The Budget Resolution and Spending
Legislation
Megan Suzanne Lynch
Analyst on the Congress and Legislative Process
March 27, 2009
Congressional Research Service
7-5700
www.crs.gov
R40472
CRS Report for Congress
P
repared for Members and Committees of Congress
The Budget Resolution and Spending Legislation
Summary
The budget resolution sets forth aggregate levels of spending, revenue, and public debt. It is not
intended to establish details of spending or revenue policy and does not provide levels of
spending for specific agencies or programs. Instead, its purpose is to create enforceable
parameters within which Congress can consider legislation dealing with spending and revenue.
The spending policies in the budget resolution encompass two types of spending legislation:
discretionary spending and direct (mandatory) spending. Discretionary spending is controlled
through the appropriations process. Appropriations legislation is considered each fiscal year and
provides funding for numerous programs such as national defense, education, and homeland
security. Direct spending, alternately, is provided for in legislation outside of appropriations acts.
Direct spending programs are typically established in permanent law and continue in effect until
such time as revised or terminated by another law.
During the week of March 23, 2009, both the House Budget Committee and the Senate Budget
Committee approved their respective versions of a FY2010 budget resolution. The budget
resolution establishes congressional priorities by dividing spending among the 20 major
functional categories of the federal budget. These 20 categories do not correspond to the
committee system by which Congress operates, and as a result these spending levels must be
“crosswalked” to the House and Senate committees having jurisdiction over both discretionary
and direct spending. These amounts are known as 302(a) allocations and hold committees
accountable for staying within the spending limits established by the budget resolution.
Each Appropriations Committee is responsible for subdividing its 302(a) allocation among its 12
subcommittees. These allocations, referred to as 302(b) subdivisions, establish the maximum
amount that each of the 12 appropriations bills can spend.
It is inevitable that Members will consider the impact on particular programs or agencies when
they consider a budget resolution. While the budget resolution does not allocate funds among
specific agencies or programs, congressional assumptions or desires underlying the amounts set
forth in the functional categories are frequently communicated through the budget resolution.
Report language accompanying the budget resolution, as well as certain provisions in the budget
resolution, can sometimes express non-binding programmatic assumptions and desires.
Budget resolutions also often include procedural provisions such as reserve funds or
reconciliation instructions. These provisions may also reflect underlying program assumptions or
desires of Congress.
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The Budget Resolution and Spending Legislation
Contents
Introduction ................................................................................................................................ 1
The Budget Resolution................................................................................................................ 2
Content ................................................................................................................................. 2
Programmatic Assumptions................................................................................................... 2
Formulation of the Budget and the Budget Cycle................................................................... 4
Discretionary Spending ............................................................................................................... 4
Direct Spending .......................................................................................................................... 6
Reconciliation....................................................................................................................... 6
Reserve Funds............................................................................................................................. 7
Tables
Table 1. Congressional Budget Process Timetable ....................................................................... 4
Contacts
Author Contact Information ........................................................................................................ 8
Acknowledgments ...................................................................................................................... 8
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The Budget Resolution and Spending Legislation
Introduction
The Constitution grants Congress the power of the purse and provides that “No money shall be
drawn from the Treasury, but in Consequence of Appropriations made by Law.”1 It does not,
however, establish any specific procedures by which Congress must consider spending
legislation. Instead, Congress has developed rules and practices that govern consideration of
spending and other budgetary legislation under each chamber’s constitutional authority to “ ...
determine the Rules of its Proceedings.”2
It is under this authority that the procedures in the Congressional Budget Act of 1974 were
created.3 The Congressional Budget Act established the basic framework that is used today for
congressional consideration of budget and fiscal policy. It provides for the annual adoption of a
concurrent resolution on the budget as a mechanism for coordinating congressional budgetary
decision making.4
The budget resolution creates enforceable parameters with which spending, revenue, and debt
legislation must be consistent. It is not a law. It is not signed by the President nor can it be vetoed.
Instead, its purpose is to establish a framework within which Congress considers legislation
dealing with spending and revenue.
