[Analytical Perspectives]
[Budget Enforcement Act Preview Report]
[14. Deficit Reduction Fund]
[From the U.S. Government Printing Office, www.gpo.gov]


  On August 4, 1993, the President issued Executive Order 12858 to 
guarantee that the net deficit reduction achieved by the Omnibus Budget 
Reconciliation Act (OBRA) of 1993 is dedicated exclusively to reducing 
the deficit. The order established the Deficit Reduction Fund and 
requires that amounts equal to the spending reductions and revenue 
increases resulting from OBRA be credited to the Fund. The order also 
requires that information about the fund, including statements of the 
amounts in and Federal debt redeemed by the fund, be included in the 
President's budget. Table 14-1 presents the amounts that will be 
credited to the fund, based on the final scoring of OBRA by OMB:

  Table 14-1. REVENUE INCREASES AND SPENDING REDUCTIONS CREDITED TO THE 
                         DEFICIT REDUCTION FUND                         
                         (In millons of dollars)                        
------------------------------------------------------------------------
                                                 Annual      Cumulative 
                 Fiscal Year                     amount        amount   
------------------------------------------------------------------------
1994........................................     46,752        46,752   
1995........................................     82,713       129,465   
1996........................................    100,554       230,019   
1997........................................    128,898       358,917   
1998........................................    145,846       504,763   
------------------------------------------------------------------------

  Each year, amounts are credited to the fund on a daily basis equal to 
the net deficit reduction achieved by OBRA. The order requires that the 
fund balances be used exclusively to redeem maturing debt obligations of 
the Treasury held by foreign governments. On October 1, 1993, amounts 
began to be credited to the fund and. Since then, the deposits made have 
been used for the stated debt redemption purposes.
  The status of the fund on December 31, 1995, was:

            Table 14-2. STATUS OF THE DEFICIT REDUCTION FUND            
                        (In millions of dollars)                        
------------------------------------------------------------------------
                        Description                            Amount   
------------------------------------------------------------------------
Beginning balance.........................................  ............
Deposits made between October 1, 1993, and December 31,                 
 1995.....................................................    153,902   
Redemptions of Treasury debt held by foreign governments                
 between October 1, 1993, and December 31, 1995...........    153,501   
Fund balance as of December 31, 1995......................        401   
------------------------------------------------------------------------