Congressional Budget Actions in 2007

Congressional Budget Actions in 2007

Order Code RL34015
Congressional Budget Actions in 2007
Updated June 4, 2007
Bill Heniff Jr.
Analyst in American National Government
Government and Finance Division

Congressional Budget Actions in 2007
Summary
During the first session of the 110th Congress, the House and Senate will
consider many different budgetary measures. Most measures will pertain to FY2008
(which will begin on October 1, 2007) and beyond. Some also will pertain to the
budget for FY2007. As the session progresses, this report will describe House and
Senate action on major budgetary legislation within the framework of the
congressional budget process and other procedural requirements.
As the 110th Congress began, only two of the 11 regular appropriations acts for
FY2007 (which began on October 1, 2006) had been enacted. The federal agencies
and programs funded in the nine remaining regular appropriations acts were provided
temporary appropriations by successive continuing resolutions (CR).
The last CR enacted in 2006 was scheduled to expire on February 15, 2007. On
January 31 and February 14, respectively, the House and Senate passed a new CR
(H.J.Res. 20) that provided funding at the level appropriated in FY2006, with certain
exceptions through the end of FY2007 for those temporarily-funded federal
government agencies and programs. In all, the exceptions brought the total FY2007
non-emergency discretionary spending to the level agreed to by the House and
Senate, and proposed by President George W. Bush, in 2006. On February 15,
President Bush signed the measure into law (P.L. 110-5), thereby bringing action on
the FY2007 regular appropriations acts to a close.
President Bush submitted a request for FY2007 supplemental appropriations “in
support of operations in the Global War on Terror (GWOT) and the Gulf Coast’s
recovery from Hurricane Katrina.” In response to the President’s request, the House
and Senate passed H.R. 1591, U.S. Troop Readiness, Veterans’ Health, and Iraq
Accountability Act, 2007, on April 25 and 26, respectively. President Bush vetoed
the measure on May 1. The House failed to override the veto, which requires a two-
thirds vote, by a 222-203 vote on May 2. The House subsequently, on May 10,
passed two new supplemental measures (H.R. 2206 and H.R. 2207), which were
combined into one bill (H.R. 2206) and sent to the Senate. The House and Senate
exchanged amendments to H.R. 2206 (instead of resolving legislative differences in
a conference committee), clearing the measure for the President on May 24.
President Bush signed H.R. 2206 into law (P.L. 110-28) on May 25.
Congress typically begins its annual budget process for the upcoming fiscal year
once the President submits his budget for that year. President Bush submitted his
FY2008 budget to Congress on February 5, 2007.
The congressional budget process provides for an annual concurrent resolution
on the budget to serve as a framework for the consideration of budgetary legislation.
The House and Senate agreed to the conference report (H.Rept. 109-153) to the
FY2008 budget resolution (S.Con.Res. 21) by votes of 214-209 and 52-40,
respectively, on May 17.
This report will be updated as actions occur during the session.

Contents
Most Recent Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Overview of the Congressional Budget Process . . . . . . . . . . . . . . . . . . . . . . . . . . 2
The President’s Budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
The Budget Resolution: Implementation and Enforcement . . . . . . . . . . . . . 3
Expired Statutory Budget Enforcement Procedures . . . . . . . . . . . . . . . . . . . 4
Budget Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Committee Markup and Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Floor Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Reconciliation Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Revenue and Debt-Limit Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Revenue Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Debt-Limit Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Appropriations and Other Spending Legislation . . . . . . . . . . . . . . . . . . . . . . . . . 17
Discretionary Spending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Regular Appropriations for FY2007 . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Supplemental Appropriations for FY2007 . . . . . . . . . . . . . . . . . . . . . . 20
Regular Appropriations for FY2008 . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Mandatory Spending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Chronology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
For Additional Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Congressional Hearings, Reports, and Documents . . . . . . . . . . . . . . . . . . . 23
CRS Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
List of Figures
Figure 1. Actual FY2006 Revenues by Source . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Figure 2. Actual FY2006 Outlays by Major Spending Category . . . . . . . . . . . . 18
List of Tables
Table 1. The Congressional Budget Process Timetable . . . . . . . . . . . . . . . . . . . . 4
Table 2. Mapping Spending and Revenue Legislation through the
Congressional Budget Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Table 3. Budget Baselines, FY2007-FY2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Table 4. Comparison of Selected Components of the House, Senate, and
Conference Versions of the FY2008 Budget Resolution . . . . . . . . . . . . . . . 12

Congressional Budget Actions in 2007
Most Recent Developments
Before adjourning for the Memorial Day recess, Congress completed action on
President Bush’s request for FY2007 supplemental appropriations “in support of
operations in the Global War on Terror (GWOT) and the Gulf Coast’s recovery from
Hurricane Katrina.” After failing to override President Bush’s veto of the previously
passed FY2007 supplemental appropriations act (H.R. 1591), the House, on May 10,
passed two new supplemental measures (H.R. 2206 and H.R. 2207), which were
combined into one bill (H.R. 2206) and sent to the Senate. The House and Senate
exchanged amendments to H.R. 2206 (instead of resolving legislative differences in
a conference committee), clearing the measure for the President on May 24.
President Bush signed H.R. 2206 into law (P.L. 110-28) on May 25.
Introduction
During the first session of the 110th Congress, the House and Senate will
consider many different budgetary measures. Most of them will pertain to FY2008
(referred to as the “budget year”) and beyond. In addition, some will make
adjustments to the budget for FY2007 (referred to as the “current year”). As the
congressional session progresses, this report will describe House and Senate action
on major budgetary legislation within the framework of the congressional budget
process and other procedural requirements.1
Within this procedural framework, Congress will consider various budget-
related legislation in the context of the existing budget outlook and the stated goal
of achieving a balanced budget by FY2012. Current budget projections under
existing law, without any legislative changes, by the Congressional Budget Office
(CBO) and the Office of Management and Budget (OMB) show the unified budget
(i.e., including federal funds and trust funds) achieving a surplus in FY2012 and
FY2011, respectively. Specifically, CBO projects that the FY2007 unified budget
deficit will be $177 billion, with the budget achieving a surplus of $155 billion in
FY2012. Similarly, OMB projects that the FY2007 unified budget deficit will be
$186 billion, with the budget achieving a surplus of $95 billion in FY2011.2
1 For information on budget actions during the second session of the 109th Congress, see
CRS Report RL33291, Congressional Budget Actions in 2006, by Bill Heniff Jr.
2 For further information on current budget projections, see Office of Management and
Budget, Analytical Perspectives, Budget of the U.S. Government, Fiscal Year 2008
(Washington: GPO, 2007), Table 25-1, p. 371; Congressional Budget Office, An Analysis
(continued...)

