CRS Updates Report on Congressional Budget Actions

During the second session of the 109th Congress, the House and Senate will consider many different budgetary measures. Most of them will pertain to fiscal year (FY) 2007 and beyond, but some will make adjustments to the budget for FY2006. As the session progresses, this report will describe House and Senate actions on major budgetary legislation within the framework of the congressional budget process and other procedural requirements.

Congress typically begins its annual budget process once the President submits his budget for the upcoming fiscal year. On February 6, 2006, President George W. Bush submitted his FY2007 budget to Congress.

The congressional budget process provides for an annual concurrent resolution on the budget to serve as a framework for the consideration of budgetary legislation. The budget resolution sets forth aggregate spending and revenue levels, and spending levels by major functional area, for at least five fiscal years. Budget resolution policies are implemented through the enactment of reconciliation bills, revenue and debt-limit legislation, and appropriations and other spending measures. They are enforced by points of order that may be raised when legislation is pending on the House and Senate floor.

In preparation for action on the FY2007 budget resolution, on January 26, the Congressional Budget Office released its annual report on budget baseline projections, The Budget and Economic Outlook: Fiscal Years 2007-2016.

The Senate considered its version of the FY2007 budget resolution (S.Con.Res. 83) over a period of four days, March 13-16. After considering several amendments, adopting most and rejecting others, the Senate agreed to S.Con.Res. 83, as amended, by a vote of 51-49 on March 16. The House Budget Committee reported the its version of the FY2007 budget resolution (H.Con.Res. 376) on March 31. The House began general debate on the budget resolution on April 6 but did not complete consideration of the resolution, leaving it as unfinished business.

This report will be updated as actions occur during the session.

 Contents

Second, in response to President Bush's February 16 request for FY2006 supplemental appropriations for ongoing activities in Iraq and Afghanistan and for ongoing hurricane recovery efforts in the Gulf states, among other things, the Senate passed H.R. 4939, Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006, with an amendment, by a 77-21 vote on May 4. The Senate version provides $108.9 billion, and the House version adopted on March 16 provides $91.9 billion, for FY2006. The House and Senate are expected to convene a conference committee to resolve the differences between the two versions of the supplemental appropriations measure.

Within this procedural framework, Congress will consider various budget-related legislation in the context of what is arguably an unfavorable budget outlook. According to the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO), current budget projections under existing law, without any legislative changes, show annual deficits in the unified budget (i.e., including federal funds and trust funds) in each of the next several fiscal years. For example, OMB projects that the FY2006 unified budget deficit will be $367 billion, with deficits continuing, but declining, through FY2011. Similarly, CBO projects that the FY2006 unified budget deficit will be $337 billion, with a surplus not returning until FY2012.²

The President's Budget

Congress begins its budget process once the President submits his budget. The President is required by law to submit a comprehensive federal budget no later than the first Monday in February (31 U.S.C. 1105). The President's budget includes estimates of direct spending and revenues under existing laws (with certain adjustments), as well as estimates of any proposed legislative changes affecting direct spending and revenues. In addition, the President's budget contains requests, in specific dollar amounts, for discretionary spending (i.e., funds controlled through the appropriations process) for the upcoming fiscal year. Although Congress is not bound by the President's budget, congressional action on spending and revenue legislation often is influenced by his recommendations, as well as subsequent budgetary activities by the President during the year. OMB assists the President in formulating and coordinating his budget policies and activities.

On February 6, 2006, President Bush submitted his FY2007 budget to Congress. As is the usual practice, the President's budget was submitted as a multi-volume set consisting of a main document that includes the President's budget message and information on his 2007 proposals (Budget) and supplementary documents that provide special budgetary analyses (Analytical Perspectives), historical budget information (Historical Tables), and detailed account and program level information (Appendix), among other things.³ In addition, on February 9, OMB made available a supplementary document, Major Savings and Reforms in the President's 2007 Budget, outlining program terminations and reductions proposed in the President's FY2007 budget.

The President may revise his budget request any time during the year. Revisions requested before Congress has acted on the initial request are submitted as budget amendments. In addition, the President also may request supplemental appropriations for the current fiscal year for unanticipated needs.⁴

By July 15 of each year, the President is required to submit an update of his budget, commonly referred to as the mid-session review.⁵ The report contains revised estimates of the budget deficit/surplus, receipts, outlays, and budget authority, reflecting changed economic conditions and assumptions and congressional actions.

              Table 1. The Congressional Budget Process Timetable

Expired Budget Enforcement Procedures

For FY1991 through FY2002, Congress and the President also were constrained by statutory limits on discretionary spending and a statutory PAYGO requirement for direct spending and revenue legislation.⁷ Unlike the enforcement procedures associated with the budget resolution, which are employed while legislation is considered on the floor of each chamber, the discretionary spending limits and PAYGO requirement were enforced by a sequestration process, generally after legislative action for a session of Congress ended. If either of these budget constraints were violated, then the President was required to order a sequestration, which involved largely across-the-board spending cuts in non-exempt programs, by the amount of any violation. These budget enforcement mechanisms, however, expired at the end of FY2002 (i.e., September 30, 2002).

