ȱ
ŽŽ›Š•ȱžŽȱ›˜ŒŽœœȱŽ˜›–ȱ’—ȱ‘Žȱŗŗŗ‘ȱ
˜—›ŽœœDZȱȱ›’ŽȱŸŽ›Ÿ’Ž ȱ
˜‹Ž›ȱ Ž’‘ȱ
™ŽŒ’Š•’œȱ’—ȱ–Ž›’ŒŠ—ȱŠ’˜—Š•ȱ ˜ŸŽ›—–Ž—ȱ
ŽŒŽ–‹Ž›ȱřŖǰȱŘŖŖŞȱ
˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŝȬśŝŖŖȱ
   ǯŒ›œǯ˜Ÿȱ
ŚŖŗŗřȱ
ȱŽ™˜›ȱ˜›ȱ˜—›Žœœ
Pr
epared for Members and Committees of Congress

ŽŽ›Š•ȱžŽȱ›˜ŒŽœœȱŽ˜›–ȱ’—ȱ‘Žȱŗŗŗ‘ȱ˜—›Žœœȱ
ȱ
ž––Š›¢ȱ
Procedural change is a recurrent feature of federal budgeting, although the scope and impact of
changes may vary from year to year. In order to advance their budgetary, economic, or political
objectives, both Congress and the President regularly propose and make changes to the federal
budget process. This report briefly discusses the context in which federal budget process changes
are made and identifies selected reform proposals by major category. The identification of reform
proposals in this report is not intended to be comprehensive.
A variety of sources give rise to the interest in budget process reform, including Congress, the
President, State and local government officials, and special commissions, among others. Congress
initiated a thorough overhaul of its internal budget process and ameliorated ongoing conflicts
with President Richard Nixon over the withholding of appropriated funds through enactment of
the Congressional Budget and Impoundment Control Act of 1974. President Bill Clinton, like
many Presidents before him, requested line-item veto authority, which Congress granted in 1996
in the Line Item Veto Act (but was invalidated by court action in 1998). State and local
government officials were instrumental in securing passage of the Unfunded Mandates Reform
Act of 1995. Finally, special commissions, such as the President’s National Commission on
Terrorist Attacks Upon the United States (the “9/11 Commission”), have recommended changes
in budget structure and procedure that have been adopted.
The federal budget process is rooted in constitutional mandates, statutory requirements, House
and Senate rules and practices, and administrative directives. Thus, there are several avenues
through which budget process changes can occur. Either chamber may focus on changes in its
rules, thereby minimizing the time needed to effect the change and the scale of potential conflict
needed to be resolved, but at the same time possibly minimizing the impact of the changes.
Broader and potentially more consequential changes, involving statutes or constitutional
amendments, may entail a larger set of participants in the decision-making (i.e., the other
chamber, the President, state legislatures), likely escalating the effort required to reach agreement
and lengthening the time period before the changes take effect.
Legislative changes in the budget process may take the form of freestanding bills or joint
resolutions (e.g., the Line Item Veto Act), or may be incorporated into other budgetary legislation,
such as acts raising the debt limit (e.g., the Balanced Budget and Emergency Deficit Control Act
of 1985, also referred to as the Gramm-Rudman-Hollings Act), implementing reconciliation
instructions (e.g., the Budget Enforcement Act of 1990), or providing annual appropriations (e.g.,
revisions in the Senate’s cap on discretionary appropriations). Budget process changes also may
be included in the annual budget resolution (a concurrent resolution), or in simple House or
Senate resolutions.
This report will be updated as developments warrant.

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

ŽŽ›Š•ȱžŽȱ›˜ŒŽœœȱŽ˜›–ȱ’—ȱ‘Žȱŗŗŗ‘ȱ˜—›Žœœȱ
ȱ
˜—Ž—œȱ
The Context of Budget Process Reform .......................................................................................... 1
Sources of Budget Process Reform Proposals .......................................................................... 1
Avenues of Reform.................................................................................................................... 2
Early Opportunities for Budget Process Changes in the 111th Congress................................... 3
Selected Budget Process Reform Proposals .................................................................................... 4
PAYGO Rules and Discretionary Spending Limits................................................................... 4
Statutory Enforcement Procedures...................................................................................... 4
House and Senate PAYGO Rules........................................................................................ 5
Earmarking................................................................................................................................ 6
Congressional Budget Resolution and Reconciliation .............................................................. 7
Annual Appropriations Process................................................................................................. 8
Item Veto/Expanded Rescission Authority................................................................................ 9
Commission/Task Force on Long-Term Budgetary Issues ....................................................... 9
Capital Budgeting.................................................................................................................... 10
Biennial Budgeting.................................................................................................................. 10

™™Ž—’¡Žœȱ
Appendix. Citations to Selected Budget Process Laws..................................................................11

˜—ŠŒœȱ
Author Contact Information .......................................................................................................... 12