The budget resolution is not intended to establish details of spending or revenue policy. Instead,
details of such policy are to be included in legislation reported from the committees with
legislative jurisdiction subsequent to the adoption of the budget resolution. All spending or
revenue legislation reported from legislative committees, however, is expected to be consistent
with the levels and priorities agreed to in the budget resolution.
The spending policies in the budget resolution encompass two types of spending legislation:
discretionary spending and direct (or mandatory) spending. Discretionary spending is controlled
through the appropriations process. Appropriations legislation is considered annually for the fiscal
year beginning October 1. Appropriations legislation provides funding for numerous activities
such as national defense, education, and homeland security, as well as general government
operations.5
Direct spending, alternately, is provided for in legislation outside of appropriations acts. Direct
spending programs are typically established in permanent law that continue in effect until such
time as they are revised or terminated by another law. The actual annual cost of direct spending is
not determined by Congress. It is instead dictated by formulas within the legislation providing for
the program. The overall cost of a program depends on the eligibility requirements and benefits
set forth in the legislation. These criteria determine who will be eligible to receive benefits and
1 U.S. Constitution, Article I, Section 9.
2 U.S. Constitution, Article 1, Section 5.
3 P.L. 93-344 as amended.
4 For more information on the budget process generally, see CRS Report 98-721, Introduction to the Federal Budget
Process, by Robert Keith.
5 For more information on the appropriations process see CRS Report 97-684, The Congressional Appropriations
Process: An Introduction, by Sandy Streeter.
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how much benefit they will receive. Only by altering these formulas can Congress adjust how
much money will be spent.
The Budget Resolution
Content
The budget resolution sets forth levels for new budget authority, outlays, revenue, and public debt
for the budget year and four outyears.6 The levels in the budget resolution deal with aggregates,
not programmatic spending details. Assumptions concerning some major programs may be
discussed in the reports accompanying the budget resolution, but these assumptions are not in the
form of legislative language and are not binding on the committee of jurisdiction.
Rather than including levels of spending for specific agencies or programs, the budget resolution
establishes congressional priorities by dividing spending among the 20 major functional
categories of the federal budget.7 These 20 functional categories do not correspond to the
committee system by which Congress operates. As a result, the spending levels in the 20
functional categories are allocated, or “crosswalked,” to the House and Senate committees having
jurisdiction over discretionary spending (appropriations committees) and direct spending
(legislative committees). These “crosswalked” totals appear in the joint explanatory statement of
the conference report on the budget resolution and are referred to as 302(a) allocations.8 These
302(a) amounts hold committees accountable for staying within the spending limits established
by the budget resolution.
Programmatic Assumptions
It is inevitable that Members will consider the impact on particular programs or agencies when
they consider a budget resolution. Each committee is required to submit its “views and estimates”
with information on the preferences and legislative plans of that committee regarding budget
matters to help the Budget Committee determine spending levels for each of the functional
categories.
While the budget resolution does not allocate funds among specific agencies or programs,
assumptions underlying the amounts set forth in the functional categories are frequently discussed
in the reports accompanying the budget resolution. For example, the committee print
accompanying the budget resolution for FY2009 included the following language:
6 Under Section 301(a) of the Budget Act, four outyears is the minimum required, although the budget resolution may
cover more than four. For example, the budget resolution for FY2002 (H.Con.Res. 83, 107th Congress) covered 10
outyears.
7 These amounts are not enforced by points of order. For more information on functional categories see CRS Report 98-
280, Functional Categories of the Federal Budget, by Bill Heniff Jr.
8 These totals are named after Section 302(a) of the Budget Act (Titles I-IX of P.L. 93-344, 88 Stat. 297-332) as
amended, which requires that the total budget authority and outlays set forth in the budget resolution be allocated to
each House and Senate committee that has jurisdiction over specific spending legislation.
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The Committee-reported resolution assumes approximately $2 billion for the Department of
Energy’s Energy Efficiency and Renewable Energy program. The funding level is $738
million above the President’s request and would accommodate significant increases for
programs such as wind, solar, geothermal, biomass and biorefinery R&D, hydrogen, and
vehicle/building technologies. This funding level would also provide $450 million for the
Weatherization Assistance Program, a program which was zeroed out in the President’s
budget.9
Report language, however, is not binding on the committees with jurisdiction over spending and
revenue.
