Any substantive discussion of Congressional budget procedure is predicated on Congress's “power of the purse”, a phrase used to describe its obligations under Article I, Sections 8 and 9 of the Constitution “to lay and collect taxes, duties, imposts, and excises” and to exercise appropriation such that “no money shall be drawn from the Treasury, but in consequence of appropriations made by law”.
Perhaps as important as Congress's Constitutional mandates is what is not included in appropriation. Some entitlement programs, notably Social Security and Medicare, do not require yearly appropriations because the money for these programs comes from trust funds designated for these programs' exclusive use (Oleszek 52). These entitlement programs, in addition to defense spending, interest on the national debt, and salaries for federal judges, compose over 60% of the federal government's expenditures (Oleszek 53). The fact that these programs are not subject to yearly appropriation grants these programs a more solid status than any other spending. These programs can be modified, but only by changing their authorizing legislation. In the case of Social Security and Medicare, changes from Congress are rare because they would mostly affect senior citizens, the loudest and most fickle electoral group (Oleszek 53).
The initial step of the Congressional budget process requires little input from Congress as an institution. By the first Monday in February, the President must submit to Congress a budget proposal. This proposal is not merely the President's musings on general budget proposals, but is a thorough formulation of policy crafted months in advance through the Office of Management and Budget (Sinclair 122). This budget proposal is non-binding and lacks the force of law, but it is an important step because such a proposal outlines the President's policy objectives and gives Congress guidance as to what types of spending proposals would be approved by the President (Sinclair 122). The President's obligation to submit a budget proposal gives him an important voice in budget negotiations and allows him to frame budget debates in terms friendly to his policy objectives, at least initially.
After the President submits a budget proposal, a budget resolution must be formulated. The budget resolution is created by two committees, the House Committee on the Budget and the Senate Committee on the Budget, both standing committees in their respective chambers. The House Committee on the Budget's membership is uniquely subject to term limits: Members may only serve three consecutive terms on the Committee and the Chairman of the Committee is limited to four terms in that role (Oleszek 73). In keeping with the more relaxed nature of the Senate, members of the Senate Committee on the Budget are not subject to such term limits. Although there is no requirement that budget resolutions begin in the House as must revenue bills, the House Committee typically formulates a budget proposal before the Senate (Oleszek 73-74).
A budget resolution is an unusual document because it is type of concurrent resolution and does not require Presidential approval. It does not carry the force of law, but is binding in Congress because it sets the maximum level of discretionary spending for the following fiscal year and thus sets the amount of money sent to the Appropriations Committee and its subcommittees (Oleszek 71-72). The budget resolution divides the discretionary spending into twenty groups, ranging from national defense to agriculture. These twenty groups do not correspond neatly to committees' jurisdictions, so certain programs may be subject to turf wars between Appropriations subcommittees looking to consolidate “the power of the purse” in their own hands (Sinclair 125).
A budget resolution is a blueprint for future appropriation. The budget resolution must be passed by the House and the Senate. In the House and Senate, statutory rules govern the passage of a budget resolution. These rules are largely derived from the Budget Act of 1974. Unlike legislation, a budget resolution has a statutory time limit of fifty hours of debate in the Senate, effectively disallowing a filibuster (Sinclair 123). Additionally, amendments to a budget resolution must be germane, which is unusual in the Senate where germaneness is typically not enforced (Sinclair 123-124). In the House, the budget resolution is debated under strict rules that do not allow amendments and only allow wholesale substitutes of the budget resolution, usually by the minority party.
Chuck Grassley (R-IA) speaks on the Senate floor about the perceived rarity of budget resolutions from 2008-2011. Although he is factually incorrect about the presence of budget resolutions, his consternation is a good example of increased partisanship in budget debates.
Budget resolutions often contain reconciliation instructions, which are directions to Appropriations subcommittees to create legislation changing existing statute to bring revenue or spending into conformity with the amount set in the budget resolution (Oleszek 76). In effect, reconciliation instructions bind Appropriations subcommittees to amounts of discretionary spending found in the budget resolution.
After receiving instructions, the relevant House and Senate committees will submit proposals that bring federal spending or revenue in-line with the budget proposal. The House and Senate Budget Committees package these proposals into an omnibus bill that is sent directly to the floor of each respective chamber. In the House, these reconciliation bills are debated under a special rule from the Rules Committee. In the Senate, the Budget Act of 1974 stipulates terms similar to the terms for a budget proposal; a reconciliation bill cannot be filibustered as only twenty hours of debate are allowed, amendments must be germane and deficit-neutral, and passage requires a simple majority (Oleszek 78).
Although a reconciliation bill does not require a 60-vote supermajority in the Senate, overcoming the points of order allowed by the Budget Act of 1974 often requires a 60-vote supermajority. A typical point of order raised against a provision in a reconciliation bill is that it violates the limits set in a budget resolution (Oleszek 79).
Reconciliation is a system easy to abuse because members of the Senate could in theory add amendments that were not in line with the goals of reconciliation instructions. In 1985, the Senate introduced the Byrd Rule, named after the late Senator Robert Byrd (D-WV). The Byrd Rule is a crucially important piece of the reconciliation process. It disallows reconciliation amendments that are “extraneous”, a term defined in six ways. An extraneous matter is a section of legislation in a reconciliation bill that:
1) Does not produce a change in outlays or revenues;
2) Produces an outlay increase or revenue decrease when the committee is non-compliant with reconciliation instructions;
3) Is outside the jurisdiction of the committee that submitted the provision for inclusion in the reconciliation bill;
4) Creates a change in outlays or revenues which is incidental to components of the legislation not dealing with the budget;
5) Increases the deficit for a fiscal year beyond those covered by the reconciliation instructions;
6) Recommends changes in Social Security (Oleszek 80).
