Order Code RS22098
Updated August 30, 2005
CRS Report for Congress
Received through the CRS Web
Deficit Impact of Reconciliation Legislation
Enacted in 1990, 1993, and 1997
Robert Keith
Specialist in American National Government
Government and Finance Division
Summary
The budget reconciliation process is an optional procedure that operates as an
adjunct to the annual budget resolution process. During the past 25 years, Congress has
sent the President 19 reconciliation measures; 16 were signed into law and three were
vetoed. During the 1980s and 1990s, reconciliation legislation often reflected
Congress’s most significant efforts to reduce the deficit through changes in revenue and
mandatory spending laws. In recent years, however, reconciliation has been used mainly
to reduce revenues.
The FY2006 budget resolution, H.Con.Res. 95, includes reconciliation instructions
affecting mandatory spending and revenues. For the first time since 1997, reconciliation
is proposed to reduce mandatory spending as part of a deficit-reduction plan. As
background on past efforts in this regard, the deficit impact of three major reconciliation
acts enacted in the 1990s is briefly summarized.
Over a five-year period, according to Congressional Budget Office, the Omnibus
Budget Reconciliation Act of 1990 reduced the deficit by an estimated $482 billion; the
Omnibus Budget Reconciliation Act of 1993 reduced the deficit by an estimated $433
billion; and in 1997, the Balanced Budget and the Taxpayer Relief Act together reduced
the deficit by an estimated $118 billion. Reductions in mandatory spending were a
significant element in the deficit reduction achieved under each act.
This report will be updated as developments warrant.
The budget reconciliation process is an optional procedure, provided for under the
Congressional Budget Act of 1974 (P.L. 93-344, as amended), that operates as an adjunct
to the annual budget resolution process.1 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.
1 For more information on reconciliation procedures, see CRS Report RL33030, The Budget
Reconciliation Process: House and Senate Procedures, by Robert Keith and Bill Heniff Jr.
Congressional Research Service { The Library of Congress

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CRS-2
Reconciliation is a two-step process. First, reconciliation instructions are included
in the budget resolution, directing the appropriate committees to develop legislation
achieving the desired budgetary outcomes. Second, the resultant legislation is merged
together by the House and Senate Budget Committees into an omnibus reconciliation
measure that is considered in the House and Senate under expedited procedures (in some
instances, instructed committees may report their legislation directly to the floor).
Reconciliation was first used by the House and Senate during the administration of
President Jimmy Carter, in calendar year 1980 for FY1981. As an optional procedure, it
has not been used every year. During the period covering budget resolutions for FY1981-
FY2005, 16 omnibus reconciliation measures were enacted into law and three were
vetoed.
From 1980 into the 1990s, reconciliation was used to reduce the deficit through
reductions in mandatory spending, increases in revenues, or a combination of the two.
In more recent years, however, reconciliation has been used to reduce revenues and, in a
few instances, to increase spending levels in particular areas.
The FY2006 budget resolution, H.Con.Res. 95, as agreed to by the House and Senate
on April 28, 2005, includes reconciliation instructions affecting mandatory spending and
revenues.2 For the first time since 1997, reconciliation is proposed to reduce mandatory
spending as part of a deficit-reduction plan. As background on past efforts in this regard,
the deficit impact of three major reconciliation acts enacted in the 1990s is briefly
summarized below.
Reconciliation Legislation in 1990, 1993, and 1997
During the period from 1990 to the present, the House and Senate completed action
on 10 reconciliation measures and sent them to the President. Three of the measures were
vetoed by President Bill Clinton and are excluded from this discussion.3 The Personal
Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. 104-193), which
dealt with welfare reform, and the Economic Growth and Tax Relief Reconciliation Act
of 2001 (P.L. 107-16) and the Jobs and Growth Tax Relief Reconciliation Act of 2003
(P.L. 108-27), which implemented large tax cuts, also are excluded from this discussion.
The remaining reconciliation acts that the House and Senate completed action on for
three years during this period were omnibus bills, covering an array of issues, that in the
net reduced the deficit significantly (see Table 1). Each of the acts included reductions
in mandatory spending, as well as changes in revenue levels.
2 See the conference report to accompany H.Con.Res. 95, H.Rept. 109-62 (Apr. 28, 2005).
3 President Clinton vetoed the Balanced Budget Act of 1995 on Dec. 6, 1995, the Taxpayer
Refund and Relief Act of 1999 on Sept. 23, 1999, and the Marriage Tax Relief Reconciliation
Act of 2000 on Aug. 5, 2000.

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CRS-3
Table 1. Reconciliation Acts Enacted in 1990, 1993, and 1997
5-Year
Fiscal
Budget
Date
Resultant Reconciliation Act(s)
Deficit
Year
Resolution
Enacted
Impact
1991
H.Con.Res. 310
Omnibus Budget Reconciliation
11-05-90
$482
Act of 1990 (P.L. 101-508)
billion
1994
H.Con.Res. 64
Omnibus Budget Reconciliation
08-10-93
$433
Act of 1993 (P.L. 103-66)
billion
1998
H.Con.Res. 84
Balanced Budget Act of 1997
08-05-97
$118
(P.L. 105-33) and Taxpayer
billion
Relief Act of 1997 (P.L. 105-34)
Over a five-year period, according to the Congressional Budget Office (CBO), the
Omnibus Budget Reconciliation Act of 1990 reduced the deficit by an estimated $482
billion; the Omnibus Budget Reconciliation Act of 1993 reduced the deficit by an
estimated $433 billion; and in 1997, the Balanced Budget Act and the Taxpayer Relief
Act together reduced the deficit by an estimated $118 billion. Table 2 provides more
detailed information on the annual deficit impact of the acts over a five-year period.
As Figure 1 indicates, the 1990 and 1993 reconciliation acts were estimated to yield
a reduction in the deficit in the first applicable fiscal year, but a deficit increase ($21
billion) was estimated in the first year for the 1997 acts. Thereafter, deficit reduction
occurred in each year in all three instances and the amounts escalated over the period.
Figure 1. Annual Deficit Impact of Reconciliation Acts
100
rs
0
lla
o
f D
o
s
n -100
illio
B
-200
1st Year
2nd Year
3rd Year
4th Year
5th Year
Five-Year Estimating Period
1990 Act
1993 Act
1997 Acts

