Budget Reconciliation Legislation in 2005-2006 Under the FY2006 Budget Resolution

Budget Reconciliation Legislation in 2005-2006 Under the FY2006 Budget Resolution

Order Code RL33132
Budget Reconciliation Legislation in 2005-2006
Under the FY2006 Budget Resolution
Updated August 17, 2007
Robert Keith
Specialist in American National Government
Government and Finance Division

Budget Reconciliation Legislation in 2005-2006
Under the FY2006 Budget Resolution
Summary
The FY2006 budget resolution (H.Con.Res. 95), which was agreed to by the
House and Senate on April 28, 2005, included reconciliation instructions for: (1) an
omnibus bill to reduce mandatory outlays by about $35 billion over a five-year
period, covering FY2006-FY2010; (2) a bill to reduce revenues by $70 billion over
the same period; and (3) a bill to increase the limit on the public debt by $781 billion.
Congressional action on the resultant reconciliation legislation, while ultimately
successful, was marked by controversy and delay. Initial floor consideration of the
first reconciliation measure, the omnibus spending bill, occurred in November 2005.
Congressional action on reconciliation legislation carried over into the following
session, concluding with action on the revenue reconciliation bill in May 2006.
The omnibus spending reconciliation bill, the Deficit Reduction Act of 2005 (S.
1932), was signed into law by President George W. Bush on February 8, 2006, as
P.L. 109-171 (120 Stat. 4-184). The Congressional Budget Office (CBO) estimated
net mandatory outlay savings under the measure of $38.810 billion over five years.
Assuming that apparent drafting errors in two sections are corrected, CBO noted, the
five-year savings would increase by $713 million, to $39.523 billion (neither the
House nor the Senate have taken any action in this regard).
The revenue reconciliation bill, the Tax Increase Prevention and Reconciliation
Act of 2005 (H.R. 4297), was signed into law on May 17, 2006, as P.L. 109-222 (120
Stat. 345-373). The Joint Committee on Taxation estimated the five-year revenue
reduction at $69.960 billion. Additional revenue reductions, including some matters
dropped from the initial House and Senate revenue reconciliation bills in conference,
have been considered in pension reform legislation (P.L. 109-280) and other
measures.
Finally, the House and Senate passed a measure (H.J.Res. 47), outside of the
budget reconciliation process, increasing the debt limit by $781 billion. The measure
was signed into law on March 20, 2006, as P.L. 109-182 (120 Stat. 289).
Consequently, no actions were taken under the reconciliation process with respect to
debt-limit legislation.
As of May 2006, congressional action on the reconciliation legislation called for
in the FY2006 budget resolution was completed. No action was taken during the
waning days of the 2006 session on attendant matters, including legislation correcting
the two apparent drafting errors in the Deficit Reduction Act of 2005. In addition,
at least five lawsuits contesting the validity of the Deficit Reduction Act of 2005
(because of an apparent clerical error that occurred during House and Senate
consideration of the measure) have been dismissed at the federal district court level,
but appeals are being pursued in several cases.
This report will be updated as developments warrant.

Contents
Most Recent Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Overview of the Budget Reconciliation Process . . . . . . . . . . . . . . . . . . . . . . . . . . 3
The Budget Policy Context . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Baseline Budget Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
The Deficit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Mandatory Outlays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Public Debt Limit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
President Bush’s FY2006 Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Initial Budget Submission (February) . . . . . . . . . . . . . . . . . . . . . . . . . 11
Mid-Session Review (July) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
The FY2006 Budget Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Legislative History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Overall Budget Resolution Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Reconciliation Directives in the FY2006 Budget Resolution . . . . . . . . . . . . . . . 16
Initial House Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Initial Senate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Action on the Conference Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Subsequent Changes in Budget Policy Affecting Reconciliation . . . . . . . . . . . . 22
Reconciliation Legislation in 2005: Summary and Legislative History . . . . . . . 24
Spending Reconciliation Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Initial Senate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Initial House Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Action on the Conference Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Approval by the President and Subsequent Challenges . . . . . . . . . . . . 30
Brief Summary of the Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Revenue Reconciliation Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Initial Senate Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Initial House Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Action on the Conference Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Approval by the President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Brief Summary of the Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Debt-Limit Reconciliation Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Products on Selected Policy Issues Addressed in Reconciliation . . . . . . . . . . . . 46
Spending Reconciliation Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Revenue Reconciliation Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Appendix A. Deficit Reduction Act of 2005 (S. 1932): Contents Listing
of the Conference Report (H.Rept. 109-362) . . . . . . . . . . . . . . . . . . . . . . . . 50

Appendix B. Tax Increase Prevention and Reconciliation Act of 2005
(H.R. 4297): Contents Listing of the Conference Report
(H.Rept. 109-455) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
List of Figures
Figure 1. Budgetary Components of Selected Reconciliation Acts . . . . . . . . . . . 7
List of Tables
Table 1. Reconciliation Resolutions and Resultant Reconciliation Acts:
FY1991-FY2005 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Table 2. Total Deficit or Surplus: FY2000-FY2004 . . . . . . . . . . . . . . . . . . . . . . 9
Table 3. CBO and OMB Baseline Deficit Projections: FY2005-FY2010 . . . . . . 9
Table 4. Public Debt-Limit Increases: 1997-2004 . . . . . . . . . . . . . . . . . . . . . . . 11
Table 5. President Bush’s FY2006 Budget: February 2005 Submission . . . . . . 12
Table 6. President Bush’s FY2006 Budget: July 2005 Mid-Session Review . . 13
Table 7. Selected Components of the FY2006 Budget Resolution:
House, Senate, and Conference Levels . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Table 8. Initial Reconciliation Instructions: House . . . . . . . . . . . . . . . . . . . . . . 16
Table 9. Initial Reconciliation Instructions: Senate . . . . . . . . . . . . . . . . . . . . . . 18
Table 10. Reconciliation Instructions for FY2006-FY2010:
Summary of House, Senate, and Conference Amounts . . . . . . . . . . . . . . . . 20
Table 11. Reconciliation Instructions in the Conference Agreement on the
FY2006 Budget Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Table 12. CBO Scoring of Spending Reconciliation Legislation:
Senate Reported and Passed (By Title/Committee) . . . . . . . . . . . . . . . . . . . 26
Table 13. CBO Scoring of Spending Reconciliation Legislation:
House Reported and Passed (By Title/Committee) . . . . . . . . . . . . . . . . . . . 27
Table 14. CBO Scoring of Spending Reconciliation Legislation:
Conference Agreement (by Title) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Table 15. Spending Reconciliation Legislation: Savings and Costs in
Selected Program Areas (Conference Agreement) . . . . . . . . . . . . . . . . . . . 36
Table 16. JCT Scoring of Revenue Reconciliation Legislation:
Conference Agreement (by Title) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Table 17. Revenue Reconciliation Legislation: Revenue Increases and
Decreases for Selected Provisions (Conference Agreement) . . . . . . . . . . . . 44

Budget Reconciliation Legislation
in 2005-2006 Under the
FY2006 Budget Resolution
The budget reconciliation process is one of the chief tools used by Congress
during the past quarter-century to implement major changes in budget policy.
Following an indication of the most recent actions, a brief overview of the budget
reconciliation process, and an assessment of the budget policy context, this report
provides information on the consideration of budget reconciliation legislation in
2005, during the first session of the 109th Congress, and the carryover of legislative
action into 2006, during the second session.
Most Recent Actions
The most recent actions of the House and Senate on spending, revenue, and
debt-limit reconciliation legislation are summarized in the box below:
Spending Reconciliation
The Senate passed S. 1932 (the Deficit Reduction Omnibus Reconciliation
Act of 2005) on November 3, by a vote of 52-47. The Congressional Budget
Office (CBO) estimated net mandatory outlay savings of $34.644 billion over
five years (FY2006-FY2010).
The House passed H.R. 4241 (the Deficit Reduction Act of 2005) on
November 18, by a vote of 217-215. CBO estimated net mandatory outlay
savings of $49.889 billion over five years.
The conference report (H.Rept. 109-362) on S. 1932, which was renamed
the Deficit Reduction Act of 2005, was reported on December 19. CBO
estimated net mandatory outlay savings under the measure of $38.810 billion
over five years (assuming that apparent drafting errors in two sections are
corrected, CBO noted, the five-year savings would increase by $713 million, to
$39.523 billion).
On December 19, the House agreed to the conference report by a vote of
212-206. On December 21, the Senate removed extraneous matter from the
legislation pursuant to a point of order raised under the “Byrd rule,” and then,
by a vote of 51-50 (with Vice President Cheney breaking a tie vote), returned the
amended measure to the House for further action. On February 1, the House
concurred in the Senate amendment, by a vote of 216-214, clearing the measure
for the President.

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President Bush signed the measure into law on February 8 as P.L. 109-171
(120 Stat. 4-184). Due to an apparent clerical error during final action on the
measure, the Senate, later that day, agreed to S.Con.Res. 80 by unanimous
consent; the concurrent resolution deemed the version of S. 1932 presented to
the President to be a true enrollment. On February 16, the House tabled a
privileged resolution, H.Res. 687, by a vote of 219-187; the resolution would
have directed the House Committee on Standards of Official Conduct to
investigate the circumstances surrounding the apparent clerical error. Several
lawsuits have been filed contesting the validity of the Deficit Reduction Act of
2005 because of the clerical error; some of the lawsuits have been dismissed.
Revenue Reconciliation
The Senate passed S. 2020 (the Tax Relief Act of 2005) on November 18,
by a vote of 64-33. The Joint Committee on Taxation (JCT) estimated net
revenue reductions of $57.756 billion over five years (FY2006-FY2010). In
order to facilitate a conference with the House, the Senate later passed H.R.
4297 with an amendment. According to the JCT, H.R. 4297, as passed by the
Senate, would reduce revenues by $69.415 billion over FY2006-FY2010,
reflecting about $12 billion in further revenue reduction compared to the levels
in S. 2020, as passed earlier by the Senate.
The House passed H.R. 4297 (the Tax Relief Extension Reconciliation Act
of 2005) on December 8, by a vote of 234-197. JCT estimated net revenue
reductions of $56.082 billion over five years.
The conference report (H.Rept. 109-455) on H.R. 4297, which was
renamed the Tax Increase Prevention and Reconciliation Act of 2005, was filed
on May 9. The JCT estimated that the conference agreement would reduce
revenues by $69.960 billion over the five-year period, FY2006-FY2010.
The House agreed to the conference report on May 10, by a vote of 244-
185, and the Senate agreed to it the following day, by a vote of 54-44.
President Bush signed the measure into law on May 17 as P.L. 109-222
(120 Stat. 345-373). Additional revenue reductions, including some matters
dropped from the initial House and Senate revenue reconciliation bills in
conference, have been considered in pension reform legislation (P.L. 109-280)
and other measures.
Debt-Limit Reconciliation
On March 20, 2006, President Bush signed H.J.Res. 47, a measure
increasing the statutory debt limit by $781 billion to $8.965 trillion, into law as
P.L. 109-182 (120 Stat. 289). The measure was deemed to have passed the
House on April 28, 2005, pursuant to the “Gephardt rule” (House Rule XXVII),
as part of final action on the FY2006 budget resolution. The Senate passed the
measure without amendment on March 16, 2006, by a vote of 52-48.
The enactment of P.L. 109-182 obviated the need for any action on debt-
limit legislation under the reconciliation process.

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Overview of the Budget Reconciliation Process
The Congressional Budget Act of 1974 established the congressional budget
process.1 Under the act, the House and Senate are required to adopt at least one
budget resolution each year (and have done so, except for FY1999, FY2003, and
FY2005).2 The budget resolution, which takes the form of a concurrent resolution
and is not sent to the President for his approval or veto, serves as a congressional
statement in broad terms regarding appropriate revenue, spending, and debt-limit
policies, as well as a guide to the subsequent consideration of legislation
implementing such policies at agency and programmatic levels. Budget resolution
policies are enforced through a variety of mechanisms, including points of order.3
The House and Senate Budget Committees, which were created by the 1974 act,
exercise exclusive jurisdiction over budget resolutions and are responsible for
monitoring their enforcement.
In developing a budget resolution, the House and Senate Budget Committees
use various sources of budgetary information and analysis, including baseline budget
projections of revenue, spending, and the deficit or surplus prepared by the
Congressional Budget Office (CBO). A budget resolution typically reflects many
different assumptions regarding legislative action expected to occur during a session
that would cause revenue and spending levels to be changed from baseline amounts.
Most revenue and mandatory spending,4 however, occurs automatically each year
under permanent law. Therefore, if the committees with jurisdiction over the revenue
and mandatory spending programs do not report legislation to carry out the budget
resolution policies by amending existing law, revenue and mandatory spending for
these programs likely will continue without change. There are some notable
exceptions to the permanency of revenue and mandatory spending laws, such as
many of the tax cuts proposed by President George W. Bush and enacted in 2001 and
2003.
Discretionary spending, on the other hand, is provided annually in regular,
supplemental, and continuing appropriations acts. The House and Senate, therefore,
are assured an opportunity each year to consider discretionary spending within the
1 See Titles I-IX of the Congressional Budget and Impoundment Control Act of 1974 (P.L.
93-344; July 12, 1974; 88 Stat. 297-339), as amended and codified at 2 U.S.C. 621-692.
2 For background information on budget resolutions, see CRS Report RL30297,
Congressional Budget Resolutions: Selected Statistics and Information Guide, by Bill
Heniff Jr.
3 The congressional budget process, and its enforcement procedures, are discussed in more
detail in CRS Report 98-721, Introduction to the Federal Budget Process, by Robert Keith
and Allen Schick. Also, see CRS Report 97-865, Points of Order in the Congressional
Budget Process, by James V. Saturno.
4 Mandatory spending, also referred to as direct spending, is provided mainly in substantive
law under the jurisdiction of the legislative committees, in contrast to discretionary
spending, which is provided in annual appropriations acts under the jurisdiction of the
House and Senate Appropriations Committees. Most direct spending programs are
entitlements, such as Social Security, Medicare, federal civilian and military retirement, and
unemployment compensation.

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context of budget resolution policies. The enforcement of budget resolution policies
regarding discretionary spending relies, for the most part, on the ability to raise points
of order against individual appropriations acts that violate the suballocations of
discretionary spending made pursuant to Section 302(b) of the 1974 act.
The budget reconciliation process is an optional procedure that operates as an
adjunct to the budget resolution process.5 The chief purpose of the reconciliation
process is to enhance Congress’s ability to change current law in order to bring
revenue, spending, and debt-limit levels into conformity with the policies of the
budget resolution. Under the reconciliation process, the House and Senate may
compel their committees to develop legislation changing existing law. Accordingly,
reconciliation can be a potent budget enforcement tool for a large portion of the
budget.
Reconciliation is a two-stage process. First, reconciliation instructions are
included in the budget resolution, directing the appropriate committees to develop
legislation achieving the desired budgetary outcomes. If the budget resolution
instructs more than one committee in a chamber, then the instructed committees
submit their legislative recommendations to their respective Budget Committees by
the deadline prescribed in the budget resolution; the Budget Committees incorporate
them into an omnibus budget reconciliation bill without making any substantive
revisions.
The second step involves consideration of the resultant reconciliation legislation
by the House and Senate under expedited procedures. Among other things, debate
in the Senate on any reconciliation measure is limited to 20 hours (and 10 hours on
a conference report) and amendments must be germane and not include extraneous
matter. The House Rules Committee typically recommends a special rule for the
consideration of a reconciliation measure in the House that places restrictions on
debate time and the offering of amendments.
In cases where only one committee has been instructed, the process allows that
committee to report its reconciliation legislation directly to its parent chamber, thus
bypassing the Budget Committee. In some years, budget resolutions included
reconciliation instructions that afforded the House and Senate the option of
considering two or more different reconciliation bills. Once the reconciliation
legislation called for in the budget resolution has been approved or vetoed by the
President, the process is concluded; Congress cannot develop another reconciliation
bill in the wake of a veto without first adopting another budget resolution containing
reconciliation instructions.
As an optional procedure, reconciliation has not been used in every year that the
congressional budget process has been in effect. Beginning with the first use of
reconciliation by both the House and Senate in 1980, however, reconciliation has
been used in most years. Congress has sent the President 19 reconciliation acts over
the years; 16 were signed into law and three were vetoed (and the vetoes not
5 See CRS Report RL33030, The Budget Reconciliation Process: House and Senate
Procedures, by Robert Keith and Bill Heniff Jr., for more information on the process.