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ

ŽŽ›Š•ȱžŽȱ›˜ŒŽœœȱŽ˜›–ȱ’—ȱ‘Žȱŗŗŗ‘ȱ˜—›Žœœȱ
ȱ
rocedural change is a recurrent feature of federal budgeting, although the scope and impact
of changes may vary from year to year. In order to advance their budgetary, economic, or
P political objectives, both Congress and the President regularly propose and make changes
to the federal budget process. This report briefly discusses the context in which federal budget
process changes are made and identifies selected reform proposals by major category. The
identification of reform proposals in this report is not intended to be comprehensive; other
Congressional Research Service reports discuss different aspects of budget process reform in
more detail.1
‘Žȱ˜—Ž¡ȱ˜ȱžŽȱ›˜ŒŽœœȱŽ˜›–ȱ
˜ž›ŒŽœȱ˜ȱžŽȱ›˜ŒŽœœȱŽ˜›–ȱ›˜™˜œŠ•œȱ
A variety of sources give rise to the interest in budget process reform, including Congress, the
President, State and local government officials, and special commissions, among others. Congress
initiated a thorough overhaul of its internal budget process and ameliorated ongoing conflicts
with President Richard Nixon over the withholding of appropriated funds through enactment of
the Congressional Budget and Impoundment Control Act of 1974. President Bill Clinton, like
many Presidents before him, requested line-item veto authority, which Congress granted in 1996
in the Line Item Veto Act (but was invalidated by court action in 1998). State and local
government officials were instrumental in securing passage of the Unfunded Mandates Reform
Act of 1995. Finally, special commissions, such as the President’s National Commission on
Terrorist Attacks Upon the United States (the “9/11 Commission”), have recommended changes
in budget structure and procedure that have been adopted. (Citations to laws identified in this
report are provided in the Appendix.)
Outside of Congress itself, the President probably has been the most important source of budget
process reform proposals over the years. The President’s annual budget submission to Congress
typically includes at least several proposed changes in budget procedure.2 In his final budget
submission, for example, President George W. Bush advocated proposals involving such matters
as enhanced controls over mandatory and discretionary spending, stricter standards for emergency
spending designations, changes in how baseline calculations are made, earmark reform, line-item
veto, biennial budgeting, a joint budget resolution, and an automatic continuing resolution.3
In late November 2008, President-elect Barack Obama signaled his interest in pursing budget
process reform during the 111th Congress when he announced that he intended to nominate Peter
Orszag to the position of director of the Office of Management and Budget (OMB) and Rob
Nabors to the position of OMB deputy director. In making the announcement, President-elect

1 CRS reports on different budget process reforms are listed under the appropriate terms under “Current Legislative
Issues” on the CRS homepage; other pertinent CRS reports may be accessed in several ways, including by subject term
and author searches on the CRS homepage. Also, see CRS Report RL31478, Federal Budget Process Reform: Analysis
of Five Reform Issues
, by James V. Saturno, for a discussion of selected reforms proposed in past years.
2 In recent years, the President’s budget process reform proposals have been included in a separate chapter of the
Analytical Perspectives volume.
3 See the Office of Management and Budget, Budget of the United States Government, Fiscal Year 2009, Analytical
Perspectives
, Feb. 4, 2008, Chapter 15 (Budget Reform Proposals), pp. 215-225.
˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŗȱ

ŽŽ›Š•ȱžŽȱ›˜ŒŽœœȱŽ˜›–ȱ’—ȱ‘Žȱŗŗŗ‘ȱ˜—›Žœœȱ
ȱ
Obama stated: “In these challenging times, when we are facing both rising deficits and a sinking
economy, budget reform is not an option. It is an imperative.”4
Perhaps more than any other factor over the years, concern about the size and persistence of the
federal deficit has animated calls for budget process reform. The federal deficit, which amounted
to $162 billion for FY2007, jumped to $455 billion for FY2008 in the face of a significant
economic downturn. Several research organizations have indicated that the deficit for FY2009,
driven upward by further economic deterioration and the need for economic stabilization and
stimulus legislation, may reach or exceed the $1 trillion level.5 The dramatic increase in the
deficit, and its likely persistence at high levels in the short term, can be expected to fuel strong
interest in procedural reform.
ŸŽ—žŽœȱ˜ȱŽ˜›–ȱ
The federal budget process is rooted in constitutional mandates, statutory requirements, House
and Senate rules and practices, and administrative directives.6 Thus, there are several avenues
through which budget process changes can occur. Either chamber may focus on changes in its
rules, thereby minimizing the time needed to effect the change and the scale of potential conflict
needed to be resolved, but at the same time possibly minimizing the impact of the changes.
Broader and potentially more consequential changes, involving statutes or constitutional
amendments, may entail a larger set of participants in the decision-making (i.e., the other
chamber, the President, state legislatures), likely escalating the effort required to reach agreement
and lengthening the time period before the changes take effect.
Legislative changes in the budget process may take the form of freestanding bills or joint
resolutions (e.g., the Line Item Veto Act), or may be incorporated into other budgetary legislation,
such as acts raising the debt limit (e.g., the Balanced Budget and Emergency Deficit Control Act
of 1985, also referred to as the Gramm-Rudman-Hollings Act), implementing reconciliation
instructions (e.g., the Budget Enforcement Act of 1990), or providing annual appropriations (e.g.,
revisions in the Senate’s cap on discretionary appropriations).7 Budget process changes also may
be included in the annual budget resolution (a concurrent resolution), or in simple House or
Senate resolutions.
In some years, changes made in the budget process were comprehensive. The Budget and
Accounting Act of 1921 established the executive budget process, the Congressional Budget Act
of 1974 created the congressional budget process, and the Balanced Budget and Emergency
Deficit Control Act of 1985 and the Budget Enforcement Act of 1990 imposed additional budget
controls on a temporary basis. In other years, such as 1987, 1993, and 1997, existing budget
process statutes were modified in a less comprehensive fashion and extended for limited periods.