In addition to report language, certain provisions often included in the budget resolution may
indicate programmatic assumptions or desires. Budget resolutions frequently include “Sense of
the Congress” language expressing the assumptions or desires of one or both chambers for certain
programs to receive priority in funding. For example, the budget resolution for FY2009 included
language concerning sense of the Congress on servicemembers’ and veterans’ health care:
It is the sense of the Congress that—
(1) the Congress supports excellent health care for current
and former members of the United States Armed Services—
they have served well and honorably and have made significant
sacrifices for this Nation;
(2) this resolution provides $48,202,000,000 in discretionary
budget authority for 2009 for Function 700 (Veterans Benefits
and Services), including veterans’ health care, which is
$4,940,000,000 more than the 2008 level, $3,654,000,000 more
than the Congressional Budget Office’s baseline level for 2009,
and $3,284,000,000 more than the President’s budget for 2009;
and also provides more discretionary budget authority than
the President’s budget in every year after 2009;10
Budget resolutions may also include “Policy” statements.11 These statements sometimes include
language indicating that spending levels in the budget resolution assume certain policies will be
carried out. For example,
It is the policy of this resolution that ...
(5) TRICARE fees for military retirees under the age of
65 should not be increased as the President’s budget proposes;12
Neither “Sense of the Congress” provisions nor “Policy” statements are binding on the
committees with jurisdiction over spending and revenue.
Budget resolutions often include procedural provisions, such as reserve funds or reconciliation
instructions. These provisions often indicate underlying program assumptions or desires of
9 U.S. Congress. Senate Committee on the Budget. Committee Print to Accompany S.Con.Res. 70. 110th Cong., 1st sess.
S.Prt. 110-039 (Washington: GPO, 2008) p. 9.
10 S.Con.Res. 70 (110th Congress), Sec. 511.
11 S.Con.Res. 70 (110th Congress), Title IV.
12 S.Con.Res. 70 (110th Congress), Sec. 402.
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Congress. (Further information on reserve funds and reconciliation instructions is provided
below.)
Formulation of the Budget and the Budget Cycle
Federal budgeting is a cyclical activity. The President submits a budget request to Congress early
in the calendar year. Congressional committees then hold hearings where they hear testimony
from OMB officials, presidential advisors, and agencies who defend the President’s budget
recommendations.
Committees then submit their “views and estimates” to the Budget Committee of their respective
chamber. A committee’s “views and estimates” provide the Budget Committees with information
on the preferences and legislative plans of that committee regarding budget matters within its
jurisdiction. House and Senate Budget Committees then consider and report a budget resolution.
The Congressional Budget Act establishes a timetable for the consideration of budgetary
legislation. This timetable provides various target dates that reflect when certain actions typically
occur. Once the budget resolution is adopted, chambers may consider appropriations bills and any
other spending and revenue legislation consistent with the budget resolution.
Table 1. Congressional Budget Process Timetable
Deadline
Action to be completed
First Monday in February13
President submits his budget.
February 15
CBO submits report to Budget Committees.
Six weeks after President’s budget
Committees submit views and estimates to Budget Committees.
is submitted
April 1
Senate Budget Committee reports concurrent resolution on the budget.
April 15
Congress completes action on concurrent resolution on the budget.
May 15
Annual appropriations bills may be considered in the House.
June 10
House Appropriations Committee reports last annual appropriations bill.
June 15
Congress completes action on reconciliation legislation.
June 30
House completes action on regular appropriations bills.
October 1
Fiscal year begins.
Source: Sec. 300 of the Budget Act.
Discretionary Spending
The 302(a) allocations made to the House and Senate Appropriations Committees reflect their
jurisdiction over all discretionary spending. These allocations hold the appropriations committees
accountable for staying within the spending limits established by the budget resolution. In recent
13 For information on Presidential budget submission during years of transition, see CRS Report RS20752, Submission
of the President’s Budget in Transition Years, by Robert Keith.
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years, budget resolutions have also sometimes included explicit spending limits on discretionary
spending.14
Both the House and Senate Appropriations Committees have 12 subcommittees. Each of these
subcommittees is responsible for reporting one regular appropriations bill. Sometimes these bills
are packaged together in what is referred to as an omnibus appropriations act.
