Order Code RL33132
CRS Report for Congress
Received through the CRS Web
Budget Reconciliation Legislation in 2005
November 1, 2005
Robert Keith
Specialist in American National Government
Government and Finance Division
Congressional Research Service { The Library of Congress

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Budget Reconciliation Legislation in 2005
Summary
The budget reconciliation process is one of the chief tools used by Congress
during the past quarter-century to implement major changes in budget policy.
Following a brief overview of the budget reconciliation process and the current
budget policy context, this report provides information on the consideration of budget
reconciliation legislation in 2005, during the first session of the 109th Congress.
Reconciliation is a two-stage process. First, reconciliation instructions are
included in the budget resolution, directing the appropriate committees to develop
legislation achieving the desired budgetary outcomes. The second step involves
consideration of the resultant reconciliation legislation by the House and Senate
under expedited procedures.
Consideration of the FY2006 budget resolution, H.Con.Res. 95, began in the
House and Senate in March and came to a conclusion on April 28, 2005, with the
House and Senate approving the conference report on the measure. The FY2006
budget resolution included reconciliation instructions expected to lead to the
development of three different reconciliation measures: (1) an omnibus spending
bill, involving recommendations from eight House and eight Senate committees, that
would reduce mandatory outlays by about $35 billion over FY2006-FY2010; (2) a
revenue bill that would reduce revenues by $70 billion over the same period; and (3)
a bill that would increase the limit on the public debt by $781 billion. The omnibus
spending bill would be reported, without any substantive revision, by the Budget
Committees, while the revenue and debt-limit bills would be reported by the House
Ways and Means and Senate Finance Committees.
Following a surge in spending for relief and reconstruction efforts associated
with Hurricanes Katrina and Rita, Republican leaders in the House and Senate
announced plans to achieve additional savings in mandatory outlays through the
reconciliation process, and to pursue additional savings in annual appropriations acts
and through other means. By informal agreement, the schedule for the beginning of
reconciliation actions was delayed from September into late October in order to
accommodate the need to address hurricane-related relief legislation and to achieve
offsets for some of the additional spending.
The Senate Budget Committee reported the spending reconciliation bill, S. 1932
(the Deficit Reduction Omnibus Reconciliation Act of 2005) on October 27 and
began its consideration on October 31. According to cost estimates prepared by the
Congressional Budget Office, the eight Senate committees met or exceeded their
reconciliation instructions, with net outlay savings of $39.114 billion over FY2006-
FY2010. The House Budget Committee is schedule to meet on the spending
reconciliation bill on November 3. According to CBO, the reconciliation
submissions of the eight instructed House committees achieve outlay savings of
$53.929 billion over five years, which exceeds by about $4 billion the revised level
of savings requested by the House leadership.
This report will be developed as developments warrant.

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Contents
Overview of the Budget Reconciliation Process . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Current Budget Policy Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Baseline Budget Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
The Deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Mandatory Outlays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Public Debt Limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
President Bush’s FY2006 Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Initial Budget Submission (February) . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Mid-Session Review (July) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
The FY2006 Budget Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Legislative History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Overall Budget Resolution Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Reconciliation Directives in the FY2006 Budget Resolution . . . . . . . . . . . . . . . 13
Initial House Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Initial Senate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Conference Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Subsequent Changes in Budget Policy Affecting Reconciliation . . . . . . . . . . . . 19
Reconciliation Legislation in 2005: Legislative History . . . . . . . . . . . . . . . . . . . 22
Spending Reconciliation Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Initial Senate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Initial House Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Revenue Reconciliation Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Debt-Limit Reconciliation Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Products on Selected Policy Issues Addressed in Reconciliation . . . . . . . . . . . . 25
List of Figures
Figure 1. Budgetary Components of Selected Reconciliation Acts . . . . . . . . 5
List of Tables
Table 1. Reconciliation Resolutions and Resultant Reconciliation Acts: FY1991-
FY2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Table 2. Total Deficit or Surplus: FY2000-FY2004 . . . . . . . . . . . . . . . . . . . . . . 6
Table 3. CBO and OMB Baseline Deficit Projections: FY2005-FY2010 . . . . . . 7
Table 4. Public Debt-Limit Increases: 1997-2004 . . . . . . . . . . . . . . . . . . . . . . . . 9
Table 5. President Bush’s FY2006 Budget: February 2005 Submission . . . . . . . 9
Table 6. President Bush’s FY2006 Budget: July 2005 Mid-Session Review . . 11

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Table 7. Selected Components of the FY2006 Budget Resolution: House, Senate,
and Conference Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Table 8. Initial Reconciliation Instructions: House . . . . . . . . . . . . . . . . . . . . . . 14
Table 9. Initial Reconciliation Instructions: Senate . . . . . . . . . . . . . . . . . . . . . . 16
Table 10. Reconciliation Instructions for FY2006-FY2010: Summary of House,
Senate, and Conference Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Table 11. Reconciliation Instructions in the Conference Agreement on the FY2006
Budget Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Table 12. Summary of CBO Scoring of Senate Committee Spending Reconciliation
Submissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Table 13. Summary of CBO Scoring of House Committee Spending Reconciliation
Submissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

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Budget Reconciliation Legislation in 2005
The budget reconciliation process is one of the chief tools used by Congress
during the past quarter-century to implement major changes in budget policy.1
Following a brief overview of the budget reconciliation process and the current
budget policy context, this report provides information on the consideration of budget
reconciliation legislation in 2005, during the first session of the 109th Congress.
Overview of the Budget Reconciliation Process
The Congressional Budget Act of 1974 established the congressional budget
process.2 Under the act, the House and Senate are required to adopt at least one
budget resolution each year (and have done so, except for FY1999, FY2003, and
FY2005).3 The budget resolution, which takes the form of a concurrent resolution
and is not sent to the President for his approval or veto, serves as a congressional
statement in broad terms regarding appropriate revenue, spending, and debt-limit
policies, as well as a guide to the subsequent consideration of legislation
implementing such policies at agency and programmatic levels. Budget resolution
policies are enforced through a variety of mechanisms, including points of order.4
The House and Senate Budget Committees, which were created by the 1974 act,
exercise exclusive jurisdiction over budget resolutions and are responsible for
monitoring their enforcement.
In developing a budget resolution, the House and Senate Budget Committees
use various sources of budgetary information and analysis, including baseline budget
projections of revenue, spending, and the deficit or surplus prepared by the
Congressional Budget Office (CBO). A budget resolution typically reflects many
different assumptions regarding legislative action expected to occur during a session
that would cause revenue and spending levels to be changed from baseline amounts.
1 For an extensive discussion of the reconciliation process, see CRS Report RL33030, The
Budget Reconciliation Process: House and Senate Procedures, by Robert Keith and Bill
Heniff Jr.
2 See Titles I-IX of the Congressional Budget and Impoundment Control Act of 1974 (P.L.
93-344; July 12, 1974; 88 Stat. 297-339), as amended and codified at 2 U.S.C. 621-692.
3 For background information on budget resolutions, see: CRS Report RL30297,
Congressional Budget Resolutions: Selected Statistics and Information Guide, by Bill
Heniff Jr.
4 The congressional budget process, and its enforcement procedures, are discussed in more
detail in CRS Report 98-721, Introduction to the Federal Budget Process, by Robert Keith
and Allen Schick. Also, see CRS Report 97-865, Points of Order in the Congressional
Budget Process, by James V. Saturno.

