Congressional Budget Actions in 2003

Congressional Budget Actions in 2003

Order Code RL31754
CRS Report for Congress
Received through the CRS Web
Congressional Budget Actions in 2003
Updated December 17, 2004
Bill Heniff Jr.
Analyst in American National Government
Government and Finance Division
Congressional Research Service ˜ The Library of Congress

Congressional Budget Actions in 2003
Summary
During 2003, Congress considered many different budgetary measures. Most
measures pertained to fiscal year (FY) 2004 (which began on October 1, 2003) and
beyond. Some also pertained to the budget for FY2003. This report describes House
and Senate action on major budgetary legislation within the framework of the
congressional budget process and other procedural requirements.
As the 108th Congress began, only two of the 13 regular appropriations acts for
FY2003 (which began on October 1, 2002) had been enacted. On February 13, 2003,
the House and Senate agreed to the conference report to the Consolidated
Appropriations Resolution, 2003 (H.J.Res. 2), which contains the 11 remaining
regular appropriations acts for FY2003. On February 20, President George W. Bush
signed the measure into law (P.L. 108-7), thereby bringing action on the FY2003
regular appropriations acts to a close.
Subsequently, Congress passed and President Bush signed two FY2003
supplemental appropriations acts into law (P.L. 108-11 and P.L. 108-69) on April 16
and August 8, respectively.
Congress typically begins its annual budget process for the upcoming fiscal year
once the President submits his budget for that year. President Bush submitted his
FY2004 budget to Congress on February 3, 2003.
The congressional budget process is centered around the adoption of an annual
concurrent resolution on the budget. The budget resolution sets forth aggregate
spending and revenue levels, and spending levels by major functional area, for at
least five fiscal years. Budget resolution policies are implemented through the
enactment of reconciliation bills, revenue and debt-limit legislation, and
appropriations and other spending measures, and enforced by points of order that may
be raised when legislation is pending on the House and Senate floor.
On April 11, the House and Senate agreed to the FY2004 budget resolution
(H.Con.Res. 95, H.Rept. 108-71). On May 23, pursuant to the reconciliation
instructions contained in the FY2004 budget resolution (Section 201 of H.Con.Res.
95), Congress passed H.R. 2, Jobs and Growth Tax Relief Reconciliation Act of
2003. President Bush signed the legislation into law (P.L. 108-27) on May 28.
At the end of 2003, six of the 13 FY2004 regular appropriations acts, plus a
FY2004 supplemental appropriations act, had been enacted. Congress incorporated
the remaining seven regular appropriations acts into one measure — the Consolidated
Appropriations Act, 2004 (H.R. 2673, H.Rept. 108-401). The House and Senate
agreed to the conference report to the act on December 8, 2003, and January 22,
2004, respectively. On January 23, President Bush signed H.R. 2673 into law (P.L.
108-199), thereby bringing action on the FY2004 regular appropriations acts to a
close.
This report will not be updated.

Contents
Concluding Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Overview of the Congressional Budget Process . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Budget Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Reconciliation Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Revenue and Debt-Limit Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Revenue Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Debt-Limit Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Appropriations and Other Spending Legislation . . . . . . . . . . . . . . . . . . . . . . . . . 20
Discretionary Spending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Mandatory Spending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Budget Enforcement and Sequestration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Chronology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
For Additional Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Congressional Hearings, Reports, and Documents . . . . . . . . . . . . . . . . . . . 33
CRS Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
List of Figures
Figure 1. Actual FY2002 Revenues by Source . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Figure 2. Actual FY2002 Outlays
by Major Spending Category . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
List of Tables
Table 1. The Congressional Budget Process Timetable . . . . . . . . . . . . . . . . . . . . 3
Table 2. Mapping Spending and Revenue Legislation through the
Congressional Budget Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Table 3. Budget Baselines, FY2003-FY2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Table 4. Status on Regular Appropriations Acts for FY2004 . . . . . . . . . . . . . . . 24
Table 5. Timetable for Sequestration Actions . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Congressional Budget Actions in 2003
Concluding Actions
When Congress adjourned sine die on November 25, 2003, six of the 13 fiscal
year (FY) 2004 regular appropriations acts, plus a FY2004 supplemental
appropriations act, had been enacted. For agencies and programs contained in the
remaining seven regular appropriations acts not yet signed into law, a continuing
resolution (H.J.Res. 79, P.L. 108-135) had been enacted to provide temporary
appropriations through January 31, 2004; four other continuing resolutions had
provided temporary appropriations since the start of the fiscal year on October 1,
2003. To complete action on the remaining seven regular appropriations acts,
Congress incorporated them into one measure — the Consolidated Appropriations
Act, 2004 (H.R. 2673, H.Rept. 108-401). The House and Senate agreed to the
conference report to the act on December 8, 2003, and January 22, 2004,
respectively. On January 23, President Bush signed the measure into law (P.L. 108-
199), thereby bringing action on the FY2004 regular appropriations acts to a close.
Introduction
During the first session of the 108th Congress, the House and Senate considered
many different budgetary measures. Most of these measures pertained to FY2004
(which began on October 1, 2003) and beyond. Some also pertained to the budget
for FY2003 (which began on October 1, 2002, and ended on September 30, 2003).
This report describes House and Senate action on major budgetary legislation within
the framework of the congressional budget process and other procedural
requirements.
The House and Senate began 2003 with unfinished budgetary matters left over
from the 107th Congress. At the start of the 108th Congress, only two of the 13
regular appropriations acts for FY2003 had been enacted.1 The federal agencies and
programs funded in the 11 remaining regular appropriations acts were provided
temporary appropriations by successive continuing resolutions since the beginning
of the fiscal year. On February 20, 2003, President Bush signed into law the
Consolidated Appropriations Resolution, 2003 (H.J.Res. 2, P.L. 108-7), which
contains the 11 remaining regular appropriations acts, thereby bringing action on the
1 The enacted regular appropriations acts are the Defense Appropriations Act, 2003 (P.L.
107-248) and the Military Construction Appropriations Act, 2003 (P.L. 107-249). For
further information on budget actions in 2002, see CRS Report RL31795, Congressional
Budget Actions in 2002, by Bill Heniff Jr.

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FY2003 regular appropriations acts to a close.2 In addition, during 2003, Congress
adopted and President Bush signed into law two supplemental appropriations
measures for FY2003 (discussed further below).
As the FY2004 budget cycle began, Congress faced an unfavorable budget
outlook, exacerbated by an uncertain economic and geopolitical environment.
According to the Office of Management and Budget (OMB) and the Congressional
Budget Office (CBO), current budget projections under existing law, without any
legislative changes, showed annual deficits in the unified budget (i.e., including
federal funds and trust funds) in several of the ensuing fiscal years.3 When various
proposed spending increases and tax cuts were taken into account, the projections
indicated annual deficits for the foreseeable future. For example, OMB projected
that if President Bush’s FY2004 budget policy proposals were enacted, annual
unified budget deficits, ranging from $178 billion to $307 billion, would continue
through FY2008.
In addition, the “soft” economy continued to put a damper on federal revenues.
Also, the spending for the war on terrorism and homeland security, for military
operations in Iraq, and for other legislative initiatives increased the scarcity of current
and future federal government resources. Such factors potentially could worsen the
already unfavorable budget outlook.4
Overview of the Congressional Budget Process
The congressional budget process consists of the consideration and adoption of
spending, revenue, and debt-limit legislation within the framework of an annual
concurrent resolution on the budget.
Congress begins its budget process once the President submits his budget. The
President is required by law to submit a comprehensive federal budget no later than
the first Monday in February. The President’s budget includes estimates of direct
spending and revenues under existing laws, as well as requests for discretionary
spending (i.e., funds controlled through the appropriations process) for the upcoming
fiscal year. In addition, the President frequently proposes new initiatives in his
budget submission to Congress. Although Congress is not bound by the President’s
budget, congressional action on spending and revenue legislation often is influenced
by his recommendations, as well as subsequent budgetary activities by the President
2 For a guide to the contents of H.J.Res. 2, see CRS Report RS21433, FY2003 Consolidated
Appropriations Resolution: Reference Guide, by Robert Keith.
3 See OMB, Budget of the U.S. Government, Fiscal Year 2004 (Washington: GPO, 2003),
table S-1, p. 311 (for projections with President Bush’s budget proposals included) and table
S-13, p. 330 (for projections under existing law); CBO, The Budget and Economic Outlook:
Fiscal Years 2004-2013, Jan. 2003, table 1.1, p. 2 (for CBO’s budget baseline projections,
under existing law).
4 For more detailed information on the FY2004 budget throughout the year, see CRS Report
RL31784, The Budget for Fiscal Year 2004, by Philip D. Winters.

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during the year. OMB assists the President in formulating and coordinating his
budget policies and activities.
On February 3, 2003, President Bush submitted his FY2004 budget to Congress.
Following the usual practice, the President’s budget was submitted as a multi-volume
set consisting of a main document that includes the President’s budget message and
information on his 2004 proposals (Budget) and supplementary documents that
provide special budgetary analyses (Analytical Perspectives), historical budget
information (Historical Tables), and detailed account and program level information
(Appendix), among other things. The FY2004 budget documents include a new
volume relating to President Bush’s management agenda (Performance and
Management Assessment). On July 15, President Bush submitted his Mid-Session
Review of the budget to Congress. This report contains revised estimates of the
budget deficit/surplus, receipts, outlays, and budget authority for FY2003 through
FY2008, reflecting changed economic conditions and assumptions and congressional
actions.5
The Congressional Budget Act (CBA) of 1974 (Titles I-IX of P.L. 93-344, 88
Stat. 297-332) established the congressional budget process, including a timetable for
congressional action on budget legislation (see Table 1). The process is centered
around the adoption of an annual concurrent resolution on the budget. The budget
resolution sets forth aggregate spending and revenue levels, and spending levels by
major functional area, for at least five fiscal years. Because the budget resolution is
a concurrent resolution, it is not presented to the President for his signature, and thus
does not become law. Instead, it is an agreement between the House and Senate on
a congressional budget plan, providing a framework for subsequent legislative action
on the budget during each congressional session.
Table 1. The Congressional Budget Process Timetable
Date
Action to be completed
First Monday in February
President submits budget to Congress.
February 15
Congressional Budget Office submits economic and
budget outlook report to Budget Committees.
Six weeks after President
Committees submit views and estimates to Budget
submits budget
Committees.
April 1
Senate Budget Committee reports budget resolution.
April 15
Congress completes action on budget resolution.
May 15
Annual appropriations bills may be considered in the
House, even if action on budget resolution has not been
completed.
5 The President’s budget documents are available on OMB’s website, at
[http://www.whitehouse.gov/omb/budget/fy2004/], visited on Jan. 29, 2004.

