FY 2018 Budget Resolution

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Oct. 26, 2017:  House adopts Senate version of Budget Resolution (H.Con.Res. 71) 216-212, with all Democrats and 20 Republicans voting no.  The language of the Reconciliation Instructions that launch a filibuster-proof bill to cut taxes and open the Alaska National Wildlife Refuge (ANWR) to oil and gas drilling follow:

SEC. 2001. RECONCILIATION IN THE SENATE.
(a) Committee On Finance.—The Committee on Finance of the Senate shall report changes in laws within its jurisdiction that increase the deficit by not more than $1,500,000,000,000 for the period of fiscal years 2018 through 2027.
(b) Committee On Energy And Natural Resources.—The Committee on Energy and Natural Resources of the Senate shall report changes in laws within its jurisdiction to reduce the deficit by not less than $1,000,000,000 for the period of fiscal years 2018 through 2027.
(c) Submissions.—In the Senate, not later than November 13, 2017, the Committees named in subsections (a) and (b) shall submit their recommendations to the Committee on the Budget of the Senate. Upon receiving such recommendations, the Committee on the Budget of the Senate shall report to the Senate a reconciliation bill carrying out all such recommendations without any substantive revision.
SEC. 2002. RECONCILIATION IN THE HOUSE OF REPRESENTATIVES.
(a) Committee On Ways And Means.—The Committee on Ways and Means of the House of Representatives shall submit changes in laws within its jurisdiction that increase the deficit by not more than $1,500,000,000,000 for the period of fiscal years 2018 through 2027.
(b) Committee On Natural Resources.—The Committee on Natural Resources of the House of Representatives shall submit changes in laws within its jurisdiction to reduce the deficit by not less than $1,000,000,000 for the period of fiscal years 2018 through 2027.
(c) Submissions.—In the House of Representatives, not later than November 13, 2017, the committees named in subsections (a) and (b) shall submit their recommendations to the Committee on the Budget of the House of Representatives to carry out this section.

Oct. 19, 2017 – Senate adopts Budget Resolution (H.Con.Res. 71)  on a party-line 51-49 vote, with all Democrats and Sen. Rand Paul (R-KY) voting no.  The Senate plan would launch a filibuster-proof tax cut bill that would add $1.5 trillion to the public debt to pay for corporate tax cuts, lowering the top individual tax rate, and other cuts.  (The tax cuts called for in the recent framework are much larger than $1.5 trillion, but the budget plan assumes offsets that reduce the cost to $1.5 trillion.)

Oct. 5, 2017 – House of Representatives passes FY 2018 Budget Resolution (H.Con.Res. 71219-206.  Like the Senate Committee plan, the House-passed resolution would launch filibuster-proof tax cuts, but claims no addition to the public debt based on assertions that tax cuts will pay for themselves.  The House plan would also include $200 billion in entitlement cuts in the filibuster-proof tax bill.

For a comparison of the House-passed, Senate Committee-reported, and Trump budget plans, see the CBPP analysis.

Background: Congressional Budget Resolution

Following the State of the Union and transmittal of the President’s Budget, Congress begins its own budget process, including adoption of a spending and revenue framework called a “Budget Resolution,” Appropriations Bills to fund discretionary spending programs, and optional Budget Reconciliation legislation to modify mandatory spending and tax laws.

The Senate and House Budget Committees hold public hearings in February at which they receive testimony on the President’s Budget proposals from Administration officials, outside experts, trade associations and other interest groups, Members of Congress, and the public. At the same time, the other committees of Congress review the President’s Budget proposals and transmit to the Budget Committees their own “views and estimates” on appropriate spending or revenue levels for programs within their respective jurisdictions.

The Senate and House Budget Committees – using the President’s Budget request, information from their own hearings, views and estimates from other committees of Congress, and projections from the Congressional Budget Office – draft their respective versions of a “Congressional Budget Resolution” in a series of working meetings known as committee “mark-ups.”

It is important to understand that the Budget Resolution does not become a law and therefore is not presented to the President for signature. Rather, it is a congressional blueprint to guide subsequent action on specific spending and revenue measures. The Budget Resolution: (1) sets total federal spending and revenue levels; (2) allocatesspending to each Committee, including a lump-sum to the Appropriations Committee for all “discretionary” spending; (3) establishes procedures to enforce the budget blueprint; and (4) may include optional special provisions called “budget reconciliation instructions” aimed at expediting changes to mandatory spending programs or tax laws through a filibuster-proof Budget Reconciliation Bill.

Budget Reconciliation Instructions to Reform Mandatory Spending and Taxes

Reconciliation instructions direct specified House and Senate authorizing committees to report, by a certain date, legislative provisions that achieve changes in mandatory spending levels or revenue levels for programs within the authorizing committee’s jurisdiction. While specific mandatory spending or tax changes are “assumed” by the Budget Committee when the dollar targets are drafted, the authorizing committees need not – and often do not – follow the Budget Committee assumptions.

For example, the Budget Resolution could direct the Senate Finance and House Ways & Means Committees to report legislation that makes changes in programs within their jurisdiction that change spending and/or revenue levels by $____ billion over ten years.  The Budget Committees, when drafting the Budget Resolution, base the dollar amounts on specific mandatory spending and tax reforms, but the Finance and Ways & Means Committees can decide to achieve their spending and revenue targets through entirely different reforms – and in some cases, can substitute revenue changes for spending changes, or vice versa, if the total deficit impact is achieved.

Adopting the Budget Resolution

When the House and Senate Budget Committees complete committee action on their respective Budget Resolutions – with or without reconciliation instructions – they report the resolutions to the full House and full Senate, respectively. Members of the House and Senate then have an opportunity to alter the work of their respective Budget Committees by offering amendments to the Budget Resolution during debate on the House and Senate Floors.

Senate debate often includes a long series of votes on non-binding policy statements – commonly called the “vote-a-rama.”  Unfortunately, the dominance of non-binding “sense-of-the-Senate” statements in the vote-a-rama often obscures the importance of amendments that have serious impact – for example, changing the caps on spending, changing the revenue floor, or altering reconciliation instructions.

When the Senate and House have both passed their respective versions of the Budget Resolution, they appoint several of their Members to a House-Senate conference committee to resolve differences between the House- and Senate-passed resolutions. When differences have been resolved, each chamber must then vote on the compromise version of the Budget Resolution called a “Conference Report.”

Budget Resolutions are not always completed.  Congress failed to complete action on a Budget Resolution in nine fiscal years since the Budget Act was adopted in 1974, including fiscal years 2011 through 2015.