Congress and the Budget: 2016 Actions and
Events
Grant A. Driessen
Analyst in Public Finance
Megan S. Lynch
Specialist on Congress and the Legislative Process
January 1929, 2016
Congressional Research Service
7-5700
www.crs.gov
R44347
Congress and the Budget: 2016 Actions and Events
Summary
The Constitution grants Congress the power of the purse, but does not dictate how Congress must
fulfill this constitutional duty. Congress has, therefore, developed certain types of budgetary
legislation, along with rules and practices that govern its content and consideration. This set of
budgetary legislation, rules, and practices is often referred to as the congressional budget process.
It is important to note, however, that there is no prescribed congressional budget process that
must be strictly followed each year, and Congress does not always consider budgetary measures
in a linear or predictable pattern. Such dissimilarity can be the result of countless factors, such as
a lack of consensus, competing budgetary priorities, the economy, natural disasters, military
engagements, and other circumstances creating complications, obstacles, and interruptions within
the policymaking process.
Since the budget process will vary significantly each year, it is better understood not as a definite
set of actions that must occur annually, but instead as an array of opportunities for affecting the
federal budget. This report seeks to assist in (1) anticipating what budget-related actions might
occur within the upcoming year, and (2) staying abreast of budget actions that occur this year. It
provides a general description of the recurrent types of budgetary actions, and reflects on current
events that unfold in each category during 2016. In addition, it includes information on certain
events that may affect Congress’s work on the budget, such as the President’s budget request and
the Congressional Budget Office’s budget and economic outlook. The most-recent budget actions
will be noted at the beginning of the report.
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Congress and the Budget: 2016 Actions and Events
Contents
Recent Actions................................................................................................................................. 1
CBO’s Budget and Economic Outlook............................................................................................ 1
The President’s Budget Request ...................................................................................................... 2
The Budget Resolution .................................................................................................................... 3
Budget Reconciliation Legislation .................................................................................................. 4
Appropriations Legislation .............................................................................................................. 5
Mandatory Spending Legislation .................................................................................................... 5
Revenue Legislation ........................................................................................................................ 56
Debt Limit Legislation .................................................................................................................... 6
Legislation Related to Budgetary Enforcement............................................................................... 7
Chronological List of Events ........................................................................................................... 7
Contacts
Author Contact Information ............................................................................................................ 8
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Congress and the Budget: 2016 Actions and Events
Recent Actions
Summary of Events at the End of 2015
At the end of 2015, Congress acted on several pieces of significant budgetary legislation.
FY2016 and FY2017 discretionary caps for defense and nondefense spending
were modified in the Bipartisan Budget Act of 2015 (P.L. 114-74, enacted
November 2, 2015). The Bipartisan Budget Act of 2015 also suspended the
statutory debt limit until March 15, 2017.1
Full-year appropriations were enacted for FY2016 in the Consolidated
Appropriations Act, 2016 (P.L. 114-113, enacted December 18, 2015). This
funding expires at the end of the current fiscal year (September 30, 2016).2
A tax extenders package was enacted in the Protecting Americans from Tax Hikes
Act of 2015 (PATH; P.L. 114-113, enacted December 18, 2015). Section I of the
PATH Act of 2015 extended or made permanent 56 tax provisions that expired at
the end of tax year 2014, which had been extended several times in recent years.3
Most Recent Actions in 2016
The Congressional Budget Office (CBO) announced that it will release a
summary of the Budget and Economic Outlook on Tuesday, January 19. The
complete report will be releasedreleased The Budget and Economic
Outlook: 2016 to 2026 on Monday, January 25.
The Office of Management and Budget (OMB) has stated that the President’s
FY2017 budget request will be released on February 9, 2016.
The House passed the Restoring Americans’ Healthcare Freedom Reconciliation
Act of 2015 on January 6, 2016, which had been passed by the Senate on
December 3, 2015. This budget reconciliation bill, which was subsequently
vetoed by the President, was the result of the reconciliation process triggered by
the FY2016 budget resolution.
CBO’s Budget and Economic Outlook
Description
Each year, the Congressional Budget Office (CBO) releases a projection of budgetary and
economic outcomes titled The Budget and Economic Outlook. These projections include an
estimate of federal spending and receipts under current law, referred to as the baseline. The
baseline covers the current fiscal year, as well as the future 10-year period.
1
For more information, see CRS Insight IN10389, Bipartisan Budget Act of 2015: Adjustments to the Budget Control
Act of 2011, by Grant A. Driessen.