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overriden). Table 1 provides a list of the 10 reconciliation acts presented to the
President from 1990 (for FY1991 and subsequent years) to the present. Seven of the
acts were signed into law and three were vetoed by President Bill Clinton.
The inclusion of reconciliation instructions in a budget resolution has not always
resulted in House or Senate consideration of a reconciliation measure under the
instructions. In 1996, the FY1997 budget resolution (H.Con.Res. 178) provided for
three separate reconciliation measures dealing with: (1) “Welfare and Medicaid
Reform and Tax Relief”; (2) “Medicare Preservation”; and (3) “Tax and
Miscellaneous Direct Spending Reforms.” A reconciliation measure reforming the
welfare system was enacted in 1996 (P.L. 104-193), but the House and Senate did not
act on the other two reconciliation measures provided for under the budget
resolution.
Further, not every reconciliation measure considered by one chamber has been
considered by the other chamber, or been regarded as a reconciliation measure when
considered by the other chamber. In 2000, for example, the House considered and
passed several reconciliation measures, but they were not considered by the Senate.6
Initial actions under reconciliation focused on deficit-reduction efforts.
Consequently, the procedures were employed to achieve spending reductions and
revenue increases on a net basis. In the latter part of the 1990s, particularly when
large surpluses emerged in the federal budget for the first time in decades, the focus
of reconciliation action was shifted to reducing revenues, which continued into the
2000s. In the FY2006 budget resolution, reconciliation directives entail reductions
in both revenues and spending.
6 See CRS Report RL30714 (archived), Congressional Action on Revenue and Debt
Reconciliation Measures in 2000, available upon request from the author.

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Table 1. Reconciliation Resolutions and Resultant
Reconciliation Acts: FY1991-FY2005
Fiscal
Budget
Date
Resultant Reconciliation Act(s)
Year
Resolution
Enacted
1991
H.Con.Res. 310
Omnibus Budget Reconciliation Act of
11-05-90
1990 (P.L. 101-508)
1994
H.Con.Res. 64
Omnibus Budget Reconciliation Act of
08-10-93
1993 (P.L. 103-66)
1996
H.Con.Res. 67
Balanced Budget Act of 1995 (H.R. 2491)
12-06-95
(vetoed)
1997
H.Con.Res. 178
Personal Responsibility and Work
08-22-96
Opportunity Reconciliation Act of 1996
(P.L. 104-193)
1998
H.Con.Res. 84
Balanced Budget Act of 1997 (P.L. 105-33)
08-05-97
Taxpayer Relief Act of 1997 (P.L. 105-34)
08-05-97
2000
H.Con.Res. 68
Taxpayer Refund and Relief Act of 1999
09-23-99
(H.R. 2488)
(vetoed)
2001
H.Con.Res. 290
Marriage Tax Relief Reconciliation Act of
08-05-00
2000 (H.R. 4810)
(vetoed)
2002
H.Con.Res. 83
Economic Growth and Tax Relief
06-07-01
Reconciliation Act of 2001 (P.L. 107-16)
2004
H.Con.Res. 95
Jobs and Growth Tax Relief Reconciliation
05-28-03
Act of 2003 (P.L. 108-27)
Source: Prepared by the Congressional Research Service.
The three most recent years in which Congress used omnibus reconciliation
legislation to achieve net deficit reduction occurred in the 1990s (one reconciliation
act each in 1990 and 1993, and two in 1997). Over a five-year period, according to
CBO, the Omnibus Budget Reconciliation Act of 1990 reduced the deficit by an
estimated $482 billion; the Omnibus Budget Reconciliation Act of 1993 reduced the
deficit by an estimated $433 billion; and in 1997, the Balanced Budget Act and the
Taxpayer Relief Act together reduced the deficit by an estimated $118 billion.
In all three years, as shown in Figure 1, the reconciliation acts relied on net
mandatory savings, amounting over five years to an estimated $75 billion in the 1990
act, $77 billion in the 1993 act, and $107 billion in the 1997 acts. With regard to
revenues, however, the 1990 and 1993 acts reflected estimated net increases over five
years of $158 billion and $241 billion, respectively, while the 1997 acts reflected an
estimated net reduction of $80 billion over five years.
Five-year net savings in discretionary spending attributable to statutory limits,
established in the 1990 act and extended in the 1993 and 1997 legislation, ranged

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from an estimated $69 billion (in the 1993 act), to $89 billion (in the 1997 acts), to
$190 billion (in the 1990 act). Although estimates of savings in discretionary
spending were included in the CBO assessments of the budgetary impact of the
reconciliation measures, the discretionary savings actually occurred as the annual
appropriations acts were enacted over the five-year period. Debt service savings
accounted for the remaining deficit reduction.
Figure 1. Budgetary Components of Selected Reconciliation
Acts
Sources: Prepared by the Congressional Research Service from data provided by the Congressional
Budget Office in: (1) The Economic and Budget Outlook: Fiscal Years 1992-1996, January 1991,
Table III-3, p. 66; (2) The Economic and Budget Outlook: An Update, September 1993, Table 2-2,
p. 29; and (3) The Economic and Budget Outlook: An Update, September 1997, Table 10, p. 36, and
Table 11, p. 40.
Note: The savings in discretionary spending shown here, which were attributable to statutory limits
established in the 1990 act and extended in the 1993 and 1997 legislation, were included in the CBO
assessments of the budgetary impact of the reconciliation measures, but the discretionary savings
actually occurred as the annual appropriations acts were enacted over the five-year period.

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The Budget Policy Context
The House and Senate, as stated earlier, are required under the Congressional
Budget Act of 1974 to reach agreement each year on a budget resolution that
establishes a budget plan for at least five fiscal years — the upcoming fiscal year and
the ensuing four fiscal years; changes in the current fiscal year may be made as well.
During the 2005 session, for example, the budget resolution developed by the House
and Senate covered FY2006 (which began on October 1, 2005) through FY2010, and
included revisions for FY2005.
Many factors influence the development of a budget resolution, particularly the
President’s annual budget submission toward the start of the session. Development
of the budget resolution, as well as the President’s budget, involves the consideration
of estimates of future spending, revenues, and the resultant deficit (or surplus) based
on current law. These estimates are referred to as baseline budget projections, as
prepared by the Congressional Budget Office (CBO), and current services estimates,
as prepared by the Office of Management and Budget (OMB). The impact of
congressional and presidential budgetary policies often is assessed by comparing
revenue, spending, or deficit or surplus levels under such policies to the CBO and
OMB baseline estimates.
This section provides background on budget policies for FY2006-FY2010, as
formulated in 2005, with respect to budget components targeted by the reconciliation
process — the deficit, mandatory outlays, revenues, and the public debt limit. For
each component, information is provided on baseline budget projections, the
President’s budget submission, and the congressional budget resolution.
Baseline Budget Projections
On January 25, 2005, CBO issued its annual report providing baseline budget
projections, The Budget and Economic Outlook: Fiscal Years 2006 to 2015. The
baseline budget projections were updated on March 8 in conjunction with the
development of the FY2006 budget resolution; the updated March baseline is used
in this report, unless otherwise indicated.7 Current services estimates were prepared
by OMB and submitted in February as part of the President’s FY2006 budget.8
The Deficit. During the period encompassing the five fiscal years most
recently completed before the current session began, FY2000-FY2004, the federal
government incurred both surpluses and deficits, as shown in Table 2.
7 The March baseline budget projections are presented in: Congressional Budget Office, An
Analysis of the President’s Budgetary Proposals for Fiscal Year 2006, March 2005, Table
1-10, p. 23.
8 Office of Management and Budget, Budget of the United States Government, Fiscal Year
2006, Analytical Perspectives, February 7, 2005, Chapter 25 (Current Services Estimates),
Table 25-1, pp. 389-404.

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Table 2. Total Deficit or Surplus: FY2000-FY2004
(amounts in $ billions)
2000
2001
2002
2003
2004
Current Dollars
236
128
-158
-378
-412
Constant FY2000 Dollars
236
125
-152
-354
-377
Percentage of GDP
2.4%
1.3%
-1.5%
-3.5%
-3.6%
Source: Office of Management and Budget, Budget of the United States Government, Fiscal Year
2006, Historical Tables, Feb. 7, 2005, Tables 1.1-1.3, pp. 21-26.
Measured in current dollars, the FY2000 surplus of $236 billion, which was the
largest surplus since the end of World War II, steadily eroded, becoming by FY2004
the largest deficit since the end of World War II, at $412 billion. Measured in
constant FY2000 dollars, the FY2004 deficit of $377 billion was still the largest post-
war deficit, but it was $35 billion less than the current-dollar deficit for that year. As
a percentage of Gross Domestic Product (GDP), the deficit rose from 1.5% for
FY2002 to 3.6% for FY2004. The largest post-war deficit, in current dollars,
occurred in FY1992, at $290 billion; as a percentage of GDP, the largest post-war
deficit occurred in FY1983, measuring 6.0%.
Both the CBO baseline budget projections and the OMB current services
estimates indicated a sustained but declining deficit path in the coming years. As
shown in Table 3, CBO projected that the FY2005 deficit would decline from the
prior year to $365 billion.
Table 3. CBO and OMB Baseline Deficit Projections:
FY2005-FY2010
(amounts in $ billions)
2006-
2005
2006
2007
2008
2009
2010
2010
Congressional Budget Office (March 2005 Baseline Budget Projections)
Deficit
-365
-298
-268
-246
-219
-201
-1,232
Deficit
-3.0
-2.3
-2.0
-1.7
-1.5
-1.3
—
(%age of GDP)
Office of Management and Budget (February 2005 Current Services Estimates)
Deficit
-390
-361
-303
-251
-229
-207
1,351
Sources: (1) Congressional Budget Office, An Analysis of the President’s Budgetary Proposals for
Fiscal Year 2006, March 2005, Table 1-10, p. 23; (2) Office of Management and Budget, Budget of
the United States Government, Fiscal Year 2006, Analytical Perspectives, Feb. 7, 2005, Chapter 25
(Current Services Estimates), Table 25-1, p. 390.
Note: Details may not add to totals due to rounding.

CRS-10
For the five-year period covering FY2006-FY2010, CBO projected a deficit of
$298 billion for FY2006, declining gradually to $201 billion for FY2010. Over five
years, the cumulative projected deficit amounted to $1.232 trillion. As a percentage
of GDP, the baseline deficit was projected to decline from 2.3% to 1.3% over this
period.
CBO noted that the statutory rules governing the preparation of baseline
projections likely resulted in an understatement of spending for military operations
in Iraq and Afghanistan by tens of billions of dollars, thereby understating the deficit
for FY2006, and possibly later years as well.
The OMB current services estimates included higher deficit levels than CBO for
each year, but followed the same trend of gradual decline reflected in the CBO
projections.9 OMB estimated a decrease in the deficit for FY2005 from the prior
year’s level, to $390 billion. Further, OMB projected the deficit to decline from $361
billion for FY2006 to $207 billion for FY2010. Over five years, the cumulative
projected deficit amounted to $1.351 trillion.
Mandatory Outlays. Under the CBO baseline budget projections, mandatory
outlays were projected to grow by $339 billion over the five-year period, from $1.385
trillion for FY2006 to $1.724 trillion for FY2010. In comparison, outlays for net
interest were projected to grow by $93 billion, from $211 billion for FY2006 to $304
billion for FY2010, and discretionary outlays were projected to grow by $65 billion,
from $915 billion for FY2006 to $980 billion for FY2010. As a percentage of GDP,
mandatory outlays were projected to increase by FY2010 to 10.9% (an increase of
0.2% from FY2006). Outlays for net interest were projected to increase to 1.9% (an
increase of 0.3%) and discretionary outlays were projected to decrease to 6.2% (a
decrease of 0.9%).
The OMB projections for mandatory outlays showed an increase over the five-
year period of $336 billion, nearly the same as the CBO projection. The OMB
projections, however, showed higher levels of mandatory outlays for each fiscal year,
rising to $1.752 trillion for FY2010.
Revenues. According to CBO, total revenues were projected to rise by $594
billion over the five-year period, from $2.213 trillion for FY2006 to $2.807 trillion
for FY2010. As a percentage of GDP, revenues were projected to increase by
FY2010 to 17.8% (an increase of 0.6% from FY2006).
OMB projected a greater increase in revenues, $663 billion, over the five-year
period (rising to $2.841 trillion for FY2010).
9 The OMB current services estimates, unlike the CBO baseline budget projections, were
not prepared strictly in accordance with the baseline rules established in the Budget
Enforcement Act (BEA). Accordingly, some of the differences in the amounts presented
by OMB and CBO are attributable to conceptual differences, as discussed in CBO, An
Analysis of the President’s Budgetary Proposals, ibid., p. 17.

CRS-11
Public Debt Limit. Finally, CBO projected the increases that would be
needed in the public debt subject to statutory limit, which currently stands at $8.184
trillion. Although the revised debt-limit levels were not identified in the baseline
projections published in March, the projections published in January indicated that
the debt-limit level would amount to $8.529 trillion for FY2006, rising steadily to
$10.847 trillion for FY2010.
The last four increases in the public debt limit, which occurred between 1997
and 2004, are shown in Table 4. The amount of increase ranged between $450
billion and $800 billion.
Table 4. Public Debt-Limit Increases: 1997-2004
(amounts in $ billions)
Date of
Public law
Amount of
Revised
increase
number
increase
limit
08-05-1997
P.L. 105-33
450
5,950
06-28-2002
P.L. 107-199
450
6,400
05-27-2003
P.L. 108-24
984
7,384
11-19-2004
P.L. 108-415
800
8,184
Source: Office of Management and Budget, Budget of the United States Government,
Fiscal Year 2006, Historical Tables, Feb. 7, 2005, Table 7.3, pp. 121-124.
President Bush’s FY2006 Budget
Initial Budget Submission (February). President George W. Bush
submitted his budget particularly for FY2006 to Congress on February 7, 2005. The
President’s budget focused on deficit reduction, noting his goal of reducing the $521
billion deficit originally projected for FY2004 (amounting to 4.5% of GDP) in half
by FY2009.10 Under the President’s proposals, as shown in Table 5, the deficit
would be reduced over a five-year period, from $390 billion for FY2006 (3.0% of
GDP) to $207 billion for FY2010 (1.3% of GDP), a level below the 40-year historical
average of 1.7% of GDP.
Compared to the OMB current services estimates, the President’s proposals
would increase the deficit in three years (by $29 billion for FY2006, $9 billion for
FY2007, and $4 billion for FY2009) while leaving it unchanged in the other two
years. In the net, the President’s proposals would increase the deficit by $42 billion
over the five-year period, compared to the current services baseline.
10 Office of Management and Budget, Budget of the United States Government, Fiscal Year
2006, “Overview of the President’s 2006 Budget,” p. 3.

CRS-12
Table 5. President Bush’s FY2006 Budget:
February 2005 Submission
(amounts in $ billions)
2006-
2006
2007
2008
2009
2010
2010
Deficit
-390
-312
-251
-233
-207
1,393
Deficit (Percentage of GDP)
-3.0
-2.3
-1.7
-1.5
-1.3
—
Mandatory Outlay Savings
-5
-9
-7
-9
-8
-39
Revenue Reduction
— a
-3
-21
-49
-32
-106
Source: Office of Management and Budget, Budget of the United States Government, Fiscal Year
2006, Feb. 7, 2005, Summary Tables S-1 and S-6, pp. 343 and 352-359.
Note: Details may not add to total due to rounding.
a. Less than $500 million.
The President’s budget recommendations encompassed three major policies.
First, discretionary spending would be restrained throughout the five-year period,
reflecting more than 150 reductions and terminations for FY2006 in non-defense
programs.11 For FY2006, discretionary budget authority would increase over the
prior year by 5% for the Defense Department and 3% for homeland security (non-
Defense Department) activities, and would decrease by 1% for all other operations
of the federal government. Overall, total discretionary budget authority for FY2006
would increase by 2.1%, a level lower than the expected rate of inflation. For
FY2007-FY2010, total discretionary budget authority would increase by between 1%
and 3% each year, well below recent averages.
Second, mandatory outlays would be reduced over the five-year period by $62
billion, reflecting programmatic reforms amounting to $55 billion and user fee
proposals amounting to $7 billion.12 Taking into account outlay increases of $23
billion associated with certain tax proposals (e.g., health tax credits), the net
reduction in mandatory outlays would amount to $39 billion over five years. The net
reduction would eliminate more than 10% of the $330-plus billion growth in
mandatory outlays projected by OMB and CBO in the baseline during FY2006-
FY2010.
Third, revenues would be reduced in the net by $106 billion during the five-year
period.13 Half of the revenue decreases during this period, $53 billion, would be
attributed to making permanent certain tax cuts enacted in the revenue reconciliation
11 President’s FY2006 Budget, ibid., Summary Table S-2, p. 344.
12 President’s FY2006 Budget, ibid., Summary Table S-6, pp. 348-353.
13 President’s FY2006 Budget, ibid., Summary Table S-7, pp. 354-359.