CRS-2
Overview of the Congressional Budget Process
The congressional budget process consists of the consideration and adoption of
spending, revenue, and debt-limit legislation within the framework of an annual
concurrent resolution on the budget.
The President’s Budget
Congress begins its budget process once the President submits his budget. The
President is required by law to submit a comprehensive federal budget not later than
the first Monday in February (31 U.S.C. 1105). The President’s budget includes
estimates of direct spending and revenues under existing laws (with certain
adjustments), as well as estimates of any proposed legislative changes affecting direct
spending and revenues. In addition, the President’s budget contains requests, in
specific dollar amounts, for discretionary spending (i.e., funds controlled through the
appropriations process) for the upcoming fiscal year. Although Congress is not
bound by the President’s budget, congressional action on spending and revenue
legislation often is influenced by his recommendations, as well as subsequent
budgetary activities by the President during the year. OMB assists the President in
formulating and coordinating his budget policies and activities.
On February 5, 2007, President Bush submitted his FY2008 budget to Congress.
As is the usual practice, the President’s budget was submitted as a multi-volume set
consisting of a main document that includes the President’s budget message and
information on his 2008 proposals (Budget) and supplementary documents that
provide special budgetary analyses (Analytical Perspectives), historical budget
information (Historical Tables), and detailed account and program level information
(Appendix), among other things.3 In addition, on February 9, OMB made available
a supplementary document, Major Savings and Reforms in the President’s 2008
Budget, outlining program terminations and reductions proposed in the President’s
FY2008 budget.
The President may revise his budget request any time during the year. Revisions
requested before Congress has acted on the initial request are submitted as budget
amendments. In addition, the President also may request supplemental
appropriations for the current fiscal year for unanticipated needs.4
2 (...continued)
of the President’s Budgetary Proposals for Fiscal Year 2008, March 2007, p. 46; and CRS
Report RL33915, The Budget for Fiscal Year 2008, by Philip D. Winters.
3 T he President’s FY2008 budget documents a r e available at
[http://www.whitehouse.gov/omb/budget/fy2008/]. For further information on accessing
these documents, see CRS Report RS22605, FY2008 Budget Documents: Internet Access
and GPO Availability, by Jennifer Teefy.
4 These requests are available at [http://www.whitehouse.gov/omb/budget/amendments.htm].

CRS-3
By July 15 of each year, the President is required to submit an update of his
budget, commonly referred to as the mid-session review.5 The report contains
revised estimates of the budget deficit/surplus, receipts, outlays, and budget authority,
reflecting changed economic conditions and assumptions and congressional actions.
The Budget Resolution: Implementation and Enforcement
The Congressional Budget Act of 1974 (Titles I-IX of P.L. 93-344, 88 Stat. 297-
332) established the congressional budget process, including a timetable for
congressional action on budgetary legislation (see Table 1). The congressional
budget process provides for an annual concurrent resolution on the budget to serve
as a framework for the consideration of budgetary legislation. The budget resolution
sets forth aggregate spending and revenue levels, and spending levels by major
functional area, for at least five fiscal years. As a concurrent resolution, the budget
resolution is not presented to the President for his signature, and thus does not
become law. Instead, it is an agreement between the House and Senate on a
congressional budget plan, providing a framework for subsequent legislative action
on the budget during each congressional session.
Budget resolution policies are implemented through the enactment of revenue
and debt-limit legislation, appropriations and other spending measures, and, if
required by the budget resolution, one or more reconciliation bills (see Table 2).
Congress enforces budget resolution policies through points of order on the floor of
each chamber and the reconciliation process. For example, any legislation that would
cause the aggregate levels to be violated is prohibited from being considered.
Further, the total budget authority and outlays set forth in the budget resolution are
allocated among the House and Senate committees having jurisdiction over specific
spending legislation. Any legislation, or amendment, that would cause these
committee allocations to be exceeded is prohibited. Finally, the House and Senate
Appropriations Committees subdivide their allocations among their respective
subcommittees. A point of order may be raised against any appropriations measure,
or amendment, that would cause one of these subdivisions to be exceeded.6 The
budget resolution also contains spending levels by functional categories (e.g.,
national defense), but these are not enforceable. Congress also may use
reconciliation legislation (discussed further below) to enforce the direct spending,
revenue, and debt-limit provisions of a budget resolution.
5 For background information on the mid-session review, see CRS Report RL32509, The
Mid-Session Review of the President’s Budget: Timing Issues, by Robert Keith.
6 For more detailed information on these points of order and their application, see CRS
Report 97-865, Points of Order in the Congressional Budget Process, by James V. Saturno.

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Table 1. The Congressional Budget Process Timetable
Date
Action
First Monday in February
President submits budget to Congress.
February 15
Congressional Budget Office submits economic and
budget outlook report to Budget Committees.
Six weeks after President
Committees submit views and estimates to Budget
submits budget
Committees.
April 1
Senate Budget Committee reports budget resolution.
April 15
Congress completes action on budget resolution.
May 15
Annual appropriations bills may be considered in the
House, even if action on budget resolution has not been
completed.
June 10
House Appropriations Committee reports last annual
appropriations bill.
June 15
House completes action on reconciliation legislation (if
required by budget resolution).
June 30
House completes action on annual appropriations bills.
July 15
President submits mid-session review of his budget to
Congress.
October 1
Fiscal year begins.
Source: Section 300 of the Congressional Budget Act of 1974, as amended (P.L. 93-344, 2 U.S.C. 631).
In addition, both the House and Senate have “pay-as-you-go” (PAYGO)
requirements for direct spending and revenue legislation, prohibiting the
consideration of such legislation if it is projected to increase the deficit in specified
time periods (both explained further below).7
Expired Statutory Budget Enforcement Procedures
For FY1991 through FY2002, Congress and the President also were constrained
by statutory limits on discretionary spending and a statutory PAYGO requirement for
direct spending and revenue legislation.8 Unlike the enforcement procedures
7 For more detailed information on the PAYGO requirements, see CRS Report RL32835,
PAYGO Rules for Budget Enforcement in the House and Senate, by Robert Keith and Bill
Heniff Jr.
8 These constraints were first established by the Budget Enforcement Act of 1990 (Title XIII
of P.L. 101-508, Omnibus Budget Reconciliation Act of 1990, 104 Stat. 1388-573-1388-
(continued...)

CRS-5
associated with the budget resolution, which are employed while legislation is
considered on the floor of each chamber, the discretionary spending limits and
PAYGO requirement were enforced by a sequestration process, generally after
legislative action for a session of Congress ended. If either of these budget
constraints were violated, then the President was required to order a sequestration,
which involved largely across-the-board spending cuts in non-exempt programs, by
the amount of any violation. These budget enforcement mechanisms, however,
expired at the end of FY2002 (i.e., September 30, 2002).
President Bush, among others, has proposed setting new discretionary spending
limits and restoring a modified version of the PAYGO requirement, in addition to
several other budget process reforms.9 If Congress and President Bush enact new
budget enforcement procedures such as these applicable to budget legislation in
2007, this report will incorporate them accordingly.
8 (...continued)
630), which amended the Balanced Budget and Emergency Deficit Control Act of 1985
(Title II of P.L. 99-177, 99 Stat. 1038-1101).
9 In his FY2008 budget, President Bush proposed to set discretionary spending limits for
FY2007 through FY2012 and to restore the PAYGO requirement for direct spending
legislation only, among other budget reform initiatives. See OMB, Analytical Perspectives,
Budget of the U.S. Government, Fiscal Year 2008, pp. 211-220. For a contextual discussion
of budget process reform, see CRS Report RL33818, Federal Budget Process Reform in the
110th Congress: A Brief Overview, by Robert Keith.