4 Press release, “President-elect Barack Obama announces Office of Management and Budget Director and Deputy
Director,” Nov. 25, 2008, available on the Obama transition Website at [http://change.gov/newsroom].
5 See, for example, the Committee for a Responsible Federal Budget, “CRFB Projects a One Trillion Dollar Deficit,”
press release, Nov. 10, 2008, available at [http://crfb.org/documents/trilliondollardeficit.doc].
6 For an overview of the federal budget process, see CRS Report 98-721, Introduction to the Federal Budget Process,
by Robert Keith.
7 A comprehensive listing and description of major budget process laws enacted over the past century (and full legal
citations to them) is provided in CRS Report RL30795, General Management Laws: A Compendium, by Clinton T.
Brass et al..
˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
Řȱ

ŽŽ›Š•ȱžŽȱ›˜ŒŽœœȱŽ˜›–ȱ’—ȱ‘Žȱŗŗŗ‘ȱ˜—›Žœœȱ
ȱ
At other times, Congress and the President enacted statutes changing only selected aspects of the
budget process; the Line Item Veto Act (of 1996) is one example. Finally, in every Congress, the
House and Senate have modified existing rules and practices affecting the budget process and
sometimes instituted new ones.
Like other types of legislation, statutes making changes in the budget process are subject to
review by the judiciary. In several major instances, the Supreme Court has declared procedures
established by Congress and the President to be invalid on constitutional grounds. The one-House
legislative veto (found in many acts, including the Impoundment Control Act of 1974), for
example, was invalidated by I.N.S. v. Chadha in 1983, 103 S.Ct. 715 (1983); the triggering of a
sequester by the Comptroller General under the Gramm-Rudman-Hollings Act was invalidated by
Bowsher v. Synar in 1986, 478 U.S. 714 (1986); and the Line Item Veto Act was invalidated by
Clinton v. City of New York in 1998, 118 S.Ct. 2091 (1998). In the wake of court decisions,
Congress and the President may successfully modify legislation (e.g., 1987 legislation modifying
the Gramm-Rudman-Hollings Act, vesting the authority to trigger a sequester in the director of
the Office of Management and Budget), but sometimes persistent efforts to enact corrective
legislation do not succeed (e.g., line-item veto proposals).
Given that nearly every committee of the House and Senate has jurisdiction over legislation with
a budgetary impact, interest in the budget process and proposals to change it radiate throughout
both chambers. Although jurisdiction over executive and congressional budget procedures
generally resides with the Budget, Oversight and Government Reform, and Rules Committees in
the House, and with the Budget, Homeland Security and Governmental Affairs, and Rules and
Administration Committees in the Senate, other House and Senate committees, particularly the
appropriations and tax committees, may exert influence over budget process changes affecting
their legislative interests.
Š›•¢ȱ™™˜›ž—’’Žœȱ˜›ȱžŽȱ›˜ŒŽœœȱ‘Š—Žœȱ’—ȱ‘Žȱŗŗŗ‘ȱ
˜—›Žœœȱ
The first opportunity in a new Congress to change budget procedures usually occurs on the first
or second day of session. The House, which unlike the Senate is not a continuous body, must
adopt its rules anew at the beginning of each Congress. Traditionally, the House adopts its rules
from the previous Congress, with modifications (that may include changes in the budget process),
in the form of a simple resolution. The rules package for the 110th Congress, H.Res. 6, contained
several changes in the budget process, including a “pay-as-you-go” (PAYGO) rule for the House.8
A second opportunity for budget process changes typically comes in March and April, when the
two chambers consider the annual budget resolution for the fiscal year beginning on October 1.
Under authority referred to as the “elastic clause” (in Section 301 of the 1974 Congressional
Budget Act), either chamber may include procedural provisions in the annual budget resolution
that are consistent with the purposes of the 1974 act. Several procedural provisions were
incorporated, for example, into the FY2009 budget resolution (S.Con.Res. 70), including House
and Senate restrictions on the use of advance appropriations, procedures to adjust budget levels to

8 For a detailed discussion regarding the changes in the budget process made by H.Res. 6, see CRS Report RL34149,
House Rules Changes Affecting the Congressional Budget Process Made at the Beginning of the 110th Congress, by
Bill Heniff Jr..
˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
řȱ