President Bush, among others, has proposed setting new discretionary spending limits and restoring a modified version of the PAYGO requirement, in addition to several other budget process reforms.⁸ If Congress and President Bush enact budget enforcement procedures such as these applicable to budget legislation in 2006, this report will incorporate them accordingly.

Following the submission of the President's budget early in the year, Congress begins formulating the budget resolution. The House and Senate Budget Committees are responsible for developing and reporting the budget resolution. In formulating the resolution, the Budget Committees hold hearings and receive testimony from various Members of Congress and representatives of federal departments and agencies, the general public, and national organizations. Two regular hearings include separate testimony from the CBO director and the OMB director. On February 2, 2006, CBO Acting Director Donald Marron presented CBO's baseline budget projections for FY2007-FY2016 during testimony to the Senate Budget Committee.¹⁰ On February 7 and 8, OMB Director Joshua B. Bolten provided an overview of President Bush's budget request before the Senate and House Budget Committees, respectively.¹¹

The congressional budget resolution, like the President's budget, is based on budget baselines (see Table 3). The budget baseline is a projection of federal revenue, spending, and deficit or surplus levels based upon current policies, assuming certain economic conditions. Baseline projections provide a benchmark for measuring the budgetary effects of proposed policy changes. The President's budget baseline, referred to as current services estimates, is included in the budget documents submitted to Congress.¹² The President's baseline usually differs from CBO's baseline, referred to as baseline budget projections, because of different economic and technical assumptions. CBO released its annual report on budget baseline projections, The Budget and Economic Outlook: Fiscal Years 2007-2016, on January 26, 2006.¹³ Subsequently, on March 14, CBO released its revised budget baseline projections in its report An Analysis of the President's Budgetary Proposals for Fiscal Year 2007. The report also contains estimates of the President's proposals using CBO's economic and technical assumptions, and it provides an analysis of the potential macroeconomic effects of the President's budgetary proposals.

                    Table 3. Budget Baselines, FY2006-FY2011

The budget resolution was designed to provide a framework for making budget decisions, leaving specific program determinations to House and Senate Appropriations Committees and other committees with spending and revenue jurisdiction. In many instances, however, particular program changes are considered when the budget resolution is formulated. Program assumptions sometimes are referred to in the reports of the House and Senate Budget Committees and usually are discussed during floor action. Although these program changes are not binding, committees may be strongly influenced by the recommendations when formulating appropriations bills, reconciliation measures, or other budgetary legislation.

Committee Markup and Reporting

On March 9, the Senate Budget Committee marked up and voted to report the Senate version of the FY2007 budget resolution (S.Con.Res. 83, S.Prt. 109-57) by a vote of 11-10. During markup, the committee considered 20 amendments to the chairman's mark: three amendments were adopted, 15 amendments were rejected, and two amendments were withdrawn.¹⁴

The House Budget Committee, on March 31, marked up and voted to report the House version of the FY2007 budget resolution (H.Con.Res. 376, H.Rept. 109-402) by a vote of 22-17. During markup, the committee considered 23 amendments to the chairman's mark: three amendments were adopted, 18 amendments were rejected, and two amendments were withdrawn.¹⁵

Floor Consideration

The congressional budget process timetable sets April 15 as a target date for final adoption of the budget resolution.¹⁶ The Budget Act prohibits the consideration of spending, revenue, or debt-limit legislation for the upcoming year until the budget resolution has been adopted, unless the rule is waived or set aside. The House and Senate consider the budget resolution under procedures generally intended to expedite final action.

The Senate considers the budget resolution under the procedures set forth in the Budget Act, sometimes as modified by a unanimous consent agreement. Debate on the initial consideration of the budget resolution, and all amendments, debatable motions, and appeals, is limited to 50 hours. Amendments, motions, and appeals may be considered beyond this time limit, but without debate. (Consideration of the conference report is limited to 10 hours.) The Senate considered its version of the FY2007 budget resolution on March 13, 14, 15, and 16. During consideration of S.Con.Res. 83, the Senate considered 87 amendments: 54 amendments were adopted, 27 amendments were rejected, and six amendments was withdrawn. On March 16, the Senate agreed to S.Con.Res. 83, as amended, by a 51-49 vote.¹⁷

In the House, the budget resolution usually is considered under a special rule, limiting the time of debate and allowing only a few amendments, as substitutes to the entire resolution. On April 6, the House began general debate on H.Con.Res. 376 under a special rule (H.Res. 766, H.Rept. 109-405) reported by the House Rules Committee.¹⁸ After general debate, the House took no further action on the budget resolution, leaving it as unfinished business.¹⁹