CRS-13
acts of 2001 and 2003, which dealt with the dividends and capital gains tax rate
structures, expensing for small business, and other matters.
President Bush’s February budget submission did not reflect additional
discretionary spending for operations in Iraq and Afghanistan for FY2006, nor did
it reflect his proposals regarding changes in the Social Security program involving
the establishment of individual accounts.
Mid-Session Review (July). On July 13, 2005, President Bush submitted
to Congress the required Mid-Session Review (MSR) of his FY2006 budget.14 The
MSR revealed some significant changes in the budget since the initial February
submission, as shown in Table 6. The annual deficit levels dropped by between $37
billion and $89 billion, and the cumulative five-year deficit dropped by $326 billion
(from $1.393 trillion to $1.067 trillion).
Table 6. President Bush’s FY2006 Budget:
July 2005 Mid-Session Review
(amounts in $ billions)
2006-
2006
2007
2008
2009
2010
2010
Deficit
-341
-233
-162
-162
-170
1,067
Deficit (Percentage of GDP)
-2.6
-1.7
-1.1
-1.1
-1.1
—
Mandatory Outlay Savings
-3
-9
-8
13
44
37
Revenue Reduction
— a
-2
-20
-50
-33
-104
Source: Office of Management and Budget, Budget of the United States Government, Fiscal Year
2006, Mid-Session Review, July 13, 2005, Table 1, p. 6, and Tables S-6 and S-7, pp. 28-35.
Note: Details may not add to total due to rounding.
a. Less than $500 million.
The $326 billion reduction in the cumulative deficit was explained by economic
and technical reestimates amounting to $464 billion in deficit reduction (mainly
higher revenues due to a strengthened economy and the resultant lowering of debt
service costs), offset in part by policy proposals involving $138 billion in higher
outlays (mainly Social Security personal accounts and additional war funding for
FY2006). The levels associated with the President’s recommendations regarding
savings in mandatory outlays in reductions in revenue were barely changed by the
Mid-Session Review. The five-year savings in mandatory outlays were reduced by
$2 billion, from $39 billion to $37 billion, and the five-year reduction in revenues
also was lowered by $2 billion, from $106 billion to $104 billion.
14 Office of Management and Budget, Budget of the United States Government, Fiscal Year
2006, Mid-Session Review, July 13, 2005.

CRS-14
The FY2006 Budget Resolution
Consideration of the FY2006 budget resolution began in the House and Senate
in March and came to a conclusion at the end of April. Following a brief legislative
history of the budget resolution, this section provides a summary of overall budget
resolution policies.
Legislative History. The House Budget Committee reported H.Con.Res. 95
on March 11, 2005 (H.Rept. 109-17), and the Senate Budget Committee reported
S.Con.Res. 18 on the same day, but without a written report.15
The House considered H.Con.Res. 95 on March 16 and 17 under the terms of
a special rule, H.Res. 154, which had been reported by the House Rules Committee
(H.Rept. 109-19, March 15, 2005). Four amendments made in order under the
special rule were offered and defeated: (1) an amendment in the nature of a
substitute, offered by Representative Jeb Hensarling on behalf of the Republican
Study Committee, by a vote of 102-320; (2) an amendment offered by Representative
David Obey, ranking minority member of the House Appropriations Committee, by
a vote of 180-242; (3) an amendment in the nature of a substitute, offered by
Representative Melvin Watt on behalf of the Congressional Black Caucus, by a vote
of 134-292; and (4) an amendment in the nature of a substitute, offered by
Representative John Spratt, ranking minority member of the House Budget
Committee, by a vote of 165-264.
After action on the amendments was completed, the House passed H.Con.Res.
95 by a vote of 218-214.
The Senate began consideration of S.Con.Res. 18 by unanimous consent on
March 14. Consideration of the measure continued on March 15 and 16, culminating
with its passage, as amended, on March 17, by a vote of 51-49. The Senate
considered about 70 amendments, agreeing to dozens of them.
The House and Senate convened a conference on their competing versions of
the budget resolution, with H.Con.Res. 95 serving as the conference vehicle. The
conferees met on April 27 and the conference report was filed the next day.16 The
House agreed to the conference report on April 28, by a vote of 214-211, and the
Senate agreed to it the same day, by a vote of 52-47.
Overall Budget Resolution Policies. In terms of overall budget resolution
policies, the House and Senate began the conference from positions of fundamental
agreement. The budget resolutions reported by the House and Senate Budget
15 House Budget Committee, Concurrent Resolution on the Budget — Fiscal Year 2006 (to
accompany H.Con.Res. 95), H.Rept. 109-17, March 11, 2005. The Senate Budget
Committee issued a committee print, Concurrent Resolution on the Budget, FY 2006
(committee print to accompany S.Con.Res. 18), S.Prt. 109-18, 2005, in lieu of a written
report.
16 Concurrent Resolution on the Budget for Fiscal Year 2006, conference report to
accompany H.Con.Res. 95, H.Rept. 109-62, April 28, 2005.

CRS-15
Committees hewed fairly closely to the general contours of the President’s budget
proposals. Both resolutions employed a five-year time frame covering FY2006-
FY2010, with revisions included for the then current fiscal year, FY2005, as well.
The three main pillars of budget policy, as reflected in the reported budget
resolutions, involved significant restraint on the growth of discretionary spending,
a more modest curtailment of the growth of mandatory spending, and further
reductions in revenues, although at a more modest level compared to the actions
taken in 2001 and 2003.
While the House agreed to the budget resolution reported by the House Budget
Committee without change, the Senate revised the version reported by its Budget
Committee. Although dozens of amendments were adopted in the Senate, many of
them involved precatory language (i.e., sense-of-the-Senate statements) or procedural
matters rather than changes in spending or revenue levels. Some significant changes
were made in budget levels, including to reconciliation instructions (as discussed
below), but the basic outline of budget policy recommended by the Senate Budget
Committee remained intact.
The positions of the House, the Senate, and the final conference agreement
regarding several key components of the budget plan are presented in Table 7. With
regard to the cumulative deficit over the five-year period, the differences between the
House ($1.359 trillion) and the Senate ($1.450 trillion) were relatively modest; the
conference agreement essentially split the difference ($1.400 trillion). House-Senate
differences regarding total mandatory outlays and total revenues for the five-year
period were even more narrow. Again, the conference agreement essentially split the
difference ($9.401 trillion) with respect to total mandatory outlays over five years.
In the case of total revenues, the House-Senate difference was negligible ($23
billion), and the conference agreement ($12.440 trillion) was within $1 billion of the
House position.
Table 7. Selected Components of the FY2006 Budget
Resolution: House, Senate, and Conference Levels
(amounts in $ billions)
House
Senate
Conference
Deficit for FY2006
-376
-368
-383
Deficit for FY2006-FY2010
-1,359
-1,450
-1,400
Total Mandatory Outlays for FY2006-FY2010
9,374
9,432
9,401
Total Revenues for FY2006-FY2010
12,441
12,418
12,440
Source: Conference report to accompany H.Con.Res. 95, Concurrent Resolution on the Budget for
Fiscal Year 2006, H.Rept. 109-62, Apr. 28, 2005, pp. 50-67.

CRS-16
Reconciliation Directives in the
FY2006 Budget Resolution
The FY2006 budget resolutions reported by the House and Senate Budget
Committees, and adopted by the House and Senate, included reconciliation directives
for multiple reconciliation measures.
Initial House Action
The House Budget Committee reported the FY2006 budget resolution,
H.Con.Res. 95, on March 11, 2005. As reported, the budget resolution contained two
sets of reconciliation instructions to House committees in Section 201 (see Table 8).
Table 8. Initial Reconciliation Instructions: House
(amounts in $ billions)
Reported and Passed
House Committee
FY2006-
FY2006
FY2010
Spending (Mandatory outlays)
(submission date: September 16)
Agriculture
-0.797
-5.278
Education and the Workforce
-2.097
-21.410
Energy and Commerce
-0.630
-20.002
Financial Services
-0.030
-0.270
Judiciary
-0.123
-0.603
Resources
-0.096
-1.413
Transportation and Infrastructure
-0.012
-0.103
Veterans’ Affairs
-0.155
-0.798
Ways and Means
-3.907
-18.680
Total
-7.847
-68.557
Revenues
(reporting date: June 24)
Ways and Means Committee
-16.623
-45.000
Source: House Budget Committee, Concurrent Resolution on the Budget — Fiscal Year 2006 (to
accompany H.Con.Res. 95), H.Rept. 109-17, Mar. 11, 2005, pp. 69-71 and 136-137.
Section 201(a) instructed nine House committees to submit reconciliation
recommendations to the Budget Committee that would reduce mandatory outlays by
$7.847 billion in FY2006 and $68.557 billion in FY2006-FY2010. In addition,
Section 201(b) instructed the Ways and Means Committee to report a reconciliation

CRS-17
bill reducing revenues by not more than $16.623 billion in FY2006 and $45.000
billion in FY2006-FY2010. The net effect of the spending and revenue reconciliation
instructions on the deficit estimates was a decrease of $23.557 billion over the five-
year period.
The House Budget Committee contemplated a schedule in which the revenue
reconciliation bill would be considered first, before the August recess, and the
spending reconciliation bill would be considered second, after the August recess.
The submission deadline for the spending reconciliation recommendations was
September 16, 2005; the reporting deadline for the revenue reconciliation measure
was June 24.
Each of the four amendments made in order during initial House consideration
of the budget resolution would have modified or eliminated the reconciliation
instructions for FY2006-FY2010 recommended by the House Budget Committee.
The Hensarling amendment would have increased the savings in mandatory outlays
to more than $125 billion and the revenue reductions to about $106 billion; the Obey
amendment would have added revenue increases of nearly $26 billion, intended to
be targeted at wealthy taxpayers; and the Watt and Spratt amendments would have
eliminated the reconciliation instructions completely. As indicated earlier, all of the
amendments were defeated; subsequently, the House agreed to the budget resolution
without having made any changes in the reconciliation instructions as reported by the
Budget Committee.
Initial Senate Action
The Senate Budget Committee reported its version of the FY2006 budget
resolution, S.Con.Res. 18, on March 11, 2005.17 The reconciliation instructions
included in the budget resolution as reported by the Senate Budget Committee
differed in several respects from the instructions in the budget resolution agreed to
by the House (see Table 9).
First, Section 201(a) of S.Con.Res. 18 included instructions to seven committees
to achieve savings in mandatory outlays of $4.244 billion in FY2006 and $32.042
billion in FY2006-FY2010, less than half the five-year amount recommended by the
House. Second, Section 201(b) of the measure included instructions to the Senate
Finance Committee to reduce revenues by $14.939 billion in FY2006 and $70.154
billion in FY2006-FY2010, about $25 billion more over five years than the amount
recommended by the House. Third, Section 201(c) of the measure recommended an
increase in the statutory limit on the public debt of $446.464 billion, an issue the
House did not address in reconciliation. The net effect on the deficit estimates of the
spending and revenue reconciliation instructions reported by the Budget Committee
was an increase of $23.557 billion over the five-year period.
17 The committee issued a print in lieu of a report: Senate Budget Committee, Concurrent
Resolution on the Budget, Fiscal Year 2006 (committee print to accompany S.Con.Res. 18),
S.Prt. 109-18, 2005.

CRS-18
Table 9. Initial Reconciliation Instructions: Senate
(amounts in $ billions)
Reported
Passed
FY2006-
FY2006-
Senate Committee
FY2006
FY2010
FY2006
FY2010
Spending (mandatory outlays)
(submission date: June 6)
Agriculture, Nutrition, and Forestry
-0.171
-2.814
-0.171
-2.814
Banking, Housing, and Urban
-0.030
-0.270
-0.030
-0.270
Affairs
Commerce, Science, and
-0.008
-2.576
-0.008
-2.576
Transportation
Energy and Natural Resources
-0.033
-2.658
-0.033
-2.658
Environment and Public Works
-0.014
-0.112
-0.014
-0.112
Finance
-1.784
-15.036
0
0
Health, Education, Labor, and
-2.204
-8.576
-2.204
-8.576
Pensions
Total
-4.244
-32.042
-2.460
-17.006
Revenues
(reporting date: September 7)
Finance Committee
-14.939
-70.154
-19.016
-128.580
Statutory Debt Limit
(reporting date: September 16)
Finance Committee
+446.464
+446.464
Sources: (1) Senate Budget Committee, Concurrent Resolution on the Budget, Fiscal Year 2006
(committee print to accompany S.Con.Res. 18), S.Prt. 109-18, 2005, p. 43; and (2) S.Con.Res. 18, as
reported, Mar. 11, 2005, pp. 28-30; and (3) S.Con.Res. 18, as passed by the Senate, Mar. 17, 2005,
pp. 28-30.
Finally, the Senate Budget Committee proposed to reverse the timing of
legislative action compared to the House’s recommendation, imposing an earlier
submission date for spending reconciliation recommendations (June 6, instead of
September 16 in the House) and a later reporting date for revenue reconciliation
legislation (September 7, instead of June 24 in the House). The reporting date for the
reconciliation measure pertaining to the public debt limit was September 16.
The Senate, unlike the House, agreed to amendments that changed the
reconciliation instructions recommended by the Budget Committee. On March 17,
the Senate adopted three amendments that revised both the spending and revenue
reconciliation instructions. First, the Senate adopted Bingaman (for Smith)
Amendment #204, by a vote of 52-48. The amendment struck the spending
reconciliation instructions to the Finance Committee in Section 201(a)(6) and added

CRS-19
to the budget resolution a provision establishing a reserve fund of $1.5 million for the
creation of a 23-member Bipartisan Medicaid Commission. It had been widely
assumed that the Finance Committee would consider reductions in Medicaid
spending in order to meets its instruction of $15.036 billion in savings over five
years; consequently, the amendment was seen as a means of protecting the Medicaid
program from spending cuts.
The second amendment that the Senate adopted on March 17 was Bunning
Amendment #241, by a vote of 55-45. The amendment, which increased the revenue
reduction under reconciliation by $4.8 billion for FY2006 and $63.9 billion for
FY2006-FY2010, was characterized by Senator Bunning as accommodating the
repeal of a 1993 increase in the taxation of Social Security benefits.
Finally, the Senate adopted on March 17 Kennedy Amendment #177, as
modified, by a vote of 51-49. The amendment decreased the instruction to reduce
revenues by $723 million for FY2006 and $5.474 billion for FY2006-FY2010,
thereby offsetting spending increases for education programs.
The Senate also considered and rejected several other amendments that would
have modified the reconciliation instructions. In particular, the Senate rejected
Cantwell Amendment #168, by a vote of 49-51. The amendment, which would have
struck the instruction in Section 201(a)(4) to the Energy and Natural Resources
Committee to reduce outlays by $2.658 billion over five years, was characterized by
Senator Cantwell as precluding the opening of the Arctic National Wildlife Refuge
(ANWR) to oil exploration.
In the net, the amendments that the Senate adopted decreased the total outlay
reduction over five years by $15.036 billion, from the reported level of $32.042
billion to $17.006 billion, and increased the total revenue reduction over five years
by $58.426 billion, from the reported level of $70.154 billion to $128.580 billion.
By scaling back the outlay reductions and boosting the revenue reductions required
by the reconciliation instructions, the Senate dramatically changed the net effect of
reconciliation on the total deficit estimate over the five-year period. While the
reconciliation instructions in the budget resolution as reported by the Senate Budget
Committee would have increased the deficit in the net by about $38 billion over five
years, the instructions in the resolution as passed by the Senate would have increased
the deficit in the net by about an additional $73 billion over that period, or about
$111 billion in total.
Action on the Conference Report
The conferees reported their agreement on H.Con.Res. 95 on April 28, 2005.
In addition to the separate spending and revenue reconciliation measures that each
chamber had proposed, the conferees agreed to a third reconciliation measure, on the
public debt limit, as had been proposed by the Senate.
In the case of the spending and revenue reconciliation measures, the conferees
found a middle ground between the positions of the two chambers (see Table 10),
which was close to the levels reported by the Senate Budget Committee.