ŽŽ›Š•ȱžŽȱ›˜ŒŽœœȱŽ˜›–ȱ’—ȱ‘Žȱŗŗŗ‘ȱ˜—›Žœœȱ
ȱ
accommodate program integrity initiatives, and Senate points of order pertaining to short-term
and long-term deficits and provisions of appropriations legislation that constitute changes in
mandatory programs with net costs.9
House and Senate leaders have indicated their intent to consider sizeable economic stimulus and
recovery legislation in January 2009. Given that the budgetary impact of such legislation may be
quite significant, it is possible that such legislation also may be the vehicle for strengthened
budget enforcement provisions.
Congress also may express its interest in the budget process in venues that do not involve
legislative activity. In the past, consideration in the Senate of nominations to the position of OMB
director often has afforded the opportunity to discuss budget process reforms. Nominations to the
position of OMB director are considered, pursuant to S.Res. 445 (108th Congress), by both the
Senate Budget Committee and the Senate Homeland Security and Governmental Affairs
Committee.10
Ž•ŽŒŽȱžŽȱ›˜ŒŽœœȱŽ˜›–ȱ›˜™˜œŠ•œȱ
Among the various budget process reform proposals that may be considered during the 111th
Congress, many pertain to categories such as internal “pay-as-you-go” (PAYGO) rules in the
House and Senate; restoration of the statutory discretionary spending limits and PAYGO
requirement; earmarking; and modifications to budget resolution, reconciliation, and
appropriations processes. In order to illustrate the diversity of proposals, these and other
categories of reform are discussed briefly below.
 ȱž•ŽœȱŠ—ȱ’œŒ›Ž’˜—Š›¢ȱ™Ž—’—ȱ’–’œȱ
Šž˜›¢ȱ—˜›ŒŽ–Ž—ȱ›˜ŒŽž›Žœȱ
For FY1991 through FY2002, federal budget legislation was constrained by statutory limits on
discretionary spending and a PAYGO requirement for direct spending (sometimes referred to as
mandatory spending) and revenue legislation. Both these budget constraints were established by
the Budget Enforcement Act of 1990, which amended the Balanced Budget and Emergency
Deficit Control Act of 1985. The discretionary spending limits and the PAYGO requirement were
enforced by sequestration, a process by which violations were remedied by automatic, across-the-
board spending cuts. These statutory budget constraints were extended in 1993 and 1997 (and
further modified by other legislation), but the discretionary spending limits expired at the end of
FY2002 and the PAYGO requirement effectively was terminated in December 2002.

9 The House and Senate reached final agreement on the FY2009 budget resolution by agreeing to the conference report
on S.Con.Res. 70 (H.Rept. 110-659; May 20, 2008), by a vote of 48-45 in the Senate, on June 4, 2008, and by a vote of
214-210 in the House, on June 5.
10 Most recently, during the 110th Congress, the Senate considered the nomination of Jim Nussle to be OMB director,
confirming his appointment on September 4, 2007 (by a vote of 69-24). Although budget process changes were not a
prominent part of the debate in committee and on the floor, a PAYGO requirement and other procedural matters were
discussed briefly.
˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
Śȱ

ŽŽ›Š•ȱžŽȱ›˜ŒŽœœȱŽ˜›–ȱ’—ȱ‘Žȱŗŗŗ‘ȱ˜—›Žœœȱ
ȱ
In recent years, there has been considerable interest in restoring, and possibly making significant
modifications to, the statutory enforcement procedures. Some observers have argued that the
budget enforcement mechanisms associated with the BEA promoted fiscal discipline throughout
the 1990s, and contributed to the federal government achieving a total budget surplus in
FY1998—the first in almost 30 years—and the following three fiscal years.
With the return of sizeable deficits in the short term due to economic decline and in the long term
due principally to the growth of Medicare, Medicaid, and Social Security, some have argued for
restoring such statutory mechanisms to strengthen fiscal discipline. A principal point of
contention with regard to the PAYGO requirement has been whether it should apply to revenue
legislation. While some maintain that revenue reductions should not face the hurdle of a statutory
PAYGO requirement because they are needed to continue the economic growth that fuels growing
revenues, others assert that accommodating further revenue reductions in a PAYGO requirement
(i.e., by applying it only to direct spending) likely would undermine efforts to achieve significant
deficit reduction, in part by encouraging some spending initiatives to be reformulated as revenue-
losing provisions.
The FY2008 and FY2009 budget resolutions included sense-of-the-Congress statements that a
statutory PAYGO requirement should be reinstated to help control the deficit (Section 508 of
S.Con.Res. 21 and Section 515 of S.Con.Res. 70, respectively), but the 110th Congress did not
take any action in this regard.
In the current economic climate, Congress and the President are likely to address additional
legislation that would increase the deficit in the short term in order to promote economic stimulus
and recovery. Consequently, it may be more difficult at present to deal with restoring the statutory
PAYGO requirement while not impeding current economic stimulus efforts.
In the case of the statutory limits on discretionary spending, one issue has been the period of time
for which they should be established. Advocates of two- or three-year limits argue that the five-
year framework employed earlier leads to limits that are too unrealistic in the later years (due to
changing circumstances). Limits that are unrealistically high fail to impose discipline, while
limits that are unrealistically low encourage evasions through gimmickry and other means.
Shorter term limits, they argue, are more apt to be realistic and effective constraints on spending.
˜žœŽȱŠ—ȱŽ—ŠŽȱ ȱž•Žœȱ
As a supplement to the statutory PAYGO requirement, the Senate established its own PAYGO
rule in 1993 as a provision in the FY1994 budget resolution. The rule, which operates differently
than the statutory requirement, has been modified several times.
Over the years, several unsuccessful efforts were made to establish a PAYGO rule in the House.
As indicated previously, a PAYGO rule was contained in the House’s rules package for the 110th
Congress, in Section 405 of H.Res. 6. Title IV was considered separately and adopted by the
House on January 5, 2007, by a vote of 280-152 (all five titles of H.Res. 6 were adopted by the
House and took effect on that day). The House’s PAYGO rule imposes a bar against revenue and
direct spending legislation that increases a deficit (or reduces a surplus) over different time
periods (i.e., the six-year and 11-year periods beginning with the current fiscal year) and makes
no exception for revenue or direct spending proposals assumed in the budget resolution.
˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
śȱ