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Date
Action to be completed
June 10
House Appropriations Committee reports last annual
appropriations bill.
June 15
House completes action on reconciliation legislation (if
required by budget resolution).
June 30
House completes action on annual appropriations bills.
July 15
President submits mid-session review of his budget to
Congress.
October 1
Fiscal year begins.
Source: Section 300 of the Congressional Budget Act of 1974, as amended (P.L. 93-344, 2 U.S.C.
631).
Note: Dates serve as guidelines, except the first and last, which are required by law.
Budget resolution policies are implemented through the enactment of revenue
and debt-limit legislation, appropriations and other spending measures, and, if
required by the budget resolution, one or more reconciliation bills (see Table 2).
Congress enforces budget resolution policies through points of order on the floor of
each chamber and the reconciliation process. For example, any legislation that would
cause the aggregate levels to be violated is prohibited from being considered.
Further, the total budget authority and outlays set forth in the budget resolution are
allocated among the House and Senate committees having jurisdiction over specific
spending legislation. Any legislation, or amendment, that would cause these
committee allocations to be exceeded is prohibited. Finally, the House and Senate
Appropriations Committees subdivide their allocations among their respective 13
subcommittees. A point of order may be raised against any appropriations act, or
amendment, that would cause one of these subdivisions to be exceeded.6 The budget
resolution also contains spending levels by functional categories (e.g., national
defense), but these are not enforceable. Congress also may use reconciliation
legislation (discussed further below) to enforce direct spending, revenue, and debt-
limit provisions of a budget resolution.
For FY1991 through FY2002, Congress and the President also were constrained
by statutory limits on discretionary spending and a “pay-as-you-go” (PAYGO)
requirement for direct spending and revenue legislation.7 Unlike the enforcement
procedures associated with the budget resolution, which are employed while
legislation is considered on the floor of each chamber, the discretionary spending
limits and PAYGO requirement were enforced by a sequestration process generally
after legislative action for a session of Congress ended. These budget enforcement
mechanisms, however, expired at the end of FY2002 (i.e., September 30, 2002).
6 For more detailed information on these points of order and their application, see CRS
Report 97-865, Points of Order in the Congressional Budget Process, by James V. Saturno.
7 These constraints were first established by the Budget Enforcement Act (BEA) of 1990
(Title XIII of P.L. 101-508, Omnibus Budget Reconciliation Act of 1990, 104 Stat. 1388-
573-1388-630), which amended the Balanced Budget and Emergency Deficit Control Act
of 1985 (Title II of P.L. 99-177, 99 Stat. 1038-1101).

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Table 2. Mapping Spending and Revenue Legislation through the Congressional Budget Process
The annual budget resolution is the centerpiece of the congressional budget process by setting forth aggregate spending and revenue levels for at least five fiscal years. Budget resolution policies
are implemented through the enactment of appropriations and other spending measures, revenue legislation, and, if required by the budget resolution, one or more reconciliation bills. Spending amounts
are allocated among each House and Senate committee with jurisdiction over specific spending legislation.
Discretionary spending
Mandatory spending and revenues
and appropriated entitlements
<Full Appropriations Committee subdivides its
If the annual budget resolution contains optional
Separate from any reconciliation directives, Congress
spending allocation [302(a) allocation] among its
reconciliation instructions, Congress considers
may consider and adopt individual mandatory
subcommittees [302(b) allocations].
legislation changing mandatory spending, revenues,
— or
spending or revenue legislation.
or both through the reconciliation process.
—
<Each of the 13 appropriations subcommittees holds
hearings and drafts one of the 13 regular
appropriations acts.
<Full Appropriations Committee reports each
<Each legislative committee directed to do so
<Each legislative committee may hold hearings and
appropriations act, which must not exceed the
recommends legislative changes to existing law to
consider legislation referred to it or draft original
respective 302(b) allocation.
achieve the mandatory spending or revenue levels set
legislation.
forth in the budget resolution and submits those
<Full chamber considers and adopts each
recommendations to the Budget Committee by a date
<Each committee may report to its parent chamber
appropriations act.
certain.
mandatory spending or revenue legislation, which
must not cause direct spending under the committee’s
<House and Senate resolve differences in conference
<Budget Committee packages the committees’
jurisdiction to exceed its spending ceiling [302(a)
committees.
legislative recommendations into one or more
allocation] or cause revenues to fall below the revenue
omnibus reconciliation measures, “without any
floor set forth in the budget resolution.
<House and Senate separately agree to conference
substantive revision.”
reports to each appropriations act.
<Full chamber considers individual mandatory
<Full chamber considers omnibus reconciliation
spending or revenue legislation.
<President signs each appropriations act into law.
measure under special procedures that limit the
measure’s contents and floor debate.
<House and Senate resolve differences in conference
committees.
<House and Senate resolve differences in conference
committee.
<House and Senate separately agree to conference
reports to individual mandatory spending or revenue
<House and Senate separately agree to conference
legislation.
report to omnibus reconciliation legislation.
<President signs individual mandatory spending or
<President signs omnibus reconciliation legislation
revenue legislation into law.
into law.

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At the beginning of the 108th Congress, it was not clear whether Congress and
the President would restore these budget enforcement mechanisms, establish similar
but modified ones, or take no action on additional budget controls.8 In the event
Congress considers restoring or modifying these budget enforcement mechanisms
during 2003, the last section of this report provides an overview of how they
operated.
Budget Resolution
The Congressional Budget Act, as amended, establishes the concurrent
resolution on the budget as the centerpiece of the congressional budget process. The
budget resolution sets forth aggregate spending and revenue levels, and spending
levels by major functional area, for at least five fiscal years. Once adopted, it
provides the framework for subsequent action on budget-related legislation.
Following the submission of the President’s budget early in the year, Congress
begins formulating the budget resolution. The House and Senate Budget Committees
are responsible for developing and reporting the budget resolution. In formulating
it, the Budget Committees hold hearings and receive testimony from Members of
Congress and representatives from federal departments and agencies, the general
public, and national organizations. Two regular hearings include separate testimony
from the CBO director and the OMB director. On January 30, 2003, CBO Acting
Director Barry B. Anderson presented CBO’s baseline budget projections for
FY2004-FY2013 during testimony to the Senate Budget Committee.9 On February
4, the day after President Bush’s FY2004 budget was submitted to Congress, OMB
Director Mitchell E. Daniels Jr. provided an overview of the budget request, and
defended it, before the House Budget Committee.10
The congressional budget resolution, as well as the President’s budget, is based
on budget baselines (see Table 3). The budget baseline is a projection of federal
revenue, spending, and deficit or surplus levels based upon current policies, assuming
certain economic conditions. The President’s budget baseline, referred to as current
services estimates, is included in the budget documents submitted to Congress.11 The
8 In his FY2004 budget, President Bush proposed to restore and extend for two years
(FY2004 and FY2005) the statutory limits on discretionary spending and the PAYGO
requirement for direct spending and revenue legislation. See OMB, Budget of the U.S.
Government, Fiscal Year 2004, Analytical Perspectives, pp. 315-316.
9 Mr. Anderson’s written testimony is available on CBO’s website at
[http://www.cbo.gov/showdoc.cfm?index=4031&sequence=0], visited on Jan. 29, 2004.
10 Mr. Daniel’s written testimony is available on the House Budget Committee’s website at
[http://www.house.gov/budget/hearings/danielsstmnt020403.htm], visited on Jan. 29, 2004.
11 See the summary table S-13 in the main Budget volume, p. 330, and chapter 15 of the
(continued...)

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President’s baseline usually differs from CBO’s baseline, referred to as baseline
budget projections, because of different economic and technical assumptions.
Baseline projections provide a benchmark for measuring the budgetary effects of
proposed policy changes. On January 29, 2003, CBO released its annual report on
budget baseline projections, The Budget and Economic Outlook: Fiscal Years 2004-
2013. On March 25, CBO released its revised budget baseline projections in its
report An Analysis of the President’s Budgetary Proposals for Fiscal Year 2004. The
report also contains estimates of the President’s proposals using CBO’s economic
and technical assumptions, and provides an analysis of the potential macroeconomic
effects of the President’s budgetary proposals. Finally, on August 26, CBO released
its annual update report, The Budget and Economic Outlook: An Update, providing
further revised budget baseline projections.12
11 (...continued)
Analytical Perspectives volume, pp. 295-348, for detailed baseline estimates. OMB, Budget
of the U.S. Government, Fiscal Year 2004.
1 2 T h e C B O r e p o r t s a r e a v a i l a b l e o n t h e i r w e b s i t e a t
[ h t t p : / / w w w . c b o . g o v / s h o w d o c . c f m ? i n d e x = 4 0 3 2 & s e q u e n c e = 0 ] ,
[ h t t p : / / w w w . c b o . g o v / s h o w d o c . c f m ? i n d e x = 4 1 2 9 & s e q u e n c e = 0 ] , a n d
[http://www.cbo.gov/showdoc.cfm?index=4493&sequence=0], respectively, visited on Jan.
30, 2004.

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Table 3. Budget Baselines, FY2003-FY2008
(in billions of dollars)
Total
FY2003
FY2004
FY2005
FY2006
FY2007
FY2008
FY2004-FY2008
Office of Management and Budget — July 2003
(current services estimates — without President Bush’s proposals)
Outlays
2,210
2,252
2,304
2,377
2,481
2,587
12,001
Revenues
1,756
1,794
2,063
2,267
2,403
2,525
11,051
Total Surplus/Deficit (-)
-455
-458
-241
-110
-78
-62
-949
On-budget
-614
-621
-427
-313
-300
-300
-1,962
Off-budgeta
159
164
186
203
222
238
1,013
(current services estimates — with President Bush’s proposals)
Outlays
2,212
2,272
2,338
2,452
2,573
2,706
12,341
Revenues
1,756
1,797
2,033
2,215
2,360
2,480
10,885
Total Surplus/Deficit (-)
-455
-475
-304
-238
-213
-226
-1,456
On-budget
-615
-639
-490
-441
-435
-464
-2,469
Off-budgeta
159
164
186
203
222
238
1,013

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Total
FY2003
FY2004
FY2005
FY2006
FY2007
FY2008
FY2004-FY2008
Congressional Budget Office — August 2003
(updated budget baseline projections)
Outlays
2,170
2,305
2,404
2,501
2,624
2,761
12,595
Revenues
1,770
1,825
2,064
2,276
2,421
2,564
11,150
Total Surplus/Deficit (-)
-401
-480
-341
-225
-203
-197
-1,445
On-budget
-562
-644
-520
-425
-421
-434
-2,444
Off-budgeta
162
164
179
199
219
237
999
Sources: Office of Management and Budget, Mid-Session Review, Budget of the United States Government, Fiscal Year 2004 (Washington: GPO, 2003),
pp. 40 and 55; Congressional Budget Office, The Budget and Economic Outlook: An Update, Aug. 2003, p. 4.
a. Off-budget surpluses comprise surpluses in the Social Security trust funds as well as the net cash flow of the Postal Service.