CRS-6
Table 2. Mapping Spending and Revenue Legislation through the Congressional Budget Process
The annual budget resolution functions as the centerpiece of the congressional budget process by setting forth aggregate spending and revenue levels for at least five fiscal years. Budget resolution policies are implemented
through the enactment of appropriations and other spending measures, revenue legislation, and, if required by the budget resolution, one or more reconciliation bills. Each of these types of measures follows a separate process
but must comply with the budget policies set forth in the budget resolution.
Discretionary spending policies in the budget resolution are implemented through the appropriations process.
Annual Appropriations Process: Congress considers and adopts each year regular appropriations acts providing budgetary authority for the upcoming fiscal year.
Full Appropriations Committee
E a c h o f t h e
F u l l A p p r o p r i a t i o n s
F u l l c h a m b e r
House and Senate
House and Senate
President signs each
subdivides its spending allocation
a p p r o p r i a t i o n s
Committee reports each
c o n s i d e r s a n d
resolve differences
separately agree to
appropriations act, or
[302(a) allocation] among its
subcommittees holds
appropriations act, which must
a d o p t s e a c h
i n c o n f e r e n c e
conference report to
a n o m n i b u s
s u b c o m m i t t e e s [ 3 0 2 ( b )
hearings and drafts a
not exceed the respective
appropriations act.
committees.
each appropriations
appropriations act,
allocations].
r
e
g u
l
a
r
302(b) allocation.
act. From time to
into law.
appropriations act.
time, Congress merges
two or more regular
appropriations acts
into an omnibus
appropriations act.
Mandatory spending, revenue, and debt-limit policies in the budget resolution are implemented through the regular legislative process or the reconciliation process.
Regular legislative process: Congress may consider and adopt individual mandatory spending, revenue, or debt-limit legislation.
Each legislative committee
Each committee may report to its parent
Full chamber considers
House and Senate resolve
House and Senate separately
President signs individual
may hold hearings and
chamber mandatory spending or revenue
ind ivid ua l ma nd atory
differences in conference
agree to conference reports
mandatory spending or
c o ns id e r l e g i s l a t i o n
legislation, which must not: (1) cause
spe nding or re venue
committees.
to individual mandatory
revenue legislation into
referred to it or draft
direct spending under the committee’s
legislation.
spending or revenue
law.
original legislation.
jurisdiction to exceed its spending
legislation.
ceiling [302(a) allocation]; (2) cause
revenues to fall below the revenue floor
set forth in the budget resolution; or (3)
violate the Se na te ’ s PAYGO
requirement.
Reconciliation Process: Congress may include in the budget resolution reconciliation instructions directing one or more committees to recommend legislative changes to existing law in order to bring mandatory spending,
revenues, the debt-limit, or a combination of these, into compliance with the budget resolution policies.
Each legislative committee directed to do so
Budget Committee packages the
Full chamber considers
House and Sena te
House and Senate
P r e s i d e n t s i g n s
recommends legislative changes to existing law
c o m m i t t e e s ’ l e g i s l a t i v e
a n y o m n i b u s
resolve differences in
separately agree to
o
m n i b
u s
to achieve the mandatory spending or revenue
recommendations into one or more
reconciliation measure
conference committee.
conference report to
r e c o n c i l i a t i o n
levels set forth in the budget resolution and
omnibus reconciliation measures,
under special procedures
omnibus reconciliation
legislation into law.
submits these reconciliation recommendations
“without any substantive revision.”
that limit the measure’s
legislation.
to the Budget Committee by a date certain.
contents and floor debate.

CRS-7
Budget Resolution
The Congressional Budget Act, as amended, establishes the concurrent
resolution on the budget as the centerpiece of the congressional budget process.10
The budget resolution sets forth aggregate spending and revenue levels, and spending
levels by major functional area, for at least five fiscal years. Once adopted, it
provides the framework for subsequent action on budget-related legislation.
Following the submission of the President’s budget early in the year, Congress
begins formulating the budget resolution. The House and Senate Budget Committees
are responsible for developing and reporting the budget resolution. In formulating
it, the Budget Committees hold hearings and receive testimony from various
Members of Congress and representatives of federal departments and agencies, the
general public, and national organizations. Two regular hearings include separate
testimony from the new CBO director and the OMB director. On January 25 and 30,
2007, CBO Director Peter R. Orszag presented CBO’s baseline budget projections
for FY2008-FY2017 during separate testimony to the Senate and House Budget
Committees, respectively.11 On February 6 and 7, OMB Director Robert J. Portman
provided an overview of President Bush’s budget request before the House and
Senate Budget Committees, respectively.12
The congressional budget resolution, like the President’s budget, is based on
budget baselines (see Table 3). The budget baseline is a projection of federal
revenue, spending, and deficit or surplus levels based upon current policies, assuming
certain economic conditions. Baseline projections provide a benchmark for
measuring the budgetary effects of proposed policy changes. The President’s budget
baseline, referred to as current services estimates, is included in the budget
documents submitted to Congress.13 The President’s baseline usually differs from
CBO’s baseline, referred to as baseline budget projections, because of different
economic and technical assumptions. On January 24, 2007, CBO released its initial
budget baseline projections in its annual report, The Budget and Economic Outlook:
Fiscal Years 2008-2017. On March 21, CBO released updated baseline projections
in its report An Analysis of the President’s Budgetary Proposals for Fiscal Year
2008.14 The report also contains estimates of the President’s proposals using CBO’s
10 For historical information on budget resolutions, see CRS Report RL30297,
Congressional Budget Resolutions: Selected Statistics and Information Guide, by Bill
Heniff Jr. and Justin Murray.
11 Peter Orszag’s written testimony to the budget committees is available on CBO’s website
at [http://www.cbo.gov].
12 Robert Portman’s written testimony to the House Budget Committee is available at
[http://budget.house.gov/hearings/2007/08Portman_testimony_with_charts.pdf]; his written
t e s t i m o n y t o t h e S e n a t e B u d g e t C o m m i t t e e i s a v a i l a b l e a t
[http://budget.senate.gov/democratic/testimony/2007/Portman_budget020707FINAL.pdf].
13 See chapter 25 of the Analytical Perspectives volume, pp. 371-387, for the current
services estimates. OMB, Budget of the U.S. Government, Fiscal Year 2008.
14 Both the Senate and House versions of the FY2008 budget resolution use CBO’s March
(continued...)