ŽŽ›Š•ȱžŽȱ›˜ŒŽœœȱŽ˜›–ȱ’—ȱ‘Žȱŗŗŗ‘ȱ˜—›Žœœȱ
ȱ
In May 2007, the Senate revised its PAYGO rule as part of the FY2008 budget resolution (Section
201 of S.Con.Res. 21). The revised Senate rule conforms closely to the House rule, applying to
the same two time periods and eliminating any exception for revenue or direct spending proposals
assumed in the budget resolution; it expires on September 30, 2017. In addition, the revised
Senate PAYGO rule is buttressed by other Senate rules designed to discourage legislation that
increases the deficit in both the short- and long-terms; these rules can be waived only by the
affirmative vote of three-fifths of the membership (60 Senators, if no seats are vacant).
The operation of the House and Senate PAYGO rules was confounded in 2008, during the second
session of the 110th Congress, by the need to enact legislation dealing with the housing crisis and
economic downturn in a manner that substantially increases the deficit in the short term. The
expectation that additional legislation will be addressed in 2009 to stimulate the economy and
facilitate recovery, with the associated increases in the deficit, makes the issue of potentially
revising the House and Senate PAYGO rules more complicated and uncertain.
Š›–Š›”’—ȱ
Reform of congressional earmarking practices in appropriations, direct spending, and tax
legislation (and accompanying reports) was addressed by the House and Senate with the adoption
of new rules in the 110th Congress. In late 2008, House Republicans rejected a proposed
moratorium with respect to earmark requests through mid-February 2009; a special 10-member
panel of House Republicans is expected to report on further earmark reforms at that time.11 Other
proposals regarding earmark reform are expected to be proposed in the House and Senate during
the 111th Congress, as well.
While definitions of earmarking vary, an earmark generally is considered to be an allocation of
resources to specifically-targeted beneficiaries, either through earmarks of discretionary or direct
spending, limited tax benefits, or limited tariff benefits. Earmarks may be proposed by the
President or may be originated by Congress. Concern about recent earmarking practices arose
because some of them were inserted into legislation or accompanying reports without any
identification of the sponsor, and the belief that many earmarks were not subject to proper
scrutiny and diverted resources to lesser-priority items or items without sufficient justification,
thereby contributing to wasteful spending or revenue loss.
The essential feature of earmark reform proposals is a bar against the consideration of legislation
that does not identify individual earmarks and the Members who sponsored them, the distribution
of such information in a way that makes it readily available before the legislation is considered,
and certification by earmark sponsors that neither they nor their spouses have a financial interest
in the earmark.
Earmark reform provisions, requiring the identification of earmarks and their sponsors before
legislation may be considered and imposing other restrictions on the use of earmarks, were
contained in Title IV (Section 404) of the House’s rules package for the 110th Congress, H.Res. 6,
adopted on January 5, 2007. The earmark reform provisions were added to the rules of the House
as Clause 9 of Rule XXI and Clauses 16 and 17 of Rule XXIII. The earmark identification

11 See CQ Today: (1) “House GOP Backs Away from Earmark Moratorium,” by David Clarke and Alan K. Ota, Nov.
20, 2008; and (2) “House Republicans Create Anti-Earmark Panel,” by Catharine Richert, Dec. 19, 2008.

