Spending Reconciliation Directives to the Senate Finance Committee in Congressional Budget Resolutions



Order Code RS21993
Updated December 28, 2006
Spending Reconciliation Directives to the
Senate Finance Committee in Congressional
Budget Resolutions
Robert Keith
Specialist in American National Government
Government and Finance Division
Bill Heniff Jr.
Analyst in American National Government
Government and Finance Division
Summary
During the more than 30 years that the congressional budget process has been in
effect, the Senate Finance Committee has been subject to spending reconciliation
directives in a budget resolution on 16 occasions. Fourteen instances involved directives
to reduce spending, while the remaining two, for FY2002 and FY2004, instructed the
committee to increase outlays (to accommodate related tax policy changes). In every
instance but one, for FY1982, spending reconciliation directives to the committee were
accompanied by revenue reconciliation directives.
The spending reconciliation directives varied in their time frame, from single-year
coverage (in the FY1981 and FY1990 budget resolutions) to 11-year coverage (in the
FY2002 and FY2004 budget resolutions). Further, the amount of required spending
changes ranged from about $100 million for a single year to about $530 billion over
seven years. The largest spending increase was directed in the FY2004 budget
resolution ($27.476 billion in outlays for 11 years, covering FY2003-FY2013), while
the largest spending decrease was directed in the FY1996 budget resolution ($530.359
billion for seven years, covering FY1996-FY2002).
This report will be updated as developments warrant. (For additional information,
see CRS Report RS20870, Revenue Reconciliation Directives to the Senate Finance
Committee in Congressional Budget Resolutions
, by Robert Keith.)
The budget reconciliation process is an optional procedure under the Congressional
Budget Act of 1974 (P.L. 93-344, as amended) that operates as an adjunct to the annual
budget resolution process. The 1974 act first became effective for FY1976, and Congress

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has completed action on at least one budget resolution each year, except for FY1999,
FY2003, FY2005, and FY2007.
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. With respect to spending,
reconciliation is focused on direct spending (also called mandatory spending), which
derives from substantive law under the jurisdiction of the legislative committees and
largely involves entitlement programs. Discretionary spending, on the other hand, is
under the control of the Appropriations Committees and is subject to enforcement under
different procedures. Roughly two-thirds of total annual spending is direct spending.
Accordingly, reconciliation probably is the most potent budget enforcement tool available
to Congress for a large portion of the budget.
Reconciliation is a two-stage process in which reconciliation directives are included
in the budget resolution, directing the appropriate committees to develop legislation
achieving the desired budgetary outcomes, and the resultant legislation, usually
incorporated into an omnibus bill, is considered under expedited procedures in the House
and Senate. No reconciliation legislation can be developed or considered unless a budget
resolution containing reconciliation directives is adopted by both chambers.1 Each
directive to a committee is specified as discrete dollar amounts of spending (budget
authority, outlays, or both), revenues, deficit reduction (any combination of spending and
revenues), or the debt limit to be increased or reduced for a fiscal year or a range of fiscal
years.
Reconciliation was first used by the House and Senate in calendar year 1980 for
FY1981.2 As an optional procedure, it has not been used every year. During the more
than 30 years that the congressional budget process has been in effect, 18 reconciliation
measures were enacted into law and three were vetoed.3
Since the inception of the congressional budget process, the Senate Finance
Committee has been subject to spending reconciliation directives in a budget resolution
on 16 occasions (see Table 1). Fourteen instances involved directives to reduce spending,
while the remaining two, for FY2002 and FY2004, instructed the committee to increase
outlays (to accommodate related tax policy changes). In all but one of these 16 instances,
for FY1982, spending reconciliation directives to the committee were accompanied by
1 The House and Senate sometimes have put budget enforcement procedures into effect in the
absence of a budget resolution by means of a “deeming resolution.” Although a deeming
resolution has not been used to trigger action on a reconciliation measure, presumably this course
of action remains an option for the House and Senate. If a consensus did not exist to support a
budget resolution, however, it might likely not exist to support reconciliation legislation either.
For more information on deeming resolutions, see CRS Report RL31443, The “Deeming
Resolution”: A Budget Enforcement Tool
, by Robert Keith.
2 The Senate considered a revenue-reduction bill for FY1976 (H.R. 5559) under reconciliation
procedures in December 1975. It was initiated under a second budget resolution for that fiscal
year and was not considered to be a reconciliation bill in the House; the bill did not become law.
3 For an identification of individual reconciliation measures, see CRS Report RL30458, The
Budget Reconciliation Process: Timing of Legislative Action
, by Robert Keith.