CRS-20
Table 10. Reconciliation Instructions for FY2006-FY2010:
Summary of House, Senate, and Conference Amounts
(amounts in $ billions)
Reconciliation Instructions
House-
Senate-
Conference
for FY2006-FY2010
Passed
Passed
Agreement
Changes in Mandatory Outlays
-68.557
-17.006
-34.658
Changes in Revenues
-45.000
-128.580
-70.000
Change in Statutory Debt Limit
[none]
+446.464
+781.000
Net Effect on Deficit
-23.557
+111.574
+35.342
Source: Concurrent Resolution on the Budget for Fiscal Year 2006 (conference report to accompany
H.Con.Res. 95), H.Rept. 109-62, Apr. 28, 2005, pp. 11-14 and 68-71.
Note: Negative sign (-) denotes a decrease; positive sign (+) denotes an increase.
With respect to savings in mandatory outlays, the conferees recommended
reconciliation instructions to eight House and eight Senate committees, requiring
total savings of $34.658 billion over FY2006-FY2010.18 This was about half the
amount of savings recommended by the House ($68.557 billion) and about twice the
amount of savings recommended by the Senate ($17.006 billion). The House’s
reconciliation instructions had involved nine House committees and the Senate’s
instructions had involved seven Senate committees; in the final instructions, the
House Veterans’ Affairs Committee was dropped and the Senate Judiciary
Committee was added.
Table 11 presents more detailed information on the reconciliation instructions
included in the conference agreement.
18 For two committees, the House Education and Workforce Committee and the Senate
Health, Education, Labor, and Pensions Committee, the period of savings includes FY2005
as well.

CRS-21
Table 11. Reconciliation Instructions in the Conference
Agreement on the FY2006 Budget Resolution
Amount
($ billions)
Committee
FY2006-
FY2006
FY2010
Spending (mandatory outlays)
(submission date: September 16)
House Agriculture
-0.173
-3.000
House Education and the Workforce a
-0.992
-12.651
House Energy and Commerce
-0.002
-14.734
House Financial Services
-0.030
-0.470
House Judiciary
-0.060
-0.300
House Resources
—
-2.400
House Transportation and Infrastructure
-0.012
-0.103
House Ways and Means b
-0.250
-1.000
Total for House Committees
-1.519
-34.658
Senate Agriculture, Nutrition, and Forestry
-0.173
-3.000
Senate Banking, Housing, and Urban Affairs
-0.030
-0.470
Senate Commerce, Science, and Transportation
-0.010
-4.810
Senate Energy and Natural Resources
—
-2.400
Senate Environment and Public Works
-0.004
-0.027
Senate Finance
—
-10.000
Senate Health, Education, Labor, and Pensions a
-1.242
-13.651
Senate Judiciary
-0.060
-0.300
Total for Senate Committees
-1.519
-34.658
Revenues
(reporting date: September 23)
House Ways and Means Committee
-11.000
-70.000
Senate Finance Committee
-11.000
-70.000
Statutory Debt Limit
(reporting date: September 30)
House Ways and Means Committee
+781.000
Senate Finance Committee
+781.000
Source: Concurrent Resolution on the Budget for Fiscal Year 2006 (conference report to accompany
H.Con.Res. 95), H.Rept. 109-62, Apr. 28, 2005, pp. 11-14 and 68-71.
a. The reconciliation instructions to the House Education and the Workforce Committee and the
Senate Health, Education, Labor, and Pensions Committee for FY2006 and FY2006-FY2020
also encompass FY2005.
b. The reconciliation instructions to the Ways and Means Committee are “to reduce the deficit,”
which may include reductions in outlays, increases in revenues, or a combination of the two.

CRS-22
Subsequent Changes in Budget Policy
Affecting Reconciliation
Beginning in September 2005, Congress and the President have enacted various
measures intended to provide relief to the victims of Hurricane Katrina and Hurricane
Rita and to fund reconstruction activities.19 Legislative efforts in this area have
continued into 2006. Republican leaders in the House and Senate and others
expressed concern about the impact of these relief and reconstruction efforts on the
federal deficit and developed plans to enact offsets to some of the relief costs.
On October 6, 2005, Speaker of the House J. Dennis Hastert issued a press
release on a plan developed by House Republican leaders.20 In commenting on the
plan, Speaker Hastert noted:
Hurricanes Katrina and Rita have dealt a severe blow to our nation, both in terms
of human and economic losses. We can and will recover, but it will require some
serious belt-tightening throughout the federal government. House Republican
leadership, Committee Chairmen and key members of the conference have
worked together to come up with a proposal we believe can accomplish this task.
In order to maintain our commitment to deficit reduction, we are proposing to
move a mid-session Budget Amendment for the first time in almost 30 years
(1977). The Amendment will increase the total amount of savings which can
help pay for these unexpected costs.
The “Hastert Plan” has four elements, according to the Speaker’s press release:
! an increase of $15 billion or more in the mandatory savings required
to be achieved through the budget reconciliation process, from about
$35 billion for FY2006-FY2010 to at least $50 billion for that
period, as well as the “dollar-for-dollar” offset of any new
mandatory spending for disaster relief included in reconciliation
legislation;
! continued restraint on discretionary spending, including an
additional across-the-board cut in discretionary spending for
FY2006;
! packages of additional rescissions to further help offset
reconstruction costs; and
19 Hurricane Katrina made landfall in Louisiana, Mississippi, and Alabama on August 29,
2005 (after impacting Florida on August 25), and Hurricane Rita made landfall in Louisiana
and Texas on September 24. CRS reports on different aspects of this issue are listed on the
CRS Web page [http://www.crs.gov] under the Current Legislative Issues term “Disaster —
Hurricanes.”
20 Speaker’s Press Office, Speaker Hastert Comments on Republicans’ Initial Spending Cut
Proposal, October 6, 2005, available on the Web at [http://www.speaker.gov].

CRS-23
! the permanent elimination, through “deauthorization,” of programs
already “zeroed out” in the current appropriations process.21
As announced by the Speaker, the plan did not indicate what portion or amount
of costs would be offset. The Speaker’s press release stated that a first step in
implementing the plan could be the consideration of a revised budget resolution for
FY2006.22 House action on a revised budget resolution tentatively was scheduled for
Thursday, October 20, but action was postponed and was not rescheduled.23 The
House and Senate Budget Committees may mark up the budget resolution for
FY2007 as early as March 2006. In some past years, the budget resolution has
included revised figures for the fiscal year in progress.
According to an assessment made by the Senate Budget Committee on January
18, 2006, the five-year costs stemming from these measures, covering FY2006-
FY2010, are estimated at $98.921 billion. Most of the relief costs — $62.3 billion
— are attributable to two emergency supplemental appropriations acts, P.L. 109-61
and P.L. 109-62. The Senate Budget Committee’s assessment does not reflect
several measures still pending in the House or Senate or expected to be considered
at a later time. These measures could increase the costs for hurricane-related relief
by tens of billions of dollars.
In the meantime, seven of the eight House committees were informed by the
Republican leadership that they should work toward achieving, in the aggregate, an
additional $15 billion in five-year savings through their reconciliation
recommendations. Although the increased savings amounts for each committee were
not announced officially, media reports indicated that the House Ways and Means
and Education and Workforce Committees were expected to achieve most of the
increased savings, roughly an additional $7 billion and $5 billion, respectively.24
By informal agreement, the schedule of reconciliation actions in the House was
delayed to accommodate these developments.
In the Senate, the Republican leadership announced its support for enacting
offsets, but did not specify a comprehensive plan to do so or indicate any intent to
consider a revised budget resolution. On September 12, Senate Majority Leader Bill
Frist and Senate Budget Committee Chairman Judd Gregg issued a joint statement
21 For more information on this topic, see CRS Report RL33127, Speaker Hastert’s Plan to
Offset Spending: A Procedural Perspective, by Robert Keith.
22 Procedures for revising a budget resolution are discussed in CRS Report RL33122,
Congressional Budget Resolutions: Revisions and Adjustments, by Robert Keith.
23 See (1) “Leaders Delay Budget Vote in House,” by Susan Davis and Peter Cohn,
CongressDaily AM, October 20, 2005; (2) “Senate Panel Looks to Finish Cuts October 24;
Blunt Plans to Try Again on Amendment,” by Jonathan Nicholson, BNA Daily Report for
Executives, no. 203, October 21, 2005, p. G-9; and (3) “Blunt Won’t Gamble on Budget
Votes,” by Alexander Bolton, The Hill, October 21, 2005.
24 See, for example, “House Looking to Two Committees to Boost Reconciliation Spending
Cut Totals,” by Jonathan Nicholson, in BNA’s Daily Report for Executives, no. 206,
October 26, 2005, p. G-14.

CRS-24
indicating that, in order to allow “the Congress and the committees to address the
immediate concerns related to the recent hurricane and not be encumbered by budget
reconciliation requirements in the near term,” the Senate Budget Committee would
not meet to markup the spending reconciliation bill until October 26.25
On September 27, Senate Majority Leader Frist, Budget Committee Chairman
Gregg, and other members of the Republican leadership, wrote to the chairmen of the
committees subject to reconciliation instructions, asking them to recommend
spending reductions “above and beyond” those already called for under the
instructions as part of the offset efforts. In addition, the leadership also sent letters
to the chairmen of non-reconciled committees, encouraging them to find savings
within their committee’s jurisdiction as well.26 Specific amounts of additional
savings for the committees were not identified in the correspondence.
As discussed in the next section, the spending reconciliation bills reported by
the House and Senate Budget Committees proposed net savings substantially greater
than were required, but the savings were scaled back somewhat during further
legislative action. According to CBO, the net savings over five years attributed to the
conference agreement on the spending reconciliation bill amount to $39.523 billion
(assuming the correction of two apparent drafting errors), which is nearly $5 billion
more than required under the reconciliation instructions in the FY2006 budget
resolution.
Additional savings were achieved in appropriations legislation enacted late in
2005, including a government-wide, one-percent across-the-board spending cut in the
Defense Appropriations Act for FY2006 (Division B, Section 3801 of P.L. 109-148,
enacted into law on December 30, 2005).
Reconciliation Legislation in 2005:
Summary and Legislative History
Under the revised schedule for reconciliation actions, the House and Senate
passed the spending reconciliation bill in November, reached a conference agreement
in December, and finally cleared the measure for the President on February 1;
President Bush signed the Deficit Reduction Act of 2005 into law (P.L. 109-171) on
February 8. Both chambers passed the revenue reconciliation bill late in 2005,
reached a conference agreement in May 2006, and cleared the measure for the
President on May 11; President Bush signed the Tax Increase Prevention and
Reconciliation Act of 2005 into law (P.L. 109-222) on May 17, 2006. The need to
consider a debt-limit reconciliation bill has been obviated by the enactment of
another measure (P.L. 109-182).
25 The statement is available on the website of the Senate Budget Committee (Republican)
at [http://www.senate.gov/~budget/republican/] under “News Room.”
26 Examples of the letters, as well as a September 28, 2005 press release issued by Budget
Committee Chairman Gregg on the subject, are available on Senate Budget Committee
website, cited above.

CRS-25
Spending Reconciliation Legislation
Initial Senate Action. The Senate Budget Committee met on October 26,
2005, and ordered the omnibus spending reconciliation bill, S. 1932 (the Deficit
Reduction Omnibus Reconciliation Act of 2005), reported by a party-line vote of 12-
10. The bill was reported the following day, without a written report.27
According to the Senate Budget Committee, the submissions from the instructed
committees exceeded the outlay savings required by the instructions in the aggregate
by $4.649 billion for FY2006 and $4.456 billion for FY2006-FY2010. The FY2006
outlay savings totaled $6.168 billion, compared to instructions totaling $1.519
billion; the FY2006-FY2010 outlay savings totaled $39.114 billion, compared to
instructions totaling $34.658 billion. All eight of the instructed committees met or
exceeded their instructions for FY2006 and exceeded their instructions for FY2006-
FY2010. A summary of CBO’s scoring of the savings in S. 1932, as reported by
committee (and as passed), is presented in Table 12.
The Senate began consideration of S. 1932 on October 31. After four days of
consideration, the Senate passed the bill on November 3, by a vote of 52-47. During
Senate consideration of the bill, 20 amendments were adopted, nine were rejected,
and four were withdrawn; additionally, nine amendments fell under points of order.
Ten of the 20 amendments that were adopted had a significant budgetary impact,
including three with an outlay impact in FY2006-FY2010 of about $1 billion or
more: (1) Enzi Amendment #2352, which increased education spending by $2.555
billion; (2) Bingaman Amendment #2365, which reduced Medicaid spending by
$1.194 billion; and (3) Feinstein Amendment #2411, which increased Medicaid
spending by $950 million.28 In the net, the amendments adopted by the Senate
reduced the savings from the reported level by $746 million in FY2006 (to $5.422
billion) and by $4.470 billion in FY2006-FY2010 (to $34.644 billion).
As shown in Table 12, the outlay savings in the bill as passed by the Senate
exceeded the instructed level for FY2006 by $3.963 billion and virtually matched the
instructed level for FY2006-FY2010 (falling below by $14 million).29
Initial House Action. The House Budget Committee met on November 3 to
consider the spending reconciliation bill and ordered it reported by a party-line vote
of 21-17. The bill, H.R. 4241, the Deficit Reduction Act of 2005, was reported on
November 7 (H.Rept. 109-276). During the committee markup of the measure
27 In lieu of a written report, the Senate Budget Committee issued a print, Deficit Reduction
Omnibus Reconciliation Act of 2005, S.Prt. 109-37, October 2005.
28 The impact of the amendments is assessed in: Congressional Budget Office, Letter to the
Honorable Judd Gregg, November 8, 2005, Table 2.
29 The estimated outlay savings for the bill, as passed by the Senate, reflect in Title I
(Committee on Agriculture, Nutrition, and Forestry) the enactment of H.R. 2744, the
Agriculture, Rural Development, Food and Drug Administration, and Related Agencies
Appropriations Act, 2006 (which became P.L. 109-97 on November 10, 2005).

CRS-26
(which, under the rules of the reconciliation process, does not allow substantive
amendments), the committee rejected six motions offered by Democratic Members
to direct the chairman to request of the House Rules Committee that certain
amendments be made in order during consideration of the Deficit Reduction Act of
2005, and that the special rule for consideration of the bill not allow its consideration
until after the House has considered the revenue reconciliation bill.
Table 12. CBO Scoring of Spending Reconciliation Legislation:
Senate Reported and Passed (By Title/Committee)
(outlays in $ billions)
Instructions
Reported
Passed
FY2006-
FY2006-
FY2006-
FY2006
FY2006
FY2006
FY2010
FY2010
FY2010
Agriculture, Nutrition,
-0.173
-3.000
-0.196
-3.014
-0.108
-2.663
and Forestry
Banking, Housing, and
-0.030
-0.470
-0.030
-0.570
-0.030
-0.570
Urban Affairs
Commerce, Science,
-0.010
-4.810
-0.010
-5.984
-0.010
-5.311
and Transportation
Energy and Natural
—
-2.400
0.000
-2.501
0.000
-2.501
Resources
Environment and
-0.004
-0.027
-0.004
-0.030
-0.004
-0.030
Public Works
Finance
—
-10.000
-0.819
-10.006
-1.691
-9.299
Health, Education,
-1.242
-13.651
-5.015
-16.431
-3.494
-13.874
Labor, and Pensions
Judiciary
-0.060
-0.300
-0.094
-0.578
-0.085
-0.394
Total
-1.519
-34.658
-6.168
-39.114
-5.422
-34.644
Sources: (1) Senate Budget Committee, Deficit Reduction Omnibus Reconciliation Act of 2005, S.Prt.
109-37, October 2005, pp. 8-12; and (2) Congressional Budget Office, Letter to the Honorable Judd
Gregg, Nov. 8, 2005, Table 1.
Notes: Details may not add to totals due to rounding. The reconciliation instructions to the Health,
Education, Labor, and Pensions Committee for FY2006 and FY2006-FY2020 also encompassed
FY2005. The estimated savings for Title I (Committee on Agriculture, Nutrition, and Forestry), as
passed by the Senate, reflect enactment of H.R. 2744, the Agriculture, Rural Development, Food and
Drug Administration, and Related Agencies Appropriations Act, 2006 (which became P.L. 109-97 on
Nov. 10, 2005).