CRS-8
economic and technical assumptions, and provides an analysis of the potential
macroeconomic effects of the President’s budgetary proposals.
Table 3. Budget Baselines, FY2007-FY2012
(in billions of dollars)
Total
FY2007
FY2008
FY2009
FY2010
FY2011
FY2012
FY2008-
FY2012
Congressional Budget Office — March 2007
[budget baseline projections]
Revenues
2,542
2,720
2,810
2,901
3,167
3,405
15,003
Outlays
2,719
2,833
2,944
3,058
3,202
3,250
15,286
Surplus/Deficit (-)
-177
-113
-134
-157
-35
155
-283
On-budget
-363
-315
-351
-388
-281
-102
-1,438
Off-budgeta
186
202
217
232
247
257
1,155
Office of Management and Budget — February 2007
[current services estimates]
Revenues
2,550
2,714
2,831
3,008
3,151
3,348
15,052
Outlays
2,735
2,752
2,866
2,973
3,116
3,201
14,908
Surplus/Deficit (-)
-185
-38
-35
34
35
147
143
On-budget
-368
-250
-261
-210
-228
-130
-1,079
Off-budgeta
183
212
225
244
263
277
1,009
Sources: Congressional Budget Office, An Analysis of the President’s Budgetary Proposals for Fiscal Year 2008, Mar. 2007,
p. 46; Office of Management and Budget, Analytical Perspectives, Budget of the United States Government, Fiscal Year 2008
(Washington: GPO, 2007), p. 371.
Note: Details may not add to totals due to rounding.
a. Off-budget surpluses comprise surpluses in the Social Security trust funds as well as the net cash flow of the Postal Service.
Also in preparation for upcoming congressional budget actions, CBO released
its periodic report on the budgetary implications of policy choices, Budget Options,
on February 23. The report provides background information and the estimated 10-
year budgetary effects of 182 spending options and 65 revenue options.15
Another source of input comes from the “views and estimates” of congressional
committees with jurisdiction over spending and revenues. Within six weeks after the
President’s budget submission, or by a date set by the Budget Committees, each
House and Senate committee is required to submit views and estimates of budget
matters under its jurisdiction to its respective Budget Committee. These views and
14 (...continued)
2007 baseline projections. See S.Prt. 110-19, Committee print to accompany S.Con.Res. 21,
Concurrent Resolution on the Budget FY2008, p. 3; and H.Rept. 110-69, Report to
accompany H.Con.Res. 99, Concurrent Resolution on the Budget — Fiscal Year 2008, p.
5.
15 All CBO reports are available on its website at [http://www.cbo.gov].

CRS-9
estimates, frequently submitted in the form of a letter to the chair and ranking
minority Member of the Budget Committee, typically include comments on the
President’s budget proposals and estimates of the budgetary impact of any legislation
likely to be considered during the current session of Congress. The Budget
Committees are not bound by these recommendations. The views and estimates often
are printed in the committee report or committee print accompanying the budget
resolution in the Senate16 and compiled as a separate committee print in the House.
The budget resolution was designed to provide a framework for making budget
decisions, leaving specific program determinations to the House and Senate
Appropriations Committees and other committees with spending and revenue
jurisdiction. In many instances, however, particular program changes are considered
when the budget resolution is formulated. Program assumptions sometimes are
referred to in the reports of the House and Senate Budget Committees and usually are
discussed during floor action. Although these program changes are not binding,
committees may be strongly influenced by the recommendations when formulating
appropriations bills, reconciliation measures, or other budgetary legislation.
The congressional budget process timetable sets April 15 as a target date for
final adoption of the budget resolution.17 The Budget Act prohibits the consideration
of spending, revenue, or debt-limit legislation for the upcoming year until the budget
resolution has been adopted, unless the rule is waived or set aside.
Committee Markup and Reporting
On March 15, the Senate Budget Committee marked up and voted to report the
Senate version of the FY2008 budget resolution (S.Con.Res. 21, S.Prt. 110-19) by
a vote of 12-11. During markup, the committee considered 20 amendments to the
chairman’s mark: 10 amendments were adopted and 11 amendments were rejected.18
The House Budget Committee, on March 21, marked up and voted to report the
House version of the FY2008 budget resolution (H.Con.Res. 99, H.Rept. 110-69) by
a vote of 22-17. During markup, the committee considered 30 amendments to the
16 S.Prt. 110-19, pp. 50-258.
17 In years when Congress is late in adopting, or does not adopt, a budget resolution, the
House and Senate independently may adopt “deeming resolution” provisions for the purpose
of enforcing certain budget levels. Deeming resolution provisions, typically included in a
simple resolution, specify certain budget levels normally contained in the budget resolution,
including aggregate spending and revenue levels, spending allocations to House and Senate
committees, spending allocations to the Appropriations Committees only, or a combination
of these. In some cases, an entire budget resolution, earlier adopted by one chamber, may
be deemed to have been passed. Under a deeming resolution, the enforcement procedures
related to the Congressional Budget Act, discussed later in this report, have the same force
and effect as if Congress had adopted a budget resolution. For further information on
“deeming resolutions,” see CRS Report RL31443, The “Deeming Resolution”: A Budget
Enforcement Tool, by Robert Keith.
18 For a description of the amendments and the roll call votes, see S.Prt. 110-19, Committee
print to accompany S.Con.Res. 21, Concurrent Resolution on the Budget FY2008, pp. 28-31.

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chairman’s mark: three amendments were adopted, 26 amendments were rejected,
and one amendment was withdrawn.19
Floor Consideration
The House and Senate consider the budget resolution under procedures
generally intended to expedite final action.
The Senate considers the budget resolution under the procedures set forth in the
Budget Act, sometimes as modified by a unanimous consent agreement. Debate on
the initial consideration of the budget resolution, and all amendments, debatable
motions, and appeals, is limited to 50 hours. Amendments, motions, and appeals
may be considered beyond this time limit, but without debate. (Consideration of the
conference report is limited to 10 hours.) The Senate considered its version of the
FY2008 budget resolution on March 20, 21, 22, and 23. During consideration of
S.Con.Res. 21, the Senate considered 91 amendments: 63 amendments were
adopted, 24 amendments were rejected, one amendment fell on a point of order, and
three amendments were withdrawn. On March 23, the Senate agreed to S.Con.Res.
21, as amended, by a 52-47 vote.20
In the House, the budget resolution usually is considered under a special rule,
limiting the time of debate and allowing only a few amendments, as substitutes to the
entire resolution. On March 28 and 29, the House considered H.Con.Res. 99 under
a structured rule (H.Res. 275, H.Rept. 110-79) reported by the House Rules
Committee. The special rule provided for the consideration of H.Con.Res. 99,
limited general debate to four hours, and made in order the three amendments in the
nature of a substitute printed in the House Rules Committee report. The House
agreed to H.Res. 275 by a vote of 229-197 after agreeing to order the previous
question by a vote of 225-196. During consideration of the FY2008 budget
resolution, the House rejected the three amendments made in order by the special
rule. The House subsequently agreed to H.Con.Res. 99 by a vote of 216-210.21
After resolving the differences between their respective versions, the House and
Senate agreed to the conference report to accompany the FY2008 budget resolution
(S.Con.Res. 21, H.Rept. 110-153) by votes of 214-209 and 52-40, respectively, on
19 For a description of the amendments and the roll call votes, see H.Rept. 110-69,
Concurrent Resolution on the Budget — Fiscal Year 2007, committee report to accompany
H.Con.Res. 99, pp. 67-92.
20 For the consideration and adoption of the Senate version of the FY2008 budget resolution,
see Congressional Record, daily edition, vol. 153 (March 20-23, 2007), pp. S3308-S3340,
S3452, S3453-S3512, S3545, S3547-S3603, S3647-S3655, S3659-S3702.
21 For the consideration and adoption of H.Res. 275 and H.Con.Res. 99, see Congressional
Record, daily edition, vol. 153 (March 28 and 29, 2007), pp. H3192-H3199, H3203-H3204,
H3237-H3265, H3283-H3338.