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CRS-2
Most revenue and mandatory spending,5 however, occurs automatically each year
under permanent law. Therefore, if the committees with jurisdiction over the revenue
and mandatory spending programs do not report legislation to carry out the budget
resolution policies by amending existing law, revenue and mandatory spending for
these programs likely will continue without change. There are some notable
exceptions to the permanency of revenue and mandatory spending laws, such as
many of the tax cuts proposed by President George W. Bush and enacted in 2001 and
2003.
Discretionary spending, on the other hand, is provided annually in regular,
supplemental, and continuing appropriations acts. The House and Senate, therefore,
are assured an opportunity each year to consider discretionary spending within the
context of budget resolution policies. The enforcement of budget resolution policies
regarding discretionary spending relies, for the most part, on the ability to raise points
of order against individual appropriations acts that violate the suballocations of
discretionary spending made pursuant to Section 302(b) of the 1974 act.
The budget reconciliation process is an optional procedure that operates as an
adjunct to the budget resolution process. 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. Under the reconciliation process, the House and Senate may
compel their committees to develop legislation changing existing law. Accordingly,
reconciliation can be a potent budget enforcement tool for a large portion of the
budget.
Reconciliation is a two-stage process. First, reconciliation instructions are
included in the budget resolution, directing the appropriate committees to develop
legislation achieving the desired budgetary outcomes. If the budget resolution
instructs more than one committee in a chamber, then the instructed committees
submit their legislative recommendations to their respective Budget Committees by
the deadline prescribed in the budget resolution; the Budget Committees incorporate
them into an omnibus budget reconciliation bill without making any substantive
revisions.
The second step involves consideration of the resultant reconciliation legislation
by the House and Senate under expedited procedures. Among other things, debate
in the Senate on any reconciliation measure is limited to 20 hours (and 10 hours on
a conference report) and amendments must be germane and not include extraneous
matter. The House Rules Committee typically recommends a special rule for the
consideration of a reconciliation measure in the House that places restrictions on
debate time and the offering of amendments.
5 Mandatory spending, also referred to as direct spending, is provided mainly in substantive
law under the jurisdiction of the legislative committees, in contrast to discretionary
spending, which is provided in annual appropriations acts under the jurisdiction of the
House and Senate Appropriations Committees. Most direct spending programs are
entitlements, such as Social Security, Medicare, federal civilian and military retirement, and
unemployment compensation.

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In cases where only one committee has been instructed, the process allows that
committee to report its reconciliation legislation directly to its parent chamber, thus
bypassing the Budget Committee. In some years, budget resolutions included
reconciliation instructions that afforded the House and Senate the option of
considering two or more different reconciliation bills. Once the reconciliation
legislation called for in the budget resolution has been approved or vetoed by the
President, the process is concluded; Congress cannot develop another reconciliation
bill in the wake of a veto without first adopting another budget resolution containing
reconciliation instructions.
As an optional procedure, reconciliation has not been used in every year that the
congressional budget process has been in effect. Beginning with the first use of
reconciliation by both the House and Senate in 1980, however, reconciliation has
been used in most years. Congress has sent the President 19 reconciliation acts over
the years; 16 were signed into law and three were vetoed (and the vetoes not
overriden). Table 1 provides a list of the 10 reconciliation acts presented to the
President from 1990 (for FY1991 and subsequent years) to the present. Seven of the
acts were signed into law and three were vetoed by President Bill Clinton.
The inclusion of reconciliation instructions in a budget resolution has not always
resulted in House or Senate consideration of a reconciliation measure under the
instructions. In 1996, the FY1997 budget resolution (H.Con.Res. 178) provided for
three separate reconciliation measures dealing with: (1) “Welfare and Medicaid
Reform and Tax Relief”; (2) “Medicare Preservation”; and (3) “Tax and
Miscellaneous Direct Spending Reforms.” A reconciliation measure reforming the
welfare system was enacted in 1996 (P.L. 104-193), but the House and Senate did not
act on the other two reconciliation measures provided for under the budget
resolution.
Further, not every reconciliation measure considered by one chamber has been
considered by the other chamber, or been regarded as a reconciliation measure when
considered by the other chamber. In 2000, for example, the House considered and
passed several reconciliation measures, but they were not considered by the Senate.6
Initial actions under reconciliation focused on deficit-reduction efforts.
Consequently, the procedures were employed to achieve spending reductions and
revenue increases on a net basis. In the latter part of the 1990s, particularly when
large surpluses emerged in the federal budget for the first time in decades, the focus
of reconciliation action was shifted to reducing revenues, which continued into the
2000s. In the FY2006 budget resolution, reconciliation directives entail reductions
in both revenues and spending.
6 See CRS Report RL30714, Congressional Action on Revenue and Debt Reconciliation
Measures in 2000, by Robert Keith.

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Table 1. Reconciliation Resolutions and Resultant
Reconciliation Acts: FY1991-FY2005
Fiscal
Budget
Date
Resultant Reconciliation Act(s)
Year
Resolution
Enacted
1991
H.Con.Res. 310
Omnibus Budget Reconciliation Act of
11-05-90
1990 (P.L. 101-508)
1994
H.Con.Res. 64
Omnibus Budget Reconciliation Act of
08-10-93
1993 (P.L. 103-66)
1996
H.Con.Res. 67
Balanced Budget Act of 1995 (H.R. 2491)
12-06-95
(vetoed)
1997
H.Con.Res. 178
Personal Responsibility and Work
08-22-96
Opportunity Reconciliation Act of 1996
(P.L. 104-193)
1998
H.Con.Res. 84
Balanced Budget Act of 1997 (P.L. 105-33)
08-05-97
Taxpayer Relief Act of 1997 (P.L. 105-34)
08-05-97
2000
H.Con.Res. 68
Taxpayer Refund and Relief Act of 1999
09-23-99
(H.R. 2488)
(vetoed)
2001
H.Con.Res. 290
Marriage Tax Relief Reconciliation Act of
08-05-00
2000 (H.R. 4810)
(vetoed)
2002
H.Con.Res. 83
Economic Growth and Tax Relief
06-07-01
Reconciliation Act of 2001 (P.L. 107-16)
2004
H.Con.Res. 95
Jobs and Growth Tax Relief Reconciliation
05-28-03
Act of 2003 (P.L. 108-27)
The three most recent years in which Congress used omnibus reconciliation
legislation to achieve net deficit reduction occurred in the 1990s (one reconciliation
act each in 1990 and 1993, and two in 1997). Over a five-year period, according to
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.
In all three years, as shown in Figure 1, 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 statutory limits,
established in the 1990 act and extended in the 1993 and 1997 legislation, ranged
from an estimated $69 billion (in the 1993 act), to $89 billion (in the 1997 acts), to
$190 billion (in the 1990 act). Although estimates of savings in discretionary

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CRS-5
spending were included in the CBO assessments of the budgetary impact of the
reconciliation measures, the discretionary savings actually occurred as the annual
appropriations acts were enacted over the five-year period. Debt service savings
accounted for the remaining deficit reduction.
Figure 1. Budgetary Components of Selected Reconciliation Acts
250
Revenues
Mandatory Outlays
Discretionary Outlays
Debt Service
s
0
Billions of Dollar
-250
1990
1993
1997
Reconciliation Acts
Note: Negative amounts = deficit reduction.
Sources: Prepared by the Congressional Research Service from data provided by the Congressional
Budget Office in: (1) The Economic and Budget Outlook: Fiscal Years 1992-1996, January 1991,
Table III-3, p. 66; (2) The Economic and Budget Outlook: An Update, September 1993, Table 2-2,
p. 29; and (3) The Economic and Budget Outlook: An Update, September 1997, Table 10, p. 36, and
Table 11, p. 40.
Note: The savings in discretionary spending shown here, which were attributable to statutory limits
established in the 1990 act and extended in the 1993 and 1997 legislation, were included in the CBO
assessments of the budgetary impact of the reconciliation measures, but the discretionary savings
actually occurred as the annual appropriations acts were enacted over the five-year period.
Current Budget Policy Context
The House and Senate, as stated earlier, are required under the Congressional
Budget Act of 1974 to reach agreement each year on a budget resolution that
establishes a budget plan for at least five fiscal years — the upcoming fiscal year and
the ensuing four fiscal years; changes in the current fiscal year may be made as well.
During the 2005 session, for example, the budget resolution developed by the House
and Senate covered FY2006 (which began on October 1, 2005) through FY2010, and
included revisions for FY2005.

