ABSTRACT
This chapter describes the alternative ways of calculating the baseline, sets out the varying assumptions that affect calculations of the size of the reductions, and shows how different baselines and different assumptions affect the resulting estimates. It also shows how the reductions were distributed among different types of programs. The budget authority cut is also significant for those studying the effect of cuts on grants to states and localities. Throughout 1981, reports of the size of the reductions enacted by Congress differed. The major reason for this was that different reports used different baselines against which to measure the reductions. The initial Reagan budget cuts can be better understood by looking next at the distribution of the reductions by budget functions and program type. The reconciliation act of 1981 affected spending levels in 232 out of the 1,314 accounts that made up the federal budget.