The Byrd Rule is enforced largely by the Senate parliamentarian, who has the unenviable task of giving each reconciliation bill a “Byrd Bath”, marking extraneous material for removal (Oleszek 80). Budget reconciliation bills passed are often derided by members of the minority party as being full of “Byrd droppings”.
An important organization for members of Congress and the budget process in general is the Congressional Budget Office (CBO). Created in 1974 as part of the Budget Act of 1974, the CBO is required to create a cost estimate for every bill reported out of committee (Sinclair 127). Because the CBO is a non-partisan group, its cost estimates are given much weight by congressmen of both parties. A CBO number could possibly derail an entire reconciliation bill by allowing a member to raise a point of order claiming that a provision in the bill is not within the budget.
Here, Kent Conrad (D-ND) uses figures from the CBO to illustrate a point about deficits while raising a point of order.
Kent Conrad Raises a Point of Order
The power of the President is re-asserted when a reconciliation bill is in use. Because a reconciliation bill is a bill and not a resolution like a budget resolution, it is subject to Presidential approval and thus possibly a Presidential veto (Sinclair 126). Thus, the President gets a seat at the table in budget negotiations.
Although reconciliation provides for much federal spending in modern Congresses, the traditional budgeting route utilizes the authorization/appropriation paradigm instead (Oleszek 50). In theory, funds for federal programs must be authorized by an authorizing committee, such as the Committee on Energy and Commerce. These authorizing committees are where policy is decided; Appropriations Committees do not have the ability to create policy per se. However, in practice the process of first authorizing an agency and then appropriating money is often bent. By suspending the rules or operating under unanimous consent in the Senate, lawmakers can roll authorization and appropriation together (Sinclair 114). In some cases, appropriation happens without renewal of an agency's authorization.
These bills come from the twenty-four subcommittees of the Appropriations Committee, with twelve subcommittees in each chamber (Oleszek 50). These subcommittees are responsible for funneling discretionary spending to federal agencies pursuant to a budget resolution. The process by which money is divvied up between Appropriations subcommittees is one of the most secretive processes in United States government and is largely controlled by Appropriations subcommittee chairs who are often referred to as the “College of Cardinals”(Oleszek 76).
Officials from the executive branch or the military are common witnesses during Appropriations Committee hearings. These witnesses must make their cases for sustained or increased spending to the relevant Appropriations subcommittee. Typically, these witnesses tie agency funding to a generally agreeable policy objective, such as job creation or national security. By using media outlets such as C-SPAN, these witnesses are able to make their case more directly to the electorate. In the following clip, Coast Guard Commandant Robert Papp makes a budget request to the Senate Appropriations Subcommittee on Homeland Security.
Coast Guard Budget Request
Because the Coast Guard is a component of the military, it is given a comparatively friendly hearing. Friendly, at least, compared to the reception EPA Administrator Lisa Jackson received at a House Appropriations Committeee budget request meeting.
An appropriation bill is subject to controls on spending from the budget resolution, but the rules stipulating that appropriation bills be budget-neutral are often waived, either by a special rule in the House or by a three-fifths vote in the Senate (Oleszek 58). The Appropriations subcommittees put together their respective bills and report them to the floor of the House and Senate, where they are subject to a floor vote. After voting, the bills are sent to a conference committee to iron out differences between the House and Senate versions of the bill. After conference, the bill is sent to the President, hopefully for his signature.
Through the 1970s, the twelve appropriation bills were generally passed separately(Sinclair 115). In modern Congresses that are more subject to partisanship, appropriation bills are often concatenated to ease their passage. In fact, Congress has not passed all twelve Appropriations bills since 1994 (Sinclair 115). When the Congress cannot pass an Appropriations bill, it is presented with two options. It can either allow a section of the federal government to shut down, furloughing employees and cutting federal services, or it can find “another way” to continue appropriating. The former is such a horrendous prospect for members of Congress that such shutdowns are mercifully rare (Sinclair 116).
If Congress cannot pass appropriating legislation by the beginning of the fiscal year, it uses a continuing resolution (CR) to keep a particular section of the government funded. A CR may appropriate funds for a particular agency for as little as a few days, or as long as the entire fiscal year. In recent Congresses, the practice of using CR to fund programs has become commonplace. In 2002, Congress was unable to pass eleven out of twelve Appropriations bills so it rolled all eleven into a CR that was not passed and signed by the President until 2003, four months after the start of the fiscal year (Sinclair 115).
The budget process of the United States Congress is notoriously complex and allows money to travel via several routes. This is because there is no Constitutional requirement that budgeting be done in any particular way. The methods used, whether they be authorization/appropriation, continuing resolution, or reconciliation, allow the Congress to fund the massive federal bureaucracy with a great degree of continuity.
Works CitedOleszek, Walter J. Congressional Procedures and the Policy Process. 8th ed. Washington, D.C.: CQ, 2011. Print.
Sinclair, Barbara. Unorthodox Lawmaking: New Legislative Processes in the U.S. Congress. 4th ed. Washington, D.C. : London: CQ, 2012. Print.