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Many factors influence the development of a budget resolution, particularly the
President’s annual budget submission toward the start of the session. Development
of the budget resolution, as well as the President’s budget, involves the consideration
of estimates of future spending, revenues, and the resultant deficit (or surplus) based
on current law. These estimates are referred to as baseline budget projections, as
prepared by the Congressional Budget Office (CBO), and current services estimates,
as prepared by the Office of Management and Budget (OMB). The impact of
congressional and presidential budgetary policies often is assessed by comparing
revenue, spending, or deficit or surplus levels under such policies to the CBO and
OMB baseline estimates.
This section provides background on budget policies for FY2006-FY2010 with
respect to budget components targeted this year by the reconciliation process — the
deficit, mandatory outlays, revenues, and the public debt limit. For each component,
information is provided on baseline budget projections, the President’s budget
submission, and the congressional budget resolution.
Baseline Budget Projections
On January 25, 2005, CBO issued its annual report providing baseline budget
projections, The Budget and Economic Outlook: Fiscal Years 2006 to 2015. The
baseline budget projections were updated on March 8 in conjunction with the
development of the FY2006 budget resolution; the updated March baseline is used
in this report, unless otherwise indicated.7 Current services estimates were prepared
by OMB and submitted in February as part of the President’s FY2006 budget.8
The Deficit. During the period encompassing the five fiscal years most
recently completed before the current session began, FY2000-FY2004, the Federal
Government incurred both surpluses and deficits, as shown in Table 2.
Table 2. Total Deficit or Surplus: FY2000-FY2004
(amounts in $ billions)
2000
2001
2002
2003
2004
Current Dollars
236
128
-158
-378
-412
Constant FY2000 Dollars
236
125
-152
-354
-377
Percentage of GDP
2.4%
1.3%
-1.5%
-3.5%
-3.6%
Source: Office of Management and Budget, Budget of the United States Government, Fiscal Year
2006, Historical Tables, Feb. 7, 2005, Tables 1.1-1.3, pp. 21-26.
7 The March baseline budget projections are presented in: Congressional Budget Office, An
Analysis of the President’s Budgetary Proposals for Fiscal Year 2006, March 2005, Table
1-10, p. 23.
8 Office of Management and Budget, Budget of the United States Government, Fiscal Year
2006, Analytical Perspectives, Feb. 7, 2005, Chapter 25 (Current Services Estimates), Table
25-1, pp. 389-404.

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CRS-7
Measured in current dollars, the FY2000 surplus of $236 billion, which was the
largest surplus since the end of World War II, steadily eroded, becoming by FY2004
the largest deficit since the end of World War II, at $412 billion. Measured in
constant FY2000 dollars, the FY2004 deficit of $377 billion was still the largest post-
war deficit, but it was $35 billion less than the current-dollar deficit for that year. As
a percentage of Gross Domestic Product (GDP), the deficit rose from 1.5% for
FY2002 to 3.6% for FY2004.
The largest post-war deficit, in current dollars, occurred in FY1992, at $290
billion; as a percentage of GDP, the largest post-war deficit occurred in FY1983,
measuring 6.0%.
Both the CBO baseline budget projections and the OMB current services
estimates indicated a sustained but declining deficit path in the coming years. As
shown in Table 3, CBO projected that the FY2005 deficit would decline from the
prior year to $365 billion.
Table 3. CBO and OMB Baseline Deficit Projections: FY2005-
FY2010
(amounts in $ billions)
2006-
2005
2006
2007
2008
2009
2010
2010
Congressional Budget Office (March 2005 Baseline Budget Projections)
Deficit
-365
-298
-268
-246
-219
-201
-1,232
Deficit
-3.0
-2.3
-2.0
-1.7
-1.5
-1.3
—
(%age of GDP)
Office of Management and Budget (February 2005 Current Services Estimates)
Deficit
-390
-361
-303
-251
-229
-207
1,351
Sources: (1) Congressional Budget Office, An Analysis of the President’s Budgetary Proposals for
Fiscal Year 2006, March 2005, Table 1-10, p. 23; (2) Office of Management and Budget, Budget of
the United States Government, Fiscal Year 2006, Analytical Perspectives, Feb. 7, 2005, Chapter 25
(Current Services Estimates), Table 25-1, p. 390.
Note: Details may not add to totals due to rounding.
For the five-year period covering FY2006-FY2010, CBO projected a deficit of
$298 billion for FY2006, declining gradually to $201 billion for FY2010. Over five
years, the cumulative projected deficit amounted to $1.232 trillion. As a percentage
of GDP, the baseline deficit was projected to decline from 2.3% to 1.3% over this
period.
CBO noted that the statutory rules governing the preparation of baseline
projections likely resulted in an understatement of spending for military operations
in Iraq and Afghanistan by tens of billions of dollars, thereby understating the deficit
for FY2006, and possibly later years as well.

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CRS-8
The OMB current services estimates included higher deficit levels than CBO for
each year, but followed the same trend of gradual decline reflected in the CBO
projections.9 OMB estimated a decrease in the deficit for FY2005 from the prior
year’s level, to $390 billion. Further, OMB projected the deficit to decline from $361
billion for FY2006 to $207 billion for FY2010. Over five years, the cumulative
projected deficit amounted to $1.351 trillion.
Mandatory Outlays. Under the CBO baseline budget projections, mandatory
outlays were projected to grow by $339 billion over the five-year period, from $1.385
trillion for FY2006 to $1.724 trillion for FY2010. In comparison, outlays for net
interest were projected to grow by $93 billion, from $211 billion for FY2006 to $304
billion for FY2010, and discretionary outlays were projected to grow by $65 billion,
from $915 billion for FY2006 to $980 billion for FY2010. As a percentage of GDP,
mandatory outlays were projected to increase by FY2010 to 10.9% (an increase of
0.2% from FY2006). Outlays for net interest were projected to increase to 1.9% (an
increase of 0.3%) and discretionary outlays were projected to decrease to 6.2% (a
decrease of 0.9%).
The OMB projections for mandatory outlays showed an increase over the five-
year period of $336 billion, nearly the same as the CBO projection. The OMB
projections, however, showed higher levels of mandatory outlays for each fiscal year,
rising to $1.752 trillion for FY2010.
Revenues. According to CBO, total revenues were projected to rise by $594
billion over the five-year period, from $2.213 trillion for FY2006 to $2.807 trillion
for FY2010. As a percentage of GDP, revenues were projected to increase by
FY2010 to 17.8% (an increase of 0.6% from FY2006).
OMB projected a greater increase in revenues, $663 billion, over the five-year
period (rising to $2.841 trillion for FY2010).
Public Debt Limit. Finally, CBO projected the increases that would be
needed in the public debt subject to statutory limit, which currently stands at $8.184
trillion. Although the revised debt-limit levels were not identified in the baseline
projections published in March, the projections published in January indicated that
the debt-limit level would amount to $8.529 trillion for FY2006, rising steadily to
$10.847 trillion for FY2010.
The last four increases in the public debt limit, which occurred between 1997
and 2004, are shown in Table 4. The amount of increase ranged between $450
billion and $800 billion.
9 The OMB current services estimates, unlike the CBO baseline budget projections, were
not prepared strictly in accordance with the baseline rules established in the Budget
Enforcement Act (BEA). Accordingly, some of the differences in the amounts presented
by OMB and CBO are attributable to conceptual differences, as discussed in CBO, An
Analysis of the President’s Budgetary Proposals, ibid., p. 17.