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May 17.22 Table 4 provides a comparison of several components contained in the
House, Senate, and conference versions of the FY2008 budget resolution.
22 The House considered the conference report under a special rule (H.Res. 409), which it
agreed to by a 225-194 vote, after agreeing to order the previous question by a 224-193 vote.
For the House consideration of H.Res. 409 and the conference report to S.Con.Res. 21, see
Congressional Record, daily edition, vol. 153 (May 17, 2007), pp. H5355-H5373. For the
Senate consideration of the conference report to S.Con.Res. 21, see Congressional Record,
daily edition, vol. 153 (May 17, 2007), pp. S6220-S6253.

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Table 4. Comparison of Selected Components of the House, Senate,
and Conference Versions of the FY2008 Budget Resolution
(amounts in millions of dollars for FY2008, except where noted)
House version (H.Con.Res. 99)
Senate version (S.Con.Res. 21)
Conference version (S.Con.Res. 21)
Total revenues
2,050,797
2,008,975
2,015,858
Total spending

Budget authority
2,495,291
2,490,185
2,496,028
(discretionary)
(954,937)
(942,295)
(953,052)

Outlays
2,465,888
2,460,251
2,469,636
(discretionary)
(1,027,192)
(1,021,392)
(1,028,397)
Deficit (on-budget)
-415,091
-451,276
-453,778
Debt subject to limit
9,461,000
[none]
9,504,150
Reconciliation directives:
(1) September 10, 2007;
[none]
(1) September 10, 2007;
(1) deadline;
(2) House Committee on Education and Labor;
(2) House Committee on Education and
(2) committee involved;
(3) -75 (FY2007-FY2012)
Labor and Senate Committee on Health,
(3) total amount of deficit reduction
Education, Labor, and Pensions;
(3) -750 (FY2007-FY2012)
Reserve or contingency funds (#)
12
39
23
Declaratory provisions (#)a
16
1
17
Notes: Amounts are for FY2008, except where noted. The total budget amounts in the budget resolution do not include the off-budget financial transactions of the Social Security Trust Funds and the U.S. Postal Service.
a. The number of declaratory provisions includes sense of the House, sense of Congress, and policy statements included in the budget resolution.

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Reconciliation Legislation
Congress may implement changes to existing law related to direct spending,
revenues, or the debt limit through the reconciliation process, under Section 310 of
the Budget Act.23 The reconciliation process has two stages. First, Congress includes
reconciliation directives in a budget resolution directing one or more committees in
each chamber to recommend changes in statute to achieve the levels of direct
spending, revenues, debt limit, or a combination thereof, agreed to in the budget
resolution.24
Second, each instructed committee develops legislative recommendations to
meet its reconciliation directives and reports its legislative recommendations to its
respective chamber directly or transmits such recommendations to its respective
budget committee. Section 310(b) of the Budget Act specifies two options for the
submission of legislative recommendations to comply with reconciliation directives:
(1) if one committee is instructed, the committee reports its legislative
recommendations to its parent chamber directly; or (2) if two or more committees are
instructed, the committees submit their legislative recommendations to their
respective Budget Committee. In the latter case, the legislative language
recommended by committees is packaged “without any substantive revision” into one
or more budget reconciliation bills, as set forth in the budget resolution, by the House
and Senate Budget Committees.
Once the reconciliation legislation is reported in the House or Senate,
consideration is governed by special procedures. These procedures serve to limit
what may be included in reconciliation legislation, prohibit certain amendments, and
encourage its completion in a timely fashion. In the House, as with the budget
resolution, reconciliation legislation usually is considered under a special rule,
establishing the time allotted for debate and what amendments will be in order. In
the Senate, debate on a budget reconciliation bill, and on all amendments, debatable
motions, and appeals, is limited to not more than 20 hours. After the 20 hours of
debate has been reached, consideration of amendments, motions, and appeals may
continue, but without debate.
In both chambers, the Budget Act requires that amendments to reconciliation
legislation be germane and not increase the deficit. Also, the Budget Act prohibits
the consideration of reconciliation legislation, or any amendment to a reconciliation
bill, recommending changes to the Social Security program. Finally, in the Senate,
23 For a full discussion of the reconciliation process, see CRS Report RL33030, The Budget
Reconciliation Process: House and Senate Procedures, by Robert Keith and Bill Heniff Jr.
24 At the beginning of the 110th Congress, the House adopted a new rule (clause 7 of rule
XXI) that prohibits the consideration of a budget resolution containing reconciliation
directives that would have the net effect of increasing the deficit or reducing the surplus.
In the Senate, Section 202 of S.Con.Res. 21, the FY2008 budget resolution, agreed to on
May 17, prohibits the consideration of a reconciliation measure that would increase the
deficit or reduce the surplus.

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Section 313 of the Budget Act, commonly referred to as the Byrd rule, prohibits
extraneous matter in a reconciliation bill.25
The FY2008 budget resolution (S.Con.Res. 21), agreed to by the House and
Senate on May 17, contains reconciliation directives (Sections 601 and 602) to the
House Committee on Education and Labor, and the Senate Committee on Health,
Education, Labor, and Pensions, to report by September 10, 2007, reconciliation
legislation reducing the deficit by $750 million over the period covering FY2007-
FY2012.
Revenue and Debt-Limit Legislation
Congress may adopt individual revenue and debt-limit measures without
employing the optional reconciliation process as well.
Revenue Legislation
Revenue and debt-limit legislation is under the jurisdiction of the House Ways
and Means Committee and the Senate Finance Committee. Article I, Section 7, of
the U.S. Constitution requires that revenue legislation originate in the House of
Representatives, but the Senate has considerable latitude to amend a revenue bill
received from the House.
Most of the laws establishing the federal government’s revenue sources (see
Figure 1) are permanent and continue year after year without any additional
legislative action. Congress, however, typically enacts revenue legislation, changing
some portion of the existing tax system or renewing expiring provisions, every year.
Revenue legislation may include changes to individual and corporate income taxes,
social insurance taxes, excise taxes, or tariffs and duties.
25 For detailed information on the Byrd rule, see CRS Report RL30862, The Budget
Reconciliation Process: The Senate’s “Byrd Rule,” by Robert Keith.