Once an Appropriations Committee has received its 302(a) allocation, it then subdivides the
committee allocation among its subcommittees as soon as practicable after the budget resolution
has been adopted. These suballocations are known as 302(b) subdivisions.15 The appropriations
committees may make allocations among subcommittees, even if they do not correspond with the
levels set forth in the functional categories of the budget resolution. Section 302(c) of the Budget
Act provides a point of order against the consideration of any appropriations measures before the
Appropriations Committee reports its subdivisions.
The appropriations committees are then required to report these subdivisions to their respective
chambers. The appropriations committees may revise the 302(b) subdivisions anytime during the
appropriations process to reflect actions taken on spending legislation. If an appropriations
committee does adjust the subdivisions among subcommittees, it must inform its respective
chamber of the new levels by issuing a new 302(b) subdivision report.
After extensive hearings, each of the subcommittees reports one of the regular appropriations bills
to its respective full appropriations committee. Then, the full Appropriations Committee reports
the bill to its respective chamber.
Section 302(f) of the Budget Act prohibits consideration of any measure or amendment that
would cause the 302(a) or 302(b) allocations to be exceeded. Since appropriations subcommittees
usually report their bills at the maximum level of spending, amendments offered to the
appropriations bill on the floor are often vulnerable to being ruled out of order since they would
cause the spending to exceed the 302(b). 16
This rule, combined with other rules and practices, makes it difficult to rearrange spending
priorities within an appropriations bill through amendments on the floor. A separate amendment
(or amendments) to reduce spending would need to be agreed upon prior to, or in conjunction
with, one that would increase spending for an agency or program in order to offset that increase.17
14 For example, see S.Con.Res. 70 (110th Congress), Sec. 312.
15 These totals are named after Section 302(b) of the Budget Act which requires that the Appropriations Committees
suballocate 302(a) allocations among their respective subcommittees.
16 Such points of order may be waived by a special rule reported from the Rules Committee or by unanimous consent in
the House. In the Senate, points of order may be waived by unanimous consent or by a 3/5 vote of Senators duly sworn
and chosen (60 if no vacancies).
17 In the House, Rule XXI, clause 2(f) provides that “ ... it shall be in order to consider en bloc amendments proposing
only to transfer appropriations among objects in the bill without increasing the levels of budget authority or outlays in
the bill. When considered en bloc pursuant to this paragraph, such amendments may amend portions of the bill not yet
read for amendment ... and shall not be subject to a demand for division of the question.” For more information on
offsets in the House, see CRS Report RL31055, House Offset Amendments to Appropriations Bills: Procedural
Considerations, by Sandy Streeter.
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Direct Spending
House and Senate legislative committees also receive 302(a) allocations that reflect their
jurisdiction over direct spending programs. Any legislation reported by these committees must be
consistent with these allocations.18 As with discretionary spending, Section 302(f) prohibits the
consideration of any measure or amendment that would cause the 302(a) allocation to be
exceeded.
Reconciliation
Points of order can effectively limit spending that results from appropriations acts or new
entitlement legislation to levels consistent with the budget resolution, but are not an effective
control on spending that results from existing laws providing direct spending. As a result,
Congress has established the reconciliation process as a way to instruct committees to develop
legislation to change current revenue or direct spending laws so that these programs conform with
policies established in the budget resolution.19
The reconciliation process is an optional two-stage process in which instructions are included in
the budget resolution. Reconciliation instructions are in the form of a directive to a specific
committee to recommend legislative changes. These instructions are specific and include (1) the
committee responsible for making the change, (2) the dollar amount of the change, and (3) the
period over which this change should be measured. Reconciliation instructions also include a
deadline for the committee to submit such recommendations. For example, the budget resolution
for FY2006 included the following reconciliation instruction:
(a) SUBMISSIONS TO SLOW THE GROWTH IN MANDATORY SPENDING- (1) Not
later than September 16, 2005, the House committees named in paragraph (2) shall submit
their recommendations to the House Committee on the Budget. After receiving those
recommendations, the House Committee on the Budget shall report to the House a
reconciliation bill carrying out all such recommendations without any substantive revision.