2
For more information, see CRS Insight IN10415, Brief Summary of the FY2016 Omnibus and the Historical
Frequency of Omnibus Appropriations, by Jessica Tollestrup.
3
For more information, see CRS Report R43898, Tax Provisions that Expired in 2014 (“Tax Extenders”), by Molly F.
Sherlock.
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Congress and the Budget: 2016 Actions and Events
Congress uses the baseline in many ways as it makes budgetary decisions. For example, the
baseline assists Congress in assessing the current budget and economic situation to assist them in
developing a budget resolution for the upcoming fiscal year. In addition, the baseline provides a
benchmark against which Congress can measure the budgetary impact of legislative proposals.
This is used not only to weigh the merits of legislation, but also to enforce budgetary constraints.
Changes in budget projections between baselines are sorted into three categories: (1) legislative
changes, which are adjustments due to enacted laws since the last baseline publication; (2)
economic changes, which are reflective of shifts in underlying economic conditions; and (3)
technical changes, which are modeling adjustments made in an effort to improve the accuracy of
projections.
The Budget and Economic Outlook is generally released in January, with updates typically
occurring in March (following the release of the President’s Budget) and August.
Actions in 2016
CBO released a summary of theThe Budget and Economic Outlook: 2016 to 2026 on Monday on Tuesday, January 19.25.4 The
forecast summary includes federal budget deficit projections of $544 billion in FY2016 and $561
billion in
FY2017, equivalent to 2.9% of annual gross domestic product (GDP) in each year.
Those totals
represent an increase in the deficit total from FY2015, which was $439 billion (2.5%
of GDP).
CBO projects that budget deficits will continue to increase in the ensuing decade, rising
to $1,366
billion (4.9% of GDP) in FY2026, the final year of the budget window.
The summaryoutlook projects a cumulative deficit from FY2016 through FY2025 of $8.6556 trillion, a 22%
increase from projections over the same period in the August 2015 baseline.4 Though a detailed
breakdown of the changes since the last baseline is not yet available, CBO reported that roughly
5 The deficit increase
is primarily attributable to projected decreases in federal revenues, which accounted for 79%
($1.226 trillion) of the total change. The remaining adjustments (21%, or $0.323 trillion) were
attributable to increased federal spending.
CBO reported that roughly half of the adjustments were due to enactment of legislation in late 2015. Newly incorporated
legislation with budgetary effects includes the Bipartisan Budget Act of 2015 (P.L. 114-74), the
2015. More than half (57%) of the legislative adjustments resulted from reductions to federal
revenues; projected increases in federal expenditures were responsible for the remaining changes
(43%). Newly incorporated legislation with budgetary effects included the Bipartisan Budget Act
of 2015 (P.L. 114-74), the Consolidated Appropriations Act, 2016 (P.L. 114-113), and the
Protecting Americans from Tax
Hikes Act of 2015 (P.L. 114-113). Economic revisions accounted
for roughly 30% of the change
in deficit projections, with the remainder attributable to technical modeling adjustments.
The complete report will be released Monday, January 25.5 in deficit projections, and about 20% of the deficit changes were
attributable to technical modeling adjustments.
The President’s Budget Request
Description
The Budget and Accounting Act of 1921 (P.L. 67-13), as amended, requires the President to
submit a budget request to Congress for the upcoming fiscal year.6 The budget is required to
include (1) estimates of spending, revenues, borrowing, and debt; (2) detailed estimates of the
4
This total excludes projections for FY2026, which was included in the January summary but was not estimated in the
August 2015 baseline.
5
Congressional Budget Office, “CBO to Issue Summary of Updated Projections January 19, Full Report January 25,”
press release, January 8, 2016, https://www.cbo.gov/publication/511214
Congressional Budget Office, The Budget and Economic Outlook: 2016 to 2026, January 2016, available at
https://www.cbo.gov/publication/51129.
5
This total excludes projections for FY2026, which was included in the January summary but was not estimated in the
August 2015 baseline.
6
Under Title 31 of the U.S. Code.
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Congress and the Budget: 2016 Actions and Events
include (1) estimates of spending, revenues, borrowing, and debt; (2) detailed estimates of the
financial operations of federal agencies and programs; (3) the President’s budgetary, policy, and
legislative recommendations; and (4) information supporting the President’s recommendations.7
The budget request is required to be submitted on or after the first Monday in January, but no
later than the first Monday in February. The President’s budget has been submitted after the
statutory deadline on several occasions.8
Actions in 2016
OMB has stated that the President’s FY2017 budget request will be released on February 9,
2016.9
The Budget Resolution
Description
The Congressional Budget Act of 1974 (the Budget Act) provides for the annual adoption of a
budget resolution.10 The budget resolution reflects an agreement between the House and Senate
on a budgetary framework for the upcoming fiscal year, designed to establish parameters within
which Congress will consider subsequent budgetary legislation.