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revenue reconciliation directives.4 In addition, three other budget resolutions included
revenue reconciliation directives to the committee, but not spending reconciliation
directives.
The spending reconciliation directives varied in their time frame, from single-year
coverage (in the FY1981 and FY1990 budget resolutions) to 11-year coverage (in the
FY2002 and FY2004 budget resolutions). Further, the amount of required spending
changes ranged from about $100 million for a single year to about $530 billion over seven
years. The largest spending increase was directed in the FY2004 budget resolution
($27.476 billion in outlays for 11 years, covering FY2003-FY2013), while the largest
spending decrease was directed in the FY1996 budget resolution ($530.359 billion for
seven years, covering FY1996-FY2002).
Reconciliation directives to the committee to reduce spending in the first 13 budget
resolutions involved broad-scale efforts to reduce the deficit. In addition to the Finance
Committee, at least several other Senate committees (and as many as 11 in one instance)
also were subject to reconciliation directives in each budget resolution to reduce spending
or to achieve deficit reduction. Deficit estimates during this period generally ranged from
a little below $100 billion to nearly $300 billion per year.
The FY1998 budget resolution included reconciliation directives to the Finance
Committee and other Senate committees to reduce spending in order to bring deficit levels
down.5 The resultant reconciliation measures, the Balanced Budget Act of 1997 and the
Taxpayer Relief Act of 1997, contributed to achieving a surplus of $69 billion for
FY1998, the first surplus in many years.
For the next three fiscal years, FY1999-FY2001, the budget remained in surplus
before returning to a deficit. For FY2000 and FY2001, unlike the practice for the
preceding two decades, the Finance Committee was subject only to revenue reconciliation
directives; no spending reconciliation directives were included for the Finance Committee
or any other committee. For FY2002, the reconciliation directives included a $100 billion
increase in outlays, as well as revenue reductions of $1.250 trillion, over the period
covering FY2001-FY2011. For FY2004, the reconciliation directives included a $27.5
billion increase in outlays, as well as revenue reductions of $522.5 billion, over the period
covering FY2003-FY2013. The reconciliation directives to increase outlays were
intended to accommodate related tax policy changes.
For FY2006, the budget resolution included reconciliation directives to the Finance
Committee and other Senate committees to reduce spending by about $35 billion over five
years, covering FY2006-FY2010. In addition, the budget resolution also instructed the
4 See CRS Report RS20870, Revenue Reconciliation Directives to the Senate Finance Committee
in Congressional Budget Resolutions
, by Robert Keith.
5 See CRS Report RS22098, Deficit Impact of Reconciliation Legislation Enacted in 1990, 1993,
1997, and 2006
, by Robert Keith.