CRS-27
According to scoring by CBO, the reconciliation submissions of each of the
eight instructed committees, as shown in Table 13, met or exceeded (substantially
exceeded, in some instances) its instructions for FY2006-FY2010. The submissions
of two committees in particular, Education and Workforce and Ways and Means,
exceeded the required five-year savings by $7.771 billion and $7.048 billion,
respectively. The combined savings from all eight committees, amounting to
$53.918 billion over five years, exceeded the total instructed levels by $19.260
billion, more than achieving the leadership’s request for an additional $15 billion in
outlay savings.
Table 13. CBO Scoring of Spending Reconciliation Legislation:
House Reported and Passed (By Title/Committee)
(outlays in $ billions)
Instructions
Reported
Passed
House
FY2006-
FY2006-
FY2006-
Committee
FY2006
FY2010
FY2006
FY2010
FY2006
FY2010
Agriculture a
-0.173
-3.000
-0.567
-3.650
-0.555
-3.503
Education and the
Workforce b
-0.992
-12.651
-7.678
-20.422
-7.678
-20.422
Energy and
-0.002
-14.734
+2.832
-17.066
+2.852
-16.576
Commerce
Financial Services
-0.030
-0.470
-0.030
-0.470
-0.030
-0.470
Judiciary
-0.060
-0.300
-0.076
-0.428
-0.076
-0.428
Resources
—
-2.400
-0.006
-3.678
-0.006
-0.286
Transportation
-0.012
-0.103
-0.030
-0.156
-0.030
-0.156
and Infrastructure
Ways and Means
-0.250
-1.000
-0.100
-8.048
-0.100
-8.048
Total
-1.519
-34.658
-5.655
-53.918
-5.623
-49.889
Sources: (1) Congressional Budget Office, “Cost Estimates for Reconciliation Legislation,” providing
estimates for committee-reported legislation, and (2) Letter from CBO Director Holtz-Eakin to Budget
Committee Chairman Nussle, Nov. 18, 2005, Table 1, both available on the CBO website at
[http://www.cbo.gov/]
a. The estimates for the House Agriculture Committee reflect scorekeeping adjustments for
commodity programs made by the House Budget Committee affecting FY2010 and beyond.
b. The reconciliation instructions to the House Education and the Workforce Committee for FY2006
and FY2006-FY2020 also encompassed FY2005.

CRS-28
The House tentatively was scheduled to consider the spending reconciliation bill
on November 10 pursuant to a special rule reported by the House Rules Committee.
The special rule, H.Res. 542 (H.Rept. 109-281), which was approved by the Rules
Committee on November 9 by voice vote, provided (under a self-executing feature)
for the adoption of amendments modifying the language regarding food stamp
eligibility and striking provisions dealing with the Arctic National Wildlife Reserve
(ANWR) and oil and gas leasing in the Outer Continental Shelf (OCS), and barred
the consideration of any further amendments. Neither the rule nor the bill were
considered at that time, however. On November 17, the House tabled H.Res. 542
pursuant to the terms of a special rule (H.Res. 558) on a further continuing resolution
for FY2006 (H.J.Res. 72).
On November 17, the House Rules Committee met and reported a second
special rule for the consideration of the spending reconciliation bill. The special rule,
H.Res. 560 (H.Rept. 109-303), provided (under a self-executing feature) for the
adoption of amendments modifying the language regarding food stamp eligibility and
striking provisions dealing with ANWR and OCS leasing, as in the first rule, and
modifying the Medicaid language, and barred the consideration of any further
amendments. Later that day, the House considered and passed H.Res. 560 by voice
vote, after agreeing to an amendment offered by Representative Adam Putnam. The
Putnam amendment provided for the incorporation of further amendments into the
bill under a self-executing feature of the special rule.
Later on November 17, the House considered H.R. 4241 under the closed rule,
passing the bill early on November 18, by a vote of 217-215. Beyond the
amendments incorporated automatically pursuant to H.Res. 560, no amendments
were considered. According to CBO, the modifications made pursuant to H.Res. 560
reduced the overall outlay savings in the bill to $49.889 billion over five years (see
Table 13).30
In order to prepare for conference action, the House then immediately passed
the Senate companion bill, S. 1932, without objection, after amending it to substitute
the House-passed language in H.R. 4241.
Action on the Conference Report. On December 14, the Senate disagreed
to the House amendment to S. 1932 and requested a conference. Seven different
motions to instruct conferees were offered and agreed to that day: DeWine (71-20),
Kohl (75-16), Harkin (66-26), Baucus (75-16), Carper (64-27), Kennedy (83-8), and
Reed (63-28). Senate conferees were appointed the next day.
On December 16, the House agreed to the request for a conference and
appointed conferees. A motion to instruct conferees, offered by Representative John
30 Letter from CBO Director Holtz-Eakin to Budget Committee Chairman Nussle,
November 18, 2005, Table 1, available on the CBO website at [http://www.cbo.gov/] The
estimate reflects scorekeeping adjustments for agricultural commodity programs made by
the House Budget Committee that affect FY2010 and beyond. See also the document on the
House Budget Committee’s website [http://www.house.gov/budget/], The Deficit Reduction
Act of 2005 As Amended by the Manager’s Amendment, November 17, 2005.

CRS-29
Spratt, ranking minority member of the House Budget Committee, was agreed to by
a vote of 246-175.
The conference report (H.Rept. 109-362) on S. 1932, which was renamed the
Deficit Reduction Act of 2005, was reported on December 19 (during the legislative
day of December 18).31 Appendix A provides a contents listing of S. 1932 as set
forth in the conference report. The Congressional Budget Office estimated net
mandatory outlay savings under the measure of $38.810 billion over FY2006-
FY2010 (assuming that apparent drafting errors in two sections are corrected, CBO
noted, the five-year savings would increase by $713 million, to $39.523 billion).32
On December 19, the House agreed to the conference report by a vote of 212-
206. The Senate considered a motion to proceed to the consideration of the
conference report on December 19. Senate consideration of the conference report
occurred on December 19-21. On December 21, the Senate removed extraneous
matter from the legislation pursuant to a point of order raised under the “Byrd rule,”
and then, by a vote of 51-50 (with Vice President Cheney breaking a tie vote),
returned the amended measure to the House for further action.
The extraneous matter was removed from S. 1932 pursuant to a point of order
raised by Senator Kent Conrad, the ranking minority member of the Senate Budget
Committee.33 The point of order sought to strike four provisions from the measure:
! Section 5001(b)(3), requiring the Secretary of Health and Human
Services to submit to Congress by August 1, 2007, a report on the
plan for the hospital value based purchasing program under
Medicare;
! Section 5001(b)(4), requiring the Medicare Payment Advisory
Commission to submit to Congress by June 1, 2007, a report that
includes detailed recommendations on a structure of value based
payment adjustments for hospital services under Medicare;
! a portion of Section 6043 (proposing a new subsection (e)(4) to the
proposed new Section 1916A of the Social Security Act), relating to
the negligent standard for hospitals and physicians who treat
Medicaid patients; and
31 The conference report also is set forth in the Congressional Record (daily ed.) of
December 18, 2005, vol. 151, no. 164, book II, at pages H12641-H12737.
32 See the CBO Cost Estimate on S. 1932, January 27, 2006, 80 p., available on the CBO
website at [http://www.cbo.gov] CBO identifies the apparent drafting errors as occurring
in Section 8006, regarding direct loans to parents of postsecondary students, and Section
10002(a)(2), dealing with bankruptcy fees.
33 The raising and disposition of the point of order, and other procedural actions related
thereto, appear in the Congressional Record (daily ed.) of December 21, 2005, at pages
S14204-S14205.

CRS-30
! Section 7404, regarding eligibility for foster care maintenance
payments and adoption assistance.
Following an unsuccessful attempt to waive the “Byrd rule,” in which a waiver
motion offered by Senator Judd Gregg failed by a vote of 52-48 (by not achieving the
necessary 60 votes), the chair sustained the point of order against all of the sections
except for Section 7404.
In order to complete final action on S. 1932, the House and Senate had to
resolve the remaining differences with respect to Section 5001(b)(3) and (b)(4) and
the applicable portion of Section 6043. On December 21, Speaker J. Dennis Hastert
sought unsuccessfully to have the House concur in the Senate changes by unanimous
consent.34 At that time, the decision was made to carry over House action into early
2006, toward the beginning of the second session.
On February 1, the House considered H.Res. 653, a resolution reported by the
House Rules Committee (H.Rept. 109-366; January 31, 2006), which provided for
the concurrence by the House in the Senate amendment to the House amendment to
S. 1932.35 By agreeing to the resolution, by a vote of 216-214, the House cleared the
measure for the President.
Prior to agreeing to H.Res. 653, the House overcame a point of order raised by
Representative Jim McDermott, by a vote of 226-201. The point of order, raised
pursuant to Section 426(a) of the Congressional Budget Act of 1974, pertained to the
inclusion in S. 1932 of an unfunded mandate involving the child support enforcement
program.
Approval by the President and Subsequent Challenges. President
Bush signed the measure into law on February 8, as P.L. 109-171 (120 Stat. 4-184),
and issued a signing statement indicating how specified provisions in the law would
be regarded by the executive branch:
The executive branch shall construe section 1936(d)(2) of the Social Security Act
as enacted by section 6034 of the Act, which purports to make consultation with
a legislative agent a precondition to execution of the law, to call for but not
mandate such consultation, as is consistent with the Constitution’s provisions
concerning the separate powers of the Congress to legislate and the President to
execute the laws.
34 BNA Daily Report for Executives, “Senate OKs Budget Bill by Thin Margin, But Changes
Send Package Back to House,” by Kurt Ritterpusch, December 22, 2005, p. G-2.
35 House consideration of H.Res. 653 appears in the Congressional Record (daily ed.) of
February 1, 2006, at pages H37-H60 and H68-H114.

CRS-31
Sections 5006(b) and 5008(c) of the Act, and section 401A(a)(2)(C) of the
Higher Education Act of 1965 as enacted by section 8003 of the Act, call for
executive branch officials to submit legislative recommendations to the
Congress. The executive branch shall construe such provisions in a manner
consistent with the constitutional authority of the President to supervise the
unitary executive branch and to recommend for congressional consideration such
measures as the President shall judge necessary and expedient.36
At the same time, a dispute arose regarding an apparent clerical error in the
measure and its impact on the status of the Deficit Reduction Act of 2005 as public
law. The issue pertains to Section 5101 of the act, which deals with rental
reimbursement periods for durable medical equipment under Medicare. Section
5101(a) provides for a 13-month period for certain durable medical equipment, such
as wheelchairs, and Section 5101(b) provides for a 36-month period for oxygen
equipment.37 Apparently, due to a clerical error, the engrossed Senate amendment
mistakenly referred to a 36-month period in Section 5101(a), which the House agreed
to without correction; in the course of enrolling the measure for the President, the
erroneous reference to a 36-month period in the subsection was corrected to reflect
a 13-month period. According to the Congressional Budget Office, net Medicare
savings would be reduced by about $2 billion over a five-year period (FY2006-
FY2010) if the rental reimbursement period under Section 5101(a) were extended to
36 months.38
Due to concerns regarding the apparent clerical error, the Senate on February 8
passed by unanimous consent S.Con.Res. 80, a measure stating:
That the enrollment of the bill S. 1932 as presented to the President for his
signature on February 8, 2006, is deemed the true enrollment of the bill reflecting
the intent of the Congress in enacting the bill into law.39
The House has not considered S.Con.Res. 80.
White House spokesman Scott McClellan, in the daily press briefing on
February 13, indicated that the Administration regards S. 1932 as public law.40
The next day, February 14, House Democratic Leader Nancy Pelosi and other
members of the House Democratic leadership sent a letter to Speaker Hastert
requesting that the legislation be reconsidered. On February 16, House Democratic
36 The signing statement by President Bush, and a fact sheet on the law, are available at the
White House website under “Current News” for February 8, 2006
[http://www.whitehouse.gov].
37 See Deficit Reduction Act of 2005, conference report to accompany S. 1932, H.Rept. 109-
362, December 19, 2005, pp. 215-216.
38 Congressional Budget Office, letter of February 13, 2006, to the Honorable John Spratt
Jr. from Acting Director Donald B. Marron.
39 Congressional Record (daily ed.), February 8, 2006, p. S870.
40 BNA Daily Report for Executives, “Despite Clerical Error, White House Says New Deficit
Reduction Act Still Valid Law,” by Jonathan Nicholson, February 14, 2006, p. A-21.

CRS-32
Leader Pelosi offered a privileged resolution, H.Res. 687, directing the House
Committee on Standards of Official Conduct to conduct an investigation into the
matter; the House tabled the resolution by a vote of 219-187.41
At least five challenges to the Deficit Reduction Act of 2005 were raised in
federal district court, mainly on the ground that it violated the Bicameral Clause of
the Constitution (i.e., was not passed in identical form in both chambers).42 All five
lawsuits were dismissed at the district court level, including:
! Zeigler v. Gonzalez, No. 1:06-CV-00080 (S.D. Ala.), filed on
February 13, 2006, in the U.S. District Court for the Southern
District of Alabama; decided by Chief Judge Callie V.S. Granade on
June 28, 2007;43
! One Simple Loan. v. U.S. Secretary of Education, No. 06-CV-2979
(S.D.N.Y.), filed on April 18, 2006, in the U.S. District Court for the
Southern District of New York; decided by Judge Richard M.
Berman on June 9, 2006;44
! California Department of Social Services v. Leavitt, CIV S-99-0355
(E.D. Calif.), filed in the U.S. District Court for the Eastern District
of California; decided by Judge Frank C. Dambrell, Jr. on July 18,
2006; and
! Public Citizen v. Clerk of the District Court of the District of
Columbia, No. 1:06-00523-JDB (D.D.C.), filed on March 21, 2006,
in the U.S. District Court for the District of Columbia; decided by
Judge John D. Bates on August 11, 2006.45
! Conyers v. Bush, No. 2:06-cv-11972 (E.D. Mich.) filed on April 28,
2006, by Representative John Conyers, the then-ranking member of
the House Judiciary Committee, and other ranking members of
41 Congressional Record (daily ed.), February 16, 2006, pp. H351-H352.
42 For a detailed discussion on this topic, see CRS Report RS22507, Constitutionality of the
Deficit Reduction Act of 2005: Litigation, by Thomas J. Nicola. Also, see (1) Roll Call,
“Judges Toss Pair of Legal Challenges to DRA,” by Jennifer Yachnin, August 14, 2006; and
(2) National Health Law Program, Health Advocate, “The Deficit Reduction Act of 2005:
Congress Targets Beneficiaries for Cuts,” no. 224, Spring 2006, p. 2.
43 CQ Today, “Lawsuit by Conservative Alabama Lawyer Seeks to Invalidate Savings Law,”
by Steven T. Dennis, February 15, 2005.
44 The actions in this case are explained in CRS Congressional Distribution Memorandum
by Thomas J. Nicola, Constitutionality of the Deficit Reduction Act of 2005: Dismissal of
One Simple Loan, et al. v. U.S. Secretary of Education, et al., July 17, 2006, 3 pages.
45 BNA Daily Report for Executives, “Federal Judge Tosses Suit Challenging Deficit
Reduction Law,” by Jonathan Nicholson, August 14, 2006, p. A-22. Information on the
l a w s u i t a l s o i s a v a i l a b l e a t P u b l i c C i t i z e n ’ s w e b s i t e a t
[http://www.citizen.org/hot_issues/issue.cfm?ID=1335].