The budget resolution does not become law: therefore, no money is spent or collected as a result
of its adoption. Instead, it is meant to assist Congress in considering an overall budget plan.11
Once the budget resolution has been agreed to by both chambers, certain levels contained in it are
enforceable through points of order.12
The budget resolution is under the jurisdiction of the House and Senate Budget Committees, and
its content, consideration, and implementation are shaped primarily by requirements in the
Budget Act. While the Budget Act directs that Congress is to complete action on a budget
resolution by April 15, Congress often does so later than April 15. Furthermore, since the current
timetable for action on the budget resolution was established in 1985, there have been nine years
when the House and Senate did not reach agreement on a budget resolution. In such years,
Congress often employs alternative legislative tools to serve as a substitute for a budget
7
As stated in CRS Report R43163, The President’s Budget: Overview of Structure and Timing of Submission to
Congress, by Michelle D. Christensen. Refer to this report for more information on the President’s budget request.
8
Ibid.
9
Shaun Donovan, Director of the Office of Management and Budget, Twitter, January 7, 2016, https://twitter.com/
ShaunOMB.
10
Titles I-IX of P.L. 93-344, as amended; 2 U.S.C. 601-688.
11
The Budget Act requires that the budget resolution include the following budgetary levels for the upcoming fiscal
year and at least four out years: total spending, total revenues, the surplus/deficit, new spending for each major
functional category, and the public debt. The Budget Act also requires that the aggregate amounts of spending
recommended in the budget resolution be allocated among committees.
12
This means that if legislation is being considered on the House or Senate floor that would violate certain levels
contained in the budget resolution, a Member may raise a point of order against the consideration of that legislation.
Points of order are not self-enforcing, meaning that if no Member raises a point of order, a chamber may consider and
pass legislation that would violate levels established in the budget resolution. In addition, either chamber may waive
the point of order. The process for waiving points of order, and the number of Members required to waive points of
order, varies by chamber. Generally, such points of order can be waived in the House by a simple majority of Members
and in the Senate by three-fifths of all Senators.
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Congress often employs alternative legislative tools to serve as a substitute for a budget
resolution. These substitutes are typically referred to as “deeming resolutions,” because they are
deemed to serve in place of an annual budget resolution for the purposes of establishing
enforceable budget levels for the upcoming fiscal year.13
Actions in 2016
As described above, Congress sometimes employs a substitute for a budget resolution, referred to
as a deeming resolution. Occasionally, Congress will take steps in advance to provide for the
opportunity to use a deeming resolution for an upcoming budget year, without precluding
congressional action on a budget resolution for that budget year. For example, the Bipartisan
Budget Act of 2015 (P.L. 114-74) included a provision directing the Senate Budget Committee
chair to file in the Congressional Record levels that will then become enforceable in the Senate as
if they had been included in a budget resolution for FY2017. The Senate Budget Committee chair
is directed to file such levels after April 15, 2016, but not later than May 15, 2016. Again, this
provision in no way precludes the House or Senate from acting on a budget resolution, but
provides the option for a Senate substitute for a budget resolution in the event that the chambers
have not reached agreement on a budget resolution.14
Budget Reconciliation Legislation
Description
Budget reconciliation is an optional congressional process that operates as an adjunct to the
budget resolution. If Congress intends to use the reconciliation process, reconciliation directives
(also referred to as reconciliation instructions) must be included in the annual budget resolution.
These directives trigger the second stage of the process by instructing individual committees to
develop and report legislation that would change laws within their respective jurisdictions related
to mandatory spending, revenue, or the debt limit.
Once a specified committee develops legislation, it is eligible to be considered under expedited
procedures in both the House and Senate. As with all legislation considered through
reconciliation, any differences in the legislation passed by the two chambers must be resolved.
Congress has not employed the reconciliation process annually. Since 1980, it has passed 24 bills
through reconciliation.15
Actions in 2016
On January 6, 2016, the House passed the Restoring Americans’ Healthcare Freedom
Reconciliation Act of 2015, which had been passed by the Senate on December 3, 2015. This
budget reconciliation bill, which was subsequently vetoed by the President, was the result of the
reconciliation process triggered by the FY2016 budget resolution. This action would not preclude
a budget resolution for FY2017 from triggering another reconciliation process.