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Table 4. Public Debt-Limit Increases: 1997-2004
(amounts in $ billions)
Date of
Public Law
Amount of
Revised
Increase
Number
Increase
Limit
08-05-1997
105-33
450
5,950
06-28-2002
107-199
450
6,400
05-27-2003
108-24
984
7,384
11-19-2004
108-415
800
8,184
Source: Office of Management and Budget, Budget of the United States Government, Fiscal Year
2006, Historical Tables, Feb. 7, 2005, Table 7.3, pp. 121-124.
President Bush’s FY2006 Budget
Initial Budget Submission (February). President George W. Bush
submitted his budget particularly for FY2006 to Congress on February 7, 2005. The
President’s budget focused on deficit reduction, noting his goal of reducing the $521
billion deficit originally projected for FY2004 (amounting to 4.5% of GDP) in half
by FY2009.10 Under the President’s proposals, as shown in Table 5, the deficit
would be reduced over a five-year period, from $390 billion for FY2006 (3.0% of
GDP) to $207 billion for FY2010 (1.3% of GDP), a level below the 40-year historical
average of 1.7% of GDP.
Table 5. President Bush’s FY2006 Budget: February 2005
Submission
(amounts in $ billions)
2006-
2006
2007
2008
2009
2010
2010
Deficit
-390
-312
-251
-233
-207
1,393
Deficit (Percentage of
-3.0
-2.3
-1.7
-1.5
-1.3
—
GDP)
Mandatory Outlay
-5
-9
-7
-9
-8
-39
Savings
Revenue Reduction
— a
-3
-21
-49
-32
-106
Source: Office of Management and Budget, Budget of the United States Government, Fiscal Year
2006, Feb. 7, 2005, Summary Tables S-1 and S-6, pp. 343 and 352-359.
Note: Details may not add to total due to rounding.
a Less than $500 million.
10 Office of Management and Budget, Budget of the United States Government, Fiscal Year
2006, “Overview of the President’s 2006 Budget,” p. 3.

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CRS-10
Compared to the OMB current services estimates, the President’s proposals
would increase the deficit in three years (by $29 billion for FY2006, $9 billion for
FY2007, and $4 billion for FY2009) while leaving it unchanged in the other two
years. In the net, the President’s proposals would increase the deficit by $42 billion
over the five-year period, compared to the current services baseline.
The President’s budget recommendations encompassed three major policies.
First, discretionary spending would be restrained throughout the five-year period,
reflecting more than 150 reductions and terminations for FY2006 in non-defense
programs.11 For FY2006, discretionary budget authority would increase over the
prior year by 5% for the Defense Department and 3% for homeland security (non-
Defense Department) activities, and would decrease by 1% for all other operations
of the federal government. Overall, total discretionary budget authority for FY2006
would increase by 2.1%, a level lower than the expected rate of inflation. For
FY2007-FY2010, total discretionary budget authority would increase by between 1%
and 3% each year, well below recent averages.
Second, mandatory outlays would be reduced over the five-year period by $62
billion, reflecting programmatic reforms amounting to $55 billion and user fee
proposals amounting to $7 billion.12 Taking into account outlay increases of $23
billion associated with certain tax proposals (e.g., health tax credits), the net
reduction in mandatory outlays would amount to $39 billion over five years. The net
reduction would eliminate more than 10% of the $330-plus billion growth in
mandatory outlays projected by OMB and CBO in the baseline during FY2006-
FY2010.
Third, revenues would be reduced in the net by $106 billion during the five-year
period.13 Half of the revenue decreases during this period, $53 billion, would be
attributed to making permanent certain tax cuts enacted in the revenue reconciliation
acts of 2001 and 2003, which dealt with the dividends and capital gains tax rate
structures, expensing for small business, and other matters.
President Bush’s February budget submission did not reflect additional
discretionary spending for operations in Iraq and Afghanistan for FY2006, nor did
it reflect his proposals regarding changes in the Social Security program involving
the establishment of individual accounts.
Mid-Session Review (July). On July 13, 2005, President Bush submitted
to Congress the required Mid-Session Review (MSR) of his FY2006 budget.14 The
MSR revealed some significant changes in the budget since the initial February
submission, as shown in Table 6. The annual deficit levels dropped by between $37
11 President’s FY2006 Budget, ibid., Summary Table S-2, p. 344.
12 President’s FY2006 Budget, ibid., Summary Table S-6, pp. 348-353.
13 President’s FY2006 Budget, ibid., Summary Table S-7, pp. 354-359.
14 Office of Management and Budget, Budget of the United States Government, Fiscal Year
2006, Mid-Session Review, July 13, 2005.

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CRS-11
billion and $89 billion, and the cumulative five-year deficit dropped by $326 billion
(from $1.393 trillion to $1.067 trillion).
Table 6. President Bush’s FY2006 Budget: July 2005 Mid-
Session Review
(amounts in $ billions)
2006-
2006
2007
2008
2009
2010
2010
Deficit
-341
-233
-162
-162
-170
1,067
Deficit (Percentage of GDP)
-2.6
-1.7
-1.1
-1.1
-1.1
—
Mandatory Outlay Savings
-3
-9
-8
13
44
37
Revenue Reduction
— a
-2
-20
-50
-33
-104
Source: Office of Management and Budget, Budget of the United States Government, Fiscal Year
2006, Mid-Session Review, July 13, 2005, Table 1, p. 6, and Tables S-6 and S-7, pp. 28-35.
Note: Details may not add to total due to rounding.
aLess than $500 million.
The $326 billion reduction in the cumulative deficit was explained by economic
and technical reestimates amounting to $464 billion in deficit reduction (mainly
higher revenues due to a strengthened economy and the resultant lowering of debt
service costs), offset in part by policy proposals involving $138 billion in higher
outlays (mainly Social Security personal accounts and additional war funding for
FY2006). The levels associated with the President’s recommendations regarding
savings in mandatory outlays in reductions in revenue were barely changed by the
Mid-Session Review. The five-year savings in mandatory outlays were reduced by
$2 billion, from $39 billion to $37 billion, and the five-year reduction in revenues
also was lowered by $2 billion, from $106 billion to $104 billion.
The FY2006 Budget Resolution
Consideration of the FY2006 budget resolution began in the House and Senate
in March and came to a conclusion at the end of April. Following a brief legislative
history of the budget resolution, this section provides a summary of overall budget
resolution policies.
Legislative History. The House Budget Committee reported H.Con.Res. 95
on March 11, 2005 (H.Rept. 109-17), and the Senate Budget Committee reported
S.Con.Res. 18 on the same day, but without a written report.15
15 House Budget Committee, Concurrent Resolution on the Budget — Fiscal Year 2006 (to
accompany H.Con.Res. 95), H.Rept. 109-17, Mar. 11, 2005. The Senate Budget Committee
issued a committee print, Concurrent Resolution on the Budget, FY 2006 (committee print
(continued...)

