Deficit Reduction Act - Definition and Overview

The Deficit Reduction Act was passed by the US Congress in 1993 under the Clinton adminstration. It was designed to increase tax revenues by $250 billion over a period of 5 years and to reduce Federal spending by the same amount. The legislation increased the top marginal tax rate on personal income to 39.6% and added roughly four cents per gallon to the Federal excise tax on gasoline. All in all, it promoted a reverse crowding-out effect.

Reference

McConnell Brue Economics, 15th Edition, McGraw-Hill