" Bryan is an American politician. He served as the 25th Governor of the U.S. state of Nevada from 1983 to 1989. He is a former United States Senator from Nevada. He is a member of the Democratic Party.-Early life:...

 (D-NV), Nunn
Sam Nunn
Samuel Augustus Nunn, Jr. is an American lawyer and politician. Currently the co-chairman and Chief Executive Officer of the Nuclear Threat Initiative , a charitable organization working to reduce the global threats from nuclear, biological and chemical weapons, Nunn served for 24 years as a...

 (D-GA), Johnston
Bennett Johnston Jr.
John Bennett Johnston, Jr., known as J. Bennett Johnston , is an American lobbyist who was a Democratic Party politician and United States Senator from Louisiana from 1972 to 1997.-Early life:...

 (D-LA), Boren
David L. Boren
David Lyle Boren is an academic leader and American politician from the state of Oklahoma. A Democrat, he served as the 21st Governor of Oklahoma from 1975 to 1979 and in the United States Senate from 1979 to 1994. He is currently president of the University of Oklahoma. He was the longest serving...

 (D-OK), and Shelby
Richard Shelby
Richard Craig Shelby is the senior U.S. Senator from Alabama. First elected to the Senate in 1986, he is the ranking member of the United States Senate Committee on Banking, Housing, and Urban Affairs and was its chairman from 2003 to 2007....

(D-AL) now (R-AL)) and 44 Republicans voting against). President Clinton signed the bill on August 10, 1993.


By the end of President Clinton's term, there was a budget surplus (with the help of borrowed funds from the Social Security and Medicare accounts).

External links

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