Second, each instructed committee develops legislative recommendations to meet its reconciliation directives and reports its legislative recommendations to its respective chamber directly or transmits such recommendations to its respective budget committee. Section 310(b) of the Congressional Budget Act of 1974 (Titles I-IX of P.L. 93-344, 88 Stat. 297-332) specifies two options for the submission of legislative recommendations to comply with reconciliation directives: (1) if one committee is instructed, the committee reports its legislative recommendations to its parent chamber directly; or (2) if two or more committees are instructed, the committees submit their legislative recommendations to their respective Budget Committee. In the latter case, the legislative language recommended by committees is packaged "without any substantive revision" into one or more budget reconciliation bills, as set forth in the budget resolution, by the House and Senate Budget Committees.

Once the reconciliation legislation is reported in the House or Senate, consideration is governed by special procedures. These procedures serve to limit what may be included in reconciliation legislation, prohibit certain amendments, and encourage its completion in a timely fashion. In the House, as with the budget resolution, reconciliation legislation usually is considered under a special rule, establishing the time allotted for debate and what amendments will be in order. In the Senate, debate on a budget reconciliation bill, and on all amendments, debatable motions, and appeals, is limited to not more than 20 hours. After the 20 hours of debate has been reached, consideration of amendments, motions, and appeals may continue, but without debate.

In both chambers, the Budget Act requires that amendments to reconciliation legislation be germane and not increase the deficit. Also, the Budget Act prohibits the consideration of reconciliation legislation, or any amendment to a reconciliation bill, recommending changes to the Social Security program. Finally, in the Senate, Section 313 of the Budget Act, commonly referred to as the Byrd rule, prohibits extraneous matter in a reconciliation bill.²¹

Reconciliation Provided by the FY2006 Budget Resolution

As 2006 began, Congress had not completed action on the reconciliation measures provided for in the FY2006 budget resolution (H.Con.Res. 95, H.Rept. 109-62), which was agreed to by Congress in 2005. The FY2006 budget resolution provided for three reconciliation measures: (1) to cut direct (or mandatory) spending by about $35 billion; (2) to cut taxes by $70 billion; and (3) to increase the statutory debt limit by $781 billion. (For an extensive discussion of these reconciliation measures, see CRS Report RL33132, Budget Reconciliation Legislation in 2005-2006 Under the FY2006 Budget Resolution, by Robert Keith.)

At the end of 2005, the House agreed to the conference report on the spending reconciliation measure (S. 1932, the Deficit Reduction Act of 2005).²² In the Senate, however, the conference report failed when a point of order under the Byrd rule (Section 313 of the Budget Act) against three provisions in the conference report was sustained. Subsequently, the Senate agreed to a motion to concur in the House amendment to S. 1932 with a further amendment containing the text of the conference report with the violating provisions stricken.²³ The House did not act on the further amendment to S. 1932 before adjourning the first session of the 109th Congress sine die.

Accordingly, at the beginning of the second session of the 109th Congress, on February 1, the House completed action on the spending reconciliation measure, S. 1932, the Deficit Reduction Act of 2005, by agreeing to H.Res. 653 (H.Rept. 109-366) by a 216-214 vote.²⁴ The resolution provided that the House concur in the Senate amendment to the House amendment to S. 1932, thereby clearing the measure for the President. On February 8, President Bush signed S. 1932 into law (P.L. 109-171). According to CBO, the Deficit Reduction Act of 2005 is projected to reduce mandatory spending by about $39 billion over the five-year period of FY2006-FY2010.²⁵

During 2005 as well, the House and the Senate passed different revenue reconciliation measures (H.R. 4297, the Tax Relief Extension Reconciliation Act of 2005, and S. 2020, the Tax Relief Act of 2005, respectively). Before adjourning for the year, however, the Senate and the House had not taken any further action on these revenue reconciliation measures. Early in the second session of the 109th Congress, to facilitate conference action, the Senate considered and passed H.R. 4297, as amended by the text of the Senate-passed revenue reconciliation measure, among other amendments, by a 66-31 vote on February 2, 2006. During consideration of H.R. 4297, the Senate considered 14 amendments: seven amendments were adopted, one amendment was rejected, five amendments fell on points of order, and one amendment was withdrawn.²⁶

On February 8 and 14, respectively, the House and the Senate agreed to a conference to resolve the legislative differences between their respective versions of the tax reconciliation bill, H.R. 4297. According to the Joint Committee on Taxation, the House-passed tax reconciliation measure is projected to reduce revenues by $55.6 billion, and the Senate-passed measure is projected to reduce revenues by $69.4 billion, over the five-year period of FY2006-FY2010.²⁷

Neither the House nor the Senate has taken action on a third reconciliation measure changing the statutory limit on the public debt.