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CRS-4
The largest amount of deficit reduction occurred in the fifth (and final) year of the
estimating period for each of the acts in these three years and amounted to $160 billion
for the 1990 act, $143 billion for the 1993 act, and $91 billion for the 1997 acts.
In each case, the reconciliation legislation implemented deficit-reduction policies
agreed to by Congress and the President involving both spending and revenue changes.
In the case of spending, in addition to mandatory spending reductions in reconciliation,
the deficit-reduction policies assumed a reduction in the growth of discretionary spending
over the ensuing years. Although discretionary spending is provided in annual
appropriations acts, statutory limits on discretionary spending were established (and
extended) in the three reconciliation acts. Accordingly, CBO included estimates of the
savings expected to occur in discretionary spending pursuant to the statutory limits in its
assessments of the deficit impact of the reconciliation legislation.
Figure 2 shows that in all three years, the reconciliation acts relied on net mandatory
savings, amounting over five years to an estimated $75 billion in the 1990 act, $77 billion
in the 1993 act, and $107 billion in the 1997 acts. With regard to revenues, however, the
1990 and 1993 acts reflected estimated net increases over five years of $158 billion and
$241 billion, respectively, while the 1997 acts reflected an estimated net reduction of $80
billion over five years. Five-year net savings in discretionary spending attributable to the
statutory limits ranged from an estimated $69 billion (in the 1993 act), to $89 billion (in
the 1997 acts), to $190 billion (in the 1990 act). Debt service savings accounted for the
remaining deficit reduction.
Figure 2. Five-Year Deficit Impact of Reconciliation Acts
250
Revenues
Mandatory Outlays
Discretionary Outlays
Debt Service
s
0
s of Dollar
Billion
-250
1990
1993
1997
Reconciliation Acts
Note: Negative amounts = deficit reduction.

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ear
al
5
0
9
9
7
9
7
-158
-7
-1
-5
-482
-241
-7
-6
-4
-433
5-Y
Tot
2002
2001
2000
1999
9
6
8
1
1998
-5
-2
-3
-2
-143
1
3
4
ear
1997
-61
-2
-2
-1
-118
5
numbers = deficit reduction)
iscal Y
2
7
CRS-
-8
-8
ative
F
1996
-5
-1
-83
9
9
5
7
-9
0
-3
1995
-3
-1
-7
-2
-160
-44
-56
9
8
7
6
-5
0
-1
1994
-37
-1
-5
-1
-131
-2
-33
1990
1993
2
6
1
0
ct of
ct of
1993
-3
-1
-3
-1
-89
(in billions of dollars; neg
2
9
-4
1992
-33
-1
-1
-69
econciliation A
8
econciliation A
-9
-6
-1
1991
-1
-33
cuts
cuts
ice
cuts
cuts
ice
s
s
enue
ing
enue
ing
iscretionary
iscretionary
Table 2. Estimated Deficit Impact of Reconciliation Legislation Enacted in 1990, 1993, and 1997
Omnibus Budget R
Rev
increases
Mandatory
spending
D
spending
Debt serv
sav
Total
Omnibus Budget R
Rev
increases
Mandatory
spending
D
spending
Debt serv
sav
Total

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e
Th
ear
al
9
80
-2
-107
-8
-118
(2)
5-Y
Tot
ber 1997,
em
2
3
ept
3, p. 66;
18
-4
2002
-5
-5
-91
e, S
e III-
abl
1
24
-1
2001
-16
-3
-24
1991, T
look: An Updat
0
4
ary
23
1
u
2000
-3
-1
-20
Out
, Jan
7
-1
1
-3
1999
-10
c and Budget
s 1992-1996
9
1
1
1
0
21
1998
ear
Y
e Economi
h
scal
T
ear
1997
d (3)
6
look: Fi
an
iscal Y
CRS-
F
1996
Out
1997
2, p. 29;
e 2-
abl
1995
Act of
c and Budget
.
1994
ber 1993, T
g
Economi
em
in
d
payer Relief
e
h
n
T
ept
u
ro
1993
e, S
e to
u
fice, (1)
Updat
tals d
1992
et Of
An
1997 and Tax
to
dg
look:
to
e 11, p. 40.
d
al Bu
abl
t ad
1991
Out
o
sion
d T
n
ay
udget Act of
s
res
g
ice
n
ing
o
: C
c and Budget
lanced B
enue
: Details m
a
iscretionary
e 10, p. 36, an
B
Rev
decreases
Mandatory
spending
increases/cuts
D
spending
increases/cuts
Debt serv
costs/sav
Total
abl
Sources
Economi
T
Note

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