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committee to reduce revenues by $70 billion over the same period, and to increase the
limit on the public debt by $781 billion.6
Table 1. Spending Reconciliation Directives to the Senate Finance
Committee in Congressional Budget Resolutions: FY1976-FY2007
Conference
Amount of spending decrease (-)
Instructions
Fiscal
Congress/
Budget
Report
or increase (+) b
to change
Year
Session
Resolution a
(H.Rept.)
(in millions of dollars)
revenues?
1976
94/1
H.Con.Res. 466
94-698
[no spending reconciliation directives]
Yes
1977
[no reconciliation directives]
1978
[no reconciliation directives]
1979
[no reconciliation directives]
1980
[no reconciliation directives]
1981
96/2
H.Con.Res. 307
96-1051
FY1981: -900 (BA); -2,200 (O)
Yes
1982
97/1
H.Con.Res. 115
97-46
FY1981: -212 (BA); -286 (O)
No
FY1982: -4,394 (BA); -9,218 (O)
FY1983: -4,563 (BA); -10,744 (O)
FY1984: -4,675 (BA); -11,589 (O)
1983
97/2
S.Con.Res. 92
97-614
FY1983: -1,106 (BA); -4,429 (O)
Yes
FY1984: -1,444 (BA); -5,564 (O)
FY1985: -1,740 (BA); -5,976 (O)
1984
98/1
H.Con.Res. 91
98-248
FY1984: -400 (O)
Yes
FY1985: -500 (O)
FY1986: -800 (O)
1985
[no reconciliation directives]
1986
99/1
S.Con.Res. 32
99-249
FY1986: -3,307 (O)
Yes
FY1987: -7,951 (O)
FY1988: -10,908 (O)
1987
99/2
S.Con.Res. 120
99-664
FY1987: -850 (O)
Yes
FY1988: -1,495 (O)
FY1989: -1,790 (O)
1988
100/1
H.Con.Res. 93
100-175
FY1988: -1,600 (O)
Yes
FY1989: -3,150 (O)
FY1990: -4,450 (O)
1989
[no reconciliation directives]
1990
101/1
H.Con.Res. 106
101-50
FY1990: -2,300 (O)
Yes
1991
101/2
H.Con.Res. 310
101-820
FY1991: -3,015 (O)
Yes
FY1991-FY1995: -55,883 (O)
FY1991: -2,000 (DR)
FY1991-FY1995: -20,000 (DR)
1992
[no reconciliation directives]
1993
[no reconciliation directives]
6 For additional information on reconciliation actions for FY2006, see CRS Report RL33132,
Budget Reconciliation Legislation in 2005-2006 Under the FY2006 Budget Resolution, by Robert
Keith.

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Conference
Amount of spending decrease (-)
Instructions
Fiscal
Congress/
Budget
Report
or increase (+) b
to change
Year
Session
Resolution a
(H.Rept.)
(in millions of dollars)
revenues?
1994
103/1
H.Con.Res. 64
103-48
FY1994: -2,346 (O)
Yes
FY1994-FY1998: -35,157 (O)
1995
[no reconciliation directives]
1996
104/1
H.Con.Res. 67
104-159
FY1996: -15,328 (O)
Yes
FY1996-FY2000: -272,974 (O)
FY1996-FY2002: -530,359 (O)
1997
104/2
H.Con.Res. 178
104-612
First Set of Directives c
Yes
FY1997: -260 (O)
FY1997-FY2002: -98,321 (O)
FY2002: -36,578 (O)
Second Set of Directives c
FY1997: -6,800 (O)
FY1997-FY2002: -158,000 (O)
FY2002: -52,803 (O)
Third Set of Directives c
FY1997: -3,639 (DR)
FY1997-FY2002: -23,184 (DR)
FY2002: -4,121 (DR)
1998
105/1
H.Con.Res. 84
105-116
FY2002: -40,911 (O)
Yes
FY1998-FY2002: -100,646 (O)
1999
[no budget resolution]
2000
106/1
H.Con.Res. 68
106-91
[no spending reconciliation directives]
Yes
2001
106/2
H.Con.Res. 290
106-577
[no spending reconciliation directives]
Yes
2002
107/1
H.Con.Res. 83
107-60
FY2001-FY2011: +100,000 (O)
Yes
2003
[no budget resolution]
2004
108/1
H.Con.Res. 95
108-71
FY2003-FY2013: +27,476 (O)
Yes
2005
[no budget resolution]
2006
109/1
H.Con.Res. 95
109-62
FY2006-FY2010: -10,000 (O)
Yes
2007
[no budget resolution]
Source: Conference reports on budget resolutions, FY1976-FY2006.
a. Each budget resolution listed was the first, or sole, budget resolution for the fiscal year, except for FY1976
(H.Con.Res. 466 was the second budget resolution for that year).
b. BA = budget authority; O = outlays; and DR = deficit reduction (any combination of outlay reductions and
revenue increases).
c. The three sets of interdependent directives allowed for the consideration of up to three different reconciliation
bills to allow maximum legislative flexibility; the outlay and deficit reduction amounts are not necessarily
additive.