Order Code RS21993
Updated May 18, 2005
CRS Report for Congress
Received through the CRS Web
Spending Reconciliation Directives to the
Senate Finance Committee in Congressional
Budget Resolutions
Robert Keith
Specialist in American National Government
Bill Heniff Jr.
Analyst in American National Government
Government and Finance Division
Summary
During the more than 30 years that the congressional budget process has been in
effect, the Senate Finance Committee has been subject to spending reconciliation
directives in a budget resolution on 16 occasions. Fourteen instances involved directives
to reduce spending, while the remaining two, for FY2002 and FY2004, instructed the
committee to increase outlays (to accommodate related tax policy changes). In every
instance but one, for FY1982, spending reconciliation directives to the committee were
accompanied by revenue reconciliation directives.
The spending reconciliation directives varied in their time frame, from single-year
coverage (in the FY1981 and FY1990 budget resolutions) to 11-year coverage (in the
FY2002 and FY2004 budget resolutions). Further, the amount of required spending
changes ranged from about $100 million for a single year to about $530 billion over
seven years. The largest spending increase was directed in the FY2004 budget
resolution ($27.476 billion in outlays for 11 years, covering FY2003-FY2013), while
the largest spending decrease was directed in the FY1996 budget resolution ($530.359
billion for seven years, covering FY1996-FY2002).
This report will be updated as developments warrant. (For additional information,
see CRS Report RS20870, Revenue Reconciliation Directives to the Senate Finance
Committee in Congressional Budget Resolutions, by Robert Keith.)
The budget reconciliation process is an optional procedure under the Congressional
Budget Act of 1974 (P.L. 93-344, as amended) that operates as an adjunct to the annual
budget resolution process. The 1974 act first became effective for FY1976, and Congress
has completed action on at least one budget resolution each year, except for FY1999,
FY2003, and FY2005.
Congressional Research Service { The Library of Congress

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CRS-2
The chief purpose of the reconciliation process is to enhance Congress’s ability to
change current law in order to bring revenue, spending, and debt limit levels into
conformity with the policies of the budget resolution. With respect to spending,
reconciliation is focused on direct spending (also called mandatory spending), which
derives from substantive law under the jurisdiction of the legislative committees and
largely involves entitlement programs. Discretionary spending, on the other hand, is
under the control of the Appropriations Committees and is subject to enforcement under
different procedures. Roughly two-thirds of total annual spending is direct spending.
Accordingly, reconciliation probably is the most potent budget enforcement tool available
to Congress for a large portion of the budget.
Reconciliation is a two-stage process in which reconciliation directives are included
in the budget resolution, directing the appropriate committees to develop legislation
achieving the desired budgetary outcomes, and the resultant legislation, usually
incorporated into an omnibus bill, is considered under expedited procedures in the House
and Senate. No reconciliation legislation can be developed or considered unless a budget
resolution containing reconciliation directives is adopted by both chambers.1 Each
directive to a committee is specified as discrete dollar amounts of spending (budget
authority, outlays, or both), revenues, deficit reduction (any combination of spending and
revenues), or the debt limit to be increased or reduced for a fiscal year or a range of fiscal
years.
Reconciliation was first used by the House and Senate in calendar year 1980 for
FY1981.2 As an optional procedure, it has not been used every year. During the more
than 30 years that the congressional budget process has been in effect, 16 reconciliation
measures were enacted into law and three were vetoed.3
Since the inception of the congressional budget process, the Senate Finance
Committee has been subject to spending reconciliation directives in a budget resolution
on 16 occasions (see Table 1). Fourteen instances involved directives to reduce spending,
while the remaining two, for FY2002 and FY2004, instructed the committee to increase
outlays (to accommodate related tax policy changes). In all but one of these 16 instances
(for FY1982), spending reconciliation directives to the committee were accompanied by
revenue reconciliation directives.4 In addition, three other budget resolutions included
1 The House and Senate sometimes have put budget enforcement procedures into effect in the
absence of a budget resolution by means of a “deeming resolution.” Although a deeming
resolution has not been used to trigger action on a reconciliation measure, presumably this course
of action remains an option for the House and Senate. If a consensus did not exist to support a
budget resolution, however, it might likely not exist to support reconciliation legislation either.
For more information on deeming resolutions, see CRS Report RL31443, The “Deeming
Resolution”: A Budget Enforcement Tool, by Robert Keith.
2 The Senate considered a revenue-reduction bill for FY1976 (H.R. 5559) under reconciliation
procedures in December 1975. It was initiated under a second budget resolution for that fiscal
year and was not considered to be a reconciliation bill in the House; the bill did not become law.
3 For an identification of individual reconciliation measures, see CRS Report RL30458, The
Budget Reconciliation Process: Timing of Legislative Action, by Robert Keith.
4 See CRS Report RS20870, Revenue Reconciliation Directives to the Senate Finance Committee
(continued...)