CRS-15
Figure 1. Actual FY2006 Revenues by Source
Source: Chart created by CRS based on data from Congressional Budget Office, The Budget and
Economic Outlook: Fiscal Years 2008-2017 (Washington: CBO, 2007), p. 142.
Revenue legislation is not considered automatically in the congressional budget
process on an annual basis. Frequently, however, the President proposes and
Congress considers changes in revenue laws to effect adjustments in the rates of
taxation or the distribution of the tax burden, or for other purposes. An initial step
in the congressional budget process is the publication of revenue estimates of the
President’s budget by CBO. These revenue estimates usually differ from the
President’s, since they are based on different economic and technical assumptions
(e.g., growth of the economy and change in the inflation rate). Cost estimates of any
congressional revenue proposals are prepared by the Joint Committee on Taxation
(JCT). They are published in committee reports or in the Congressional Record and
are available on JCT’s website.26
The budget resolution recommends yearly revenue levels, based on baseline
estimates of federal government revenues that assume the continuation of existing
laws and any proposed policy changes to them. Revenue levels in the budget
resolution provide the framework for any action on revenue measures during the
session. A point of order may be raised against consideration of legislation that
causes revenues to fall below the agreed upon levels for the first fiscal year or the
total for all fiscal years in the budget resolution. This point of order may be set aside
by unanimous consent, or waived by a special rule in the House or by a three-fifths
vote in the Senate (i.e., 60 Senators if there are no vacancies).
26 [http://www.house.gov/jct/].

CRS-16
In addition, both the House and Senate have “pay-as-you-go” (PAYGO)
requirements for revenue legislation (as well as direct spending, as discussed below).
The House and Senate PAYGO rules (Rule XXI, clause 10, and Section 201 of
S.Con.Res. 21, the FY2008 budget resolution, respectively) prohibit the
consideration of revenue legislation (as well as direct spending legislation) that
would have the net effect of increasing the deficit or reducing the surplus over either
a six-year period (FY2007-FY2012) or an 11-year period (FY2007-FY2017). Like
many other budget-related points of order, the PAYGO points of order may be set
aside by unanimous consent, or waived by a special rule in the House or by a three-
fifths vote in the Senate (i.e., 60 Senators if there are no vacancies).
For additional information on tax legislation in 2007, see CRS Report RL33768,
Major Tax Issues in the 110th Congress, by David L. Brumbaugh.
Debt-Limit Legislation
The amount of money the federal government is allowed to borrow generally is
subject to a statutory limit (31 U.S.C. 3101). From time to time, Congress considers
and adopts legislation to change this limit.27
Federal debt consists of debt held by the public plus debt held by government
accounts. The debt held by the public represents the total net amount borrowed from
the public to cover all or most of the federal government’s budget deficits. By
contrast, the debt held by government accounts represents the total net amount of
federal debt issued to specialized federal accounts, primarily trust funds (e.g., Social
Security). Trust fund surpluses by law must be invested in special (non-negotiable)
federal government securities, and thus are held in the form of federal debt. The
combination of both types of debt is subject to the statutory public debt limit.
Therefore, budget deficits or trust fund surpluses may contribute to the federal
government reaching the existing debt limit.
The annual congressional budget resolution specifies the appropriate level of the
public debt for each fiscal year covered by the resolution. Although the budget
resolution does not become law itself, the specified debt limits serve as a guide for
any necessary debt-limit legislation.
Congress may develop debt-limit legislation in any of three ways: (1) under
regular legislative procedures; (2) under House Rule XXVII; or (3) as part of
reconciliation legislation (as described above). Regardless of the process by which
debt-limit legislation is developed, the House Ways and Means Committee and the
Senate Finance Committee maintain exclusive jurisdiction over debt-limit legislation.
Under House Rule XXVII (commonly referred to as the Gephardt rule after its
author, former Representative Richard Gephardt), a joint resolution specifying the
27 For further information on debt-limit legislation, see CRS Report RS21519, Legislative
Procedures for Adjusting the Public Debt Limit: A Brief Overview, by Bill Heniff Jr.; and
CRS Report RL31967, The Debt Limit: The Ongoing Need for Increases, by Philip D.
Winters.

CRS-17
amount of the debt limit contained in the budget resolution automatically is
engrossed and deemed to have passed the House by the same vote as the conference
report on the budget resolution, thereby avoiding a separate vote on the debt-limit
legislation.28 The Senate has no comparable automatic engrossment procedure; if it
chooses to consider a House-passed joint resolution, it does so under the regular
legislative process.
The most recent increase in the public-debt limit was enacted as an independent
measure (P.L. 109-182, 120 Stat. 289), which originated pursuant to the Gephardt
rule, in March 2006. The debt-limit measure increased the statutory limit by $781
billion, from $8.184 trillion to $8.965 trillion. President Bush’s FY2008 budget
projects that the debt subject to the statutory limit will increase to $8.977 trillion, $12
billion over the current limit, by the end of FY2007.29 Therefore, Congress and the
President will likely need to increase the statutory limit in late 2007.
Pursuant to House Rule XXVII, upon the adoption of the FY2008 budget
resolution by Congress, the House Clerk engrossed and transmitted to the Senate a
joint resolution (H.J.Res. 43) increasing the public debt limit by $850 billion, to
$9.815 trillion. H.J.Res. 43 was deemed to have been adopted by the House on May
17 by a vote of 214-209 (i.e., the vote upon which the House agreed to the conference
report to the FY2008 budget resolution). The Senate had not yet considered H.J.Res.
43 or other debt-limit legislation.
Appropriations and Other Spending Legislation
Federal spending is categorized into two different types: discretionary or
mandatory spending. Discretionary spending is controlled through the annual
appropriations acts, while mandatory or direct spending (which consists mostly of
entitlement programs) is determined by existing law.
Actual FY2006 federal outlays totaled $2,654.4 billion (see Figure 2). Of this
total amount, $1,016.2 billion, or 38%, was discretionary spending (exploded slices
in Figure 2), while $1,638.2 billion, or 62%, was mandatory spending.
28 For further information, see CRS Report RL31913, Developing Debt-Limit Legislation:
The House’s “Gephardt Rule,” by Bill Heniff Jr.
29 OMB, Analytical Perspectives, Budget of the U.S. Government, Fiscal Year 2008, p. 234.

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Figure 2. Actual FY2006 Outlays by Major Spending Category
Source: Chart created by CRS based on data from CBO, The Budget and Economic Outlook: Fiscal
Years 2008-2017 (Washington: CBO, 2007), pp. 144, 146, and 148. The chart excludes offsetting
receipts, which are treated as negative spending (i.e., they are deducted from spending in the budget
totals); offsetting receipts totaled $140.6 billion in FY2006.
As noted above, the total budget authority and outlays set forth in the budget
resolution are allocated among the House and Senate committees with jurisdiction
over specific spending legislation. These allocations, commonly referred to as 302(a)
allocations, after the applicable section of the Congressional Budget Act, are
specified in the joint explanatory statement accompanying the conference report to
the budget resolution.30 A point of order may be raised against any legislation that
would cause a committee’s spending allocation to be exceeded. The budget
resolution typically provides for periodic revisions of these allocations if certain
conditions, specified in reserve fund provisions, for instance, are met.
Discretionary Spending
Discretionary spending is under the jurisdiction of the House and Senate
Appropriations Committees. Soon after the budget resolution is adopted by
Congress, the House and Senate Appropriations Committees subdivide their
spending allocations among their subcommittees and formally report these
subdivisions to their respective chambers. These subdivisions, referred to as 302(b)
allocations, after the applicable section of the Congressional Budget Act, represent
30 See H.Rept. 110-153, pp. 125-132.