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
Ŝȱ

ŽŽ›Š•ȱžŽȱ›˜ŒŽœœȱŽ˜›–ȱ’—ȱ‘Žȱŗŗŗ‘ȱ˜—›Žœœȱ
ȱ
requirement applies to all legislation; if no earmarks are included, then a statement to that effect
must be supplied. Later in the session, on June 18, 2007, the House adopted H.Res. 491, a
measure dealing (for the remainder of the 110th Congress) with the consideration of conference
reports on regular appropriations acts containing earmarks that were not submitted to the
conference by either chamber. The measure established a point of order that is intended to curtail
the practice of “air-dropping” earmark provisions, not first passed by either chamber, into
appropriations acts at the conference stage.
On January 18, 2007, the Senate adopted S. 1, ethics reform legislation. Title I of the act, referred
to separately as the Legislative Transparency and Accountability Act of 2007, included earmark
reform provisions requiring the prior identification of earmarks, and their sponsors, in all
spending and revenue legislation, and various other constraints on earmarking practices. Senator
Robert C. Byrd, the chairman of the Senate Appropriations Committee, announced on April 17
that the committee would follow a policy of requiring earmark disclosure for the FY2008
appropriations cycle, similar to the requirements set forth in S. 1, pending further action on the
measure.
On July 31, 2007, the House passed S. 1 with an amendment under the suspension of the rules
procedure, by a vote of 411-8. The Senate agreed to the House amendment, by a vote of 83-14, on
August 2, thus clearing the measure. President George W. Bush signed the bill into law on
September 14, 2007, as P.L. 110-81 (121 Stat. 735-776), the Honest Leadership and Open
Government Act of 2007. In its final form, P.L. 110-81 included earmark reform provisions in
Section 521 (Congressionally Directed Spending), which were added to the Standing Rules of the
Senate as a new Rule XLIV.
˜—›Žœœ’˜—Š•ȱžŽȱŽœ˜•ž’˜—ȱŠ—ȱŽŒ˜—Œ’•’Š’˜—ȱ
The Congressional Budget Act of 1974 requires the House and Senate to adopt a budget
resolution each year, setting forth aggregate spending and revenue levels, and spending levels by
major functional categories, for at least five fiscal years. The budget resolution, which is a
concurrent resolution and therefore does not become law, provides an overall budget plan that
guides congressional action on individual spending, revenue, and debt-limit measures. The 1974
act includes an optional reconciliation procedure that provides for the development and
consideration of revenue, spending, and debt-limit legislation to carry out budget resolution
policies; enforcement of budget resolution policies also occurs by means of various points of
order that may be raised on the floor. Budget resolutions and reconciliation measures are
considered under expedited procedures in both chambers.
Some Members of Congress, as well as the President, have argued that the budget resolution
would be more effective in enforcing budget policy by making it a joint resolution requiring the
President’s approval. A joint budget resolution would directly involve the President in
congressional actions on the budget early in the process. If the President and Congress reach an
impasse on a joint budget resolution, however, some are concerned that action on spending and
revenue bills might be significantly delayed.
During the 1980s and much of the 1990s, reconciliation was used principally as a means of
reducing the deficit. While some reconciliation measures included spending increases or revenue
reductions, the net impact of the legislation was to reduce the deficit. In recent years, the
reconciliation process has been used mainly to expedite the passage of legislation that increases
the deficit, primarily through revenue reduction.
˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŝȱ

ŽŽ›Š•ȱžŽȱ›˜ŒŽœœȱŽ˜›–ȱ’—ȱ‘Žȱŗŗŗ‘ȱ˜—›Žœœȱ
ȱ

Some Members in the House and Senate have argued that the reconciliation process should be
altered so that it may be used only to reduce the deficit. As part of the changes in the budget
process included in the rules package for the 110th Congress, H.Res. 6, the House included a ban
(in Section 402) against the consideration of a budget resolution containing reconciliation
directives that would increase the deficit or reduce the surplus over the six-year or 11-year
periods beginning with the current fiscal year. The Senate included a similar ban for the same two
time periods in the FY2008 budget resolution (Section 202 of S.Con.Res. 21).
——žŠ•ȱ™™›˜™›’Š’˜—œȱ›˜ŒŽœœȱ
Discretionary spending, which amounts to more than one-third of federal spending, is provided
each year in regular, supplemental, and continuing appropriations acts. Discretionary spending
funds most of the routine operations of federal agencies.
Considerable attention was focused during the past two Congresses on Appropriations Committee
structure. At the beginning of the 109th Congress, the House and Senate Appropriations
Committees consolidated and realigned their subcommittees in order to streamline the
appropriations process, facilitate the timely enactment of appropriations bills, and minimize the
likelihood of using consolidated appropriations acts. Both committees disbanded their VA-HUD
Subcommittee, and the House Appropriations Committee disbanded two others (District of
Columbia and Legislative Branch), leaving 12 Senate and 10 House appropriations
subcommittees.
At the start of the 110th Congress, further adjustments in subcommittee alignments of the House
and Senate Appropriations Committees were made, leaving each committee with 12
subcommittees. Among the changes made, each committee established a Financial Services and
General Government Subcommittee and the House Appropriations Committee reestablished a
Legislative Branch Subcommittee. Later during the 110th Congress, the House adopted H.Res. 35,
a measure establishing a Select Intelligence Oversight Panel of the House Appropriations
Committee. The panel is charged with studying and reviewing intelligence activities and the
intelligence budget and making recommendations in this area; it does not exercise jurisdiction
over appropriations legislation for these purposes. The panel includes Members of the House
Appropriations Committee and the House Permanent Select Committee on Intelligence. This
action represented the House’s response to one of the recommendations of the 9/11 Commission.
When a regular appropriations act or a continuing resolution is not in place after the start of the
fiscal year on October 1, an agency does not have the legal authority to incur obligations in order
to function and must shut down, resulting in the furlough of federal employees and disruptions in
service. In order to prevent a government shutdown (or the threat of one) due to the expiration of
funding, some Members have proposed establishing an automatic continuing resolution. An
automatic continuing resolution would provide an uninterrupted source of funding for
discretionary activities in the event one or more regular appropriations acts are not enacted by the
start of a new fiscal year. While such a device could eliminate or reduce employee furloughs and
service disruptions, some view an automatic continuing resolution as substituting a formulaic
response for deliberate and informed decision-making.

˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
Şȱ

ŽŽ›Š•ȱžŽȱ›˜ŒŽœœȱŽ˜›–ȱ’—ȱ‘Žȱŗŗŗ‘ȱ˜—›Žœœȱ
ȱ
Ž–ȱŽ˜Ȧ¡™Š—ŽȱŽœŒ’œœ’˜—ȱž‘˜›’¢ȱ
When a spending or revenue act is sent to the President for his consideration, he must approve or
veto the measure in its entirety. After a spending measure has become law, the President may
impound funds through rescission, which cancels the funding, or deferral, which delays the
expenditure of funds. Congress exercises its responsibilities in this area through procedures
established under the Congressional Budget and Impoundment Control Act of 1974 and the
regular legislative process.
Advocates of greater budget discipline proposed the Line Item Veto Act, which became law in
1996 (P.L. 104-130) but was struck down by the Supreme Court on June 25, 1998, in Clinton v.
City of New York, 118 S.Ct. 2091 (1998). Under this act, the President was authorized to strike
individual items of discretionary spending, direct spending, and certain limited tax benefits in any
law.
In the years following the Supreme Court decision, various proposals have been made in
Congress to grant item veto authority to the President in a manner that passes constitutional
muster or to otherwise expand his rescission powers. President George W. Bush, in 2006,
proposed a “legislative line-item veto,” under which Congress would have to consider proposed
rescissions in an expedited manner. The House passed H.R. 4890, the Legislative Line Item Veto
Act of 2006, on June 22, 2006, by a vote of 247-172; the Senate did not act on the measure. The
Senate considered a legislative line-item veto proposal in the 110th Congress, in the form of an
amendment offered by Senator Judd Gregg, first to S. 1 and then to minimum wage legislation,
H.R. 2; in both instances, the Gregg amendment ultimately was withdrawn.
While advocates of the item veto or expanded rescission powers for the President contend that
such tools will enhance budgetary discipline, critics suggest that their usefulness for budgetary
discipline is overstated and that they may adversely affect the balance of power between
Congress and the President over budget decisions.
˜––’œœ’˜—ȦŠœ”ȱ˜›ŒŽȱ˜—ȱ˜—ȬŽ›–ȱžŽŠ›¢ȱ œœžŽœȱ
Considerable attention has been focused recently on the large imbalances projected in the federal
budget over the long term, particularly with respect to the Social Security, Medicare, and
Medicaid programs. One device advocated by some as a means of compelling action on long-
term budgetary issues is a bipartisan commission or task force empowered to recommend
legislative changes that would correct or mitigate the imbalances.
Advocates of the commission or task force approach argue that it would be an effective means of
surmounting political opposition and achieving an end result because of the bipartisan nature of
the group, the avoidance of preconditions with respect to policy options (i.e., all options would be
“on the table”), and the action-forcing nature of expedited legislative procedures. Adherents to the
use of regular legislative procedures to deal with these issues maintain that while they may entail
a more time-consuming and difficult route, they afford more openness and participation in the
decision-making process and are more likely to lead to widespread acceptance of the results.
˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
şȱ

ŽŽ›Š•ȱžŽȱ›˜ŒŽœœȱŽ˜›–ȱ’—ȱ‘Žȱŗŗŗ‘ȱ˜—›Žœœȱ
ȱ
Š™’Š•ȱžŽ’—ȱ
Unlike many states, the federal government does not employ separate capital and operating
budgets; instead, all revenue and spending is merged together into a “unified” budget.
Information on capital budgeting, however, has been provided for many years as a separate
chapter in one of the volumes of the President’s budget. Interest in adopting a capital budget for
the federal government has been examined from time to time. In 1999, a commission established
by President Bill Clinton pursuant to Executive Order 13037 (March 3, 1997), the President’s
Commission to Study Capital Budgeting, recommended several changes in budgetary practice but
did not recommend the adoption of a formal capital budget.
Advocates of capital budgeting generally regard it as a means of boosting resources for
infrastructure needs (e.g., surface transportation and aviation systems struggling to meet capacity
and deteriorating water infrastructure), overcoming an alleged bias against capital spending in the
current budget process, and rationalizing decision-making in this area. Critics of capital budgeting
assert that shifting a significant portion of the budget to an accrual basis (in which costs are
apportioned over the lifetime of an asset rather than accounted for up front) would unduly
complicate the budget process and undermine the task of setting priorities over the full range of
governmental activities.
As a first step toward improved budgeting for infrastructure needs, some have advocated more
information gathering and analysis in this area. One proposal introduced in the 110th Congress,
for example, would have created a bipartisan National Commission on the Infrastructure of the
United States charged with studying, among other things, “the methods used to finance the
construction, acquisition, rehabilitation, and maintenance of public works improvements
(including general obligation bonds, tax-credit bonds, revenue bonds, user fees, excise taxes,
direct governmental assistance, and private investment).”
’Ž——’Š•ȱžŽ’—ȱ
While many authorizations are enacted on a multiyear cycle, Congress acts on budget resolutions
and appropriations acts annually. Biennial budgeting proposals would change the cycle under
which Congress acts on budget resolutions and appropriations acts (and annual authorization acts)
to two years.
Biennial budgeting proposals are intended to reduce the amount of time Congress spends on
budgetary legislation, to allow more time for congressional oversight of federal agencies and
programs, and generally to provide for more efficient budget decision-making. In the view of
some, however, a biennial approach could impair Congress’s ability to respond quickly to
changing economic and budgetary circumstances.
˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŗŖȱ