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CRS-12
The House considered H.Con.Res. 95 on March 16 and 17 under the terms of
a special rule, H.Res. 154, which had been reported by the House Rules Committee
(H.Rept. 109-19, March 15, 2005). Four amendments made in order under the
special rule were offered and defeated: (1) an amendment in the nature of a
substitute, offered by Representative Jeb Hensarling on behalf of the Republican
Study Committee, by a vote of 102-320; (2) an amendment offered by Representative
David Obey, ranking minority member of the House Appropriations Committee, by
a vote of 180-242; (3) an amendment in the nature of a substitute, offered by
Representative Melvin Watt on behalf of the Congressional Black Caucus, by a vote
of 134-292; and (4) an amendment in the nature of a substitute, offered by
Representative John Spratt, ranking minority member of the House Budget
Committee, by a vote of 165-264.
After action on the amendments was completed, the House passed H.Con.Res.
95 by a vote of 218-214.
The Senate began consideration of S.Con.Res. 18 by unanimous consent on
March 14. Consideration of the measure continued on March 15 and 16, culminating
with its passage, as amended, on March 17, by a vote of 51-49. The Senate
considered about 70 amendments, agreeing to dozens of them.
The House and Senate convened a conference on their competing versions of
the budget resolution, with H.Con.Res. 95 serving as the conference vehicle. The
conferees met on April 27 and the conference report was filed the next day.16 The
House agreed to the conference report on April 28, by a vote of 214-211, and the
Senate agreed to it the same day, by a vote of 52-47.
Overall Budget Resolution Policies. In terms of overall budget resolution
policies, the House and Senate began the conference from positions of fundamental
agreement. The budget resolutions reported by the House and Senate Budget
Committees hewed fairly closely to the general contours of the President’s budget
proposals. Both resolutions employed a five-year time frame covering FY2006-
FY2010, with revisions included for the current fiscal year, FY2005, as well. The
three main pillars of budget policy, as reflected in the reported budget resolutions,
involved significant restraint on the growth of discretionary spending, a more modest
curtailment of the growth of mandatory spending, and further reductions in revenues,
although at a more modest level compared to the actions taken in 2001 and 2003.
While the House agreed to the budget resolution reported by the House Budget
Committee without change, the Senate revised the version reported by its Budget
Committee. Although dozens of amendments were adopted in the Senate, many of
them involved precatory language (i.e., sense-of-the-Senate statements) or procedural
matters rather than changes in spending or revenue levels. Some significant changes
were made in budget levels, including to reconciliation instructions (as discussed
15 (...continued)
to accompany S.Con.Res. 18), S.Prt. 109-18, 2005, in lieu of a written report.
16 Concurrent Resolution on the Budget for Fiscal Year 2006, conference report to
accompany H.Con.Res. 95, H.Rept. 109-62, Apr. 28, 2005.

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CRS-13
below), but the basic outline of budget policy recommended by the Senate Budget
Committee remained intact.
The positions of the House, the Senate, and the final conference agreement
regarding several key components of the budget plan are presented in Table 7. With
regard to the cumulative deficit over the five-year period, the differences between the
House ($1.359 trillion) and the Senate ($1.450 trillion) were relatively modest; the
conference agreement essentially split the difference ($1.400 trillion). House-Senate
differences regarding total mandatory outlays and total revenues for the five-year
period were even more narrow. Again, the conference agreement essentially split the
difference ($9.401 trillion) with respect to total mandatory outlays over five years.
In the case of total revenues, the House-Senate difference was negligible ($23
billion), and the conference agreement ($12.440 trillion) was within $1 billion of the
House position.
Table 7. Selected Components of the FY2006 Budget
Resolution: House, Senate, and Conference Levels
(amounts in $ billions)
House
Senate
Conference
Deficit for FY2006
-376
-368
-383
Deficit for FY2006-FY2010
-1,359
-1,450
-1,400
Total Mandatory Outlays for
9,374
9,432
9,401
FY2006-FY2010
Total Revenues for FY2006-FY2010
12,441
12,418
12,440
Source: Conference report to accompany H.Con.Res. 95, Concurrent Resolution on the Budget for
Fiscal Year 2006, H.Rept. 109-62, Apr. 28, 2005, pp. 50-67.
Reconciliation Directives in the FY2006 Budget
Resolution
The FY2006 budget resolutions reported by the House and Senate Budget
Committees, and adopted by the House and Senate, included reconciliation directives
for multiple reconciliation measures.

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CRS-14
Initial House Action
The House Budget Committee reported the FY2006 budget resolution,
H.Con.Res. 95, on March 11, 2005. As reported, the budget resolution contained two
sets of reconciliation instructions to House committees in Section 201 (see Table 8).
Table 8. Initial Reconciliation Instructions: House
(amounts in $ billions)
Reported and Passed
House Committee
FY2006-
FY2006
FY2010
Spending (Mandatory Outlays)
(submission date: September 16)
Agriculture
-0.797
-5.278
Education and the Workforce a
-2.097
-21.410
Energy and Commerce
-0.630
-20.002
Financial Services
-0.030
-0.270
Judiciary
-0.123
-0.603
Resources
-0.096
-1.413
Transportation and Infrastructure
-0.012
-0.103
Veterans’ Affairs
-0.155
-0.798
Ways and Means**
-3.907
-18.680
Total
-7.847
-68.557
Revenues
(reporting date: June 24)
Ways and Means Committee
-16.623
-45.000
Source: House Budget Committee, Concurrent Resolution on the Budget — Fiscal Year 2006 (to
accompany H.Con.Res. 95), H.Rept. 109-17, Mar. 11, 2005, pp. 69-71 and 136-137.
Section 201(a) instructed nine House committees to submit reconciliation
recommendations to the Budget Committee that would reduce mandatory outlays by
$7.847 billion in FY2006 and $68.557 billion in FY2006-FY2010. In addition,
Section 201(b) instructed the Ways and Means Committee to report a reconciliation
bill reducing revenues by not more than $16.623 billion in FY2006 and $45.000
billion in FY2006-FY2010. The net effect of the spending and revenue reconciliation
instructions on the deficit estimates was a decrease of $23.557 billion over the five-
year period.
The House Budget Committee contemplated a schedule in which the revenue
reconciliation bill would be considered first, before the August recess, and the
spending reconciliation bill would be considered second, after the August recess.

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CRS-15
The submission deadline for the spending reconciliation recommendations was
September 16, 2005; the reporting deadline for the revenue reconciliation measure
was June 24.
Each of the four amendments made in order during initial House consideration
of the budget resolution would have modified or eliminated the reconciliation
instructions for FY2006-FY2010 recommended by the House Budget Committee.
The Hensarling amendment would have increased the savings in mandatory outlays
to more than $125 billion and the revenue reductions to about $106 billion; the Obey
amendment would have added revenue increases of nearly $26 billion, intended to
be targeted at wealthy taxpayers; and the Watt and Spratt amendments would have
eliminated the reconciliation instructions completely. As indicated earlier, all of the
amendments were defeated; subsequently, the House agreed to the budget resolution
without having made any changes in the reconciliation instructions as reported by the
Budget Committee.
Initial Senate Action
The Senate Budget Committee reported its version of the FY2006 budget
resolution, S.Con.Res. 18, on March 11, 2005.17 The reconciliation instructions
included in the budget resolution as reported by the Senate Budget Committee
differed in several respects from the instructions in the budget resolution agreed to
by the House (see Table 9).
First, Section 201(a) of S.Con.Res. 18 included instructions to seven committees
to achieve savings in mandatory outlays of $4.244 billion in FY2006 and $32.042
billion in FY2006-FY2010, less than half the five-year amount recommended by the
House. Second, Section 201(b) of the measure included instructions to the Senate
Finance Committee to reduce revenues by $14.939 billion in FY2006 and $70.154
billion in FY2006-FY2010, about $25 billion more over five years than the amount
recommended by the House. Third, Section 201(c) of the measure recommended an
increase in the statutory limit on the public debt of $446.464 billion, an issue the
House did not address in reconciliation. The net effect on the deficit estimates of the
spending and revenue reconciliation instructions reported by the Budget Committee
was an increase of $23.557 billion over the five-year period.
Finally, the Senate Budget Committee proposed to reverse the timing of
legislative action compared to the House’s recommendation, imposing an earlier
submission date for spending reconciliation recommendations (June 6, instead of
September 16 in the House) and a later reporting date for revenue reconciliation
legislation (September 7, instead of June 24 in the House). The reporting date for the
reconciliation measure pertaining to the public debt limit was September 16.
The Senate, unlike the House, agreed to amendments that changed the
reconciliation instructions recommended by the Budget Committee. On March 17,
17 The committee issued a print in lieu of a report: Senate Budget Committee, Concurrent
Resolution on the Budget, Fiscal Year 2006 (committee print to accompany S.Con.Res. 18),
S.Prt. 109-18, 2005.