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CRS-3
revenue reconciliation directives to the committee, but not spending reconciliation
directives.
The spending reconciliation directives varied in their time frame, from single-year
coverage (in the FY1981 and FY1990 budget resolutions) to 11-year coverage (in the
FY2002 and FY2004 budget resolutions). Further, the amount of required spending
changes ranged from about $100 million for a single year to about $530 billion over seven
years. The largest spending increase was directed in the FY2004 budget resolution
($27.476 billion in outlays for 11 years, covering FY2003-FY2013), while the largest
spending decrease was directed in the FY1996 budget resolution ($530.359 billion for
seven years, covering FY1996-FY2002).
Reconciliation directives to the committee to reduce spending in the first 13 budget
resolutions involved broad-scale efforts to reduce the deficit. In addition to the Finance
Committee, at least several other Senate committees (and as many as 11 in one instance)
also were subject to reconciliation directives in each budget resolution to reduce spending
or to achieve deficit reduction. Deficit estimates during this period generally ranged from
a little below $100 billion to nearly $300 billion per year.
The FY1998 budget resolution was the most recent one to include reconciliation
directives to the Finance Committee and other Senate committees to reduce spending in
order to bring deficit levels down.5 The resultant reconciliation measures, the Balanced
Budget Act of 1997 and the Taxpayer Relief Act of 1997, contributed to achieving a
surplus of $69 billion for FY1998, the first surplus in many years.
For the next three fiscal years, FY1999-FY2001, the budget remained in surplus
before returning to a deficit. For FY2000 and FY2001, unlike the practice for the
preceding two decades, the Finance Committee was subject only to revenue reconciliation
directives; no spending reconciliation directives were included for the Finance Committee
or any other committee. For FY2002, the reconciliation directives included a $100 billion
increase in outlays, as well as revenue reductions of $1.250 trillion, over the period
covering FY2001-FY2011. For FY2004, the reconciliation directives included a $27.5
billion increase in outlays, as well as revenue reductions of $522.5 billion, over the period
covering FY2003-FY2013. The reconciliation directives to increase outlays were
intended to accommodate related tax policy changes.
4 (...continued)
in Congressional Budget Resolutions, by Robert Keith.
5 See CRS Report RS22098, Deficit Impact of Reconciliation Legislation Enacted in 1990, 1993,
and 1997, by Robert Keith.

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s
s
s
s
es
Y
Yes
No
Ye
Ye
Ye
Ye
Instructions to
Change Revenues?
es]
b )
dollars)
ng Decrease (-)
9,218 (O)
10,744 (O)
11,589 (O)
4,429 (O)
5,564 (O)
5,976 (O)
2,200 (O)
286 (O)
FY1976-FY2006
Spendi
or Increase (+
reconciliation directiv
(in millions of
ng
900 (BA); -
212 (BA); -
4,394 (BA); -
4,563 (BA); -
4,675 (BA); -
1,106 (BA); -
1,444 (BA); -
1,740 (BA); -
400 (O)
500 (O)
800 (O)
3,307 (O)
7,951 (O)
10,908 (O)
850 (O)
1,495 (O)
1,790 (O)
es to the Senate Finance Committee
4
Amount of
CRS-
[no spendi
FY1981: -
FY1981: -
FY1982: -
FY1983: -
FY1984: -
FY1983: -
FY1984: -
FY1985: -
FY1984: -
FY1985: -
FY1986: -
FY1986: -
FY1987: -
FY1988: -
FY1987: -
FY1988: -
FY1989: -
erence
ept.)
Report
698
1051
46
614
248
249
664
Conf
(H.R
94-
96-
97-
97-
98-
99-
99-
a
es]
es]
es]
es]
es]
es. 466
udget
B
on.R
Resolution
.C
in Congressional Budget Resolutions:
H
H.Con.Res. 307
H.Con.Res. 115
S.Con.Res. 92
H.Con.Res. 91
S.Con.Res. 32
S.Con.Res. 120
ngress/
94/1
96/2
97/1
97/2
98/1
99/1
99/2
o
Session
C
Table 1. Spending Reconciliation Directiv
[no reconciliation directiv
[no reconciliation directiv
[no reconciliation directiv
[no reconciliation directiv
[no reconciliation directiv
l
Fisca
Year
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987