ŽŽ›Š•ȱžŽȱ›˜ŒŽœœȱŽ˜›–ȱ’—ȱ‘Žȱŗŗŗ‘ȱ˜—›Žœœȱ
ȱ
™™Ž—’¡ǯ ’Š’˜—œȱ˜ȱŽ•ŽŒŽȱžŽȱ›˜ŒŽœœȱ
Š œȱ
žŽȱŠ—ȱŒŒ˜ž—’—ȱŒȱ˜ȱŗşŘŗȱ
P.L. 67-13; June 10, 1921; 42 Stat. 20-27.
žŽȱŠ—ȱŒŒ˜ž—’—ȱ›˜ŒŽž›ŽœȱŒȱ˜ȱŗşśŖȱ
P.L. 81-784; September 12, 1950; 64 Stat. 832-845.
˜—›Žœœ’˜—Š•ȱžŽȱŠ—ȱ –™˜ž—–Ž—ȱ˜—›˜•ȱŒȱ˜ȱŗşŝŚȱ
P.L. 93-344; July 12, 1974; 88 Stat. 297-339.
Š•Š—ŒŽȱžŽȱŠ—ȱ–Ž›Ž—Œ¢ȱŽ’Œ’ȱ˜—›˜•ȱŒȱ˜ȱŗşŞśȱ
Title II of P.L. 99-177 (Increasing the Statutory Limit on the Public Debt); December 12, 1985;
99 Stat. 1038-1101.
Š•Š—ŒŽȱžŽȱŠ—ȱ–Ž›Ž—Œ¢ȱŽ’Œ’ȱ˜—›˜•ȱŽŠ’›–Š’˜—ȱŒȱ˜ȱŗşŞŝȱ
Title I of P.L. 100-119 (Increasing the Statutory Limit on the Public Debt); September 29, 1987;
101 Stat. 754-784.
žŽȱ—˜›ŒŽ–Ž—ȱŒȱ˜ȱŗşşŖȱ
Title XIII of P.L. 101-508 (Omnibus Budget Reconciliation Act of 1990); November 5, 1990; 104
Stat. 1388-573 through 630.
–—’‹žœȱžŽȱŽŒ˜—Œ’•’Š’˜—ȱŒȱ˜ȱŗşşřȱ
P.L. 103-66; August 10, 1993; 107 Stat. 683-685 (Title XIV).
—ž—ŽȱŠ—ŠŽœȱŽ˜›–ȱŒȱ˜ȱŗşşśȱ
P.L. 104-4; March 22, 1995; 109 Stat. 48-71.
’—Žȱ Ž–ȱŽ˜ȱŒȱ
P.L. 104-130; April 9, 1996; 110 Stat. 1200-1212.
˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŗŗȱ

ŽŽ›Š•ȱžŽȱ›˜ŒŽœœȱŽ˜›–ȱ’—ȱ‘Žȱŗŗŗ‘ȱ˜—›Žœœȱ
ȱ
žŽȱ—˜›ŒŽ–Ž—ȱŒȱ˜ȱŗşşŝȱ
Title X of P.L. 105-33 (Balanced Budget Act of 1997); August 5, 1997; 111 Stat. 677-712.

Notes: Major portions of selected budget process laws are codified as follows:
2 U.S.C. 621, et seq. (Congressional Budget and Impoundment Control Act of 1974, as amended);
2 U.S.C. 900, et seq. (Balanced Budget and Emergency Deficit Control Act of 1985, as amended); and
31 U.S.C. 1101, et seq. (Budget and Accounting Act of 1921, as amended).

For additional information on these and other budget process laws, see CRS Report RL30795, General Management
Laws: A Compendium
, by Clinton T. Brass et al..

ž‘˜›ȱ˜—ŠŒȱ —˜›–Š’˜—ȱ

Robert Keith

Specialist in American National Government
rkeith@crs.loc.gov, 7-8659




˜—›Žœœ’˜—Š•ȱŽœŽŠ›Œ‘ȱŽ›Ÿ’ŒŽȱ
ŗŘȱ