CRS-19
the spending ceilings on the individual regular appropriations acts. During the
appropriations process, these suballocations usually are revised several times.
Congress passes three main types of appropriations measures. Regular
appropriations acts provide budget authority for the next fiscal year, beginning on
October 1.31 (From time to time, Congress merges two or more of these regular
appropriations acts into an omnibus appropriations act.) Supplemental
appropriations acts provide additional funding for the fiscal year in progress.
Continuing appropriations acts, commonly referred to as continuing resolutions,
provide stop-gap funding for agencies that have not received regular appropriations
by the start of the fiscal year.
The President’s budget includes recommendations for the upcoming fiscal year
for agencies, programs, and activities funded in the annual appropriations measures;
account and program level detail about these recommendations is included in the
Appendix volume of the President’s budget documents. In addition, agencies submit
justification materials to the House and Senate Appropriations Committees. The
budget justifications provide more detailed information about an agency’s program
activities than is contained in the President’s budget documents and are used in
support of agency testimony during appropriations subcommittee hearings on the
President’s budget request.
The House and Senate appropriations subcommittees begin holding extensive
hearings on appropriations requests shortly after the President’s budget is submitted.
By custom, appropriations measures originate in the House. In recent years, the
Senate Appropriations Committee has adopted and reported original Senate
appropriations measures, allowing the Senate to consider appropriations measures
without having to wait for the House to adopt its version. Under this practice, the
Senate version is considered and amended on the floor, and then inserted into the
House-adopted version, when available, as a substitute amendment, thereby retaining
the House-numbered bill for final action.
Congress also often adopts one or more continuing resolutions each year
because of recurring delays in the appropriations process. For example, Congress
passed three continuing resolutions before completing action on the FY2007 regular
appropriations acts.32
31 Each subcommittee of the House and Senate Appropriations Committees typically is
responsible for one of the regular appropriations acts. At the beginning of the 110th
Congress, the House and Senate Appropriations Committees modified their subcommittee
structures, establishing 12 parallel appropriations subcommittees. For additional
information on changes to the appropriations subcommittee structure, see CRS Report
RL31572, Appropriations Subcommittee Structure: History of Changes from 1920-2005, by
James V. Saturno.
32 Initially, Congress and the President enacted a continuing appropriations resolution (Div.
B of P.L. 109-289) to provide temporary appropriations through November 17, 2006, for
agencies and programs funded in the remaining regular appropriations acts not yet enacted.
They extended this funding twice: first through December 8, 2006 (P.L. 109-369), and then
through February 15, 2007 (P.L. 109-383).

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Regular Appropriations for FY2007. At the outset of the 110th Congress,
only two of the 11 regular appropriations acts for FY2007 (which began on October
1, 2006) had been enacted. Since the start of FY2007, federal government agencies
and programs funded in regular appropriations acts not yet enacted into law received
temporary appropriations provided by three successive continuing resolutions (CRs),
generally at a rate of operations not to exceed the FY2006 enacted level.
The last CR enacted in 2006 was scheduled to expire on February 15, 2007. On
January 31 and February 14, respectively, the House and Senate passed a new CR
(H.J.Res. 20) that provided funding through the end of FY2007 for those temporarily-
funded federal government agencies and programs at the level appropriated in
FY2006, with certain exceptions. In all, the exceptions brought the total FY2007
non-emergency discretionary spending to the level agreed to by the House and
Senate, and proposed by President George W. Bush, in 2006. On February 15,
President Bush signed the measure into law (P.L. 110-5), thereby bringing action on
the FY2007 regular appropriations acts to a close.
Supplemental Appropriations for FY2007. In addition to the regular
appropriations acts, Congress typically acts on at least one supplemental
appropriations measure during a session. President Bush submitted, along with his
budget request for FY2008, a request for $103 billion in FY2007 supplemental
appropriations “in support of operations in the Global War on Terror (GWOT) and
the Gulf Coast’s recovery from Hurricane Katrina.”33 In response to the President’s
request, the House Appropriations Committee reported H.R. 1591, U.S. Troop
Readiness, Veterans’ Health, and Iraq Accountability Act, 2007 (H.Rept. 110-60) on
March 20. The House considered H.R. 1591 on March 22 and 23, and adopted the
measure by a vote of 218-212.
The Senate Appropriations Committee ordered reported S. 965, U.S. Troop
Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability
Appropriations Act, 2007 (S.Rept. 110-37) on March 22. The Senate took up H.R.
1591, amended it with the text of S. 965, and considered several other amendments
over four days between March 26 and March 29, adopting the measure, as amended,
on March 29 by a 51-47 vote.
On April 24, a conference report to accompany H.R. 1591 was filed. According
to the Appropriations Committees, H.R. 1591 would provide about $124.2 billion in
new budget authority for FY2007. The House agreed to the conference report on
April 25 by a 218-208 vote. The Senate agreed to the conference report on April 26
by a 51-46 vote. President Bush vetoed the measure on May 1. The House failed to
override the veto, which requires a two-thirds vote, by a 222-203 vote on May 2.34
33 OMB, Appendix, Budget of the U.S. Government, Fiscal Year 2008, pp. 1143-1178.
34 For further information on the FY2007 supplemental appropriations, see CRS Report
RL33900, FY2007 Supplemental Appropriations for Defense, Foreign Affairs, and Other
Purposes, by Stephen Daggett, Amy Belasco, Pat Towell, Susan B. Epstein, Connie
Veillette, Curt Tarnoff, and Rhoda Margesson.