Revenue Legislation

Revenue and debt-limit legislation is under the jurisdiction of the House Ways and Means Committee and the Senate Finance Committee. Article I, Section 7, of the U.S. Constitution requires that revenue legislation originate in the House of Representatives, but the Senate has considerable latitude to amend a revenue bill received from the House.

Most of the laws establishing the federal government's revenue sources are permanent and continue year after year without any additional legislative action (see Figure 1). Congress, however, typically enacts revenue legislation, changing some portion of the existing tax system or renewing expiring provisions, every year. Revenue legislation may include changes to individual and corporate income taxes, social insurance taxes, excise taxes, or tariffs and duties.

 

Figure 1. Actual FY2005 Revenues by Source

 

 

 

Revenue legislation is not considered automatically in the congressional budget process on an annual basis. Frequently, however, the President proposes and Congress considers changes in revenue laws to effect adjustments in the rates of taxation or the distribution of the tax burden, or for other purposes. An initial step in the congressional budget process is the publication of revenue estimates of the President's budget by CBO. These revenue estimates usually differ from the President's, since they are based on different economic and technical assumptions (e.g., growth of the economy and change in the inflation rate). Cost estimates of any congressional revenue proposals are prepared by the Joint Committee on Taxation (JCT). They are published in committee reports or in the Congressional Record and are available on JCT's website.²⁸

The budget resolution recommends yearly revenue levels, based on baseline estimates of federal government revenues, which are based on the continuation of existing laws and any proposed policy changes to them. Revenue levels in the budget resolution provide the framework for any action on revenue measures during the session. A point of order may be raised against consideration of legislation that causes revenues to fall below the agreed upon levels for the first fiscal year or the total for all fiscal years in the budget resolution. This point of order may be set aside by unanimous consent, or waived by a special rule in the House or by a three-fifths vote in the Senate (i.e., 60 Senators if there are no vacancies).

A Senate "pay-as-you-go" (PAYGO) point of order, under Section 505 of the FY2004 budget resolution (H.Con.Res. 95, 108th Congress), also may be raised against any revenue legislation not assumed in the most recently adopted budget resolution that would increase or cause an on-budget deficit for the first fiscal year, the period of the first five fiscal years, or the following five fiscal years, covered by the most recently adopted budget resolution.²⁹ A motion to waive the point of order requires a three-fifths vote.

As noted above, the House and the Senate have acted on revenue reconciliation legislation (H.R. 4297) projected to reduce revenues by $55.6 billion and $69.4 billion, respectively, over the five-year period of FY2006-2010. On February 8 and 14, respectively, the House and the Senate agreed to a conference to resolve the legislative differences between their respective versions of H.R. 4297. (For information on the consideration of this legislation, see section "Reconciliation Provided by the FY2006 Budget Resolution," above.)

Debt-Limit Legislation

The amount of money the federal government is allowed to borrow generally is subject to a statutory limit (31 U.S.C. 3101). From time to time, Congress considers and adopts legislation to change this limit.³⁰

Federal debt consists of debt held by the public plus debt held by government accounts. The debt held by the public represents the total net amount borrowed from the public to cover all or most of the federal government's budget deficits. By contrast, the debt held by government accounts represents the total net amount of federal debt issued to specialized federal accounts, primarily trust funds (e.g., Social Security). Trust fund surpluses by law must be invested in special (non-negotiable) federal government securities, and thus are held in the form of federal debt. The combination of both types of debt is subject to the statutory public debt limit. Therefore, budget deficits or trust fund surpluses may contribute to the federal government reaching the existing debt limit.

The annual congressional budget resolution specifies the appropriate level of the public debt for each fiscal year covered by the resolution. Although the budget resolution does not become law itself, the specified debt limits serve as a guide for any necessary debt-limit legislation.

Congress may develop debt-limit legislation in any of three ways: (1) under regular legislative procedures; (2) under House Rule XXVII; or (3) as part of reconciliation legislation (as described above). Regardless of the process by which debt-limit legislation is developed, the House Ways and Means Committee and the Senate Finance Committee maintain exclusive jurisdiction over debt-limit legislation.

Under House Rule XXVII (commonly referred to as the Gephardt rule after its author, former Representative Richard Gephardt), a joint resolution specifying the amount of the debt limit contained in the budget resolution automatically is engrossed and deemed to have passed the House by the same vote as the conference report on the budget resolution, thereby avoiding a separate vote on the debt-limit legislation.³¹ The Senate has no comparable automatic engrossment procedure; if it chooses to consider a House-passed joint resolution, it does so under the regular legislative process.