13
For more information, see CRS Report R44296, Deeming Resolutions: Budget Enforcement in the Absence of a
Budget Resolution, by Megan S. Lynch.
14
Ibid.
15
For more information, see CRS Report R40480, Budget Reconciliation Measures Enacted Into Law: 1980-2010, by
Megan S. Lynch.
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reconciliation process triggered by the FY2016 budget resolution. This action would not preclude
a budget resolution for FY2017 from triggering another reconciliation process.
Appropriations Legislation
Description
Appropriations legislation provides authority to agencies to obligate a specific amount of money
and directs the Treasury to make the payments for such obligations. Appropriations, also known
as discretionary spending, are under the jurisdiction of the House and Senate Appropriations
Committees. The appropriations process contemplates annual enactment of 12 regular
appropriations bills providing funding for various categories of federal programs.
Appropriations in some form must be enacted by the beginning of a new fiscal year (October 1)
or a government shutdown may occur. The content and consideration of appropriations measures
are shaped primarily by House and Senate rules, amounts in the budget resolution, the Budget
Act, and statutory limits on annual discretionary spending. Congress regularly employs
continuing resolutions (or CRs) to continue funding programs in the absence of the enactment of
regular appropriations measures.
Full-year appropriations were enacted for FY2016 in the Consolidated Appropriations Act of
2016 (P.L. 114-113, enacted December of 2015). This funding expires at the end of the fiscal year
(September 30, 2016).
Actions in 2016
This section will be updated to reflect actions on appropriations legislation as they occur.
Mandatory Spending Legislation
Description
Mandatory spending programs are generally those federal programs under which beneficiaries
that meet the requirements established by law are entitled to receive payments. Such programs,
also referred to as direct spending programs or entitlement programs, generally continue annually
without any congressional action required. Most legislative committees have jurisdiction over
some type of mandatory spending program. The content and consideration of mandatory spending
legislation are shaped primarily by House and Senate rules, the budget resolution, and the Budget
Act. Each year, Congress typically considers some legislation that affects mandatory spending in
varying degrees.
Actions in 2016
This section will be updated to reflect actions on mandatory spending legislation as they occur.
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Revenue Legislation
Description
Revenue legislation provides authority for the collection of taxes, fees, and tariffs to fund the
federal government. Most revenue is collected by the federal government as a result of previously
enacted law that continues in effect without any need for congressional action. Congress,
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however, routinely considers revenue legislation that repeals or modifies existing provisions,
extends expiring provisions, or creates new provisions. Generally revenue is under the
jurisdiction of the House Ways and Means Committee and the Senate Finance Committee. The
content and consideration of revenue measures is shaped primarily by House and Senate rules and
the budget resolution. Each year Congress passes legislation that affects revenue in varying
degrees.
Congress has extended a number of short-term tax provisions several times in recent years. In late
2015, legislation was enacted that extended 56 expiring tax provisions which had expired at the
end of tax year 2014 in Section I of the Protecting Americans from Tax Hikes (PATH) Act of
2015 (P.L. 114-113), with some of the provisions made permanent. All tax provisions in the
PATH Act are scheduled to remain in effect through 2016.
Actions in 2016
This section will be updated to reflect actions on revenue legislation as they occur.
Debt Limit Legislation
Description
The Constitution allows Congress to restrict the amount of federal debt that may be incurred as
part of its “power of the purse.” Under current law Congress exercises this power through the
federal debt limit.16 Debt subject to limit is more than 99% of total federal debt, and includes debt
held by the public (which finances budget deficits and the federal loan portfolio) and
intragovernmental debt (which represents money borrowed from federal trust funds and other
federal accounts).
When debt levels approach the statutory debt limit, Congress can choose to (1) leave the debt
limit in place; (2) increase the debt limit to allow for further federal borrowing; (3) maintain the
current debt limit and require the implementation of “extraordinary measures” that will postpone
(but not prevent) a binding debt limit from being reached; or (4) temporarily suspend or abolish
the debt limit.
The House Ways and Means Committee and the Senate Finance Committee have jurisdiction over
debt limit legislation generally. Consideration of debt limit legislation is shaped largely by House
and Senate rules as well as the budget resolution and the Budget Act.
16
The debt limit is codified at 31 U.S.C. §3101.