CRS-21
The House subsequently, on May 10, passed two new supplemental measures
(H.R. 2206 and H.R. 2207), which were combined into one bill (H.R. 2206) and sent
to the Senate. On May 17, the Senate passed H.R. 2206, with an amendment, and
requested a conference with the House. Instead of resolving the legislative
differences between the two chambers in a conference committee, on May 24, the
House amended the Senate-amended House measure, and the Senate agreed to that
House amendment, clearing the measure for the President. On May 25, President
Bush signed H.R. 2206 into law (P.L. 110-28). According to the House
Appropriations Committee, P.L. 110-28 provided about $120 billion in supplemental
appropriations for FY2007.
In each case, the supplemental appropriations were designated as emergency
requirements,35 thereby exempting the appropriations from the spending constraints
associated with the budget resolution, as mentioned above.
Regular Appropriations for FY2008. The conference report to the FY2008
budget resolution (S.Con.Res. 21, H.Rept. 110-153) provided for about $953 billion
in discretionary spending. Accordingly, the House and Senate Appropriations
Committees received spending allocations [its so-called 302(a) allocations] of
$953,052 million in budget authority and $1,028,397 million in outlays.36 As
Congress began its Memorial Day recess, the appropriations committees had yet to
report their initial subdivisions, or 302(b) allocations. Section 302(c) of the Budget
Act prohibits the consideration of the regular appropriations measures for the
upcoming fiscal year until the appropriations committees have made those
subdivisions. As mentioned above, these subdivisions serve as spending ceilings for
the individual regular appropriations measures and are enforced by points of order
on the floor of each chamber.
The conference report to the FY2008 budget resolution also contains
discretionary spending limits for FY2007 and FY2008 (Section 207 of S.Con.Res.
21), which may be enforced in the Senate by a point of order.37 A motion to waive
35 In the case of H.R. 1591, for the House, the designation was pursuant to Sections 402 and
501 of H.Con.Res. 376 (109th Congress), as made applicable by section 511(a)(4) of H.Res.
6 (110th Congress), and for the Senate, the designation was pursuant to Section 402 of
H.Con.Res. 95 (109th Congress). In the case of H.R. 2206 (as well as H.R. 2207 in the
House), for both chambers, the designation was pursuant to Section 204 of S.Con.Res. 21.
36 Section 207 of S.Con.Res. 21 provides for the adjustment of the appropriations
committees’ spending allocations up to $1,042 million (in budget authority and outlays),
plus an unlimited amount for costs of overseas deployments and related activities, for
FY2008 if they report appropriations bills that meet certain criteria involving continuing
disability reviews and Supplemental Security Income redeterminations, Internal Revenue
Service tax compliance, health care fraud and abuse control program, unemployment
insurance improper payment reviews, and costs of overseas deployments and related
activities.
37 Like the appropriations committees’ spending allocations, the FY2008 discretionary
spending limits also may be adjusted upward to accommodate spending for certain purposes,
as specified in footnote 36.

CRS-22
the point of order requires a three-fifths vote (i.e., 60 Senators if there are no
vacancies).
Mandatory Spending
Mandatory spending is under the jurisdiction of the various legislative
committees of the House and Senate. Some entitlement programs, such as Medicaid
and certain veterans’ programs, are funded in annual appropriations acts, but such
spending is not considered discretionary and is not controlled through the annual
appropriations process.
In addition to the committee spending allocations, under the Section 302 process
mentioned above, mandatory spending legislation is limited by PAYGO rules in the
House and Senate. As noted above with regard to revenue legislation, the House and
Senate PAYGO rules (Rule XXI, clause 10, and Section 201 of S.Con.Res. 21, the
FY2008 budget resolution, respectively) prohibit the consideration of direct spending
legislation that would have the net effect of increasing the deficit or reducing the
surplus over either a six-year period (FY2007-FY2012) or an 11-year period
(FY2007-FY2017). Like many other budget-related points of order, the PAYGO
points of order may be set aside by unanimous consent, or waived by a special rule
in the House or by a three-fifths vote in the Senate (i.e., 60 Senators if there are no
vacancies).
On several occasions in the past, Congress has included reserve funds in the
budget resolution to accommodate specific mandatory spending legislation, often
requiring that the legislation be deficit neutral.38 Under the provisions of a reserve
fund, the chairmen of the House and Senate Budget Committees may revise the
committee spending allocations and other budget resolution levels if certain
legislation is reported by the appropriate committee. Without such an adjustment,
mandatory spending legislation might be subject to points of order if it were not
assumed in the budget resolution spending amounts.
The Senate-passed version of the FY2008 budget resolution (S.Con.Res. 21)
contains 39 reserve funds (Sections 301-324, 330-334, 336-343), and the House-
passed version (H.Con.Res. 99) contains 12 reserve funds (Sections 201-212). As
indicated in Table 4, the conference report to the FY2008 budget resolution
(S.Con.Res. 21, H.Rept. 110-153) contains 23 reserve funds (Sections 301-323) for
such purposes as SCHIP legislation and selected tax relief policies. One of these
reserve funds applies to the House only; four apply to the Senate only; and 18 apply
to both.
38 See, for example, CRS Report RS21038, Reserve Funds in the FY2002 Budget Resolution,
by Bill Heniff Jr.

CRS-23
Chronology
May 17, 2007
The House and Senate agreed to the conference report
(H.Rept. 109-153) to the FY2008 budget resolution
(S.Con.Res. 21) by votes of 214-209 and 52-40,
respectively.
March 29, 2007
The House agreed to its version of the FY2008 budget
resolution (H.Con.Res. 99) by a vote of 216-210.
March 23, 2007
The Senate agreed to its version of the FY2008 budget
resolution (S.Con.Res. 21) by a vote of 52-47.
February 5, 2007
President Bush submitted his FY2008
budget to
Congress.
January 24, 2007
CBO released its annual report on budget baseline
projections, The Budget and Economic Outlook: Fiscal
Years 2008-2017.
For Additional Reading
Congressional Hearings, Reports, and Documents
Congressional Budget Office. An Analysis of the President’s Budgetary Proposals
for Fiscal Year 2008. Washington: CBO, March 2007.
Congressional Budget Office. The Budget and Economic Outlook: Fiscal Years
2008-2017. Washington: CBO, January 2007.
U.S. Congress. House Committee on the Budget. Concurrent Resolution on the
Budget — Fiscal Year 2008. Report to accompany H.Con.Res. 99. 110th
Congress, 1st session. H.Rept. 110-69. Washington: GPO, 2007.
U.S. Congress. Senate Committee on the Budget. Concurrent Resolution on the
Budget FY2008. Committee Print to Accompany S.Con.Res. 21. 110th
Congress, 1st session. S.Prt. 110-19. Washington: GPO, 2007.
U.S. Congress. Committee on Conference. Concurrent Resolution on the Budget for
Fiscal Year 2008. Report to accompany S.Con.Res. 21. 110th Congress, 1st
session. H.Rept. 110-153. Washington: GPO, 2007.
CRS Products
CRS Report RL33291. Congressional Budget Actions in 2006, by Bill Heniff Jr.
CRS Report RL30297. Congressional Budget Resolutions: Selected Statistics and
Information Guide, by Bill Heniff Jr. and Justin Murray.

CRS-24
CRS Report RL33030. The Budget Reconciliation Process: House and Senate
Procedures, by Robert Keith and Bill Heniff Jr.
CRS Report 98-721. Introduction to the Federal Budget Process, by Robert Keith.
CRS Report 97-684. The Congressional Appropriations Process: An Introduction,
by Sandy Streeter.
CRS Report RL30343. Continuing Resolutions: FY2007 Action and Brief Overview
of Recent Practices, by Sandy Streeter.
CRS Report RS22605. FY2008 Budget Documents: Internet Access and GPO
Availability, by Jennifer Teefy.
CRS Report RL33282. The Budget for Fiscal Year 2007, by Philip D. Winters.
CRS Report RL33915. The Budget for Fiscal Year 2008, by Philip D. Winters.