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CRS-16
the Senate adopted three amendments that revised both the spending and revenue
reconciliation instructions. First, the Senate adopted Bingaman (for Smith)
Amendment #204, by a vote of 52-48. The amendment struck the spending
reconciliation instructions to the Finance Committee in Section 201(a)(6) and added
to the budget resolution a provision establishing a reserve fund of $1.5 million for the
creation of a 23-member Bipartisan Medicaid Commission. It had been widely
assumed that the Finance Committee would consider reductions in Medicaid
spending in order to meets its instruction of $15.036 billion in savings over five
years; consequently, the amendment was seen as a means of protecting the Medicaid
program from spending cuts.
Table 9. Initial Reconciliation Instructions: Senate
(amounts in $ billions)
Reported
Passed
Senate Committee
FY2006-
FY2006-
FY2006
FY2006
FY2010
FY2010
Spending (Mandatory Outlays)
(submission date: June 6)
Agriculture, Nutrition, and
-0.171
-2.814
-0.171
-2.814
Forestry
Banking, Housing, and Urban
-0.030
-0.270
-0.030
-0.270
Affairs
Commerce, Science, and
-0.008
-2.576
-0.008
-2.576
Transportation
Energy and Natural Resources
-0.033
-2.658
-0.033
-2.658
Environment and Public Works
-0.014
-0.112
-0.014
-0.112
Finance
-1.784
-15.036
0
0
Health, Education, Labor, and
-2.204
-8.576
-2.204
-8.576
Pensions
Total
-4.244
-32.042
-2.460
-17.006
Revenues
(reporting date: September 7)
Finance Committee
-14.939
-70.154
-19.016
-128.580
Statutory Debt Limit
(reporting date: September 16)
Finance Committee
+446.464
+446.464
Sources: (1) Senate Budget Committee, Concurrent Resolution on the Budget, Fiscal Year 2006
(committee print to accompany S.Con.Res. 18), S.Prt. 109-18, 2005, p. 43; and (2) S.Con.Res. 18, as
reported, Mar. 11, 2005, pp. 28-30; and (3) S.Con.Res. 18, as passed by the Senate, Mar. 17, 2005,
pp. 28-30.

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CRS-17
The second amendment that the Senate adopted on March 17 was Bunning
Amendment #241, by a vote of 55-45. The amendment, which increased the revenue
reduction under reconciliation by $4.8 billion for FY2006 and $63.9 billion for
FY2006-FY2010, was characterized by Senator Bunning as accommodating the
repeal of a 1993 increase in the taxation of Social Security benefits.
Finally, the Senate adopted on March 17 Kennedy Amendment #177, as
modified, by a vote of 51-49. The amendment decreased the instruction to reduce
revenues by $723 million for FY2006 and $5.474 billion for FY2006-FY2010,
offsetting spending increases for education programs.
The Senate also considered and rejected several other amendments that would
have modified the reconciliation instructions. In particular, the Senate rejected
Cantwell Amendment #168, by a vote of 49-51. The amendment, which would have
struck the instruction in Section 201(a)(4) to the Energy and Natural Resources
Committee to reduce outlays by $2.658 billion over five years, was characterized by
Senator Cantwell as precluding the opening of the Arctic National Wildlife Refuge
(ANWR) to oil exploration.
In the net, the amendments that the Senate adopted decreased the total outlay
reduction over five years by $15.036 billion, from the reported level of $32.042
billion to $17.006 billion, and increased the total revenue reduction over five years
by $58.426 billion, from the reported level of $70.154 billion to $128.580 billion.
By scaling back the outlay reductions and boosting the revenue reductions required
by the reconciliation instructions, the Senate dramatically changed the net effect of
reconciliation on the total deficit estimate over the five-year period. While the
reconciliation instructions in the budget resolution as reported by the Senate Budget
Committee would have increased the deficit in the net by about $38 billion over five
years, the instructions in the resolution as passed by the Senate would have increased
the deficit in the net by about an additional $73 billion over that period, or about
$111 billion in total.
Conference Agreement
The conferees reported their agreement on H.Con.Res. 95 on April 28, 2005.
In addition to the separate spending and revenue reconciliation measures that each
chamber had proposed, the conferees agreed to a third reconciliation measure, on the
public debt limit, as had been proposed by the Senate.
In the case of the spending and revenue reconciliation measures, the conferees
found a middle ground between the positions of the two chambers (see Table 10),
which was close to the levels reported by the Senate Budget Committee.
With respect to savings in mandatory outlays, the conferees recommended
reconciliation instructions to eight House and eight Senate committees, requiring
total savings of $34.658 billion over FY2006-FY2010.18 This was about half the
18 For two committees, the House Education and Workforce Committee and the Senate
(continued...)

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CRS-18
amount of savings recommended by the House ($68.557 billion) and about twice the
amount of savings recommended by the Senate ($17.006 billion). The House’s
reconciliation instructions had involved nine House committees and the Senate’s
instructions had involved seven Senate committees; in the final instructions, the
House Veterans’ Affairs Committee was dropped and the Senate Judiciary
Committee was added.
Table 10. Reconciliation Instructions for FY2006-FY2010:
Summary of House, Senate, and Conference Amounts
(amounts in $ billions)
Reconciliation Instructions
House
Senate
Conference
for FY2006-FY2010
Passed
Passed
Agreement
Changes in Mandatory Outlays
-68.557
-17.006
-34.658
Changes in Revenues
-45.000
-128.580
-70.000
Change in Statutory Debt Limit
[none]
+446.464
+781.000
Net Effect on Deficit
-23.557
+111.574
+35.342
Source: Concurrent Resolution on the Budget for Fiscal Year 2006 (conference report to accompany
H.Con.Res. 95), H.Rept. 109-62, Apr. 28, 2005, pp. 11-14 and 68-71.
Note: Negative sign (-) denotes a decrease; positive sign (+) denotes an increase.
Table 11 presents more detailed information on the reconciliation instructions
included in the conference agreement.
Table 11. Reconciliation Instructions in the Conference
Agreement on the FY2006 Budget Resolution
Amount
Committee
($ billions)
FY2006
FY2006-FY2010
Spending (Mandatory Outlays)
(submission date: September 16)
House Agriculture
-0.173
-3.000
House Education and the Workforce a
-0.992
-12.651
House Energy and Commerce
-0.002
-14.734
House Financial Services
-0.030
-0.470
House Judiciary
-0.060
-0.300
18 (...continued)
Health, Education, Labor, and Pensions Committee, the period of savings includes FY2005
as well.