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Actions in 2016
The Bipartisan Budget Act of 2015 suspended the debt limit until March 15, 2017 (P.L. 114-74).17
As a result, the Treasury may continue to sell U.S. debt instruments through 2016 and, therefore,
no debt limit event is anticipated in 2016.
Current law dictates that the debt limit be increased upon reinstatement as needed to exactly
accommodate any additional federal borrowing undertaken to date. Absent legislative action, the
16
The debt limit is codified at 31 U.S.C. §3101.
For more information on recent debt limit events, see CRS Report R43389, The Debt Limit Since 2011, by D.
Andrew Austin.
17
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debt limit will be reached shortly following reinstatement if (1) an increase in the debt limit is
required and (2) federal debt subject to the limit is increasing.
Legislation Related to Budgetary Enforcement
Congress may consider legislation designed to create new methods of budget enforcement or alter
existing budget enforcement mechanisms. Such budgetary restrictions can take many forms. If
they are to be enforced internally by the House and Senate they may be added to the House and
Senate rules, included in a budget resolution, or included in a rule-making statute that becomes
law. Congress has typically incorporated some type of internal budget enforcement in each recent
Congress. Congress has also passed legislation that creates budgetary requirements that are
enforced outside of the House and Senate. For example, in 2011 Congress passed the Budget
Control Act creating discretionary spending limits, among other things. Since the enactment of
the BCA, several pieces of legislation have been enacted making changes to the spending limits
and the enforcement procedures.18 Most recently, the Bipartisan Budget Act of 2015 (P.L. 114-74,
enacted in November of 2015) increased discretionary spending limits for FY2016 and FY2017,
among other things.19
Such budget enforcement legislation is primarily within the jurisdiction of the House and Senate
Budget Committees and often the Judiciary and Rules Committees as well. Consideration of such
legislation is shaped primarily by House and Senate Rules as well as the Budget Act.
Actions in 2016
The Bipartisan Budget Act of 2015 made changes to the discretionary spending caps for FY2017.
In addition, it established spending targets for overseas contingency operations/global war on
terrorism for FY2017 and amended the limits of adjustments allowed under the discretionary
spending limits for Program Integrity Initiatives.20
Chronological List of Events
Date
Budget Action
November 2, 2015
Enactment of the Bipartisan Budget Act of 2015 (P.L. 114-74). The Bipartisan Budget
17
For more information on recent debt limit events, see CRS Report R43389, The Debt Limit Since 2011, by D.
Andrew Austin.
18
For more information, see CRS Report R42972, Sequestration as a Budget Enforcement Process: Frequently Asked
Questions, by Megan S. Lynch.
19
For more information, see CRS Insight IN10389, Bipartisan Budget Act of 2015: Adjustments to the Budget Control
Act of 2011, by Grant A. Driessen.
20
Ibid.
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Act of 2015 modified FY2016 and FY2017 discretionary caps for defense and
nondefense spending, and suspended the statutory debt limit until March 15, 2017.
December 18, 2015
Enactment of the Consolidated Appropriations Act, 2016 (P.L. 114-113), which
included full year appropriations for FY2016.
December 18, 2015
Enactment of the Protecting Americans from Tax Hikes Act of 2015 (P.L. 114-113).
The Protecting Americans from Tax Hikes Act extended or made permanent 56 tax
provisions that expired at the end of tax year 2014, and which had been extended
several times in recent years.
January 6, 2016
House passage of the Restoring Americans’ Healthcare Freedom Reconciliation Act
of 2015, as passed by the Senate on December 3, 2015. The President subsequently
18
For more information, see CRS Report R42972, Sequestration as a Budget Enforcement Process: Frequently Asked
Questions, by Megan S. Lynch.
19
For more information, see CRS Insight IN10389, Bipartisan Budget Act of 2015: Adjustments to the Budget Control
Act of 2011, by Grant A. Driessen.
20
Ibid.
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vetoed the bill.
January 19, 2016
Anticipated CBO release of a summary of theThe Budget and Economic Outlook: 2016 to 2026.
January 25, 2016
Anticipated CBO release of theThe Budget and Economic Outlook: 2016 to 2026.
February 9, 2016
Anticipated OMB release of the President’s FY2017 budget request.
Author Contact Information
Grant A. Driessen
Analyst in Public Finance
gdriessen@crs.loc.gov, 7-7757
Congressional Research Service
Megan S. Lynch
Specialist on Congress and the Legislative Process
mlynch@crs.loc.gov, 7-7853
8