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Another source of input comes from the “views and estimates” of congressional
committees with jurisdiction over spending and revenues. Within six weeks after the
President’s budget submission, each House and Senate committee is required to
submit views and estimates of budget matters under its jurisdiction to its respective
Budget Committee. These views and estimates, frequently submitted in the form of
a letter to the chair and ranking minority Member of the Budget Committee, typically
include comments on the President’s budget proposals and estimates of the budgetary
impact of any legislation likely to be considered during the current session of
Congress. The Budget Committees are not bound by these recommendations. The
Senate Budget Committee print to accompany S.Con.Res. 23, the Senate version of
the FY2004 budget resolution, contains the views and estimates of Senate
committees (S.Prt. 108-19). The House Budget Committee has compiled the views
and estimates of House committees as a separate committee print (Serial No. CP-1).
The budget resolution was designed to provide a framework to make budget
decisions, leaving specific program determinations to House and Senate
Appropriations Committees and other committees with spending and revenue
jurisdiction. In many instances, however, particular program changes are considered
when the budget resolution is formulated. Program assumptions sometimes are
referred to in the reports of the House and Senate Budget Committees and usually are
discussed during floor action. Although these program changes are not binding,
committees may be strongly influenced by the recommendations when formulating
appropriations bills, reconciliation measures, or other budgetary legislation.
The House Budget Committee marked up and voted to report the House version
of the FY2004 budget resolution (H.Con.Res. 95, H.Rept. 108-37) by a vote of 24-19
on March 12. During markup, the Committee considered 33 amendments to the
chairman’s mark; two amendments were adopted and 31 amendments were
rejected.13 The Senate Budget Committee marked up and voted to report the Senate
version of the FY2004 budget resolution (S.Con.Res. 23, S.Prt. 108-19) by a vote of
12-11 on March 13. During markup, the Committee considered 32 amendments to
the chairman’s mark; 12 amendments were adopted and 20 amendments were
rejected.14
13 For a description of the amendments and the roll call votes, see U.S. Congress, House
Committee on the Budget, Concurrent Resolution on the Budget — Fiscal Year 2004, report
to accompany H.Con.Res. 95, 108th Cong., 1st sess., H.Rept. 108-37, Mar. 17, 2003
(Washington: GPO, 2003), pp. 145-176.
14 For a description of the amendments and the roll call votes, see U.S. Congress, Senate
Committee on the Budget, Concurrent Resolution on the Budget FY2004, committee print
to accompany S.Con.Res. 23, 108th Cong., 1st sess., S.Prt. 108-19, Mar. 2003 (Washington:
GPO, 2003), pp. 66-75.

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The congressional budget process timetable sets April 15 as a target date for
final adoption of the budget resolution.15 The CBA prohibits the consideration of
spending, revenue, or debt-limit legislation for the upcoming year until the budget
resolution has been adopted, unless the rule is waived or set aside. The House and
Senate consider the budget resolution under procedures generally intended to
expedite final action.
In the House, the budget resolution usually is considered under a special rule,
limiting the time of debate and allowing only a few amendments, as substitutes to the
entire resolution. On March 20, the House considered H.Con.Res. 95 under a
structured rule (H.Res. 151, H.Rept. 108-44) reported by the House Rules
Committee. The special rule provided that a manager’s amendment in the nature of
a substitute be considered as adopted and made in order only the four amendments
in the nature of a substitute printed in the House Rules Committee report. The House
passed H.Res. 151 by voice vote. During consideration of the FY2004 budget
resolution, the House rejected the four amendments made in order by the special rule.
The House subsequently agreed to H.Con.Res. 95 by a 215-212 vote on March 21.16
15 In years Congress is late in adopting, or does not adopt, a budget resolution, the House and
Senate independently may adopt a “deeming resolution” for the purpose of enforcing certain
budget levels. A deeming resolution, typically in the form of a simple resolution, specifies
certain budget levels normally contained in the budget resolution, including aggregate
spending and revenue levels, spending allocations to House and Senate committees,
spending allocations to the Appropriations Committees only, or a combination of these. In
some cases, an entire budget resolution, earlier adopted by one chamber, may be deemed to
have been passed. Under a deeming resolution, the enforcement procedures related to the
Congressional Budget Act, as discussed below, have the force and effect as if Congress had
adopted a budget resolution.
In 2002, for example, in the absence of an agreement on an FY2003 budget resolution
with the Senate, the House adopted a resolution deeming the House-adopted FY2003 budget
resolution (H.Con.Res. 353, 107th Congress) to have been agreed to by Congress. The
Senate did not take any similar action.
At the beginning of the 108th Congress, the House agreed to deem the FY2003 budget
resolution adopted by the House during the 107th Congress (H.Con.Res. 353) to have been
adopted by the 108th Congress. Under this deeming resolution, the enforcement procedures
of the Congressional Budget Act will have the force and effect on budget legislation
pertaining to FY2003 and beyond in the House as if the budget resolution had been adopted
by Congress, until Congress adopts an FY2004 budget resolution. See Sec. 3(a)(4) of
H.Res. 5, adopted on Jan. 7, 2003. Also, the provision required the House Budget
Committee chair to submit for printing in the Congressional Record the committee
allocations associated with the spending levels contained in H.Con.Res. 353, and other
related budget information. In the absence of official committee chair assignments, Sec. 2
of H.Res. 14, adopted by the House on Jan. 8, 2003, provided that Rep. Jim Nussle, the
prospective House Budget Committee chair (see H.Res. 24), could submit the committee
allocations. He did so on the same date. See Congressional Record, daily edition, vol. 149,
Jan. 8, 2003, pp. H74-H75.
16 For the consideration and adoption of H.Res. 151 and H.Con.Res. 95, see Congressional
Record, daily edition, vol. 149, Mar. 20 and 21, 2003, pp. H2138-H2262.

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The Senate considers the budget resolution under the procedures set forth in the
CBA, sometimes as modified by a unanimous consent agreement. Debate on the
initial consideration of the budget resolution, and all amendments, debatable motions,
and appeals, is limited to 50 hours. Amendments, motions, and appeals may be
considered beyond this time limit, but without debate. Consideration of the
conference report is limited to 10 hours. The Senate considered its version of the
FY2004 budget resolution on March 17, 18, 19, 20, 21, 25, and 26. During
consideration of S.Con.Res. 23, the Senate considered 82 amendments; 44
amendments were adopted, 35 amendments were rejected, one amendment was
withdrawn, and two amendments fell on points of order. On March 26, the Senate
agreed to S.Con.Res. 23, as amended, by a 56-44 vote. Subsequently, the Senate
incorporated its version of the FY2004 budget resolution in the companion measure,
H.Con.Res. 95, as an amendment and agreed to it by unanimous consent.17
After resolving the differences between their respective versions, the House and
Senate agreed to the conference report to accompany the FY2004 budget resolution
(H.Con.Res. 95, H.Rept. 108-71) by votes of 216-211 and 51-50 (with Vice President
Richard B. Cheney voting in the affirmative to break the tie), respectively, on April
11 (legislative day April 10, for the House).18 H.Con.Res. 95 sets forth appropriate
budgetary levels for FY2004 as follows: $1,325.5 billion in revenues; $1,861.0
billion in budget authority; $1,883.8 in outlays; and $558.4 billion in the on-budget
deficit.19
Reconciliation Legislation
Congress may implement changes to existing law related to direct spending,
revenues, or the debt limit through the reconciliation process, provided for in Section
310 of the CBA. The reconciliation process has two stages. First, Congress may
include reconciliation instructions in a budget resolution directing one or more
committees to recommend changes in statute to achieve the levels of spending,
revenues, and debt limit agreed to in the budget resolution. Second, the legislative
language recommended by these committees is packaged “without any substantive
revision” into one or more reconciliation bills, as set forth in the budget resolution,
by the House and Senate Budget Committees. In some instances, a committee may
be required to report its legislative recommendations directly to its chamber.
17 For the consideration and adoption of the Senate version of the FY2004 budget resolution,
see Congressional Record, daily edition, vol. 149, Mar. 17-21 and 25-26, 2003, pp. S3774-
S4268 and S4334-S4422.
18 For the House and Senate consideration of the conference report to H.Con.Res. 95, the
FY2004 budget resolution, see Congressional Record, daily edition, vol. 149, Apr. 10, 2003,
pp. H3194-H3230, H3279-H3298; and Congressional Record, daily edition, vol. 149, Apr.
11, 2003, pp. S5266-S5293, S5295-S5316, respectively.
19 The totals in the budget resolution do not include the revenues and outlays of the Social
Security trust funds or the net cash flow of the U.S. Postal Service (i.e., the only off-budget
entities).

CRS-13
Once reconciliation legislation is reported, it is considered under special
procedures. These procedures serve to limit what may be included in reconciliation
legislation, to prohibit certain amendments, and to encourage its completion in a
timely fashion. In the House, as with the budget resolution, reconciliation legislation
usually is considered under a special rule, establishing the time allotted for debate
and what amendments will be in order. In the Senate, the CBA provides that debate
on a budget reconciliation bill, and on all amendments, debatable motions, and
appeals, is limited to not more than 20 hours. After the 20 hours of debate has been
reached, consideration of amendments, motions, and appeals may continue, but
without debate.
In both chambers, the CBA requires that amendments to reconciliation
legislation be deficit neutral and germane. Also, the CBA prohibits the consideration
of reconciliation legislation, or any amendment to a reconciliation bill,
recommending changes to the Social Security program. Finally, in the Senate,
Section 313 of the CBA, commonly referred to as the Byrd rule, prohibits extraneous
matter in a reconciliation bill.20
Both the House and Senate versions of the FY2004 budget resolution provided
for reconciliation legislation covering the period FY2003-FY2013. The House
version, agreed to on March 21, 2003, provided for two separate reconciliation
measures: one for tax cuts (equal to about $730 billion) and the other for mandatory
spending cuts (equal to about $264.5 billion).21 The Senate version, agreed to on
March 26, provided for one reconciliation measure for tax cuts (equal to $350
billion).22
The conference report to H.Con.Res. 95, agreed to by the House and Senate on
April 11, provides for one reconciliation measure, to be reported by the appropriate
committees no later than May 8.23 The reconciliation directives require the House
Ways and Means Committee to report legislation reducing revenues by $535 billion
and increasing spending by $15 billion for the period FY2003-FY2013, and require
the Senate Finance Committee to report legislation reducing revenues by $522.524
billion and increasing spending by $27.476 billion for the period FY2003-FY2013.
Although both directives call for reconciliation legislation equal to $550 billion for
the period FY2003-FY2013, Section 202 of H.Con.Res. 95 provides a point of order
against Senate consideration of reconciliation legislation reported pursuant to the
directives, or an amendment thereto, that would cause the total revenue reductions
and outlay increases to exceed $350 billion. The point of order, however, would not
20 For detailed information on the Byrd rule, see CRS Report RL30862, Budget
Reconciliation Procedures: The Senate’s “Byrd Rule,” by Robert Keith.
21 Amounts are based on reconciliation instructions summary table of the manager’s
amendment to H.Con.Res. 95, available on the House Budget Committee’s website at
[http://www.house.gov/budget/reconinstruct04.pdf], visited on Jan. 29, 2004.
22 Section 104 of the Senate-passed version of H.Con.Res. 95.
23 For further discussion, see CRS Report RL31902, Revenue Reconciliation Directives in
the FY2004 Budget Resolution, by Robert Keith.