CRS-33
House committees with jurisdiction over agencies affected by the
Deficit Reduction Act of 2005, in United States District Court for
the Eastern District of Michigan (Judge Nancy Edmunds).46
Appeals have been pursued in several of the cases. On May 29, 2007, the
dismissal of the Public Citizen case was affirmed by the Court of Appeals for the
District of Columbia Circuit.47 In that case, the plaintiff reportedly has asked for a
review of the matter by the Supreme Court.48
Dismissal of the lawsuits by the district courts principally was based on the
Enrolled Bill Rule, arising from a case decided by the Supreme Court more than a
century ago, Marshall Field & Co. v. Clark, 143 U.S. 649, 672 (1892). Under the
rule, the signatures of the presiding officers of the House and Senate on the enrolled
bill authenticates its passage by the two chambers. One media report speculated that
the Enrolled Bill Rule may be given less consideration in subsequent court action.49
While previous media reports indicated that the House and Senate might
consider legislation making the two “technical corrections” identified by the
Congressional Budget Office (discussed below),50 the House and Senate adjourned
sine die on December 8 without taking such action.51
Brief Summary of the Act. The Deficit Reduction Act of 2005 consists of
ten titles, as shown in Table 14.
The changes made by the act affect a wide array of federal programs, including
federal assistance to agriculture (Title I); housing programs and the deposit insurance
system for banks and credit unions (Title II); the Federal Communication
Commission’s authority to auction licenses to use the electromagnetic spectrum,
federal assistance to consumers for the transition to digital television, and grants to
46 For more information on this action, see the press release of April 27, 2006, on the
minority website of the House Judiciary Committee at
[http://www.house.gov/judiciary_democrats/releases/budgetlawsuitpr42706.pdf]
47 CRS Report RS22507, ibid., p. 5.
48 BNA Daily Report for Executives, “Deficit Reduction Law Legal Despite Drafting Glitch,
Courts Say,” by Jonathan Nicholson, no. 159, August 17, 2007, p. A-14; see also,
“Correction Notice,” no. 161, August 21, 2007, p. A-24.
49 BNA Daily Report for Executives, “Initial Court Deference to 1892 Precedent In Suit on
Deficit Law May End, Experts Say,” by Jonathan Nicholson, no. 164, August 24, 2006, p.
A-26.
50 See, for example, the following: (1) BNA Daily Report for Executives, “Corrections Bill
Expected for Budget; Consequence of Clerical Error Uncertain,” by Jonathan Nicholson,
February 16, 2006, p. A-1; (2) CQ Today, “Partisan Bickering Escalates in House Over
Glitch in Budget Savings Bill,” by Steven T. Dennis, February 16, 2006; and (3) The Hill,
“House GOP: No New Vote on Budget,” by Jeffrey Young and Patrick O’Connor, February
16, 2006.
51 BNA Daily Report for Executives, “Congress Seems Unlikely to Correct Gaffes in Budget
Bill Costing $2 Billion,” by Jonathan Nicholson, no. 185, September 25, 2006, p. A-21.

CRS-34
public safety agencies of interoperable communications systems (Title III); vessel
tonnage charges levied by the U.S. Customs Service on ships entering the United
States (Title IV); Medicare (Title V); Medicaid and the State Children’s Health
Insurance Program (SCHIP) (Title VI); welfare, including the Temporary Assistance
for Needy Families (TANF) program (Title VII); federal higher education programs
and the operations of the Pension Benefit Guaranty Corporation (PBGC) (Title VIII);
the Low-Income Home Energy Assistance Program (LIHEAP) (Title IX); and civil
filing fees for federal courts and filing fees for bankruptcy relief (Title X).
According to CBO, the act is expected to lead to net costs for FY2007 ($3.635
billion in outlays), but net savings in outlays in each of the other four years
encompassed by the reconciliation instructions (see Table 14). Net savings are
estimated to amount to $4.847 billion in FY2006 and $4.474 billion in FY2008,
peaking in FY2009 at $20.780 billion, and declining to $12.342 billion in FY2010.
Net savings in the ensuring five fiscal years, FY2011-FY2015, are estimated to range
between $11.0 billion and $13.6 billion each year.
In total, net savings in outlays are expected to amount to $38.810 billion over
five years (FY2006-FY2010) and $99.263 billion over ten years (FY2006-FY2015).
In its cost estimate on the conference agreement, CBO identified apparent
drafting errors in two sections — Section 8006, regarding direct loans to parents of
postsecondary students, and Section 10002(a)(2), dealing with bankruptcy fees. If
it is assumed that the apparent drafting errors will be corrected, then the projected
five-year net outlay savings increase by $713 million, to $39.523 billion, and the 10-
year savings increase by $2.013 billion, to $101.276 billion.

CRS-35
Table 14. CBO Scoring of Spending Reconciliation Legislation: Conference Agreement (by Title)
(outlays in $ billions)
Title
FY2006
FY2007
FY2008
FY2009
FY2010
FY2006-FY2010
FY2006-FY2015
Title I — Agriculture Provisions
0.419
-1.365
-0.503
-0.651
-0.609
-2.709
-3.541
Title II — Housing and Deposit Insurance Provisions
-0.030
-0.155
-0.355
0.050
-0.030
-0.520
-2.110
Title III — Digital Television Transition and Public Safety
-0.010
1.420
2.460
-11.449
0.196
-7.383
-7.575
Title IV — Transportation Provisions
-0.030
-0.031
-0.031
-0.032
-0.032
-0.156
-0.156
Title V — Medicare
-3.431
6.222
-1.194
-2.969
-5.040
-6.412
-22.392
Title VI — Medicaid and SCHIP
2.247
-0.581
-1.676
-2.004
-2.729
-4.743
-26.384
Title VII — Human Resources and Other Provisions
-0.020
0.192
-0.285
-0.536
-0.898
-1.547
-7.190
Title VIII — Education and Pension Benefit Provisions
-3.942
-2.430
-2.928
-3.096
-3.094
-15.491
-29.536
Title IX — LIHEAP Provisions
0.000
0.469
0.144
0.013
0.000
0.625
0.625
Title X — Judiciary Related Provisions
-0.050
-0.106
-0.106
-0.106
-0.106
-0.474
-1.004
Subtotal
-4.847
3.635
-4.474
-20.780
-12.342
-38.810
-99.263
Additional Savings With Possible Corrections a
-0.063
-0.130
-0.150
-0.175
-0.195
-0.713
-2.013
Total Changes
-4.910
3.505
-4.624
-20.955
-12.537
-39.523
-101.276
Source: Congressional Budget Office, Cost Estimate for S. 1932, Deficit Reduction Act of 2005, Jan. 27, 2006.
a. According to CBO, the conference agreement on S. 1932 contains apparent drafting errors in two sections, Section 8006 (regarding direct loans to parents of postsecondary students)
and Section 10002(a)(2) (dealing with bankruptcy fees). These figures show the additional savings that would accrue if the apparent drafting errors were corrected.

CRS-36
The net figures cited above obscure a much higher level of outlay savings, offset
in part by significant program costs. Table 15 provides major examples of savings
and costs in selected program areas. Generally, the table lists examples of savings
or costs that exceed $1 billion over the five-year (FY2006-FY2010) or 10-year
(FY2006-FY2015) period. The examples are ranked in descending order on the basis
of their 10-year impact (except in the case of costs under Medicare for physicians’
payments, which amount to $7.3 billion over five years, but yield modest savings
over 10 years).

Table 15. Spending Reconciliation Legislation:
Savings and Costs in Selected Program Areas
(Conference Agreement)
(outlays in $ billions)
FY2006-
FY2006-
Program Area
FY2010
FY2015
Savings
Borrowers’ Interest Rates & Lenders’ Yields (Title VIII)
-14.3
-34.4
Medicaid: Pharmacy Reimbursement Limits (Title VI)
-3.6
-11.8
Spectrum Auction Proceeds (Title III)
-10.0
-10.3
Medicare: Imaging Services (Title IV)
-2.8
-8.1
Medicaid: Alternative Benefit Packages (Title VI)
-1.3
-6.1
Eliminate Mandatory Funding of Admin. Costs (Title VIII)
-2.2
-6.0
PBGC Premiums: Single Employer Plans (Title VIII)
-2.3
-5.8
Medicare: Home Health Services (Title V)
-2.0
-5.7
Medicaid: Additional Cost Sharing for Drugs (Title VI)
-1.0
-5.4
Medicaid: Increased Cost Sharing & Premiums (Title VI)
-1.0
-4.4
Child Support (Title VII)
-1.5
-4.1
Medicare: Risk Adjustment to MA Plans (Title V)
-6.5
-4.1
Medicaid: Asset Transfer Penalty Period (Title VI)
-1.5
-4.0
Borrowers’ Insurance Premiums/Agency Fees (Title VIII)
-1.5
-3.6
Loans Financed With Tax-Exempt Bonds (Title VIII)
-1.8
-3.0
Medicare: Disproportionate Share Adjustments (Title V)
-1.2
-3.0
Medicaid: Restrictions on Provider Taxes
-0.4
-2.9
FDIC and NCUA Premium Collections (Title II)
-0.3
-2.2
Medicaid: Targeted Case Management Services (Title VI)
-0.8
-2.1

CRS-37
FY2006-
FY2006-
Program Area
FY2010
FY2015
Supplemental Security Income (Title VII)
-0.7
-2.0
Medicare: Durable Medical Equipment (Title V)
-0.7
-1.9
Continuing Dumping & Subsidy Offset Repeal (Title VII)
-0.3
-1.8
Medicaid: Third-Party Recovery (Title VI)
-0.6
-1.7
Medicare: Income-Related Part B Premium (Title V)
-1.6
-1.6
Agriculture: Conservation Programs (Title I)
-1.0
-1.4
Costs
Medicare: Physicians’ Services
7.3
-0.4
Borrower Origination Fees (Title VIII)
4.0
13.1
PBGC: Slowed Drawdown of Reserves (Title VIII)
0.0
7.4
Medicaid: Certain Disabled Children (Title VI)
1.4
6.4
Academic Competitiveness & SMART Grants (Title VIII)
3.7
4.5
Increased Loan Limits (Title VIII)
1.5
4.2
Medicaid: Home & Community-Based Services (Title VI)
0.8
2.6
Katrina Health Care Relief (Title VI)
2.1
2.1
Medicaid: Money-Follows-the-Person Demo. (Title VI)
0.3
2.0
Child Care (Title VII)
0.9
1.9
Converter Box Subsidies (Title III)
1.4
1.4
Medicare: Dialysis Services (Title V)
0.5
1.3
Medicare: Abdominal Aneurysm Screening (Title V)
0.2
1.3
Medicaid: Integrity Program (Title VI)
0.5
1.2
Interoperability Grants (Title III)
1.0
1.0
Source: Prepared by the Congressional Research Service from data provided in: Congressional
Budget Office, Cost Estimate for S. 1932, Deficit Reduction Act of 2005, Jan. 27, 2006.

CRS-38
Revenue Reconciliation Legislation
Initial Senate Action. The Senate Finance Committee considered, amended,
and approved S. 2020, the Tax Relief Act of 2005, on November 15, by a vote of 14-
6. The committee reported the bill without a written report.52
According to estimates prepared by the Joint Committee on Taxation (JCT), the
bill as reported would have reduced revenues in the net by $59.594 billion over
FY2006-FY2010.53 Although the reconciliation instructions in the FY2006 budget
resolution allow revenue reductions of as much as $70 billion over FY2006-FY2010,
the amount of revenue reduction in the bill was reduced because of concerns
regarding the Senate’s “pay-as-you-go” (PAYGO) rule.54 The PAYGO rule, which
remains in effect through September 30, 2008, bars the consideration of revenue or
direct spending legislation that violates certain budgetary constraints for three
different time periods; during this session, the time periods are FY2006, FY2006-
FY2010, and FY2011-FY2015. A motion to waive a point of order under the
PAYGO rule requires the affirmative vote of three-fifths of the Senate membership
(60 Senators, if no seats are vacant).
Under current practices, a balance for each of the three time periods is
established each session on a PAYGO scorecard set forth in the joint explanatory
statement accompanying the conference report on the annual budget resolution. The
PAYGO scorecard is maintained by the Senate Budget Committee and is adjusted
each time a revenue or direct spending measure passes the House and Senate in
identical form.
A revenue or direct spending measure may not be considered if the balances on
the PAYGO ledger are not adequate to cover its costs. Although the PAYGO
balance for FY2006-FY2010 was expected to be adequate later in the session to
accommodate a measure reducing revenues by $70 billion over that period, at that
time it stood at about $60 billion.
The Senate began consideration of S. 2020 on November 16, continued
consideration on November 17, and passed it early on November 18, by a vote of 64-
33.
During Senate consideration of the bill, seven amendments were adopted, four
were rejected, one was withdrawn, and 18 fell on points of order. According to the
52 See Summary of the Tax Relief Act of 2005, November 8, 2005, and related items under
“Legislation” at the Senate Finance Committee website [http://www.senate.gov/~finance/]
53 Joint Committee on Taxation, Estimated Revenue Effects Of S. 2020, The “Tax Relief Act
Of 2005,” Scheduled For Consideration On The Senate Floor On November 16, 2005, JCX-
80-05, November 16, 2005, available on the Web at [http://www.house.gov/jct/].
54 The Senate’s PAYGO rule is set forth in Section 505 of the FY2004 budget resolution.
For detailed information on the origin, development, and operation of the Senate’s PAYGO
rule, see (1) CRS Report RL31943, Budget Enforcement Procedures: Senate’s “Pay-As-
You-Go” (PAYGO) Rule, by Bill Heniff Jr.; and (2) CRS Report RL32835, PAYGO Rules
for Budget Enforcement in the House and Senate, by Robert Keith and Bill Heniff Jr.

CRS-39
JCT, the bill as passed would reduce revenues in the net by $57.756 billion over
FY2006-FY2010, $1.838 billion less than the reported bill.55
Initial House Action. The House Ways and Means Committee considered,
amended, and approved H.R. 4297, the Tax Relief Extension Reconciliation Act of
2005, on November 15. The bill was reported on November 17 (H.Rept. 109-304).
The committee approved the measure by a vote of 24-15. During the markup,
Chairman Bill Thomas offered an amendment in the nature of a substitute that
removed many of the provisions, reducing the total revenue reductions to $31.947
billion over FY2006-FY2010.56 Before approving the chairman’s substitute, the
committee adopted several amendments to it that restored particular provisions,
thereby further reducing revenues. According the JCT, the bill as reported would
reduce revenues in the net by $5.773 billion in FY2006 and $56.082 billion in
FY2006-FY2010.57
On December 7, the House Rules Committee reported a special rule, H.Res. 588
(H.Rept. 109-330), providing for the consideration of H.R. 4297. The special rule
provided (under a self-executing feature) for the adoption of the amendment in the
nature of a substitute recommended by the Ways and Means Committee. In addition,
the special rule allowed one amendment in the nature of a substitute, to be offered by
Representative Charles Rangel, the ranking member of the Ways and Means
Committee, and one motion to recommit with instructions.
The House considered H.R. 4297 on December 8. After defeating the Rangel
substitute, by a vote of 192-239, and a Rangel motion to recommit with instructions,
by a vote of 193-235, the House passed the bill, by a vote of 234-197.
Action on the Conference Report. In order to facilitate a conference with
the House, the Senate took up H.R. 4297 on February 1 and passed it the next day,
by a vote of 66-31. During action on February 2, the Senate adopted a substitute
amendment (Grassley/Baucus Amendment 2707) to the House-passed bill, as well
as six amendments to the substitute amendment. In addition, one amendment was
rejected, one amendment and a motion to commit were withdrawn, and several
amendments fell, generally upon the successful raising of points of order.
55 Joint Committee on Taxation, Estimated Revenue Effects Of The Tax Provisions
Contained in S. 2020, “The Tax Relief Act of 2005,” As Passed By The Senate On November
18, 2005, JCX-82-05 R, November 29, 2005, available on the Web at
[http://www.house.gov/jct/]. The initial estimate made by the JCT, issued as JCX-82-05 on
November 28, 2005, placed the five-year revenue loss an $57.761 billion.
56 Joint Committee on Taxation, Estimated Revenue Effects Of The Chairman’s Amendment
In The Nature Of A Substitute To H.R. 4297, The “Tax Relief Extension Reconciliation Act
Of 2005,” Scheduled For Markup By The Committee On Ways And Means On November
15, 2005, JCX-79-05, November 15, 2005, available on the Web at
[http://www.house.gov/jct/].
57 Joint Committee on Taxation, Estimated Revenue Effects Of H.R. 4297, The “Tax Relief
Extension Reconciliation Act Of 2005,” As Reported By The Committee On Ways And
Means, JCX-81-05, November 18, 2005, available on the Web at
[http://www.house.gov/jct/].