The most recent increase in the public-debt limit was enacted as an independent measure (P.L. 108-415, 118 Stat. 2337) in November 2004. The debt-limit measure increased the statutory limit by $800 billion, from $7.384 trillion to $8.184 trillion. At the end of 2005, the Department of the Treasury informed Congress that it would not be able to finance government operations beyond mid-March 2006 without an increase to the statutory debt limit.³²

In 2005, pursuant to House Rule XXVII, upon the adoption of the FY2006 budget resolution by Congress, the House Clerk engrossed and transmitted to the Senate a joint resolution (H.J.Res. 47) increasing the public debt limit by $781 billion, to $8.965 trillion. H.J.Res. 47 was deemed to have been adopted by the House on April 28 by a vote of 214-211 (i.e., the vote upon which the House agreed to the conference report to the FY2006 budget resolution).

The Senate considered H.J.Res. 47 on March 15 and 16, 2006. After rejecting an amendment offered by Senator Max Baucus (S.Amdt. 3131) on a 44-55 vote, the Senate passed the measure by a 52-48 vote. President Bush signed H.J.Res. 47 into law (P.L. 109-182) on March 20.

As noted above, the FY2006 budget resolution (H.Con.Res. 95) provided for a reconciliation measure increasing the statutory limit on the public debt by $781 billion. Neither the House or the Senate, however, have acted on such a measure. The enactment of H.J.Res. 47, increasing the public debt limit by the same amount, presumably makes such reconciliation measure unnecessary.

Actual FY2005 federal outlays totaled $2,472.2 billion (see Figure 2). Of this total amount, $967.9 billion, or 39%, was discretionary spending (exploded slices in Figure 2), whereas $1,504.3 billion, or 61%, was mandatory spending.

 

Figure 2. Actual FY2005 Outlays

 

by Major Spending Category

 

 

 

As noted above, the total budget authority and outlays set forth in the budget resolution are allocated among the House and Senate committees with jurisdiction over specific spending legislation. These allocations, commonly referred to as 302(a) allocations after the applicable section of the Congressional Budget Act, are specified in the joint explanatory statement accompanying the conference report to the budget resolution. A point of order may be raised against any legislation that would cause a committee's spending allocation to be exceeded. The budget resolution typically provides for periodic revisions of these allocations if certain conditions, specified in reserve fund provisions, for instance, are met.

Discretionary Spending

Discretionary spending is under the jurisdiction of the House and Senate Appropriations Committees. Soon after the budget resolution is adopted by Congress, the House and Senate Appropriations Committees subdivide their spending allocations among their subcommittees and formally report these subdivisions to their respective chambers. These subdivisions, referred to as 302(b) allocations after the applicable section of the Congressional Budget Act, represent the spending ceilings on the individual regular appropriations acts. During the appropriations process, these suballocations usually are revised several times.

In addition to the spending ceilings associated with the 302(b) subdivisions, the total spending amount provided in appropriations bills for each fiscal year covering FY2006 through FY2008 is constrained by the discretionary spending limits contained in the FY2006 budget resolution (see Section 404 of H.Con.Res. 95). The spending limits may be enforced in the Senate by a point of order.³³ A motion to waive the point of order requires a three-fifths vote (i.e., 60 Senators if there are no vacancies).

Congress passes three main types of appropriations measures. Regular appropriations acts provide budget authority for the next fiscal year, beginning on October 1.³⁴ (From time to time, Congress merges two or more of these regular appropriations acts into an omnibus appropriations act.) Supplemental appropriations acts provide additional funding for unexpected needs while the fiscal year is in progress. Continuing appropriations acts, commonly referred to as continuing resolutions, provide stop-gap funding for agencies that have not received regular appropriations by the start of the fiscal year.

The President's budget includes recommendations for the agencies, programs, and activities funded in the annual appropriations measures; account and program level detail about these recommendations is included in the Appendix volume of the President's budget documents. In addition, agencies submit justification materials to the House and Senate Appropriations Committees. The budget justifications provide more detailed information about an agency's program activities than is contained in the President's budget documents and are used in support of agency testimony during appropriations subcommittee hearings on the President's budget request.

The House and Senate appropriations subcommittees begin holding extensive hearings on appropriations requests shortly after the President's budget is submitted. By custom, appropriations measures originate in the House. In recent years, the Senate Appropriations Committee has adopted and reported original Senate appropriations measures, allowing the Senate to consider appropriations measures without having to wait for the House to adopt its version. Under this practice, the Senate version is considered and amended on the floor, and then inserted into the House-adopted version, when available, as a substitute amendment, thereby retaining the House-numbered bill for final action.

Supplemental Appropriations. In addition to the regular appropriations acts, Congress typically acts on at least one supplemental appropriations measure during a session. On February 16, President Bush submitted two request for FY2006 supplemental appropriations for ongoing activities in Iraq and Afghanistan and for ongoing hurricane recovery efforts in the Gulf states, among other things.³⁵ In response to the President's request, the House Appropriations Committee reported H.R. 4939, Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006 (H.Rept. 109-388) on March 13. The House considered H.R. 4939 on March 15 and 16, and adopted the measure by a vote of 348-71. According to the House Appropriations Committee, the measure provides $91.9 billion for FY2006.