CRS-14
apply to a conference report on such reconciliation legislation.24 Nevertheless, during
Senate consideration of the conference report, Senator Charles Grassley, Finance
Committee Chair, reiterated the Senate’s commitment to limiting the reconciliation
legislation conference report to no more than $350 billion. Specifically, he stated:
Let me be clear, without this agreement, the budget resolution conference report
would not pass the Senate today.... I agreed that I would not return from the
conference on the growth package with a number greater than $350 billion in
revenue reductions. This means that, at the end of the day, the tax cut side of the
growth package will not exceed $350 billion over the period of the reconciliation
instruction.25
Pursuant to the reconciliation instructions in the FY2004 budget resolution
(Section 201 of H.Con.Res. 95), the House Ways and Means Committee marked up
and voted to report H.R. 2, Jobs and Growth Reconciliation Tax Act of 2003, with
an amendment in the nature of a substitute (H.Rept. 108-94), by a vote of 24-15 on
May 6. During markup, the Committee considered and rejected five amendments to
the Chair’s amendment in the nature of a substitute.26 On May 9, the full House
considered, under a closed rule (H.Res. 227, H.Rept. 108-95), and passed H.R. 2 by
a vote of 222-203.27 H.R. 2, as passed by the House, would reduce revenues by
$535.7 billion and increase outlays by $13.8 billion over the 11-year period covering
FY2003-FY2013.28
24 See U.S. Congress, Committee on Conference, Concurrent Resolution on the Budget —
Fiscal Year 2004, conference report to accompany H.Con.Res. 95, 108th Cong., 1st sess.,
H.Rept. 108-71 (Washington: GPO, 2003), p. 104.
25 Congressional Record, daily edition, vol. 149, Apr. 11, 2003, p. S5296.
26 For a description of the amendments and the roll call votes, see U.S. Congress, House
Committee on Ways and Means, Jobs and Growth Reconciliation Tax Act of 2003, report
to accompany H.R. 2, 108th Cong., 1st sess., H.Rept. 108-94, May 8, 2003 (Washington:
GPO, 2003), pp. 32-35.
27 For the consideration and adoption ofH.Res. 227 and H.R. 2, see Congressional Record,
daily edition, vol. 149, May 9, 2003, pp. H3864-H3956.
28 See cost estimate of H.R. 2 by the Congressional Budget Office, available at
[http://www.cbo.gov/showdoc.cfm?index=4213&sequence=0], visited Jan. 29, 2004. As
required by the 1974 CBA, the estimates for the revenue provisions contained in H.R. 2
were provided by the Joint Committee on Taxation. For a description and detailed estimates
of the revenue provisions contained in the House version of H.R. 2, see Joint Committee on
Taxation, Description of the Chairman’s Amendment in the Nature of Substitute to H.R. 2,
the “Jobs and Growth Tax Act of 2003” (JCX-40-03), May 5, 2003; and Joint Committee
on Taxation, Estimated Revenue Effects of a Chairman’s Amendment in the Nature of a
Substitute to H.R. 2, the “Jobs and Growth Tax Act of 2003,” (JCX-41-03), May 5, 2003.
These reports are available at [http://www.house.gov/jct/x-40-03.pdf] and
[http://www.house.gov/jct/x-41-03.pdf], respectively, visited on Jan. 29, 2004. In addition,
the JCT prepared a macroeconomic impact analysis of H.R. 2, as required by clause
3(h)(2)(A)(iii) of House Rule XIII, which was submitted into the Congressional Record on
May 8 by House Ways and Means Chairman William M. Thomas. See Congressional
Record, daily edition, vol. 149, May 8, 2003, pp. H3829-H3832.

CRS-15
In the Senate, the Finance Committee initially marked up and voted to report S.
2, Jobs and Growth Reconciliation Act of 2003, with an amendment in the nature of
a substitute (without written report), by a vote of 12-9 on May 8. During markup, the
committee considered 17 amendments; six were adopted, 10 were rejected, and one
was withdrawn.29 The Senate was expected to begin consideration of S. 2 on May
12,30 but it delayed its consideration because the Senate Parliamentarian reportedly
ruled that S. 2, as reported by the Senate Finance Committee, would not qualify as
reconciliation legislation pursuant to the instructions contained in the FY2004 budget
resolution.31 Subsequently, on May 13 by a 12-9 vote, the Senate Finance Committee
voted to report an original measure, S. 1054, Jobs and Growth Tax Relief
Reconciliation Act of 2003 (without written report), which was virtually identical to
S. 2, as previously reported with an amendment in the nature of a substitute.32 Under
the special floor procedures described above, the Senate considered S. 1054 on May
14 and 15. During consideration of S. 1054, the Senate considered 67 amendments;
30 amendments were adopted, nine amendments were rejected, seven amendments
were withdrawn, and 21 amendments fell on points of order. On May 15, the Senate
adopted H.R. 2, after striking all after the enacting clause and inserting the text of S.
1054, as amended, by a vote of 51-49.33 While an official cost estimate for the
Senate-passed reconciliation legislation has not been released by CBO or JCT, the
measure reportedly would reduce revenues by a total of $431 billion, offset by fees
and tax increases of $101 billion, and provide $20 billion in state and local aid, over
the 11-year period covering FY2003-FY2013.34
29 For a description of the amendments and the roll call votes, see Daphne Retter,
“Committee Approves Tax Cut Plan,” CQ Markup Report, May 8, 2003.
30 On May 9, the Senate reached a unanimous consent agreement providing that the Senate
proceed to the consideration of S. 2 at 2 p.m. on Monday, May 12, 2003. See Congressional
Record, daily edition, vol. 149, May 9, 2003, p. S6011.
31 For further discussion of this matter, see: (1) Alan K. Ota, “Procedural Gaffe in Senate
Delays Tax Cut Bill,” CQ Today, May 12, 2003; and (2) Bud Newman and Nancy
Ognanovich, “Procedural Glitch Delays Start of Debate on Tax Cut Reconciliation Bill in
Senate,” BNA’s Daily Report for Executives, May 13, 2003, p. G-13.
32 For further information on the markup of S. 1054, see Daphne Retter, “Committee Oks
New Tax Measure with Technical Corrections,” CQ Markup Report, May 13, 2003.
33 For the consideration of S. 1054 and subsequent adoption of H.R. 2, in lieu of S. 1054, in
the Senate, see Congressional Record, daily edition, vol. 149, May 14 and 15, 2003, pp.
S6148-S6226, S6233-S6248, S6407-S6415, S6421-S6428, S6429-S6445, and S6451-S6475.
34 See, for example, Alan K. Ota, “For Business, Tax Conference Will Be All Damage
Control,” CQ Weekly, May 17, 2003, pp. 1168-1175, especially table on p. 1175. CBO
released a cost estimate for S. 1054, as reported by the Senate Finance Committee, which
is available at [http://www.cbo.gov/showdoc.cfm?index=4218&sequence=0], visited Jan.
29, 2004. As required by the 1974 CBA, the estimates for the revenue provisions contained
in S. 1054 were provided by the Joint Committee on Taxation. For detailed estimates of the
revenue provisions contained in the reported version of S. 1054, see Joint Committee on
Taxation, Estimated Budget Effects of the “Jobs and Growth Tax Relief Reconciliation Act
Of 2003,” (JCX-50-03), May 13, 2003, available at [http://www.house.gov/jct/x-50-03.pdf],
visited on Jan. 29, 2004.

CRS-16
After resolving the differences between their respective versions,35 the House
and Senate agreed to the conference report to accompany H.R. 2 (H.Rept. 108-126)
by votes of 231-200 and 51-50 (with Vice President Cheney voting in the affirmative
to break the tie), respectively, on May 23 (legislative day May 22, for the House).36
According to CBO and the JCT, H.R. 2 is projected to reduce federal revenues by
$320.1 billion and increase federal outlays by $29.5 billion over the 11-year period
covering FY2003-FY2013.37 President Bush signed H.R. 2, the Jobs and Growth Tax
Relief Reconciliation Act of 2003, into law (P.L. 108-27) on May 28, 2003.
Revenue and Debt-Limit Legislation
Congress may adopt individual revenue and debt-limit measures without
employing the optional reconciliation process as well.
Revenue Legislation. Revenue and debt-limit legislation is under the
jurisdiction of the House Ways and Means Committee and the Senate Finance
Committee. Article I, Section 7, of the U.S. Constitution requires revenue legislation
originate in the House of Representatives, but the Senate has considerable latitude
to amend a revenue bill received from the House.
Most of the laws establishing the federal government’s revenue sources are
permanent and continue year after year without any additional legislative action (see
Figure 1).38 Congress, however, typically enacts revenue legislation, changing some
35 For a discussion and comparison of the two versions of the tax legislation as well as the
President’s tax cut proposals, see CRS Report RL31907, Tax Cut Bills in 2003: A
Comparison, by David L. Brumbaugh and Don C. Richards.
36 For the House and Senate consideration of the conference report to H.R. 2, see
Congressional Record, daily edition, vol. 149, May 22, 2003, pp. H4716-H4730; and
Congressional Record, daily edition, vol. 149, May 23, 2003, pp. S7071-S7089,
respectively. In the House, the conference report to H.R. 2 was considered under the
provisions of a special rule(H.Res. 253, H.Rept. 108-129) agreed to by a vote of 221-205.
See Congressional Record, daily edition, vol. 149, May 22, 2003, pp. H4706-H4716. In the
Senate, the conference report to H.R. 2 was considered under the provisions of an
unanimous consent agreement reached on May 22, 2003. See Congressional Record, daily
edition, vol. 149, May 22, 2003, p. S6964.
37 See the CBO cost estimate of H.R. 2, as cleared by Congress on May 23, 2003, available
at [http://www.cbo.gov/showdoc.cfm?index=4249&sequence=0], visited on Jan. 29, 2004.
Again, as required by the 1974 CBA, the estimates for the revenue provisions were provided
by the JCT. For a summary and detailed estimates of the revenue provisions contained in
the conference agreement on H.R. 2, see Joint Committee on Taxation, Summary of
Conference Agreement on H.R. 2, The “Jobs and Growth Tax Relief Reconciliation Act of
2003,” (JCX-54-03), May 22, 2003, available at [http://www.house.gov/jct/x-54-03.pdf],
and Joint Committee on Taxation, Estimated Budget Effects of the Conference Agreement
for H.R. 2, “Jobs and Growth Tax Relief Reconciliation Act Of 2003,” (JCX-55-03), May
22, 2003, available at [http://www.house.gov/jct/x-55-03.pdf], both visited on Jan. 29, 2004.
38 Chart created by CRS based on data from Congressional Budget Office, The Budget and
(continued...)