CRS-40
According to the JCT, H.R. 4297, as passed by the Senate, would reduce
revenues by $69.415 billion over FY2006-FY2010, reflecting about $12 billion in
further revenue reduction compared to the levels in S. 2020, as passed earlier by the
Senate.58 House action to clear S. 1932, the spending reconciliation measure, for
action by the President provided sufficient room on the Senate’s PAYGO scorecard
to accommodate the additional revenue reductions without incurring a violation of
the PAYGO rule.59 The JCT estimated the five-year revenue reduction in the House-
passed version of H.R. 4297 at $55.627 billion.
On February 8, the House by unanimous consent disagreed to the Senate
amendment and requested a conference, and the Speaker appointed conferees.60 The
House also rejected, by a vote of 185-297, a motion to instruct conferees on
alternative minimum tax relief, dividends and capital gains relief, and other matters,
offered by Representative Richard Neal.
On February 13, the Senate agreed to a conference and agreed to one motion to
instruct conferees (Grassley, 92-0) and rejected another (Dodd, 40-53). On the next
day, February 14, the Senate appointed conferees and agreed to five more motions
to instruct conferees: Grassley (53-47), DeWine (voice vote), Wyden (voice vote),
Talent/Snow/Lincoln (voice vote), and Hutchison (75-25). Additionally, the Senate
rejected three motions to instruct conferees: Kennedy (47-53), Reed (45-55), and
Lautenberg (46-54); another eight motions to instruct conferees were withdrawn.
The conferees met on March 15 and informal negotiations continued thereafter.
In the House, a motion to instruct conferees was agreed to on March 15 (Tanner,
222-187). Three motions to instruct conferees were rejected — on March 29
(Rangel, 192-229), on April 6 (Cardin, 196-232), and, following debate the previous
day, on April 27 (McDermott, 190-232).
The conference report (H.Rept. 109-455) on H.R. 4297, which was renamed the
Tax Increase Prevention and Reconciliation Act of 2005, was reported on May 9,
2006.61 Appendix B provides a contents listing of H.R. 4297 as set forth in the
conference report.
58 Joint Committee on Taxation, Comparison of the Estimated Revenue Effects of the Tax
Provisions Contained in H.R. 4297, the “Tax Relief Extension Reconciliation Act of 2005,”
as Passed by the House, and H.R. 4297, the “Tax Relief Act of 2005,” as Amended by the
Senate, JCX-10-06, February 9, 2006.
59 See the February 3, 2006, edition of the Senate Budget Committee’s newsletter, Informed
Budgeteer, for a discussion of the PAYGO rule and the status of reconciliation legislation.
60 See the Congressional Record (daily ed.) of February 8, 2006, at pp. H185-H191.
61 The House Ways and Means Committee issued a 6-page summary, Detailed Summary of
Conference Report, May 9, 2006, available on the Committee’s website at
[http://waysandmeans.house.gov/media/pdf/taxdocs/050906longsummary4297.pdf]. In
addition, the Senate Finance Committee issued a 10-page summary, Summary of the Tax
Prevention Increase and Reconciliation Act of 2005, available on the Committee’s website
at [http://www.senate.gov/~finance/sitepages/leg/leg050906sum.pdf]

CRS-41
According to the JCT, the conference agreement is estimated to reduce revenues
by $69.960 billion over the five-year period, FY2006-FY2010.62 CBO also issued
a cost estimate, indicating that the conference agreement is not estimated to have an
effect on federal spending.63 Further, CBO noted that the conference agreement
contains, as determined by the JCT, two unfunded private-sector mandates (involving
repeal of the FSC-ETI grandfather rule and an amendment to the Section 911 housing
exclusion), as well as an intergovernmental mandate (pertaining to withholding on
certain government payments, in Section 511), which exceed annual cost thresholds
established in the Unfunded Mandates Reform Act.
The conference agreement recommends significant revenue reduction beyond
the five-year budget “window” (FY2006-FY2020) encompassed by the reconciliation
instructions, principally with respect to extensions of current capital gains and
dividends provisions through December 31, 2010.64 The Senate’s “Byrd rule”
(Section 313 of the Congressional Budget Act of 1974) prohibits the consideration
of reconciliation legislation that increases the deficit beyond the budget window; the
prohibition is enforced by a point of order in the Senate which requires the
affirmative vote of three-fifths of the Members (60 Senators, if no seats are vacant)
to waive. Past tax-cut reconciliation acts have included sunset provisions in order
to comply with the Byrd rule, but the conference agreement on H.R. 4297 includes
offsets of the revenue losses instead. The JCT estimates the total revenue loss over
ten years (FY2006-FY2015) at $69.084 billion, an amount nearly $900 million
smaller than the five-year revenue loss.
On May 9, the House Rules Committee reported a special rule, H.Res. 805
(H.Rept. 109-458) providing for the consideration of the conference report on H.R.
4297. The next day, on May 10, the House agreed to the special rule, by a vote of
228-194, and then agreed to the conference report, by a vote of 244-185. During
action on the conference report, the House rejected a motion to recommit with
instructions offered by Representative Charles Rangel, the ranking member of the
Ways and Means Committee, by a vote of 190-239.
The Senate considered the conference report on May 11, agreeing to it by a vote
of 54-44.
Additional revenue reductions, including some matters dropped from the initial
House and Senate revenue reconciliation bills in conference, have been considered
62 Joint Committee on Taxation, Estimated Revenue Effects of the Conference Agreement
for the “Tax Increase Prevention and Reconciliation Act of 2005,” JCX-18-06, May 9,
2006.
63 Congressional Budget Office, Letter to the Honorable William “Bill” M. Thomas,
Chairman, Committee on Ways and Means, from Acting Director Donald B. Marron, May
9, 2006.
64 Although the capital gains and dividends provisions would sunset on December 31, 2010,
they would incur revenue losses in succeeding years (e.g., in FY2012, a $12.698 billion
revenue loss for the capital gains provision and a $6.326 billion revenue loss for the
dividends provision).

CRS-42
in pension reform legislation — the Pension Protection Act of 2006 (P.L. 109-280;
August 17, 2006; 120 Stat. 780 et. seq.) and other measures.65
Approval by the President. President Bush signed the measure into law on
May 17, as P.L. 109-222 (120 Stat. 345-373).66 During remarks made at the signing
of the bill, the President highlighted the provisions extending the tax cuts on
dividends and capital gains for two years (until the end of 2010).67
Brief Summary of the Act. The Tax Increase Prevention and Reconciliation
Act of 2005 consists of five titles, as shown in Table 16. The changes made by the
act involve the extension and modification of certain provisions, including reduced
rates on capital gains and dividends, increased expensing for small business, and
exceptions under Subpart F regarding taxation of controlled foreign corporations
(Title I); various other provisions affecting such matters as the taxation of certain
settlement funds, modification of the active business definition under Section 355,
amortization of song rights, and industrial development bonds (Title II); an increase
in the individual Alternative Minimum Tax (AMT) exemption amount and AMT
relief for personal tax credits (Title III); modifications in the amounts and timing of
corporate estimated tax payments (Title IV); and revenue offset provisions, including
elimination of the income limitations on Roth IRA conversions, withholding on
government payments for property and services, an increase in the age of minor
children whose unearned income is taxed as if parent’s income, and a requirement
for partial payments with submissions of offers-in-compromise (Title V).
According to the JCT, the act is expected to lead to net revenue reductions
ranging from $6.765 billion to $23.231 billion per year during the FY2006-FY2010
period (see Table 16). In total, net reductions in revenues are estimated to amount
to $69.960 billion over five years and $69.084 billion over ten years (FY2006-
FY2015).
The net revenue reduction expected over ten years is less than the net revenue
reduction expected over five years (by $876 million) because the act increases
revenues modestly (by between $85 million and $423 million) in each of the last five
years, covering FY2011-FY2015. Consequently, prohibitions against incurring a
deficit in the last five years (e.g., under the Byrd rule) did not apply during Senate
consideration of the conference report.
65 The revenue impact of the Pension Protection Act of 2006 is discussed in: Joint
Committee on Taxation, Estimated Budget Effects of H.R. 4, the “Pension Protection Act
of 2006,” as Introduced in the House of Representatives on July 28, 2006, JCX-36-06, July
28, 2006.
66 The remarks of President Bush during a signing ceremony, and a fact sheet on the law, are
available at the White House website under “Current News” for May 17, 2006
[http://www.whitehouse.gov].
67 See “Remarks on Signing the Tax Increase Prevention and Reconciliation Act of 2005”
on May 17, 2006 in the Weekly Compilation of Presidential Documents, May 22, 2006, vol.
42, no. 20, pp. 943-945.

CRS-43
Table 16. JCT Scoring of Revenue Reconciliation Legislation: Conference Agreement (by Title)
(revenues in $ billions)
Title
FY2006
FY2007
FY2008
FY2009
FY2010
FY2006-FY2010
FY2006-FY2015
Title I — Extension and Modification of Certain Provisions
-0.082
-1.012
-7.613
-19.114
-5.545
-33.367
-56.596
Title II — Other Provisions
-0.004
-0.022
-0.038
-0.048
-0.054
-0.167
-0.403
Title III — Individual AMT Provisions
-12.984
-20.888
—
—
—
-33.872
-33.872
Title IV — Corporate Estimated Tax Provisions
2.209
-2.209
—
—
-5.640
-5.640
—
Title V — Revenue Offset Provisions
0.104
0.900
0.886
0.704
0.494
3.086
21.787
Total Changes
-10.757
-23.231
-6.765
-18.458
-10.745
-69.960
-69.084
Source: Joint Committee on Taxation, Estimated Revenue Effects of the Conference Agreement for the “Tax Increase Prevention and Reconciliation Act of 2005,” JCX-18-06, May
9, 2006.

CRS-44
The net figures cited above obscure a higher level of revenue reductions, offset
in part by revenue increases. Table 17 provides information on revenue reductions
and increases associated with selected provisions, involving changes of $0.5 billion
or more over the five-year (FY2006-FY2010) or 10-year (FY2006-FY2015) period.
The provisions are ranked in descending order on the basis of their 10-year impact.
The largest revenue increases over the 10-year period involve withholding on
government payments for property and services ($6.977 billion) and elimination of
the income limitations on Roth IRA conversions ($6.432 billion); the largest revenue
decreases pertain to an increase in the individual AMT exemption amount for 2006
($31.047 billion) and the extension of reduced tax rates for dividends ($30.779
billion) and capital gains ($20.004 billion).
Table 17. Revenue Reconciliation Legislation: Revenue
Increases and Decreases for Selected Provisions
(Conference Agreement)
(revenues in $ billions)
FY2006-
FY2006-
Provision(s)
FY2010
FY2015
Revenue Increases
Withholding on government payments for property and
—
6.977
services
Eliminate the income limitations on Roth IRA conversions
-0.447
6.432
Increase in age of minor children whose unearned income
0.776
2.128
is taxed as if parent’s income
Amend section 911 housing exclusion and impose a
0.903
2.126
stacking rule and provide regulatory authority to allow for
geographic differences
Require partial payments with submissions of offers-in-
0.715
1.955
compromise (permanent 24-month rule)
Repeal of FSC/ETI binding contract relief
0.467
0.502
Revenue Decreases
Increase individual AMT exemption amount for 2006
-31.047
-31.047
Tax dividends with a 15%/0% rate structure
-13.299
-30.779
Tax capital gains with a 15%/0% rate structure
-7.252
-20.004
Delay due date (from September 15 to October 1) for a
-5.640
—
percentage of corporate estimated taxes
Controlled foreign corporations: exception under subpart
-4.796
-4.796
F for active financing income

CRS-45
FY2006-
FY2006-
Provision(s)
FY2010
FY2015
Treatment of nonrefundable personal credits under the
-2.825
-2.825
individual AMT
Controlled foreign corporations: look-through treatment
-0.746
-0.746
of payments between related CFCs under foreign personal
holding company income rules
Source: Prepared by the Congressional Research Service from data provided in: Joint Committee
on Taxation, Estimated Revenue Effects of the Conference Agreement for the “Tax Increase
Prevention and Reconciliation Act of 2005,” JCX-18-06, May 9, 2006.
Debt-Limit Reconciliation Legislation
Neither the House Ways and Means Committee nor the Senate Finance
Committee scheduled any meetings to consider debt-limit reconciliation legislation.
On November 15, 2005, the Treasury Department indicated that the level of
public debt subject to the statutory limit had exceeded $8 trillion for the first time
($8,002,607,000,000).68 In view of the pattern of monthly deficits and surpluses in
the last several years, the current limit of $1.184 trillion was expected to suffice into
about the middle of the first quarter of calendar year 2006.
In a letter to Senate Majority Whip Mitch McConnell, dated December 29,
2005, Treasury Secretary John W. Snow indicated that the debt limit would become
insufficient in mid-February 2006, and that “all available prudent and legal actions”
to finance government operations within that limit would be exhausted by mid-
March.69 Thus, by using various financing techniques that have been employed in the
past, the Treasury Department was expected to be able to cope with an insufficient
debt limit for about a month before defaulting on government obligations.70
In addition to the reconciliation process, the House and Senate may use other
procedures to develop and consider debt-limit legislation.71 Pursuant to House Rule
XXVII (the “Gephardt rule”), H.J.Res. 47 was deemed to have passed the House
automatically on April 28, 2005, in conjunction with House approval of the
conference report on the FY2006 budget resolution. The measure proposed an
increase of $781 billion in the statutory debt limit, to $8.965 trillion, the same
increase recommended in the budget resolution and contained in the reconciliation
68 See the Daily Treasury Statement for November 15, 2005, Table III-C, p. 2, available on
the web at [http://www.fms.treas.gov/dts/].
69 Quoted in “Treasury Secretary Urges Speedy Action on Debt Limit Increase,” by CQ
Staff, CQ Today, December 30, 2005.
70 For further information on this topic, see CRS Report RL31967, The Debt Limit: The
Ongoing Need for Increases, by Philip D. Winters.
71 These procedures are reviewed in CRS Report RS21519, Legislative Procedures for
Adjusting the Public Debt Limit, by Robert Keith and Bill Heniff Jr.

CRS-46
instructions. On March 16, 2006, the Senate passed H.Res. 47 without amendment,
by a vote of 52-48.
President Bush signed the measure into law on March 20, as P.L. 109-182. The
enactment of the measure obviated the need for any action on debt-limit legislation
under the reconciliation process.
Products on Selected Policy Issues
Addressed in Reconciliation
The reconciliation legislation being developed and considered in the House and
Senate addresses a wide range of policy issues. For information on the specific
policy proposals recommended in the legislation, the reader is directed to the reports
(and committee prints) of the instructed committees, as well as to the floor debate.72
In addition, the reader is directed to the cost estimates and related reports prepared
by CBO and the JCT for each of the committee submissions; these estimates briefly
summarize the policy proposals.73
The Congressional Research Service also has prepared reports and issue briefs
on major issues addressed in reconciliation legislation; they are identified on the CRS
website under the Current Legislative Issues term “Reconciliation, Budget” and are
available at [http://www.crs.gov]. The CRS reports and issue briefs posted on the
website so far are listed below by major category; additional products will be listed
as they become available.
Spending Reconciliation Legislation
Agriculture and Nutrition
CRS Report RS22086, Agriculture and FY2006 Budget Reconciliation, by Ralph M.
Chite.
CRS Report RL33475, Dairy Policy Issues, by Ralph M. Chite.
72 For the spending reconciliation bill, see (1) Senate Budget Committee, Deficit Reduction
Omnibus Reconciliation Act of 2005 (print to accompany S. 1932), S.Prt. 109-37, October
2005 (the print is not yet available online), and (2) House Budget Committee, Deficit
Reduction Act of 2005 (report to accompany H.R. 4241), H.Rept. 109-276, November 7,
2005.
For the revenue reconciliation bill, see (1) Senate Finance Committee, Summary of the Tax
Relief Act of 2005, November 8, 2005, and other materials (in lieu of a committee report)
under “Legislation” at the Committee’s website [http://www.senate.gov/~finance/], and (2)
House Ways and Means Committee, Tax Relief Extension Reconciliation Act of 2005 (report
to accompany H.R. 4297), H.Rept. 109-304, November 17, 2005.
73 Congressional Budget Office, “Cost Estimates for Reconciliation Legislation,” available
at [http://www.cbo.gov/] and Joint Committee on Taxation, various reports, available at
[http://www.house.gov/jct/].