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CRS-19
Amount
Committee
($ billions)
FY2006
FY2006-FY2010
House Resources
—
-2.400
House Transportation and Infrastructure
-0.012
-0.103
House Ways and Means b
-0.250
-1.000
Total for House Committees
-1.519
-34.658
Senate Agriculture, Nutrition, and Forestry
-0.173
-3.000
Senate Banking, Housing, and Urban Affairs
-0.030
-0.470
Senate Commerce, Science, and Transportation
-0.010
-4.810
Senate Energy and Natural Resources
—
-2.400
Senate Environment and Public Works
-0.004
-0.027
Senate Finance
—
-10.000
Senate Health, Education, Labor, and Pensions a
-1.242
-13.651
Senate Judiciary
-0.060
-0.300
Total for Senate Committees
-1.519
-34.658
Revenues
(reporting date: September 23)
House Ways and Means Committee
-11.000
-70.000
Senate Finance Committee
-11.000
-70.000
Statutory Debt Limit
(reporting date: September 30)
House Ways and Means Committee
+781.000
Senate Finance Committee
+781.000
Source: Concurrent Resolution on the Budget for Fiscal Year 2006 (conference report to accompany
H.Con.Res. 95), H.Rept. 109-62, Apr. 28, 2005, pp. 11-14 and 68-71.
aThe reconciliation instructions to the House Education and the Workforce Committee and the Senate
Health, Education, Labor, and Pensions Committee for FY2006 and FY2006-FY2020 also encompass
FY2005.
bThe reconciliation instructions to the Ways and Means Committee are “to reduce the deficit,” which
may include reductions in outlays, increases in revenues, or a combination of the two.
Subsequent Changes in Budget Policy Affecting
Reconciliation
Beginning in September 2005, Congress and the President have enacted various
measures intended to provide relief to the victims of Hurricane Katrina and Hurricane

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CRS-20
Rita and to fund reconstruction activities.19 Legislative efforts in this area are
expected to continue this session and into the next. Republican leaders in the House
and Senate and others have expressed concern about the impact of these relief and
reconstruction efforts on the federal deficit and have indicated that they would
develop plans to enact offsets to the relief costs.
On October 6, 2005, Speaker of the House J. Dennis Hastert issued a press
release on a plan developed by House Republican leaders.20 In commenting on the
plan, Speaker Hastert noted:
Hurricanes Katrina and Rita have dealt a severe blow to our nation, both in
terms of human and economic losses. We can and will recover, but it will
require some serious belt-tightening throughout the federal government. House
Republican leadership, Committee Chairmen and key members of the conference
have worked together to come up with a proposal we believe can accomplish this
task. In order to maintain our commitment to deficit reduction, we are proposing
to move a mid-session Budget Amendment for the first time in almost 30 years
(1977). The Amendment will increase the total amount of savings which can
help pay for these unexpected costs. (emphasis in the original)
The “Hastert Plan” has four elements, according to the Speaker’s press release:
! an increase of $15 billion or more in the mandatory savings required
to be achieved through the budget reconciliation process, from about
$35 billion for FY2006-FY2010 to at least $50 billion for that
period, as well as the “dollar-for-dollar” offset of any new
mandatory spending for disaster relief included in reconciliation
legislation;
! continued restraint on discretionary spending, including an
additional across-the-board cut in discretionary spending for
FY2006;
! packages of additional rescissions to further help offset
reconstruction costs; and
! the permanent elimination, through “deauthorization,” of programs
already “zeroed out” in the current appropriations process.21
19 Hurricane Katrina made landfall in Louisiana, Mississippi, and Alabama on August 29,
2005 (after impacting Florida on August 25), and Hurricane Rita made landfall in Louisiana
and Texas on September 24. CRS reports on different aspects of this issue are listed on the
CRS Web page [http://www.crs.gov] under the Current Legislative Issues term “Disaster —
Hurricanes.”
20 Speaker’s Press Office, Speaker Hastert Comments on Republicans’ Initial Spending Cut
Proposal, Oct. 6, 2005, available on the Web at [http://www.speaker.gov]
21 For more information on this topic, see CRS Report RL33127, Speaker Hastert’s Plan to
Offset Spending: A Procedural Perspective, by Robert Keith.

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CRS-21
As announced by the Speaker, the plan does not indicate what portion or amount
of costs are to be offset. The Speaker’s press release stated that the first step in
implementing the plan may be the consideration of a revised budget resolution for
FY2006 in the coming days.22 House action on a revised budget resolution
tentatively was scheduled for Thursday, October 20, but action was postponed and
has not yet been rescheduled.23
According to a preliminary assessment made by the Senate Budget Committee
on October 24, 2005, the five-year costs stemming from these measures, covering
FY2006-FY2010, are estimated at $70.913 billion. Most of the relief costs — $62.3
billion — are attributable to two emergency supplemental appropriations acts, P.L.
109-61 and P.L. 109-62. The Senate Budget Committee’s preliminary assessment
does not reflect several measures also enacted into law in September and October,
still pending in the House or Senate, or expected to be considered at a later time.
These measures could increase the costs for hurricane-related relief by tens of billions
of dollars.
In the meantime, seven of the eight House committees were informed by the
Republican leadership that they should work toward achieving, in the aggregate, an
additional $15 billion in five-year savings through their reconciliation
recommendations. Although the increased savings amounts for each committee have
not been announced officially, media reports indicate that the House Ways and
Means and Education and Workforce Committees were expected to achieve most of
the increased savings, roughly an additional $7 billion and $5 billion, respectively.24
By informal agreement, the schedule of reconciliation actions in the House was
delayed to accommodate these developments. The House Budget Committee
announced that it would markup the spending reconciliation bill during the first week
in November, and the instructed committees were expected to make their
submissions to the Budget Committee during the prior week. Action on the revenue
reconciliation bill and the debt-limit reconciliation bill is expected to occur after
initial action on the spending reconciliation bill has been completed.
In the Senate, the Republican leadership announced its support for enacting
offsets, but has not specified a comprehensive plan to do so or indicated any intent
to consider a revised budget resolution. On September 12, Senate Majority Leader
Bill Frist and Senate Budget Committee Chairman Judd Gregg issued a joint
statement indicating that, in order to allow “the Congress and the committees to
22 Procedures for revising a budget resolution are discussed in CRS Report RL33122,
Congressional Budget Resolutions: Revisions and Adjustments, by Robert Keith.
23 See: (1) “Leaders Delay Budget Vote in House,” by Susan Davis and Peter Cohn,
CongressDaily AM, Oct. 20, 2005; (2) “Senate Panel Looks to Finish Cuts Oct. 24; Blunt
Plans to Try Again on Amendment,” by Jonathan Nicholson, BNA Daily Report for
Executives, no. 203, Oct. 21, 2005, p. G-9; and (3) “Blunt Won’t Gamble on Budget Votes,”
by Alexander Bolton, The Hill, Oct. 21, 2005.
24 See, for example, “House Looking to Two Committees to Boost Reconciliation Spending
Cut Totals,” by Jonathan Nicholson, in BNA’s Daily Report for Executives, no. 206, Oct.
26, 2005, p. G-14.