CRS-17
portion of the existing tax system, every year. Revenue legislation may include
changes to individual and corporate income taxes, social insurance taxes, excise
taxes, or tariffs and duties.
Figure 1. Actual FY2002 Revenues by Source
Revenue legislation is not considered automatically in the congressional budget
process on an annual basis. Frequently, however, the President proposes and
Congress considers changes in the rates of taxation or the distribution of the tax
burden. An initial step in the congressional budget process is the publication of
revenue estimates of the President’s budget by CBO. On March 25, CBO released
its report An Analysis of the President’s Budgetary Proposals for Fiscal Year 2004,
which contains estimates of the President’s proposals using CBO’s economic and
technical assumptions, and provides an analysis of the potential macroeconomic
effects of the President’s budgetary proposals.39 These revenue estimates usually
differ from the President’s, since they are based on different economic and technical
assumptions (e.g., growth of the economy and change in the inflation rate). Cost
estimates of any congressional revenue proposals are prepared by CBO, based on
revenue estimates made by the Joint Committee on Taxation (JCT), and are
38 (...continued)
Economic Outlook: Fiscal Years 2004-2013, p. 150.
3 9 T h e r e p o r t i s a v a i l a b l e o n C B O ’ s w e b s i t e a t
[http://www.cbo.gov/showdoc.cfm?index=4129&sequence=0]. The Joint Committee
on Taxation also released a description and estimates of the revenue provisions contained
in the President’s FY2004 budget proposal, which are available at
[http://www.house.gov/jct/s-7-03.pdf] and [http://www.house.gov/jct/x-15-03.pdf],
respectively, visited on Jan. 30, 2004.

CRS-18
published in committee reports or in the Congressional Record, as well as available
on JCT’s website.40
The budget resolution includes baseline estimates of federal government
revenues based on the continuation of existing laws and any proposed policy
changes. The revenue levels in the budget resolution provide the framework for any
action on revenue measures during the session. A point of order may be raised
against the consideration of legislation that causes revenues to fall below the agreed
upon levels for the first fiscal year or the total for all fiscal years in the budget
resolution. This point of order may be set aside by unanimous consent, or waived by
a special rule in the House or by a three-fifths vote in the Senate.
A Senate PAYGO point of order, under Section 505 of the FY2004 budget
resolution (H.Con.Res. 95), also may be raised against any revenue legislation not
assumed in the most recently adopted budget resolution that would increase or cause
an on-budget deficit for the first fiscal year, the period of the first five fiscal years,
or the following five fiscal years, covered by the most recently adopted budget
resolution. A motion to waive the point of order requires a three-fifths vote (i.e., 60
Senators if there are no vacancies).
The conference report to H.Con.Res. 95, agreed to by the House and Senate on
April 11, allows for revenue reductions of about $1.225 trillion for the period
FY2003-FY2013, below the budget baseline projected levels.41
Debt-Limit Legislation. The amount of money the federal government is
allowed to borrow generally is subject to a statutory limit (31 U.S.C. 3101). From
time to time, Congress and the President have enacted legislation to raise this limit.42
Federal debt consists of debt held by the public plus debt held by government
accounts. The debt held by the public represents the total net amount borrowed from
the public to cover the federal government’s budget deficits. By contrast, the debt
held by government accounts represents the total net amount of federal debt issued
to specialized federal accounts, primarily trust funds (e.g., Social Security). Trust
fund surpluses by law must be invested in special (non-negotiable) federal
government securities and thus are held in the form of federal debt. The combination
of both types of debt is subject to the statutory public debt limit. Therefore, budget
deficits or trust fund surpluses may contribute to the federal government reaching the
existing debt limit.
The most recent increase in the public-debt limit was enacted as an independent
measure (P.L. 107-199, 116 Stat. 734) in June 2002. The debt-limit measure
40 See [http://www.house.gov/jct/].
41 Total level of revenue reductions based on Section 101(1)(B) of H.Con.Res. 95 (H.Rept.
108-71). This amount does not include any outlay increases associated with certain tax
credits assumed in the budget resolution.
42 For further information on debt-limit legislation, see CRS Report RS21519, Legislative
Procedures for Adjusting the Public Debt Limit, by Robert Keith and Bill Heniff Jr.; and
CRS Report RL31967, The Debt Limit: The Need for Increases, by Philip D. Winters.

CRS-19
increased the statutory limit by $450 billion, to $6,400 billion. As early as December
2002, the Administration indicated that the debt subject to the limit might reach the
statutory ceiling in the first half of 2003.43 Most recently, Treasury Secretary Snow
informed Congress that the Treasury would reach the debt ceiling “on or about May
28, 2003,” stating:
The Treasury has now taken all prudent and legal steps to avoid reaching the
statutory debt limit, including reducing the size of our regular bill auctions and
drawing down available cash. An immediate permanent increase in the debt limit
is crucial to preserve the confidence in the US Government and to prevent
uncertainty that would adversely affect our economic recovery.44
Pursuant to House Rule XXVII, upon the adoption of the FY2004 budget
resolution, the House Clerk engrossed and transmitted to the Senate a joint resolution
(H.J.Res. 51) increasing the public debt limit by $984 billion, to $7,384 billion.
House Rule XXVII (commonly referred to as the “Gephardt rule” after its author,
Representative Richard Gephardt) provides that, upon the adoption of the budget
resolution by Congress, a joint resolution specifying the amount of the public debt
limit contained in the budget resolution automatically is engrossed and deemed to
have passed the House by the same vote as the conference report on the budget
resolution, thereby avoiding a separate vote on the debt-limit legislation.45 H.J.Res.
51 was deemed to have been adopted by the House on April 11 by a vote of 216-211
(i.e., the vote upon which the House agreed to the FY2004 budget resolution).
The Senate has no comparable automatic engrossment procedure; if it chooses
to consider a House-passed joint resolution, it does so under the regular legislative
process. On May 23, following the vote on adoption of the conference report to H.R.
2, Jobs and Growth Tax Relief Reconciliation Act of 2003, the Senate began
consideration of H.J.Res. 51 under the provisions of an unanimous consent
agreement reached on May 7.46 During consideration of H.J.Res. 51, the Senate
considered eight amendments; seven amendments were rejected and one amendment
43 See letter to Speaker J. Dennis Hastert from Kenneth Dam, deputy secretary, Department
of the Treasury, Dec. 24, 2002, at [http://www.ustreas.gov/press/releases/po3718.htm]. On
at least three subsequent occasions, Treasury Secretary John W. Snow reiterated to Congress
the need for an increase of the statutory limit on the public debt. See letters to Speaker
Hastert from Secretary Snow, dated Feb. 19, 2003, available at
[http://www.ustreas.gov/press/releases/js46.htm]; dated April 4, 2003, available at
[http://www.ustreas.gov/press/releases/js259.htm]; and dated May 19, 2003, available at
[http://www.ustreas.gov/press/releases/js386.htm]. All websites were visited on Jan. 29,
2004.
44 Ibid.
45 For further information on the Gephardt rule, see CRS Report RL31913, Developing
Debt-Limit Legislation: The House’s “Gephardt Rule,” by Bill Heniff Jr.
46 The unanimous consent agreement provided that at a time to be determined by the
majority leader, after consultation with the Democratic leader, the Senate proceed to the
consideration of H.J.Res. 51; that first-degree amendments be limited to 12 per side; and that
no amendments relevant to gun liability and hate crimes be in order. See Congressional
Record, daily edition, vol. 149, May 7, 2003, p. S5838.

CRS-20
fell on a point of order. Subsequently, the Senate passed the measure by a vote of 53-
44.47 On May 27, President Bush signed H.J.Res. 51, increasing the statutory limit
on the public debt, into law (P.L. 108-24).
Appropriations and Other Spending Legislation
Federal spending is categorized into two different types: discretionary or
mandatory spending. Discretionary spending is controlled through the annual
appropriations acts, while mandatory or direct spending (which consists mostly of
entitlement programs) is determined by existing law.
Actual FY2002 federal outlays totaled $2,011 billion (see Figure 2).48 Of this
total amount, $734 billion, or about 36.5%, was discretionary spending (exploded
slices in Figure 2), while $1,277 billion, or 63.5%, was mandatory spending.
Figure 2. Actual FY2002 Outlays
by Major Spending Category
As noted above, the total budget authority and outlays set forth in the budget
resolution are allocated among the House and Senate committees with jurisdiction
over specific spending legislation. These allocations, commonly referred to as 302(a)
47 For the consideration and passage of H.J.Res. 51, see Congressional Record, daily edition,
vol. 149, May 23, 2003, pp. S7089-S7115.
48 Chart created by CRS based on data from Office of Management and Budget, Budget of
the U.S. Government, Fiscal Year 2004, p. 312.

CRS-21
allocations after the applicable section of the Congressional Budget Act, are specified
in the joint explanatory statement accompanying the conference report to the budget
resolution.49 A point of order may be raised against any legislation that would cause
a committee’s spending allocation to be exceeded.
Discretionary Spending. Discretionary spending is under the jurisdiction
of the House and Senate Appropriations Committees. Soon after the budget
resolution is adopted by Congress, the House and Senate Appropriations Committees
subdivide their spending allocations among their subcommittees and formally report
these suballocations to their respective chambers. These suballocations, referred to
as 302(b) allocations after the applicable section of the Congressional Budget Act,
represent the spending ceilings on the individual regular appropriations acts. During
the appropriations process, these suballocations usually are revised several times.
Congress passes three main types of appropriations measures. Regular
appropriations acts provide budget authority for the next fiscal year, beginning on
October 1. Each of the 13 subcommittees of the Appropriations Committees of the
House and Senate is responsible for one of the 13 regular appropriations acts.
Supplemental appropriations acts provide additional funding for unexpected needs
while the fiscal year is in progress. Continuing appropriations acts, commonly
referred to as continuing resolutions, provide stop-gap funding for agencies that have
not received regular appropriations by the start of the fiscal year.
The President’s budget includes recommendations for the annual appropriations;
account and program level detail about these recommendations is included in the
Appendix volume of the President’s budget documents. In addition, agencies submit
justification materials to the House and Senate Appropriations Committees. The
budget justifications provide more detailed information about an agency’s program
activities than is contained in the President’s budget documents and are used in
support of agency testimony during Appropriations subcommittee hearings on the
President’s budget request.
The House and Senate appropriations subcommittees begin holding extensive
hearings on appropriations requests shortly after the President’s budget is submitted.
By custom, appropriations measures originate in the House. In recent years, the
Senate Appropriations Committee has adopted and reported original Senate
appropriations measures, allowing the Senate to consider appropriations measures
without having to wait for the House to adopt its version. Under this practice, the
Senate version is considered and amended on the floor, and then inserted into the
House-adopted version, when available, as a substitute amendment, thereby retaining
the House-numbered bill for final action.
Appropriations for FY2003. At the outset of the 108th Congress, only two
of the 13 regular appropriations acts for FY2003 had been enacted. Since the start
of FY2003, the federal government agencies and programs not yet funded in regular
49 See U.S. Congress, Committee on Conference, Concurrent Resolution on the Budget —
Fiscal Year 2004, Conference Report to accompany H.Con.Res. 95, 108th Cong., 1st sess.,
H.Rept. 108-71 (Washington: GPO, 2003), pp. 123-132.