CRS-47
Arctic National Wildlife Refuge (ANWR)
CRS Report RS22304, ANWR and FY2006 Budget Reconciliation Legislation, by
Bill Heniff Jr. and M. Lynne Corn.
CRS Report RL33523, Arctic National Wildlife Refuge (ANWR): Controversies for
the 109th Congress, by M. Lynne Corn, Bernard A. Gelb, and Pamela Baldwin.
“Byrd Amendment” on Anti-Dumping
CRS Report RL33045, The Continuing Dumping and Subsidy Offset Act (“Byrd
Amendment”), by Jeanne J. Grimmett and Vivian C. Jones.
Deposit Insurance
CRS Report RS20724, Federal Deposit and Share Insurance: Proposals for
Change, by William D. Jackson.
CRS Report RL33143, Federal Deposit Insurance Reform Legislation (Including
Budgetary Implications), by Barbara Miles and William Jackson.
Energy and Minerals
CRS Report RS22313, Energy and Minerals Issues in the FY2006 Budget
Reconciliation Bill, by Marc Humphries.
Federal Judicial System
CRS Report RL33189, Proposals in the 109th Congress to Split the Ninth Circuit
Court of Appeals, by R. Sam Garrett.
Medicare, Medicaid, and SCHIP (State Children’s Health Insurance Program)
CRS Report RL33131, Budget Reconciliation FY2006: Medicaid, Medicare, and
State Children’s Health Insurance Program (SCHIP) Provisions, by Evelyne
C. Baumrucker, Hinda Chaikind, April Grady, Jim Hahn, Jean Hearne, Elicia
Herz, Bob Lyke, Paulette Morgan, Jennifer O’Sullivan, Rich Rimkunas, Julie
Stone, Sibyl Tilson, and Karen Tritz.
CRS Report RS22333, Budget Reconciliation FY2006: Provisions Affecting the
Medicaid Federal Medical Assistance Percentage, by April Grady.
CRS Report RL33130, Budget Reconciliation: Projections of Funding in the State
Children’s Health Insurance Program, by Chris L. Peterson.
CRS Report RL33121, Medicaid Issues for the 109th Congress, by Jean Hearne.
CRS Report RL33251, Side-by-Side Comparison of Medicare, Medicaid, and SCHIP
Provisions in the Deficit Reduction Act of 2005, by Karen Tritz, Sibyl Tilson,
Julie Stone, Chris Peterson, Jennifer O’Sullivan, Paulette C. Morgan, Elicia J.

CRS-48
Herz, Jeanne Hearne, Jim Hahn, April Grady, Hinda Chaikind, and Evelyne P.
Baumrucker.
Outer Continental Shelf Leasing
CRS Report RL33493, Outer Continental Shelf: Debate Over Oil and Gas Leasing
and Revenue Sharing, by Marc Humphries.
Pension Benefit Guaranty Corporation (PBGC)
CRS Report RS22315, Budget Reconciliation and the PBGC, by Neela K. Ranade.
Spectrum Auction and Fees and Transition to Digital Television
CRS Report RL31260, Digital Television: An Overview, by Lennard G. Kruger.
CRS Report RS22218, Spectrum Auctions and Deficit Reduction: FY2006 Budget
Reconciliation, by Linda K. Moore.
CRS Report RS22306, Spectrum Use and the Transition to Digital TV, by Linda K.
Moore.
Student Loans
CRS Report RS22308, Student Loans and FY2006 Budget Reconciliation, by Adam
Stoll.
Welfare
CRS Report RL33155, Child Welfare: Foster Care and Adoption Assistance
Provisions in the Budget Reconciliation Bills, by Emilie Stoltzfus.
CRS Report RS22377, Child Support Provisions in the Deficit Reduction Act of 2005
(P.L. 109-171), by Carmen Solomon-Fears.
CRS Report RS22369, TANF, Child Care, Marriage Promotion, and Responsible
Fatherhood Provisions in the Deficit Reduction Act of 2005 (S. 1932), by Gene
Falk.
CRS Report RL33157, Welfare Reauthorization: A Side-by-Side Comparison of
Current Law, Senate Committee Approved and House Budget Reconciliation
Bill Provisions, by Gene Falk, Melinda Gish, Carmen Solomon-Fears, and
Emilie Stoltzfus.

CRS-49
Revenue Reconciliation Legislation
CRS Report RS21992, Extending the 2001, 2003, and 2004 Tax Cuts, by Gregg
Esenwein.
CRS Report RL32781, Federal Deductibility of State and Local Taxes, by Steven
Maguire.
CRS Report RL32719, Major Tax Issues in the 109th Congress, by David L.
Brumbaugh.
CRS Report RL31181, Research Tax Credit: Current Status, Legislative Proposals,
and Policy Issues, by Gary Guenther.
CRS Report RL31852, Small Business Expensing Allowance: Current Status,
Legislative Proposals, and Economic Effects, by Gary Guenther.
CRS Report RS22322, Taxes and Fiscal Year 2006 Budget Reconciliation: A Brief
Summary, by David L. Brumbaugh.
CRS Report RS22100, The Alternative Minimum Tax for Individuals: Legislative
Initiatives and Their Revenue Effects, by Gregg Esenwein.
CRS Report RS21682, The Tax Deduction for Classroom Expenses of Elementary
and Secondary School Teachers, by Linda Levine.
CRS Report RL30089, The Work Opportunity Tax Credit (WOTC) and the Welfare-
to-Work (WtW) Tax Credit, by Linda Levine.

CRS-50
Appendix A. Deficit Reduction Act of 2005 (S. 1932):
Contents Listing of the Conference Report (H.Rept. 109-362)
Congressional Record
Page Number
Printed Conference Report
Title/Subtitle
(December 18, 2005)
Content
Chapter/Subchapter
Joint
Joint
Legislative Text
Explanatory
Legislative Text
Explanatory
Statement
Statement
Sec. 1
Short Title
H12641
—
1
—
Sec. 2
Table of Titles
H12641
—
1
—
Title I
Agriculture Provisions
H12641
H12687
2
187
Subtitle A
Commodity Programs
H12641
H12687
2
187
Subtitle B
Conservation
H12641
H12688
3
189
Subtitle C
Energy
H12641
H12688
4
191
Subtitle D
Rural Development
H12641
H12688
4
191
Subtitle E
Research
H12641
H12688
5
191
Title II
Housing and Deposit Insurance Provisions
H12642
H12689
5
194
Subtitle A
FHA Asset Disposition
H12642
H12689
5
194

CRS-51
Congressional Record
Page Number
Printed Conference Report
Title/Subtitle
(December 18, 2005)
Content
Chapter/Subchapter
Joint
Joint
Legislative Text
Explanatory
Legislative Text
Explanatory
Statement
Statement
Subtitle B
Deposit Insurance
H12642
H12689
7
195
Title III
Digital Television Transition and Public Safety
H12645
H12691
19
200
Title IV
Transportation Provisions
H12647
H12735
26
360
Title V
Medicare
H12647
H12692
26
205
Subtitle A
Provisions Relating to Part A
H12647
H12692
26
205
Subtitle B
Provisions Relating to Part B
H12649
H12695
36
215
Chapter 1
Payment Provisions
H12649
H12695
36
215
Chapter 2
Miscellaneous
H12651
H12697
42
222
Subtitle C
Provisions Relating to Parts A and B
H12652
H12699
45
229
Subtitle D
Provisions Relating to Part D
H12652
H12699
47
232
Title VI
Medicaid and SCHIP
H12654
H12705
53
252
Subtitle A
Medicaid
H12654
H12705
53
252

CRS-52
Congressional Record
Page Number
Printed Conference Report
Title/Subtitle
(December 18, 2005)
Content
Chapter/Subchapter
Joint
Joint
Legislative Text
Explanatory
Legislative Text
Explanatory
Statement
Statement
Chapter 1
Payment for Prescription Drugs
H12654
H12705
53
252
Chapter 2
Long-Term Care Under Medicaid
H12655
H12709
60
269
Subchapter A
Reform of Asset Transfer Rules
H12655
H12709
60
269
Subchapter B
Expanded Access to Certain Benefits
H12657
H12714
67
285
Chapter 3
Eliminating Fraud, Waste, and Abuse in Medicaid
H12658
H12719
72
302
Chapter 4
Flexibility in Cost Sharing and Benefits
H12661
H12721
81
310
Chapter 5
State Financing Under Medicaid
H12663
H12724
92
319
Chapter 6
Other Provisions
H12664
H12726
96
329
Subchapter A
Family Opportunity Act
H12664
H12726
96
329
Subchapter B
Money Follows the Person Rebalancing
H12666
H12728
102
335
Demonstration
Subchapter C
Miscellaneous
H12668
H12729
111
339

CRS-53
Congressional Record
Page Number
Printed Conference Report
Title/Subtitle
(December 18, 2005)
Content
Chapter/Subchapter
Joint
Joint
Legislative Text
Explanatory
Legislative Text
Explanatory
Statement
Statement
Subtitle B
SCHIP
H12673
H12732
130
348
Subtitle C
Katrina Relief
H12673
H12734
132
357
Title VII
Human Resources and Other Provisions
H12674
H12735
135
361
Subtitle A
TANF
H12674
H12735
135
361
Subtitle B
Child Care
H12676
H12736
141
363
Subtitle C
Child Support
H12676
H12736
141
363
Subtitle D
Child Welfare
H12677
H12736
149
364
Subtitle E
Supplemental Security Income
H12679
H12736
154
364
Subtitle F
Repeal of Continued Dumping and Subsidy Offset
H12679
—
155
—
Subtitle G
Effective Date
H12679
—
155
—
Title VIII
Education and Pension Benefit Provisions
H12679
H12736
155
365
Subtitle A
Higher Education Provisions
H12679
—
155
—

CRS-54
Congressional Record
Page Number
Printed Conference Report
Title/Subtitle
(December 18, 2005)
Content
Chapter/Subchapter
Joint
Joint
Legislative Text
Explanatory
Legislative Text
Explanatory
Statement
Statement
Subtitle B
Pensions
H12686
H12736
181
365
Title IX
LIHEAP Provisions
H12686
H12736
184
365
Title X
Judiciary Related Provisions
H12686
—
184
—
Subtitle A
Civil Filing Adjustments
H12686
—
184
—
Subtitle B
Bankruptcy Fees
H12686
—
185
—
Note: The conference report was printed in the Congressional Record (daily ed.) of Dec. 18, 2005, vol. 151, no. 164, book II. A statement regarding the clarification of a clerical error
(pertaining to a reference in Section 10002(a)(2), dealing with bankruptcy fees, in Title X — Judiciary Related Provisions) was inserted by Senate Budget Committee Chairman Judd
Gregg into the Congressional Record (daily ed.) of Dec. 21, 2005, at pages S14298-S14299.

CRS-55
Appendix B. Tax Increase Prevention and Reconciliation Act of 2005 (H.R. 4297):
Contents Listing of the Conference Report (H.Rept. 109-455)
Congressional Record
Page Number
Conference Report
(May 5, 2006)
Title/Section
Content
Joint
Joint
Legislative Text
Explanatory
Legislative Text
Explanatory
Statement
Statement
Sec. 1
Short Title, Etc.
H2209
—
1
—
Title I
Extension and Modification of Certain Provisions
H2210
H2216
2
36
Sec. 101
Increased Expensing for Small Business
H2210
H2228
2
79
Sec. 102
Capital Gains and Dividends Rates
H2210
H2227
2
74
Sec. 103
Controlled Foreign Corporations
H2210
H2227
2
70
Title II
Other Provisions
H2210
—
3
85
Sec. 201
Clarification of Taxation of Certain Settlement Funds
H2210
H2230
3
85
Sec. 202
Modification of Active Business Definition Under Section
H2210
H2230
4
86
355
Sec. 203
Veterans’ Mortgage Bonds
H2210
H2232
5
91

CRS-56
Congressional Record
Page Number
Conference Report
(May 5, 2006)
Title/Section
Content
Joint
Joint
Legislative Text
Explanatory
Legislative Text
Explanatory
Statement
Statement
Sec. 204
Capital Gains Treatment for Certain Self-Created Musical
H2210
H2232
6
93
Works
Sec. 205
Vessel Tonnage Limit
H2211
H2232
6
94
Sec. 206
Modification of Special Arbitrage Rule for Certain Funds
H2211
H2233
7
96
Sec. 207
Amortization of Expenses Incurred in Creating or Acquiring
H2211
H2233
7
97
Music or Music Copyrights
Sec. 208
Modification of Effective Date of Disregard of Certain
H2211
H2264
8
203
Capital Expenditures for Purposes of Qualified Small Issue
Bonds
Sec. 209
Modification of Treatment of Loans to Qualified Continuing
H2211
H2265
8
208
Care Facilities
Title III
Alternative Minimum Tax Relief
H2211
H2229
9
80
Sec. 301
Increase in Alternative Minimum Tax Exemption Amount for
H2211
H2229
9
80
2006

CRS-57
Congressional Record
Page Number
Conference Report
(May 5, 2006)
Title/Section
Content
Joint
Joint
Legislative Text
Explanatory
Legislative Text
Explanatory
Statement
Statement
Sec. 302
Allowance of Nonrefundable Personal Credits Against
H2211
H2216
9
36
Regular and Alternative Minimum Tax Liability
Title IV
Corporate Estimated Tax Provisions
H2211
H2294
10
310
Sec. 401
Time for Payment of Corporate Estimated Taxes
H2211
H2294
10
310
Title V
Revenue Offset Provisions
H2211
H2267
10
216
Sec. 501
Application of Earnings Stripping Rules to Partners Which
H2211
H2281
10
265
Are Corporations
Sec. 502
Reporting of Interest on Tax-Exempt Bonds
H2212
H2284
11
275
Sec. 503
5-Year Amortization of Geological and Geophysical
H2212
H2285
11
280
Expenditures for Certain Major Integrated Oil Companies
Sec. 504
Application of FIRPTA to Regulated Investment Companies
H2212
H2286
12
282
Sec. 505
Treatment of Distributions Attributable to FIRPTA Gains
H2212
H2287
12
285

CRS-58
Congressional Record
Page Number
Conference Report
(May 5, 2006)
Title/Section
Content
Joint
Joint
Legislative Text
Explanatory
Legislative Text
Explanatory
Statement
Statement
Sec. 506
Prevention of Avoidance of Tax on Investments of Foreign
H2212
H2287
13
290
Persons in United States Real Property Through Wash Sale
Transactions
Sec. 507
Section 355 Not to Apply to Distributions Involving
H2213
H2230
15
85
Disqualified Investment Companies
Sec. 508
Loan and Redemption Requirements on Pooled Financing
H2213
H2283
18
272
Requirements
Sec. 509
Partial Payments Required When Submission of Offers-in-
H2214
H2272
19
234
Compromise
Sec. 510
Increase in Age of Minor Children Whose Unearned Income
H2214
H2282
20
268
Is Taxed As If Parent’s Income
Sec. 511
Imposition of Withholding on Certain Payments Made by
H2214
H2291
21
299
Government Entities
Sec. 512
Conversions to Roth IRAs
H2214
H2292
22
301
Sec. 513
Repeal of FSC/ETI Binding Contract Relief
H2215
H2292
22
304

CRS-59
Congressional Record
Page Number
Conference Report
(May 5, 2006)
Title/Section
Content
Joint
Joint
Legislative Text
Explanatory
Legislative Text
Explanatory
Statement
Statement
Sec. 514
Only Wages Attributable to Domestic Production Taken Into
H2215
H2293
23
306
Account in Determining Deduction for Domestic Production
Sec. 515
Modification of Exclusion for Citizens Living Abroad
H2215
H2293
23
307
Sec. 516
Tax Involvement of Accommodation Parties in Tax Shelter
H2215
H2241
25
125
Transactions
Note: The conference report was printed in the Congressional Record (daily ed.) of May 9, 2006, vol. 152, no. 55.