The Senate Appropriations Committee, subsequently, ordered reported H.R. 4939 with an amendment in the nature of a substitute (S.Rept. 109-230) on April 4. The Senate considered the FY2006 supplemental appropriations act over seven days between April 25 and May 4, adopting the measure, as amended, on May 4 by a 77-21 vote. According to the Senate Appropriations Committee, the measure provides $108.9 billion for FY2006.

In each case, the supplemental appropriations were designated as emergency requirements pursuant to Section 402 of H.Con.Res. 95, the FY2006 budget resolution, thereby exempting the appropriations from the spending constraints associated with the budget resolution, as mentioned above.

Continuing Resolutions. Congress also often adopts one or more continuing resolutions each year because of recurring delays in the appropriations process. For example, Congress passed three continuing resolutions before completing action on the FY2006 regular appropriations acts.³⁶

Mandatory Spending

Mandatory spending is under the jurisdiction of the various legislative committees of the House and Senate. Some entitlement programs, such as Medicaid and certain veterans' programs, are funded in annual appropriations acts, but such spending is not considered discretionary and is not controlled through the annual appropriations process.

In addition to the committee spending allocations, under the Section 302 process mentioned above, mandatory spending legislation is limited by the Senate's PAYGO requirement. As with revenue legislation mentioned above, a point of order, under Section 505 of the FY2004 budget resolution (H.Con.Res. 95, 108th Congress), may be raised against any mandatory spending legislation not assumed in the most recently adopted budget resolution that would increase or cause an on-budget deficit for the first fiscal year, the period of the first five fiscal years, or the following five fiscal years, covered by the most recently adopted budget resolution.³⁷ A motion to waive the point of order requires a three-fifths vote (i.e., 60 Senators if there are no vacancies).

On several occasions in the past, Congress has included reserve funds in the budget resolution to accommodate specific mandatory spending legislation, often requiring that the legislation be deficit neutral.³⁸ Under the provisions of a reserve fund, the chairmen of the House and Senate Budget Committees may revise the committee spending allocations and other budget resolution levels if certain legislation is reported by the appropriate committee. Without such an adjustment, mandatory spending legislation might be subject to points of order if it were not assumed in the budget resolution spending amounts.

The Senate agreed to its version of the FY2007 budget resolution (S.Con.Res. 83) by a vote of 51-49.

February 6, 2006

President Bush submitted his FY2007 budget to Congress.

February 1, 2006

The House completed action on the spending reconciliation measure, S. 1932, the Deficit Reduction Act of 2005, by concurring in the Senate amendment to the House amendment to S. 1932, thereby clearing the measure for the President. [On February 8, President Bush signed S. 1932 into law (P.L. 109-171).]

January 26, 2006

CBO released its annual report on budget baseline projections, The Budget and Economic Outlook: Fiscal Years 2007-2016.

Congressional Budget Office. An Analysis of the President's Budgetary Proposals for Fiscal Year 2007. Washington: CBO, March 2006.

Congressional Budget Office. The Budget and Economic Outlook: Fiscal Years 2007-2016. Washington: CBO, January 2006.

U.S. Congress. Senate Committee on the Budget. Concurrent Resolution on the Budget FY2007. Committee Print to Accompany S.Con.Res. 83. 109th Congress, 2nd session. S.Prt. 109-57. Washington: GPO, 2006.

CRS Products

CRS Report RL32791. Congressional Budget Actions in 2005, by Bill Heniff Jr.

CRS Report RL30297. Congressional Budget Resolutions: Selected Statistics and Information Guide, by Bill Heniff Jr. and Justin Murray

CRS Report RL33132. Budget Reconciliation Legislation in 2005-2006 Under the FY2006 Budget Resolution, by Robert Keith.

CRS Report RL33030. The Budget Reconciliation Process: House and Senate Procedures, by Robert Keith and Bill Heniff Jr.

CRS Report 98-721. Introduction to the Federal Budget Process, by Robert Keith and Allen Schick.

CRS Report 97-684. The Congressional Appropriations Process: An Introduction, by Sandy Streeter.

CRS Report RL30343. Continuing Appropriations Acts: Brief Overview of Recent Practices, by Sandy Streeter.

CRS Report RS22390. FY2007 Budget Documents: Internet Access and GPO Availability, by Jennifer Anne Teefy.

CRS Report RL32812. The Budget for Fiscal Year 2006, by Philip D. Winters.

CRS Report RL33282. The Budget for Fiscal Year 2007, by Philip D. Winters.

² For further information on the current budget deficit projections, see Office of Management and Budget, Budget of the U.S. Government, Fiscal Year 2007 (Washington: GPO, 2006), Table S-12, p. 333; Congressional Budget Office, The Budget and Economic Outlook: Fiscal Years 2007-2016 (Washington: CBO, 2006), Summary Table 1, p. xiv; and CRS Report RL33282, The Budget for Fiscal Year 2007, by Philip D. Winters.