CRS-22
appropriations acts received temporary appropriations in eight successive continuing
resolutions (CRs): P.L. 107-229 (through October 4, 2002); P.L. 107-235 (through
October 11); P.L. 107-240 (through October 18); P.L. 107-244 (through November
22); P.L. 107-294 (through January 11, 2003); P.L. 108-2 (through January 31); P.L.
108-4 (through February 7); and P.L. 108-5 (through February 20).
On February 13, the House and Senate agreed to the conference report to the
Consolidated Appropriations Resolution, 2003 (H.J.Res. 2), which contains the 11
remaining regular appropriations acts for FY2003.50 On February 20, President Bush
signed the measure into law (P.L. 108-7), thereby bringing action on the FY2003
regular appropriations acts to a close.
In addition to the 13 regular appropriations acts, Congress typically acts on at
least one supplemental appropriations measure during a session. On March 25,
within days of initiating military operations in Iraq, President Bush submitted a $74.7
billion supplemental appropriations request for FY2003 to provide additional
resources for operations in Iraq, international assistance and Iraqi relief and
reconstruction, homeland security, and the legislative branch.51
On April 1, in response to the President’s request, the Senate Appropriations
Committee reported S. 762, Supplemental Appropriations Act to Support Department
of Defense Operations in Iraq for Fiscal Year 2003 (S.Rept. 108-33). The Senate
considered S. 762 on April 2 and 3, and adopted the measure with amendments by
a 93-0 vote on April 3. In the House, the House Appropriations Committee reported
H.R. 1559, Emergency Wartime Supplemental Appropriations Act, 2003 (H.Rept.
108-55) on April 2. The House considered H.R. 1559 under an open rule (H.Res.
172) on April 3, and adopted the measure by a 414-12 vote. Subsequently, on April
7, the Senate passed H.R. 1559 by unanimous consent in lieu of S. 762 after
incorporating the text of S. 762 in H.R. 1559 as an amendment.
House and Senate conferees resolved the differences between the two versions
of the FY2003 supplemental appropriations measure and filed a conference report
(H.Rept. 108-76) on April 12. The House and Senate agreed to the conference report
on H.R. 1559 by voice vote and unanimous consent, respectively, on the same day.52
President Bush signed the legislation into law (P.L. 108-11) on April 16. P.L. 108-11
provides $78.5 billion in supplemental appropriations for FY2003 for operations in
50 For a guide to the contents of H.J.Res. 2, see CRS Report RS21433, FY2003 Consolidated
Appropriations Resolution: Reference Guide, by Robert Keith.
5 1 A copy of the request is available on OMB’s website at
[http://www.whitehouse.gov/omb/budget/amendments/supplemental_3_25_03.pdf]. For a
detailed discussion of President Bush’s supplemental appropriations request, see CRS
Report RL31829, Supplemental Appropriations FY2003: Iraq Conflict, Afghanistan, Global
War on Terrorism, and Homeland Security, by Amy Belasco and Larry Nowels.
52 On April 11, the Senate had agreed by unanimous consent that when the Senate received
the conference report from the House, and with the concurrence of the two Senate leaders,
the conference report would be agreed to by the Senate. See Congressional Record, daily
edition, vol. 149, Apr. 11, 2003, p. S5392.

CRS-23
Iraq, international assistance and Iraqi relief and reconstruction, homeland security,
the legislative branch, and aviation assistance.
On July 7, 2003, President Bush submitted an additional FY2003 supplemental
appropriations request totaling $1,889 million for wildfire suppression and
emergency rehabilitation activities, emergency disaster response expenses, and
recovery and investigation costs associated with the Space Shuttle Columbia
accident.53
On July 25, in response to the President’s request, the House considered and
passed H.R. 2859, Emergency Supplemental Appropriations for Disaster Relief Act,
2003, by a vote of 352-60. Subsequently, on July 31, the Senate passed H.R. 2859
without amendment by unanimous consent.54 President Bush signed the legislation
into law (P.L. 108-69) on August 8. P.L. 108-69 provides $983.6 million for
emergency disaster assistance for FY2003.
Appropriations for FY2004. Pursuant to the FY2004 budget resolution
(H.Con.Res. 95), the House and Senate Appropriations Committees each received
spending allocations of $784,675 million in budget authority and $861,084 million
in outlays for the FY2004 regular appropriations measures.55 On June 24, 2003, the
House Appropriations Committee’s spending allocation was increased to $785,565
million in budget authority and $861,342 million in outlays to accommodate
additional spending for Project Bioshield.56
On June 17, 2003, the House Appropriations Committee approved its initial
spending allocations to its subcommittees (H.Rept. 108-171) and has revised these
suballocations once (on July 22, 2003, H.Rept. 108-228). On June 20, the Senate
Appropriations Committee approved its initial spending suballocations (S.Rept. 108-
77) and has revised these suballocations six times (on July 14, S.Rept. 108-101; on
July 16, S.Rept. 108-103; on September 5, S.Rept. 108-145; on September 16,
5 3 A copy of the request is available on OMB’s website at
[http://www.whitehouse.gov/omb/budget/amendments/supplemental_7_7_03.pdf].
54 Prior to this action, the Senate provided emergency supplemental appropriations for
FY2003 in Title III of the Legislative Branch Appropriations Act, 2004 (H.R. 2657/S. 1383),
which passed the Senate on July 11. The House did not include emergency supplemental
appropriations for FY2003 in its version of H.R. 2657.
55 These amounts reflect the enactment of the supplemental appropriations for FY2003 (P.L.
108-11). Section 421 of the FY2004 budget resolution required the chairs of the House and
Senate Budget Committees to adjust the appropriate allocations and budget aggregates to
reflect enactment of such a measure. The revisions were submitted for printing in the
Congressional Record on May 6 (in the House) and May 7 (in the Senate). See
Congressional Record, daily edition, vol. 149, May 6, 2003, pp. H3662-H3663, and
Congressional Record, daily edition, vol. 149, May 7, 2003, pp. S5843-S5847.
56 On June 24, 2003, House Budget Committee Chairman Jim Nussle, under the authority
of Section 404 of the FY2004 budget resolution, increased the House Appropriations
Committee’s FY2004 302(a) spending allocation by $890 million in budget authority and
$258 million in outlays. See Congressional Record, daily edition, vol. 149, June 24, 2003,
p. H5802.

CRS-24
S.Rept. 108-148; on September 24, S.Rept. 108-153; and on October 29, S.Rept.
108-175). As mentioned above, these suballocations serve as spending ceilings for
the 13 individual regular appropriations measures and are enforced by points of order
on the floor of each chamber.
The House and Senate began consideration of the regular appropriations bills
for FY2004 during the week of June 24 and July 7, respectively. Table 4 provides
information on the timing of congressional and presidential action on the 13 regular
appropriations bills.57
Table 4. Status on Regular Appropriations Acts for FY2004
Date Passed
Date Passed
Title and Bill Number(s)
Date Enacted
House
Senate
Agriculture (H.R. 2673/S. 1427)
July 14
November 6
January 23, 2004
(P.L. 108-199)a
Commerce-Justice-State (H.R. 2799/S. 1585)
July 23
)
January 23, 2004
(P.L. 108-199)a
Defense (H.R. 2658/S. 1382)
July 8
July 17
September 30, 2003
(P.L. 108-87)
D.C. (H.R. 2765/S. 1382)
September 9
November 18
January 23, 2004
(P.L. 108-199)a
Energy and Water (H.R. 2754/S. 1424)
July 18
September 16
December 1, 2003
(P.L. 108-137)
Foreign Operations (H.R. 2800/S. 1426)
July 24
October 30
January 23, 2004
(P.L. 108-199)a
Homeland Security (H.R. 2555)
June 24
July 24
October 1, 2003
(P.L. 108-90)
Interior (H.R. 2691/S. 1391)
July 17
September 23
November 10, 2003
(P.L. 108-108)
Labor-HHS-Education (H.R. 2660/S. 1356)
July 10
September 10
January 23, 2004
(P.L. 108-199)a
Legislative Branch (H.R. 2657/S. 1383)
July 9
July 11
September 30, 2003
(P.L. 108-83)
Military Construction (H.R. 2559/S. 1357)
June 26
July 11
November 22, 2003
(P.L. 108-132)
Transportation-Treasury (H.R. 2989/S. 1589)
September 9
October 23
January 23, 2004
(P.L. 108-199)a
VA-HUD (H.R. 2861/S. 1584)
July 25
November 18
January 23, 2004
(P.L. 108-199)a
a. Congress incorporated seven regular appropriations bills into one measure — the Consolidated Appropriations Act, 2004
(H.R. 2673, H.Rept. 108-401).
57 For the up-to-date status of and further information on the FY2004 appropriations bills,
see [http://www.crs.gov/products/appropriations/apppage.shtml] the CRS Appropriations
website.