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s
s
s
s
s
Ye
Yes
Ye
Ye
Ye
Ye
Instructions to
Change Revenues?
b )
dollars)
ng Decrease (-)
c
55,883 (O)
20,000 (DR)
35,157 (O)
272,974 (O)
530,359 (O)
98,321 (O)
Spendi
or Increase (+
(in millions of
1,600 (O)
3,150 (O)
4,450 (O)
2,300 (O)
3,015 (O)
2,000 (DR)
2,346 (O)
15,328 (O)
260 (O)
36,578 (O)
FY1995: -
FY1995: -
FY1998: -
FY2000: -
FY2002: -
FY2002: -
5
Amount of
CRS-
FY1988: -
FY1989: -
FY1990: -
FY1990: -
FY1991: -
FY1991-
FY1991: -
FY1991-
FY1994: -
FY1994-
FY1996: -
FY1996-
FY1996-
First Set of Directives
FY1997: -
FY1997-
FY2002: -
erence
ept.)
175
50
820
48
159
612
Report
Conf
(H.R
100-
101-
101-
103-
104-
104-
a
es]
es]
es]
es]
udget
B
Resolution
H.Con.Res. 93
H.Con.Res. 106
H.Con.Res. 310
H.Con.Res. 64
H.Con.Res. 67
H.Con.Res. 178
ngress/
o
Session
100/1
101/1
101/2
103/1
104/1
104/2
C
[no reconciliation directiv
[no reconciliation directiv
[no reconciliation directiv
[no reconciliation directiv
l
Fisca
Year
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997

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et
e
dg
islativ
d bu
leg
s
s
es
es
econ
m
u
Ye
Ye
Y
Y
Yes
Yes
Yes
e s
im
h
ax
Instructions to
as t
.
m
w
Change Revenues?
w
466
.
allo
creases)
es
.R
e in
u
ills to
on
en
b
n
es]
es]
rev
d
ciliatio
b
n
)
1976 (H.C
s an
n
Y
dollars)
ng Decrease (-)
c
r F
ctio
u
t reco
c
o
158,000 (O)
23,184 (DR)
100,646 (O)
10,000 (O)
red
cept f
ifferen
Spendi
tlay
irectives
u
or Increase (+
D
ree d
reconciliation directiv
reconciliation directiv
ear, ex
f o
o
th
(in millions of
6,800 (O)
52,803 (O)
3,639 (DR)
4,121 (DR)
40,911 (O)
ng
ng
n
e.
FY2002: -
FY2002: -
FY2002: -
FY2011: +100,000 (O)
FY2013: +27,476 (O)
FY2010: -
to
p
itiv
iscal y
atio
d
6
f u
Amount of
e f
in
b
o
ad
m
n
r th
o
CRS-
Second Set of
FY1997: -
FY1997-
FY2002: -
Third Set of Directives
FY1997: -
FY1997-
FY2002: -
FY2002: -
FY1998-
[no spendi
[no spendi
FY2001-
FY2003-
FY2006-
f
co
y
eratio
tion
(an
n
sid
ecessarily
n
2006.
olu
t n
Y
o
erence
ept.)
ctio
e co
612
116
91
577
60
71
62
F
u
Report
et res
r th
o
Conf
(H.R
dg
104-
105-
106-
106-
107-
108-
109-
1976-
f
ts are n
n
Y
u
eficit red
ed
o
w
s, F
le, bu
o
a
n
am
n
tio
u
es. 68
es. 290
t, or s
es allo
ol
DR = d
d
ctio
u
udget
irs
B
on.R
on.R
res
e f
et
s; an
irectiv
Resolution
.C
.C
dg
t d
H.Con.Res. 178
H.Con.Res. 84
H
H
H.Con.Res. 83
H.Con.Res. 95
H.Con.Res. 95
as th
tlay
u
en
eficit red
bu
d
n
d
d
ted w
e
p
et resolution]
et resolution]
et resolution]
s on
lis
an
ear).
; O = o
e
rd
rity
te
tlay
ngress/
tion
at y
o
u
o
Session
104/2
105/1
106/1
106/2
107/1
108/1
109/1
olu
th
f in
e o
C
ce report
r th
[no budg
[no budg
[no budg
o
o
f
n
; th
feren
et res
et au
n
tio
g
d
ility
l
o
dg
lu
u
ree sets
ib
: C
bu
reso
= b
e th
flex
Fisca
Year
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
A
h
urce
Each
. B
So
a.
b
c. T

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