³ The President's FY2007 budget documents are available at [http://www.gpoaccess.gov/ usbudget/fy07/browse.html]. For further information on accessing these documents, see CRS Report RS22390, FY2007 Budget Documents: Internet Access and GPO Availability, by Jennifer Anne Teefy.

⁴ These requests are available at [http://www.gpoaccess.gov/usbudget/fy07/amndsup.html].

⁵ For background information on the mid-session review, see CRS Report RL32509, The Mid-Session Review of the President's Budget: Timing Issues, by Robert Keith.

⁶ For more detailed information on these points of order and their application, see CRS Report 97-865, Points of Order in the Congressional Budget Process, by James V. Saturno.

⁷ These constraints were first established by the Budget Enforcement Act of 1990 (Title XIII of P.L. 101-508, Omnibus Budget Reconciliation Act of 1990, 104 Stat. 1388-573-1388-630), which amended the Balanced Budget and Emergency Deficit Control Act of 1985 (Title II of P.L. 99-177, 99 Stat. 1038-1101).

⁸ In his FY2007 budget, President Bush proposed to set discretionary spending limits for FY2007 through FY2011 and to restore the PAYGO requirement for direct spending legislation only, among other budget reform initiatives. See Office of Management and Budget, Analytical Perspectives, Budget of the U.S. Government, Fiscal Year 2007, pp. 211-217. For a contextual discussion of budget process reform, see CRS Report RS21752, Federal Budget Process Reform: A Brief Overview, by Bill Heniff Jr. and Robert Keith.

⁹ For historical information on budget resolutions, see CRS Report RL30297, Congressional Budget Resolutions: Selected Statistics and Information Guide, by Bill Heniff Jr. and Justin Murray.

¹⁰ Donald Marron's written testimony to the Senate Budget Committee is available at [http://www.cbo.gov/ftpdocs/70xx/doc7034/02-02-OutlookTestimony.pdf].

¹¹ Joshua Bolten's written testimony to the Senate Budget Committee is available at [http://www.senate.gov/~budget/republican/hearingarchive/ testimonies/2006/2006-02-07Bolten.pdf]; his written testimony to the House Budget Committee is available at [http://www.house.gov/budget/hearings/boltenstmnt020806.pdf].

¹² See the summary table S-12 in the main Budget volume, p. 333, and chapter 25 of the Analytical Perspectives volume, pp. 359-374, for the current services estimates. Office of Management and Budget, Budget of the U.S. Government, Fiscal Year 2007.

¹³ The report is available on the website of the Congressional Budget Office at [http://www.cbo.gov/ftpdocs/70xx/doc7027/01-26-BudgetOutlook.pdf].

¹⁴ For a description of the amendments and the roll call votes, see U.S. Congress, Senate Committee on the Budget, Concurrent Resolution on the Budget FY2007, committee print to accompany S.Con.Res. 83, 109th Cong., 2nd sess., S.Prt. 109-57, Mar. 2006 (Washington: GPO, 2006), pp. 47-54.

¹⁵ For a description of the amendments and the roll call votes, see U.S. Congress, House Committee on the Budget, Concurrent Resolution on the Budget -- Fiscal Year 2007, committee report to accompany H.Con.Res. 376, 109th Cong., 2nd sess., H.Rept. 109-402, Mar. 31, 2006 (Washington: GPO, 2006), pp. 97-120.

¹⁶ In years when Congress is late in adopting, or does not adopt, a budget resolution, the House and Senate independently may adopt "deeming resolution" provisions for the purpose of enforcing certain budget levels. Deeming resolution provisions, typically included in a simple resolution, specify certain budget levels normally contained in the budget resolution, including aggregate spending and revenue levels, spending allocations to House and Senate committees, spending allocations to the Appropriations Committees only, or a combination of these. In some cases, an entire budget resolution, earlier adopted by one chamber, may be deemed to have been passed. Under a deeming resolution, the enforcement procedures related to the Congressional Budget Act, discussed later in this report, have the same force and effect as if Congress had adopted a budget resolution. For further information on "deeming resolutions," see CRS Report RL31443, The "Deeming Resolution": A Budget Enforcement Tool, by Robert Keith.

¹⁷ For the consideration and adoption of the Senate version of the FY2007 budget resolution, see Congressional Record, daily edition, vol. 152 (Mar. 13-16, 2006), pp. S1987-S2019, S2054-S2116, S2146-S2184, S2225-S2236, S2241-S2293.

¹⁸ The House agreed to H.Res. 766 by a vote of 225-196 after agreeing to order the previous question by a vote of 226-199. For the consideration and adoption of H.Res. 766, see Congressional Record, daily edition, vol. 152 (Apr. 6, 2006), pp. H1568-H1578.

¹⁹ For the consideration and adoption of H.Con.Res. 376, see Congressional Record, daily edition, vol. 152 (Apr. 6, 2006), pp. H1578-H1609.