CRS-25
Congress also often adopts one or more continuing resolutions each year
because of recurring delays in the appropriations process. As noted above, for
example, Congress passed eight continuing resolutions before completing action on
the FY2003 regular appropriations acts. At the beginning of FY2004 on October 1,
2003, only three of the 13 regular appropriations acts had been enacted.
Consequently, Congress passed and President Bush signed into law a continuing
appropriations act (H.J.Res. 69, P.L. 108-84) to provide temporary appropriations
through October 31, 2003, for agencies and programs funded in the remaining 10
regular appropriations measures not yet enacted. The House and Senate passed the
continuing resolution by a 407-8 vote and by unanimous consent, respectively, on
September 25. President Bush signed the measure into law on September 30.
Subsequently, Congress and President Bush extended the temporary funding through
November 7 (H.J.Res. 75, P.L. 108-104), November 21 (H.J.Res. 76, P.L. 108-107),
and January 31, 2004 (H.J.Res. 79, P.L. 108-135).58
On December 8, 2003, and January 22, 2004, respectively, the House and Senate
agreed to the conference report to H.R. 2673, the Consolidated Appropriations Act,
2004 (H.Rept. 108-401), which contains the remaining seven FY2004 regular
appropriations acts not enacted individually.59 On January 23, President Bush signed
the measure into law (P.L. 108-199), thereby bringing action on the FY2004 regular
appropriations acts to a close.
As noted above, Congress typically acts on at least one supplemental
appropriations measure while a fiscal year is in progress. On September 17,
President Bush submitted a $87 billion supplemental appropriations request for
FY2004 to provide additional resources for Iraq and Afghanistan security and
reconstruction.60 On September 30, in response to the President’s request, the Senate
Appropriations Committee ordered reported S. 1689, Emergency Supplemental
Appropriations for Iraq and Afghanistan Security and Reconstruction Act, 2004
(S.Rept. 108-160). The Senate began consideration of S. 1689 on October 1, and
adopted the measure with amendments by a 87-12 vote on October 17. In the House,
58 Subsequently, Congress passed and President Bush signed into law a fifth continuing
resolution (H.J.Res. 82, P.L. 108-185), which made changes to the previous continuing
resolution related to certain spending accounts, but did not change its expiration date (i.e.,
Jan. 31, 2004).
59 On December 9, 2003, a unanimous consent request was made that the Senate agree to the
conference report to H.R. 2673, but an objection was heard. See Congressional Record,
daily edition, vol. 149, Dec. 9, 2003, pp. S16082-S16083. Subsequently, a motion to invoke
cloture on the conference report was initially rejected on Jan. 20, but then, on
reconsideration, was agreed to on Jan. 22, leading to a vote on the measure. See
Congressional Record, daily edition, vol. 150, Jan. 20, 2004, pp. S20-S21, and
Congressional Record, daily edition, vol. 150, Jan. 22, 2004, p. S156.
6 0 A copy of the request is available on OMB’s website at
[http://www.whitehouse.gov/omb/budget/amendments/supplemental_9_17_03.pdf]. For a
detailed discussion of President Bush’s supplemental appropriations request, see CRS
Report RL32090, FY2004 Supplemental Appropriations for Iraq, Afghanistan, and the
Global War on Terrorism: Military Operations & Reconstruction Assistance, by Stephen
Daggett, Larry Nowels, Curt Tarnoff, and Rhoda Margesson.

CRS-26
the House Appropriations Committee reported its version of the supplemental
appropriations measure for FY2004 (H.R. 3289, H.Rept. 108-312) on October 14.
The House considered H.R. 3289 on October 16 and 17, and adopted the measure by
a 303-125 vote. Subsequently, on the same day, the Senate passed H.R. 3289 by
unanimous consent in lieu of S. 1689 after incorporating the text of S. 1689 in H.R.
3289 as an amendment.
House and Senate conferees resolved the differences between the two versions
of the FY2004 supplemental appropriations measure and filed a conference report
(H.Rept. 108-337) on October 30. The House and Senate agreed to the conference
report on H.R. 3289 by a 289-121 vote on October 31 and by voice vote on
November 3, respectively. President Bush signed the legislation into law (P.L. 108-
106) on November 6. P.L. 108-106 provides $87.5 billion in supplemental
appropriations for FY2004 for security and reconstruction activities in Iraq and
Afghanistan.
Mandatory Spending. Mandatory spending is under the jurisdiction of the
various legislative committees of the House and Senate. Some entitlement programs,
such as Medicaid and certain veterans’ programs, are funded in annual appropriations
acts, but such spending is not considered discretionary and is not controlled through
the annual appropriations process.
On several occasions in the past, Congress has included reserve funds in the
budget resolution to accommodate specific mandatory spending legislation. Under
the provisions of a reserve fund, the chairmen of the House and Senate Budget
Committees may revise the committee spending allocations and other budget
resolution levels if certain legislation is reported by the appropriate committee.
Without such an adjustment, mandatory spending legislation might be subject to
points of order if it was not assumed in the budget resolution spending amounts.
The FY2004 budget resolution (H.Con.Res. 95), as agreed to by Congress,
includes six reserve funds related to mandatory spending legislation.61 The six
reserve funds provide for the adjustment of committee spending allocations and other
budget resolution levels to accommodate legislation related to (1) Medicare
modernization and prescription drugs; (2) Medicaid reform; (3) State Children’s
Health Insurance Program; (4) Project Bioshield; (5) health insurance for the
uninsured; and (6) Medicaid coverage for children with special needs.
On June 27, 2003, the House and Senate passed legislation to provide
prescription drug coverage under Medicare (H.R. 1/S. 1).62 Prior to the consideration
of the legislation in the Senate, Budget Committee Chairman Don Nickles adjusted
the Senate Finance Committee’s spending allocations pursuant to the reserve fund
61 See Section 401-406 of H.Con.Res. 95, H.Rept. 108-71.
62 For further information on this legislation, see CRS Report RL31992, Medicare
Prescription Drug Provisions of S. 1, as Passed by the Senate, and H.R. 1, as Passed by the
House, by Jennifer O’Sullivan.

CRS-27
provisions contained in Section 401 of H.Con.Res. 95.63 After resolving differences
between the two versions of the legislation, the conference committee filed a
conference report (H.Rept. 108-391) on November 21.64 The House agreed to the
conference report by a 220-215 vote on November 22. Subsequently, the Senate
agreed to the conference report by a 54-44 vote on November 25, clearing the
measure for the President.65 According to CBO, H.R. 1, Medicare Prescription Drug,
Improvement, and Modernization Act of 2003, is estimated to increase direct
spending by $395 billion, and increase federal revenues by $0.5 billion, over the 10-
year period covering FY2004-FY2013.66
Budget Enforcement and Sequestration
Beginning in 1990, Congress and the President were constrained by statutory
limits on discretionary spending and a pay-as-you-go (PAYGO) requirement for
direct spending and revenue legislation.67 Initially applicable through FY1995, they
were modified and extended in 1993 to apply through FY1997, and extended again
in 1997 to apply through FY2002. In each case, the budgetary controls were
designed to enforce 5-year budget agreements between Congress and the President.
Without any legislative action by Congress and the President to extend the budget
enforcement mechanisms further, they expired at the end of FY2002 (i.e., September
30, 2002).
63 On June 18, 2003, Senate Budget Committee Chairman Don Nickles increased the Senate
Finance Committee’s spending allocation by $113.54 billion in budget authority and
$113.57 billion in outlays for the period FY2004-2008 and $400 billion in budget authority
and outlays for the period FY2004-2013. See Congressional Record, daily edition, vol. 149,
June 18, 2003, p. S8118.
64 For further information on the conference report, see CRS Report RL31996, Overview of
the Medicare Prescription Drug and Reform Conference Agreement, H.R. 1, by Jennifer
O’Sullivan, Hinda Chaikind, Sibyl Tilson, Jennifer Boulanger, and Paulette Morgan.
65 During Senate consideration of the conference report to H.R. 1, the Senate agreed to
waive Sections 311(A)(2) and 302(f) of the Congressional Budget Act by a 61-39 vote. See
Congressional Record, daily edition, vol. 149, Nov. 24, 2003, pp. S15698-S15711. As
noted above, a motion to waive a Budget Act point of order in the Senate requires a three-
fifths vote.
66 See the CBO cost estimate of the conference report to accompany H.R. 1, available at
[http://www.cbo.gov/showdoc.cfm?index=4808&sequence=0], visited on November 26,
2003.
67 The discretionary spending limits and the PAYGO requirement were first established by
the Budget Enforcement Act (BEA) of 1990 (Title XIII of P.L. 101-508, Omnibus Budget
Reconciliation Act of 1990, 104 Stat. 1388-573-1388-630), which amended the Balanced
Budget and Emergency Deficit Control Act of 1985 (Title II of P.L. 99-177, 99 Stat. 1038-
1101). The limits were extended in 1993 (Title XIV of P.L. 103-66, Omnibus Budget
Reconciliation Act of 1993, 107 Stat. 683-685) and in 1997 (Budget Enforcement Act of
1997, Title X of P.L. 105-33, Balanced Budget Act of 1997, 111 Stat. 677-712).

CRS-28
In the event Congress considers restoring or modifying these budget
enforcement mechanisms during 2003, an overview of how they operated is provided
below.
Since 1990, the statutory limits had applied to different categories of
discretionary spending. During some periods, discretionary spending was combined
into a single category; at other times it was divided into two or more broad
categories, such as defense and nondefense spending. Currently, adjustable
discretionary spending limits still exist for highway and mass transit spending for
FY2003 and conservation spending (divided into six subcategories) through FY2006,
but the sequestration process to enforce them expired on September 30, 2002.
Under the PAYGO requirement, the net effect of new direct spending and
revenue legislation enacted for a fiscal year could not cause a positive balance
(reflecting an increase in the on-budget deficit or a reduction in the on-budget
surplus) on a multiyear PAYGO “scorecard.” For each fiscal year, this scorecard
maintained the balances of the accumulated budgetary effects of laws enacted during
the current session and prior years. The PAYGO requirement applied to legislation
enacted through FY2002, but it covered the effects of such legislation through
FY2006.
The discretionary spending limits and PAYGO requirement were enforced
primarily by sequestration, which involved automatic, largely across-the-board
spending cuts in non-exempt programs. Sequestration was triggered if the OMB
director estimated in the final sequestration report at the end of a session that one or
more of the discretionary spending limits would be exceeded or the PAYGO
requirement would be violated. A within-session sequestration was possible if a
supplemental appropriations bill caused the spending levels of the current fiscal year
to exceed the statutory limit for a particular category. The discretionary spending
limits, as well as a PAYGO requirement similar to the expired statutory one, also
could have been enforced through points of order while legislation was being
considered on the Senate floor. (The House did not provide for similar points of
order.)
The FY2004 budget resolution (H.Con.Res. 95) extended the Senate PAYGO
point of order through September 30, 2008. Under the Senate PAYGO rule, a point
of order may be raised against any direct spending or revenue legislation that would
increase or cause an on-budget deficit for the first fiscal year, the period of the first
five fiscal years, or the following five fiscal years, covered by the most recently
adopted budget resolution. A motion to waive this point of order requires a vote of
three-fifths of Senators (i.e., 60 Senators if there are no vacancies).
Table 5 provides the timetable for sequestration actions. As indicated, OMB
and CBO were required to publish preview and update sequestration reports to
provide Congress and the President with advance notice regarding the possibility of
a sequester. If one or both types of sequester were anticipated, these reports could
have afforded Congress and the President enough warning so that they could enact
legislation to forestall them. Only an OMB within-session or final sequestration
report could have triggered a sequester; the CBO sequestration reports were advisory
only.

