Fiscal Legislation

Fiscal Legislation in the United States

Congress Addresses Fiscal Legislation in the Federal Budget Process

Fiscal Legislation in the congressional and executive budget processes (GAO source): Reconciliation Measure. When the concurrent resolution on the budget contains reconciliation instructions, the committees must submit legislative language that changes laws in their jurisdiction to the Budget Committee of their house on the date specified in the instructions. The Budget Committees may make no substantive changes to the submissions, but must report the submissions to the House or Senate as a single reconciliation bill. If, however, a reconciled committee fails to meet the numerical targets included in its reconciliation instruction, procedures exist to modify the bill on the floor so that the targets are met. (If only one committee is instructed, that committee reports its recommendations directly to the House or Senate.)

The reconciliation legislation is a unique vehicle through which Congress enforces its budget plan for revenue and direct spending set forth in the budget resolution. Both the House of Representatives and the Senate consider the reconciliation legislation reported to them from their respective Budget Committees under special rules. (The Appropriations Committees are not subject to reconciliation instructions.) Generally, in the House, the legislation is considered under a special rule, a simple resolution adopted by the House prior to consideration of the reconciliation legislation that governs the debate and the amendments that are in order. In the Senate, reconciliation legislation is considered under special procedures set forth in the Congressional Budget Act, which limits the period of debate and the types of amendments that are in order and subjects the legislation and amendments to the Byrd Rule, which prohibits “extraneous material.” (See Byrd Rule for more detail.)

The differences between the two houses are typically resolved in a conference committee and the resulting legislation is passed by both houses and must be signed by the President to become law.

Appropriations and Other Fiscal Legislation

Generally, throughout this period, Congress considers revenue legislation and legislation affecting spending, including the regular appropriations acts.10 All legislation considered by Congress that affects revenue or spending must comply with the committee allocations and the total levels of revenues and spending in the concurrent resolution on the budget.11

11Appropriations bills are developed by the House and Senate Appropriations Committees and their subcommittees. Each subcommittee has jurisdiction over specific federal agencies or programs and is responsible for one of the general appropriations bills.12 The Constitution requires that all revenue (tax) bills originate in the House; by custom, the House also originates appropriations measures.

The Congressional Budget Act requires that the House and Senate Appropriations Committees subdivide the amounts allocated to them under the budget resolution among their subcommittees (Section 302(b) allocations).13 Once the subcommittees receive their allocations, the subcommittees begin drafting their appropriations bills to fund discretionary spending programs. Proposed legislation that would cause the section 302(b) allocations to be exceeded is subject to a point of order.

CBO prepares a cost estimate on each appropriations bill, just as it provides cost estimates for any legislative measure reported by a committee of Congress. The Budget Committees use this information to determine whether the legislation complies with a committee’s allocation, a subcommittee’s suballocation, and the budget totals in the budget resolution.

Congress must enact these regular appropriations bills by October 1 of each year. If these regular bills are not enacted by the deadline (and they usually are not), Congress must pass a continuing resolution prior to the beginning of each fiscal year to fund government operations into the next fiscal year. When an agency does not receive its new appropriation before its current appropriation expires, it must cease ongoing, regular functions that are funded with annual appropriations, except for those related to emergencies involving the safety of human life or the protection of property.

Guide to U.S. Federal Congressional Budget Process

  • Congressional Budget Process
  • Budget Committees
  • Estimates Reports
  • Budget Resolution
  • Fiscal Legislation

Guide to Stages of the Federal Budgeting Process

  • Federal Budget Execution
  • Federal Budget Development
  • Executive Budget Formulation
  • Next Budget Request
  • Initial Budget Request Materials
  • OMB Passback Decisions
  • President Budget Request
  • Mid-Session Review Document
  • Congressional Budget Process
  • Budget Committees
  • Estimates Reports
  • Budget Resolution
  • Fiscal Legislation
  • Federal Budget Control
  • Impoundment

Resources

See Also

Further Reading

  • Legislatures and the budget process: the myth of fiscal control

    (J Wehner, 2010)

  • Reconcilable Differences?: Congress, the Budget Process, and the Deficit (JB Gilmour, 1990)
  • Fiscal institutions and fiscal performance

    (JM Poterba, J von Hagen, 2008)

Notes

10 Less than 40 percent of total budget authority is appropriated through the annual appropriations process.

The remainder of the budgetary resources spent by the federal government are provided by law other than

annual appropriations acts. (For further explanation, see the definitions of Backdoor Authority, Budget

Authority, Direct Spending, Obligational Authority, and Outlay.)

11 The rules of the House of Representatives also prohibit consideration of appropriations bills for

expenditures not previously authorized by law. See Rule XXI, Rules of the House of Representatives. A

similar, but more limited provision exists in Rule XVI, Standing Rules of the Senate. (See Point of Order.)

(Some agency programs or functions are reauthorized every year, while others are authorized for several

years or permanently.) The effect of such rules is that an appropriation bill is subject to a point of order if it

is not preceded by an authorization of appropriation.

12 As of March 2005, the House of Representatives has 10 appropriation subcommittees: Agriculture, Rural

Development, Food and Drug Administration, and Related Agencies; Defense; Energy and Water

Development, and Related Agencies; Foreign Operations, Export Financing and Related Programs;

Homeland Security; Interior, Environment, and Related Agencies; Labor, Health and Human Services,

Education, and Related Agencies; Military Quality of Life and Veterans Affairs and Related Agencies;

Science, the Departments of State, Justice, and Commerce, and Related Agencies; and Transportation,

Treasury, and Housing and Urban Development, the Judiciary, and the District of Columbia. The Senate has

12 appropriation subcommittees: Agriculture, Rural Development, and Related Agencies; Commerce,

Justice, and Science; Defense; District of Columbia; Energy and Water; Homeland Security; Interior and

Related Agencies; Labor, Health and Human Services, Education and Related Agencies; Legislative Branch;

Military Construction and Veterans Affairs; State, Foreign Operations, and Related Programs; and

Tran
sportation, Treasury, the Judiciary, Housing and Urban Development, and Related Agencies.


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