March 7, 2005

• Congressman Jim Kolbe (R, Arizona 8th)– Arizona Senate 1977-1983– Elected to the U.S. House in 1984– Chairs the Appropriations Foreign Ops

Subcommittee– Key issues include trade, Social Security

reform, and Immigration Reform

• Appropriations/Authorizations politics• Buying the Beretta

“The Congressional Budget Process” from Congressional

Procedures and the Policy Process

-Walter J. Oleszek                                                                           Skip

Constitution

“The greatest power of the legislative branch is the power of the purse” –Senator Robert Byrd

• Article I, Section 8: The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States …To borrow Money on the credit of the United States

• Article I Section 9: No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law

• Amendment XVI: The Congress shall have power to lay and collect taxes on incomes

Phases of Federal Budgeting

1. Preparation and submission of budget by President to Congress

2. Congressional review of President’s budget and action on required budgetary matters

3. Execution of budget-related laws by federal departments and agencies

4. Audits of agency spending

Authorizations vs. Appropriations

Authorizations: establish, continue or modify programs or policies

Appropriations: fund authorized programs and policies

• Each Chamber has an Appropriations Committee, and many Authorizing Committees

• NEW: The House has moved to 10 subcommittees, and the Senate to 12.

• Two stage process is not required by Constitution

Types of Appropriations Bills

1. Annual (aka: regular or general)• 13 annual appropriations bills

2. Supplemental: provide funding for unexpected items

3. Continuing (aka: continuing resolutions): provide funding for agencies that did not receive an annual appropriation at the beginning of the fiscal year

Budget Lexicon

• Discretionary Spending: spending that Congress can control through the appropriations process (35.9% of budget est. 2004)

• Direct Spending: primarily funds entitlement funds; under the control of authorizing committees (64.1% of budget est. 2004)

• Budget Authority: approval by Congress for the government to spend money

• Budget Outlay: payment of money• Earmark: recommendation that agencies should

spend funds on a specific purpose (“pork”)

Options for the Appropriations Committee

1. Provide all the funds recommended in the authorization bill

2. Propose reductions in the amounts authorized

3. Refuse to fund

Implications

• Flexibility: Each Chamber can waive the rules in the authorization-appropriations procedure

• Bicameral Differences: Senate has more flexibility than House

• Committee Rivalries: CONFLICT between Authorizing and Appropriations Committees

Exceptions to the Rules

• Limitation Riders: provisions that prevent spending of funds for specific purposes– Must not impose additional rules on executive branch

officials, interfere with discretionary authority or require officials to make judgments not required by existing law

• Germaneness: Senate rules require that amendments to bill be germane

• Limits on Riders: House restricts opportunities for members to offer limitation riders; Senate reinstates rule making a point of order on legislation in an Appropriations bill

1974 Budget Reform Act

• Creates House Budget and Senate Budget Committees, and Congressional Budget Office (CBO)

• Role of Budget Committees: preparing a concurrent budget resolution, reviewing impact of proposed legislation on federal spending, overseeing CBO

• CBO: Congress’ primary source for information to evaluate budget, tax and spending proposals

Concurrent Budget Resolution

• Two Parts– Fiscal Aggregates– Subdivision of aggregates among 20

functional categories

• Sets overall discretionary spending for the upcoming fiscal year

• Establishes context for budgeting: guides actions of authorizing, appropriating and taxing committees, outlines priorities

Resolving Conflict

• House and Senate must resolve differences in budget resolutions in conference committee

Reconciliation• Optional procedure that enables Congress

to implement comprehensive fiscal policy by changing tax and entitlement laws

• Process1. Approval of budget resolution instructing House

and Senate committees to report legislation making cuts in spending, increases in revenue or both

2. Packaging the recommendations into a bill followed by Floor action in each Chamber

• Byrd Rule: reconciliation provisions must reduce the deficit

Controls on Impoundments

• Title X: Permits Congress to review executive impoundments– Deferrals– Rescissions

• 1996: Congress granted Line Item Veto Act to strengthen President’s ability to control spending– Declared unconstitutional by Supreme Court

Points of Order on Budget

• Point of Order: notice that the process or substance of a bill violates the rules of the Chamber– Procedural: raised to ensure compliance with

Budget Act of 1974– Substantive: raised to ensure compliance with

the Budget Resolution

• House and Senate permit waivers on points of order

Acts Affecting Budget Process

• 1985 Balanced Budget and Emergency Deficit Control Act (Gramm-Rudman-Hollings)– Established annual deficit reduction targets

• Budget Enforcement Act of 1990– Set spending caps on discretionary spending– Subject tax and entitlement programs to

PAYGO procedure

Credits

• Presentation based on: Oleszek, Walter J., Congressional Procedures and the Policy Process. (Washington, DC: CQ Press, 2004) 39-75.

• Images from: http://www.cqpress.com/product/Congressional-Procedures-and-the-Policy-2.html (Accessed 2/28/05); www.cbo.gov ; http://www.house.gov/kildee/images/ffeicon.gif (Accessed 3/5/05)