CRS-29
Table 5. Timetable for Sequestration Actions
Deadline
Action to be completed
Five days before the
CBO sequestration preview report.
President submits budget
Date of the President’s
OMB sequestration preview report (as part of the
budget submission
President’s budget).
August 10
Notification regarding military personnel.
August 15
CBO sequestration update report.
August 20
OMB sequestration update report.
10 days after end of session
CBO final sequestration report.
15 days after end of session
OMB final sequestration report; presidential
sequestration order.
Source: Section 254(a) of the Balanced Budget and Emergency Deficit Control Act of 1985, as
amended (P.L. 99-177, 2 U.S.C. 904).
At the end of the 107th Congress, Congress passed and President Bush signed
legislation (P.L. 107-312, 116 Stat. 2456) that removed the positive balances on the
PAYGO scorecard through FY2006, thereby preventing any future PAYGO
sequestration unless the budget enforcement mechanism is restored.68
Chronology
January 23, 2004
President Bush signed into law H.R. 2673, the Consolidated
Appropriations Act, 2004 (P.L. 108-199), which contains
seven of the 13 regular FY2004 appropriations acts, thereby
bringing action on the FY2004 regular appropriations acts to
a close. [The House and Senate agreed to the conference
report (H.Rept. 108-401) to the measure on December 8,
2003, and January 22, 2004, respectively.]
November 25, 2003
Senate passed the conference report (H.Rept. 108-391) to
accompany H.R. 1 by a 54-44 vote, clearing the measure for
the President.
November 22, 2003
House passed the conference report (H.Rept. 108-391) to
accompany H.R. 1, Medicare Prescription Drug,
Improvement, and Modernization Act of 2003, by a 220-215
vote.
68 For further information on the recent removal of PAYGO balances, see CRS Report
RS21378, Termination of the “Pay-As-You-Go” (PAYGO) Requirement for FY2003 and
Later Years, by Robert Keith.

CRS-30
November 21, 2003
House and Senate passed H.J.Res. 79, extending the
temporary appropriations through January 31, 2004, for
agencies and programs funded in the regular appropriations
measures not yet enacted. (President Bush signed H.J.Res.
79 into law (P.L. 108-135) on November 22.)
November 7, 2003
Senate passed H.J.Res. 76. (President Bush signed H.J.Res.
76 into law (P.L. 108-107) on November 7.)
November 5, 2003
House passed H.J.Res. 76, extending the temporary
appropriations through November 21, 2004, for agencies and
programs funded in the regular appropriations measures not
yet enacted.
November 3, 2003
Senate passed the conference report (H.Rept. 108-337) to
accompany H.R. 3289 by voice vote. (President Bush signed
H.R. 3289 into law (P.L. 108-106) on November 6. P.L. 108-
106 provides $87.5 billion in supplemental appropriations for
FY2004 for security and reconstruction activities in Iraq and
Afghanistan.)
October 31, 2003
House passed the conference report (H.Rept. 108-337) to
accompany H.R. 3289, Emergency Supplemental
Appropriations Act for Defense and for the Reconstruction
of Iraq and Afghanistan, 2004, by a 298-121 vote.
October 30, 2003
House and Senate passed H.J.Res. 75, extending the
temporary appropriations through November 7, 2004, for
agencies and programs funded in the regular appropriations
measures not yet enacted. (President Bush signed H.J.Res.
75 into law (P.L. 108-104) on October 31.)
October
17,
2003
House and Senate passed H.R.
3289, Emergency
Supplemental Appropriations Act for Defense and for the
Reconstruction of Iraq and Afghanistan, 2004, by a 303-125
vote and by unanimous consent, respectively. (The Senate
passed S. 1689, its version of the supplemental
appropriations measure, by a 87-12 vote. Subsequently, the
Senate passed H.R. 3289 by unanimous consent in lieu of S.
1689 after incorporating the text of S. 1689 in H.R. 3289 as
an amendment.)
September 25, 2003
House and Senate passed H.J.Res. 69, providing temporary
appropriations through October 31, 2003, for agencies and
programs funded in the regular appropriations measures not
yet enacted. At the beginning of FY2004 on October 1,
2003, only three of the 13 regular appropriations acts had
been enacted. (President Bush signed H.J.Res. 69 into law
(P.L. 108-84) on September 30.)
September 17, 2003
President Bush submitted a $87 billion supplemental
appropriations request for FY2004 to provide additional
resources for Iraq and Afghanistan security and
reconstruction.

CRS-31
August 8, 2003
President Bush signed H.R. 2859, Emergency Supplemental
Appropriations for Disaster Relief Act, 2003, into law (P.L.
108-69), following passage by the House (July 25) and the
Senate (July 31). The law provides $983.6 million for
emergency disaster assistance for FY2003.
July 7, 2003
President Bush submitted an additional FY2003 supplemental
appropriations request totaling $1,889 million for wildfire
suppression and emergency rehabilitation activities,
emergency disaster response expenses, and recovery and
investigation costs associated with the Space Shuttle
Columbia accident.
June 27, 2003
House passed H.R. 1 by a 216-215 vote and Senate passed S.
1 by a 76-21 vote. Both measures provided prescription drug
benefits under Medicare. (Subsequently, on July 7, the
Senate passed H.R. 1 by unanimous consent in lieu of S. 1
after incorporating the text of S. 1 in H.R. 2 as an
amendment.)
May 28, 2003
President Bush signed H.R. 2, Jobs and Growth Tax Relief
Reconciliation Act of 2003 into law (P.L. 108-27). The law
is projected to reduce federal revenues by $320.1 billion and
increase federal outlays by $29.5 billion over the 11-year
period covering FY2003-FY2013, according to CBO and the
JCT.
May 23, 2003
House and Senate agreed to the conference report to H.R. 2,
Jobs and Growth Tax Relief Reconciliation Act of 2003
(H.Rept. 108-126).
May 15, 2003
Senate passed H.R. 2, Jobs and Growth Tax Reconciliation
Act of 2003, after striking all after the enacting clause and
inserting the text of S. 1054, as amended, by a vote of 51-49.
May 9, 2003
House passed H.R. 2, Jobs and Growth Tax Reconciliation
Act of 2003, by a vote of 222-203.
April 16, 2003
President Bush signed H.R. 1559, the Emergency Wartime
Supplemental Appropriations Act, 2003, into law (P.L. 108-
11).
April 12, 2003
House and Senate agreed to the conference report (H.Rept.
108-76) to H.R. 1559, which provides $78.5 billion in
supplemental appropriations for FY2003, by voice vote and
unanimous consent, respectively.
April 11, 2003
House (legislative day of April 10) and Senate agreed to the
FY2004 budget resolution (H.Con.Res. 95, H.Rept. 108-71)
by votes of 216-211 and 51-50, respectively.

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April 3, 2003
Senate passed S. 762, Supplemental Appropriations Act to
Support Department of Defense Operations in Iraq for Fiscal
Year 2003, with amendments by a 93-0 vote. Subsequently,
on April 7, the Senate passed H.R. 1559 by unanimous
consent in lieu of S. 762 after incorporating the text of S. 762
in H.R. 1559 as an amendment.
April 3, 2003
House passed H.R. 1559, Emergency Wartime Supplemental
Appropriations Act, 2003, as amended by a 414-12 vote.
March 26, 2003
Senate agreed to its version of the FY2004 budget resolution
(S.Con.Res. 23, S.Prt. 108-18) by a 56-44 vote.
March 25, 2003
President Bush submitted a $74.7 billion supplemental
appropriations request for FY2003 to provide additional
resources for operations in Iraq, international assistance and
Iraqi relief and reconstruction, homeland security, and the
legislative branch.
March 21, 2003
House agreed to its version of the FY2004 budget resolution
(H.Con.Res. 95, H.Rept. 108-37) by a 215-212 vote.
February 3, 2003
President Bush submitted his FY2004 budget to Congress.
For Additional Reading
Congressional Hearings, Reports, and Documents
Congressional Budget Office. The Budget and Economic Outlook: Fiscal Years
2004-2013. Washington: January 2003.
Congressional Budget Office. An Analysis of the President’s Budgetary Proposals
for Fiscal Year 2004. Washington: March 2003.
Congressional Budget Office. The Budget and Economic Outlook: An Update.
Washington: August 2003.
U.S. Congress. Committee on Conference. Concurrent Resolution on the Budget —
Fiscal Year 2004. Conference report to accompany H.Con.Res. 95. 108th
Congress, 1st session. H.Rept. 108-71. Washington: GPO, 2003.
U.S. Congress. Committee on Conference. Jobs and Growth Tax Relief
Reconciliation Act of 2003. Conference report to accompany H.R. 2. 108th
Congress, 1st session. H.Rept. 108-126. Washington: GPO, 2003.
U.S. Congress. Committee on Conference. Medicare Prescription Drug,
Improvement, and Modernization Act of 2003. Conference report to accompany
H.R. 1. 108th Congress, 1st session. H.Rept. 108-391. Washington: GPO,
2003.

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U.S. Congress. House Committee on the Budget. Concurrent Resolution on the
Budget — Fiscal Year 2004. Report to accompany H.Con.Res. 95. 108th
Congress, 1st session. H.Rept. 108-37. Washington: GPO, 2003.
U.S. Congress. House Committee on Ways and Means. Jobs and Growth
Reconciliation Tax Act of 2003. Report to accompany H.R. 2. 108th Congress,
1st session. H.Rept. 108-94. Washington: GPO, 2003.
U.S. Congress. Senate Committee on the Budget. Concurrent Resolution on the
Budget FY2004. Committee print to accompany S.Con.Res. 23. 108th
Congress, 1st session, S.Prt. 108-19. Washington: GPO, 2003.
CRS Products
CRS Report RL31795. Congressional Budget Actions in 2002, by Bill Heniff Jr.
CRS Report RL30297. Congressional Budget Resolutions: Selected Statistics and
Information Guide, by Bill Heniff Jr.
CRS Report 98-721. Introduction to the Federal Budget Process, by Robert Keith
and Allen Schick.
CRS Report RL31996. Overview of the Medicare Prescription Drug and Reform
Conference Agreement, H.R. 1, by Jennifer O’Sullivan, Hinda Chaikind, Sibyl
Tilson, Jennifer Boulanger, and Paulette Morgan.
CRS Report 97-684. The Congressional Appropriations Process: An Introduction,
by Sandy Streeter.
CRS Report RL30343. Continuing Appropriations Acts: Brief Overview of Recent
Practices, by Sandy Streeter.
CRS Report RL31784. The Budget for Fiscal Year 2004, by Philip D. Winters