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CRS-22
address the immediate concerns related to the recent hurricane and not be
encumbered by budget reconciliation requirements in the near term,” the Senate
Budget Committee would not meet to markup the spending reconciliation bill until
October 26.25
On September 27, Senate Majority Leader Frist, Budget Committee Chairman
Gregg, and other members of the Republican leadership, wrote to the chairmen of the
committees subject to reconciliation instructions, asking them to recommend
spending reductions “above and beyond” those already called for under the
instructions as part of the offset efforts. In addition, the leadership also sent letters
to the chairmen of non-reconciled committees, encouraging them to find savings
within their committee’s jurisdiction as well.26 Specific amounts of additional
savings for the committees were not identified in the correspondence.
Reconciliation Legislation in 2005: Legislative
History
Under the revised schedule for reconciliation actions, the Senate initiated action
on the spending reconciliation measure in late October, with the House expected to
follow suit in early November. Action on the two other reconciliation measures is
expected to occur later in the session.
Spending Reconciliation Legislation
Initial Senate Action. The Senate Budget Committee met on October 26,
2005, and ordered the omnibus spending reconciliation bill, S. 1932 (the Deficit
Reduction Omnibus Reconciliation Act of 2005), reported by a party-line vote of 12-
10. The bill was reported the following day, without a written report.27
According to the Senate Budget Committee, the submissions from the instructed
committees exceeded the outlay savings required by the instructions in the aggregate
by $4.649 billion for FY2006 and $4.456 billion for FY2006-FY2010. The FY2006
outlay savings totaled $6.168 billion, compared to instructions totaling $1.519
billion; the FY2006-FY2010 outlay savings totaled $39.114 billion, compared to
instructions totaling $34.658 billion. All eight of the instructed committees met or
exceeded their instructions for FY2006 and exceeded their instructions for FY2006-
FY2010. A summary of the Congressional Budget Office’s scoring of the savings
by committee is presented in Table 12.
25 The statement is available on the website of the Senate Budget Committee (Republican)
at [http://www.senate.gov/~budget/republican/] under “News Room.”
26 Examples of the letters, as well as a Sept. 28, 2005 press release issued by Budget
Committee Chairman Gregg on the subject, are available on Senate Budget Committee
website, cited above.
27 In lieu of a written report, the Senate Budget Committee issued a print, Deficit Reduction
Omnibus Reconciliation Act of 2005, S.Prt. 109-37, October 2005.

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CRS-23
Table 12. Summary of CBO Scoring of Senate Committee
Spending Reconciliation Submissions
(amounts in $ billions)
Instructions
Submissions
Senate Committee
FY2006-
FY2006-
FY2006
FY2006
FY2010
FY2010
Agriculture, Nutrition, and
-0.173
-3.000
-0.196
-3.014
Forestry
Banking, Housing, and Urban
-0.030
-0.470
-0.030
-0.570
Affairs
Commerce, Science, and
-0.010
-4.810
-0.010
-5.984
Transportation
Energy and Natural Resources
—
-2.400
0.000
-2.501
Environment and Public Works
-0.004
-0.027
-0.004
-0.030
Finance
—
-10.000
-0.819
-10.006
Health, Education, Labor, and
-1.242
-13.651
-5.015
-16.431
Pensions a
Judiciary
-0.060
-0.300
-0.094
-0.578
Total
-1.459
-34.658
-6.168
-39.114
Source: Senate Budget Committee, Deficit Reduction Omnibus Reconciliation Act of 2005, S.Prt.
109-37, October 2005, pp. 8-12.
aThe reconciliation instructions to the Health, Education, Labor, and Pensions Committee for FY2006
and FY2006-FY2020 also encompass FY2005.
The Senate began consideration of S. 1932 on October 31.
Initial House Action. The House Budget Committee is scheduled to meet to
consider reporting the spending reconciliation bill on November 3.
Although the spending reconciliation measure has not yet been reported by the
House Budget Committee, the reconciliation submissions of the eight instructed
committees have been scored by CBO. As shown in Table 13, each of the
committees has met or exceeded (substantially exceeded, in some instances) its
instructions for FY2006-FY2010. The submissions of two committees in particular,
Education and Workforce and Ways and Means, exceed the required five-year
savings by $7.771 billion and $7.048 billion, respectively. The combined savings
from all eight committees, amounting to $53.929 billion over five years, exceeds the
leadership’s request for an additional $15 billion in outlay savings.

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CRS-24
Table 13. Summary of CBO Scoring of House Committee
Spending Reconciliation Submissions
(amounts in $ billions)
Instructions
Submissions
Senate Committee
FY2006-
FY2006-
FY2006
FY2006
FY2010
FY2010
Agriculture
-0.173
-3.000
-0.567
-3.650
Education and the Workforce a
-0.992
-12.651
-7.678
-20.422
Energy and Commerce
-0.002
-14.734
+2.832
-17.077
Financial Services
-0.030
-0.470
-0.030
-0.470
Judiciary
-0.060
-0.300
-0.076
-0.428
Resources
—
-2.400
-0.006
-3.678
Transportation and Infrastructure
-0.012
-0.103
-0.030
-0.156
Ways and Means
-0.250
-1.000
-0.100
-8.048
Total
-1.269
-34.658
-5.655
-53.929
Source: Congressional Budget Office, “Cost Estimates for Reconciliation Legislation.” Cost
estimates for committees are available individually on the CBO website at
[http://www.cbo.gov/publications/collections/reconciliation.cfm]
aThe reconciliation instructions to the House Education and the Workforce Committee for FY2006
and FY2006-FY2020 also encompass FY2005.
The House is expected to consider the spending reconciliation measure during
the week of November 7-11.
Revenue Reconciliation Legislation
[There is no action to report yet on revenue reconciliation legislation in the
House or Senate.]
Debt-Limit Reconciliation Legislation
[There is no action to report yet on debt-limit reconciliation legislation in the
House or Senate.]

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CRS-25
Products on Selected Policy Issues Addressed in
Reconciliation
The reconciliation legislation being developed and considered in the House and
Senate addresses a wide range of policy issues. For information on the specific
policy proposals recommended by the instructed committees, the reader is directed
to the print issued (in lieu of a report) by the Senate Budget Committee, and the
forthcoming report of the House Budget Committee.28 In addition, the reader is
directed to the cost estimates prepared by CBO for each of the committee
submissions; these estimates briefly summarize the policy proposals.29
The Congressional Research Service also has prepared reports and issue briefs
on major issues addressed in reconciliation legislation; they are identified on the CRS
website under the Current Legislative Issues term “Reconciliation, Budget” and are
available at [http://www.crs.gov]. The CRS reports and issue briefs posted on the
website so far are listed below by major category; additional products will be listed
as they become available.
Agriculture and Nutrition
CRS Report RS22086, Agriculture and FY2006 Budget Reconciliation, by
Ralph M. Chite.
Arctic National Wildlife Refuge (ANWR)
CRS Report RS22304, ANWR and FY2006 Budget Reconciliation Legislation,
by Bill Heniff Jr. and M. Lynne Corn.
“Byrd Amendment” on Anti-Dumping
CRS Report RL33045, The Continuing Dumping and Subsidy Offset Act (“Byrd
Amendment”), by Jeanne J. Grimmett and Vivian C. Jones.
Deposit Insurance
CRS Report RS20724, Federal Deposit and Share Insurance: Proposals for
Change, by William D. Jackson.
Medicare and Medicaid
CRS Report RL33121, Medicaid Issues for the 109th Congress, by Jean Hearne.
28 Senate Budget Committee, Deficit Reduction Omnibus Reconciliation Act of 2005, S.Prt.
109-37, October 2005; the print is not yet available online. The House Budget Committee
report will be cited when it becomes available.
29 Congressional Budget Office, “Cost Estimates for Reconciliation Legislation.” Cost
estimates for committees are available individually on the CBO website at
[http://www.cbo.gov/publications/collections/reconciliation.cfm]

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CRS-26
Outer Continental Shelf Leasing
CRS Issue Brief IB10149, Outer Continental Shelf: Debate Over Oil and Gas
Leasing and Revenue Sharing, by Marc Humphries.
SCHIP (State Children’s Health Insurance Program)
CRS Report RL33130, Budget Reconciliation: Projections of Funding in the
State Children’s Health Insurance Program, by Chris L. Peterson.
Spectrum Auction and Fees
CRS Report RS22306, Spectrum Auctions and Deficit Reduction: FY2006
Budget Reconciliation, by Linda K. Moore and Lennard G. Kruger.
Student Loans
CRS Report RS22308, Student Loans and FY2006 Budget Reconciliation, by
Adam Stoll.
Welfare
CRS Issue Brief IB10140, Welfare Reauthorization: Overview of the Issues, by
Gene Falk, Melinda Gish, and Carmen Solomon-Fears.

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