Reserve Funds

Budget Resolution Reserve Funds

  • Reserve Funds are an optional component of a Budget Resolution, which have been used heavily in recent budget resolutions.
  • These are provisions that allow total spending and committee allocations in a Congressional Budget Resolution to be adjusted upward to accommodate additional spending for a specifically defined purpose.
  • The adjustment of spending levels is typically dependent on one or more contingencies, for example that (1) the additional spending will be “deficit neutral” and (2) that the covered legislation is dedicated to specific objectives.
  • Because most reserve funds require that the new legislation be “deficit neutral” (paid for by unspecified spending cuts or tax increases), the use of the term reserve fund is actually a misnomer, since a Budget Resolution “reserve fund” does not allocate any funds.
  • In fact, among the few scenarios in which a “reserve fund” has any purpose at all (other than to make a political statement) are where a mechanism is needed to allow the Budget Committees to adjust spending totals and/or committee allocations to accommodate a new program that is to be paid for by spending cuts in another committee’s jurisdiction or by tax increases dedicated to a specific purpose, for example, infrastructure.
  • If a new program is paid for by spending cuts within a committee’s own jurisdiction, there is no net increase in the committee’s spending or in total Federal spending, so no adjustments to the Budget Resolution are required and “reserve fund” authority is unnecessary.

Examples of Budget Resolution Reserve Funds

Reserve Funds in Title III of S.Con.Res. 21 (FY 2008 Budget Resolution):

  • Sec. 301. Deficit-neutral reserve fund for SCHIP legislation.
  • Sec. 302. Deficit-neutral reserve fund for veterans and wounded service members.
  • Sec. 303. Deficit-neutral reserve fund for tax relief.
  • Sec. 304. Deficit-neutral reserve fund for Medicare improvements.
  • Sec. 305. Deficit-neutral reserve funds for health care quality, effectiveness, efficiency, and transparency.
  • Sec. 306. Deficit-neutral reserve fund for higher education.
  • Sec. 307. Deficit-neutral reserve fund for the Farm Bill.
  • Sec. 308. Deficit-neutral reserve fund for energy legislation.
  • Sec. 309. Deficit-neutral reserve fund for county payments legislation.
  • Sec. 310. Deficit-neutral reserve fund for terrorism risk insurance reauthorization.
  • Sec. 311. Deficit-neutral reserve fund for affordable housing.
  • Sec. 312. Deficit-neutral reserve fund for receipts from Bonneville Power Administration.
  • Sec. 313. Deficit-neutral reserve fund for Indian claims settlement.
  • Sec. 314. Deficit-neutral reserve fund for improvements in health.
  • Sec. 315. Deficit-neutral reserve fund for child care.
  • Sec. 316. Deficit-neutral reserve fund for immigration reform in the Senate.
  • Sec. 317. Deficit-reduction reserve fund.
  • Sec. 318. Deficit-neutral reserve fund for manufacturing initiatives in the Senate.
  • Sec. 319. Deficit-neutral reserve fund for the Food and Drug Administration in the Senate.
  • Sec. 320. Deficit-neutral reserve fund for Medicaid.
  • Sec. 321. Reserve fund adjustment for revenue measures in the House.
  • Sec. 322. Deficit-neutral reserve fund for San Joaquin River restoration and Navajo Nation water rights settlements.
  • Sec. 323. Deficit-neutral reserve fund for selected tax relief policies in the Senate.

Example of Reserve Fund language

  • SEC. 301. DEFICIT-NEUTRAL RESERVE FUND FOR SCHIP LEGISLATION.
    (a) Senate— (2) RESERVE FUND—In the Senate, the Chairman of the Senate Committee on the Budget may revise the allocations, aggregates, and other appropriate levels in this resolution for a bill, joint resolution, amendment, motion, or conference report that provides up to $50,000,000,000 in outlays over the period of the total of fiscal years 2007 through 2012 for reauthorization of the State Children’s Health Insurance Program (SCHIP), if such legislation maintains coverage for those currently enrolled in SCHIP, continues efforts to enroll uninsured children who are already eligible for SCHIP or Medicaid but are not enrolled, or supports States in their efforts to move forward in covering more children, by the amounts provided in that legislation for those purposes, provided that the outlay adjustment shall not exceed $50,000,000,000 in outlays over the period of the total of fiscal years 2007 through 2012, and provided that such legislation would not increase the deficit over either the period of the total of fiscal years 2007 through 2012 or the period of the total of fiscal years 2007 through 2017.
    (b) House Reserve Fund for the State Children’s Health Insurance Program—The Chairman of the House Committee on the Budget may revise the allocations of a committee or committees, aggregates, and other appropriate levels for bills, joint resolutions, amendments, or conference reports, which contains matter within the jurisdiction of the Committee on Energy and Commerce that expands coverage and improves children’s health through the State Children’s Health Insurance Program (SCHIP) under title XXI of the Social Security Act and the program under title XIX of such Act (commonly known as Medicaid) and that increases new budget authority that will result in not more than $50,000,000,000 in outlays in fiscal years 2007 through 2012, and others which contain offsets so designated for the purpose of this section within the jurisdiction of another committee or committees, if the combined changes would not increase the deficit or decrease the surplus for the total over the period of fiscal years 2007 through 2012 or the period of fiscal years 2007 through 2017.