²⁰ For a full discussion of the reconciliation process, see CRS Report RL33030, The Budget Reconciliation Process: House and Senate Procedures, by Robert Keith and Bill Heniff Jr.

²¹ For detailed information on the Byrd rule, see CRS Report RL30862, The Budget Reconciliation Process: The Senate's "Byrd Rule," by Robert Keith.

²² For the House consideration of the conference report to S. 1932, see Congressional Record, daily edition, vol. 151 (Dec. 18, 2005), pp. H12233-H12241, H12269-H12277.

²³ The Senate considered the conference report to S. 1932 on December 19-21, 2005. See Congressional Record, daily edition, vol. 151 (Dec. 19-21, 2005), pp. S14015-S14024, S14068- S14069, S14073-S14164, S14202-S14221.

²⁴ Prior to the consideration of H.Res. 653, Representative Jim McDermott raised a point of order against the consideration of the special rule under Section 426 of the Budget Act (which relates to the waiving of a point of order under the Unfunded Mandates Reform Act). Pursuant to the provisions of this section of the Budget Act, the House agreed to consider H.Res. 653 by a vote of 226-201. See Congressional Record, daily edition, vol. 152 (Feb. 1, 2006), pp. H37-H60, H68-H114.

²⁵ [http://www.cbo.gov/ftpdocs/70xx/doc7028/s1932conf.pdf].

²⁶ A motion to commit the bill to the Finance Committee with instructions also was offered and subsequently withdrawn. Two amendments to this motion to commit fell when the motion was withdrawn. For the consideration and adoption of H.R. 4297, see Congressional Record, daily edition, vol. 152 (Feb. 2-3, 2006), pp. S387-S436, S461, S466-S502.

²⁷ [http://www.house.gov/jct/x-10-06.pdf].

²⁸ [http://www.house.gov/jct/].

²⁹ See the Senate Budget Committee's Budget Bulletin dated February 3, 2006, available at [http://www.senate.gov/~budget/republican/analysis/2006/bb01- 2006.pdf].

³⁰ For further information on debt-limit legislation, see CRS Report RS21519, Legislative Procedures for Adjusting the Public Debt Limit: A Brief Overview, by Robert Keith and Bill Heniff Jr.; and CRS Report RL31967, The Debt Limit: The Ongoing Need for Increases, by Philip D. Winters.

³¹ For further information, see CRS Report RL31913, Developing Debt-Limit Legislation: The House's "Gephardt Rule," by Bill Heniff Jr.

³² See, for example, Jonathan Nicholson, "Snow Seeks Boost in Debt Limit In Advance of Mid-February Deadline," BNA's Daily Report for Executives (Jan. 3, 2006), p. A-17.

³³ Section 404 of H.Con.Res. 95 also provided for the adjustment of the FY2006 discretionary spending limits to accommodate spending for continuing disability reviews, Internal Revenue Service tax enforcement, health care fraud and abuse control program, and unemployment insurance improper payments. These discretionary spending limits for FY2006 were adjusted on July 28, 2005. See Congressional Record, daily edition, vol. 151 (July 28, 2005), pp. S9274-S9275.

³⁴ Each subcommittee of the House and Senate Appropriations Committees typically is responsible for one of the regular appropriations acts. At the beginning of the 109th Congress, the House Appropriations Committee reduced the number of its subcommittees to 10. It also reduced the number of regular appropriations bills to 11, with each subcommittee responsible for one regular appropriations act and the full Committee responsible for the accounts and programs of the Legislative Branch. Similarly, the Senate Appropriations Committee also reduced the number of its subcommittees to 12, with a corresponding number of regular appropriations bills. At the end of the 109th Congress, 1st sess., the House and the Senate passed a total of 11 regular appropriations acts for FY2006. For additional information on changes to the appropriations subcommittee structure, see CRS Report RL31572, Appropriations Subcommittee Structure: History of Changes from 1920-2005, by James V. Saturno.

³⁵ See [http://www.whitehouse.gov/omb/budget/amendments.htm] for the President's supplemental requests.

³⁶ Initially, Congress passed, and President Bush signed into law, a continuing resolution (H.J.Res. 68, P.L. 109-77) to provide temporary appropriations through November 18, 2005, for agencies and programs funded in the regular appropriations acts not enacted by the start of the fiscal year. Subsequently, Congress and President Bush extended the temporary funding through December 17 (H.J.Res. 72, P.L. 109-105) and December 31 (H.J.Res. 75, P.L. 109-128).

³⁷ See the Senate Budget Committee's Budget Bulletin dated February 3, 2006, available at [http://www.senate.gov/~budget/republican/analysis/2006/bb01- 2006.pdf].

³⁸ See, for example, CRS Report RS21038, Reserve Funds in the FY2002 Budget Resolution, by Bill Heniff Jr.