(2) INSTRUCTIONS-
(A) COMMITTEE ON AGRICULTURE- The House Committee on Agriculture shall report
changes in laws within its jurisdiction sufficient to reduce the level of direct spending for
that committee by $173,000,000 in outlays for fiscal year 2006 and $3,000,000,000 in
outlays for the period of fiscal years 2006 through 2010.20
Many changes in direct spending programs have been a result of reconciliation legislation. For
example, the instructions in the above example resulted in Title I of the Deficit Reduction Act of
2005 (P.L. 109-171), a reconciliation act. Other titles of that measure included language to make
changes in Medicare (Title V), Medicaid and SCHIP (Title VI), and LIHEAP (Title IX). Similarly,
reconciliation acts in other years have included titles making changes in diverse direct spending
programs as well.
18 When Congress considers new revenue or direct spending legislation, CBO estimates the amount of revenues or
outlays that would ensue if the measure were enacted. For revenues CBO uses estimates prepared by the Joint
Committee on Taxation. These numbers are then measured against the baseline.
19 For more information on the reconciliation process, see CRS Report 98-814, Budget Reconciliation Legislation:
Development and Consideration, by Bill Heniff Jr..
20 H.Con.Res. 95 (109th Congress), Sec. 201.
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The reconciliation process begins when Congress includes reconciliation instructions in a budget
resolution directing one or more committees to recommend changes in current law to achieve the
levels of direct spending, revenues, or the debt limit agreed to in the budget resolution.
Committees respond to these instructions by drafting legislative language to meet their specified
targets. The legislative language recommended by committees is packaged "without any
substantive revision" into one or more reconciliation bills by the House and Senate Budget
Committees. If only a single committee is instructed to recommend reconciliation changes then
those changes are reported directly to its respective chamber. Once reported, reconciliation
legislation is considered under special procedures on the House and Senate floor.
Reserve Funds
Spending allocations may be revised subsequent to the adoption of the budget resolution if
provided for in the budget resolution. Congress frequently includes provisions referred to as
“reserve funds” in the annual budget resolution, which provide the chairs of the House and Senate
Budget Committees the authority to adjust the committee spending allocations if certain
conditions are met. Typically these conditions consist of legislation dealing with a particular
policy being reported by the appropriate committee or an amendment dealing with that policy
being offered on the floor. Once this action has taken place, the Budget Committee chairman
submits the adjustment to his respective chamber.
Reserve funds frequently require that the net budgetary impact of the specified legislation be
deficit neutral. Deficit-neutral reserve funds provide that a committee may report legislation with
spending in excess of its allocations, but require the excess amounts be "offset" by equivalent
amounts. The Budget Committee chairman may then increase the committee spending allocations
by the appropriate amounts to prevent a point of order under Section 302 of the Budget Act. For
example, the budget resolution for FY2009 included the following language providing for a
deficit-neutral reserve fund concerning San Joaquin River restoration and Navajo nation water
rights settlements:
In the House, the Chairman of the Committee on the Budget may revise the allocations,
aggregates, and other appropriate levels in this resolution for any bill, joint resolution,
amendment, or conference report that would fulfill the purposes of the San Joaquin River
Restoration Settlement Act or implement a Navajo Nation water rights settlement and other
provisions authorized by the Northwestern New Mexico Rural Water Projects Act by the
amounts provided in such measure if such measure would not increase the deficit or decrease
the surplus for the period of fiscal years 2008 through 2013 or for the period of fiscal years
2008 through 2018.21
Reserve funds are not always required to be deficit-neutral. They may, instead, allow the levels of
spending set forth in the budget resolution to be exceeded, as long as the policy legislation meets
the conditions of the reserve fund. In some instances, the increases authorized by a reserve fund
are limited to specified amounts.
21 S.Con.Res. 70 (110th Congress), Sec. 216.
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Author Contact Information
Megan Suzanne Lynch
Analyst on the Congress and Legislative Process
mlynch@crs.loc.gov, 7-7853
Acknowledgments
This report draws from materials authored by Bill Heniff Jr, Robert Keith, James Saturno, and Sandy
Streeter.
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