For other versions of this document, see http://wikileaks.org/wiki/CRS-RL31754 ------------------------------------------------------------------------------ Order Code RL31754 CRS Report for Congress Received through the CRS Web Congressional Budget Actions in 2003 Updated December 17, 2004 Bill Heniff Jr. Analyst in American National Government Government and Finance Division Congressional Research Service ~ The Library of Congress Congressional Budget Actions in 2003 Summary During 2003, Congress considered many different budgetary measures. Most measures pertained to fiscal year (FY) 2004 (which began on October 1, 2003) and beyond. Some also pertained to the budget for FY2003. This report describes House and Senate action on major budgetary legislation within the framework of the congressional budget process and other procedural requirements. As the 108th Congress began, only two of the 13 regular appropriations acts for FY2003 (which began on October 1, 2002) had been enacted. On February 13, 2003, the House and Senate agreed to the conference report to the Consolidated Appropriations Resolution, 2003 (H.J.Res. 2), which contains the 11 remaining regular appropriations acts for FY2003. On February 20, President George W. Bush signed the measure into law (P.L. 108-7), thereby bringing action on the FY2003 regular appropriations acts to a close. Subsequently, Congress passed and President Bush signed two FY2003 supplemental appropriations acts into law (P.L. 108-11 and P.L. 108-69) on April 16 and August 8, respectively. Congress typically begins its annual budget process for the upcoming fiscal year once the President submits his budget for that year. President Bush submitted his FY2004 budget to Congress on February 3, 2003. The congressional budget process is centered around the adoption of an annual concurrent resolution on the budget. The budget resolution sets forth aggregate spending and revenue levels, and spending levels by major functional area, for at least five fiscal years. Budget resolution policies are implemented through the enactment of reconciliation bills, revenue and debt-limit legislation, and appropriations and other spending measures, and enforced by points of order that may be raised when legislation is pending on the House and Senate floor. On April 11, the House and Senate agreed to the FY2004 budget resolution (H.Con.Res. 95, H.Rept. 108-71). On May 23, pursuant to the reconciliation instructions contained in the FY2004 budget resolution (Section 201 of H.Con.Res. 95), Congress passed H.R. 2, Jobs and Growth Tax Relief Reconciliation Act of 2003. President Bush signed the legislation into law (P.L. 108-27) on May 28. At the end of 2003, six of the 13 FY2004 regular appropriations acts, plus a FY2004 supplemental appropriations act, had been enacted. Congress incorporated the remaining seven regular appropriations acts into one measure -- the Consolidated Appropriations Act, 2004 (H.R. 2673, H.Rept. 108-401). The House and Senate agreed to the conference report to the act on December 8, 2003, and January 22, 2004, respectively. On January 23, President Bush signed H.R. 2673 into law (P.L. 108-199), thereby bringing action on the FY2004 regular appropriations acts to a close. This report will not be updated. Contents Concluding Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Overview of the Congressional Budget Process . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Budget Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Reconciliation Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Revenue and Debt-Limit Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Revenue Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Debt-Limit Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Appropriations and Other Spending Legislation . . . . . . . . . . . . . . . . . . . . . . . . . 20 Discretionary Spending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Mandatory Spending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Budget Enforcement and Sequestration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Chronology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 For Additional Reading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Congressional Hearings, Reports, and Documents . . . . . . . . . . . . . . . . . . . 33 CRS Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 List of Figures Figure 1. Actual FY2002 Revenues by Source . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Figure 2. Actual FY2002 Outlays by Major Spending Category . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 List of Tables Table 1. The Congressional Budget Process Timetable . . . . . . . . . . . . . . . . . . . . 3 Table 2. Mapping Spending and Revenue Legislation through the Congressional Budget Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Table 3. Budget Baselines, FY2003-FY2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Table 4. Status on Regular Appropriations Acts for FY2004 . . . . . . . . . . . . . . . 24 Table 5. Timetable for Sequestration Actions . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Congressional Budget Actions in 2003 Concluding Actions When Congress adjourned sine die on November 25, 2003, six of the 13 fiscal year (FY) 2004 regular appropriations acts, plus a FY2004 supplemental appropriations act, had been enacted. For agencies and programs contained in the remaining seven regular appropriations acts not yet signed into law, a continuing resolution (H.J.Res. 79, P.L. 108-135) had been enacted to provide temporary appropriations through January 31, 2004; four other continuing resolutions had provided temporary appropriations since the start of the fiscal year on October 1, 2003. To complete action on the remaining seven regular appropriations acts, Congress incorporated them into one measure -- the Consolidated Appropriations Act, 2004 (H.R. 2673, H.Rept. 108-401). The House and Senate agreed to the conference report to the act on December 8, 2003, and January 22, 2004, respectively. On January 23, President Bush signed the measure into law (P.L. 108- 199), thereby bringing action on the FY2004 regular appropriations acts to a close. Introduction During the first session of the 108th Congress, the House and Senate considered many different budgetary measures. Most of these measures pertained to FY2004 (which began on October 1, 2003) and beyond. Some also pertained to the budget for FY2003 (which began on October 1, 2002, and ended on September 30, 2003). This report describes House and Senate action on major budgetary legislation within the framework of the congressional budget process and other procedural requirements. The House and Senate began 2003 with unfinished budgetary matters left over from the 107th Congress. At the start of the 108th Congress, only two of the 13 regular appropriations acts for FY2003 had been enacted.1 The federal agencies and programs funded in the 11 remaining regular appropriations acts were provided temporary appropriations by successive continuing resolutions since the beginning of the fiscal year. On February 20, 2003, President Bush signed into law the Consolidated Appropriations Resolution, 2003 (H.J.Res. 2, P.L. 108-7), which contains the 11 remaining regular appropriations acts, thereby bringing action on the 1 The enacted regular appropriations acts are the Defense Appropriations Act, 2003 (P.L. 107-248) and the Military Construction Appropriations Act, 2003 (P.L. 107-249). For further information on budget actions in 2002, see CRS Report RL31795, Congressional Budget Actions in 2002, by Bill Heniff Jr. CRS-2 FY2003 regular appropriations acts to a close.2 In addition, during 2003, Congress adopted and President Bush signed into law two supplemental appropriations measures for FY2003 (discussed further below). As the FY2004 budget cycle began, Congress faced an unfavorable budget outlook, exacerbated by an uncertain economic and geopolitical environment. According to the Office of Management and Budget (OMB) and the Congressional Budget Office (CBO), current budget projections under existing law, without any legislative changes, showed annual deficits in the unified budget (i.e., including federal funds and trust funds) in several of the ensuing fiscal years.3 When various proposed spending increases and tax cuts were taken into account, the projections indicated annual deficits for the foreseeable future. For example, OMB projected that if President Bush's FY2004 budget policy proposals were enacted, annual unified budget deficits, ranging from $178 billion to $307 billion, would continue through FY2008. In addition, the "soft" economy continued to put a damper on federal revenues. Also, the spending for the war on terrorism and homeland security, for military operations in Iraq, and for other legislative initiatives increased the scarcity of current and future federal government resources. Such factors potentially could worsen the already unfavorable budget outlook.4 Overview of the Congressional Budget Process The congressional budget process consists of the consideration and adoption of spending, revenue, and debt-limit legislation within the framework of an annual concurrent resolution on the budget. Congress begins its budget process once the President submits his budget. The President is required by law to submit a comprehensive federal budget no later than the first Monday in February. The President's budget includes estimates of direct spending and revenues under existing laws, as well as requests for discretionary spending (i.e., funds controlled through the appropriations process) for the upcoming fiscal year. In addition, the President frequently proposes new initiatives in his budget submission to Congress. Although Congress is not bound by the President's budget, congressional action on spending and revenue legislation often is influenced by his recommendations, as well as subsequent budgetary activities by the President 2 For a guide to the contents of H.J.Res. 2, see CRS Report RS21433, FY2003 Consolidated Appropriations Resolution: Reference Guide, by Robert Keith. 3 See OMB, Budget of the U.S. Government, Fiscal Year 2004 (Washington: GPO, 2003), table S-1, p. 311 (for projections with President Bush's budget proposals included) and table S-13, p. 330 (for projections under existing law); CBO, The Budget and Economic Outlook: Fiscal Years 2004-2013, Jan. 2003, table 1.1, p. 2 (for CBO's budget baseline projections, under existing law). 4 For more detailed information on the FY2004 budget throughout the year, see CRS Report RL31784, The Budget for Fiscal Year 2004, by Philip D. Winters. CRS-3 during the year. OMB assists the President in formulating and coordinating his budget policies and activities. On February 3, 2003, President Bush submitted his FY2004 budget to Congress. Following the usual practice, the President's budget was submitted as a multi-volume set consisting of a main document that includes the President's budget message and information on his 2004 proposals (Budget) and supplementary documents that provide special budgetary analyses (Analytical Perspectives), historical budget information (Historical Tables), and detailed account and program level information (Appendix), among other things. The FY2004 budget documents include a new volume relating to President Bush's management agenda (Performance and Management Assessment). On July 15, President Bush submitted his Mid-Session Review of the budget to Congress. This report contains revised estimates of the budget deficit/surplus, receipts, outlays, and budget authority for FY2003 through FY2008, reflecting changed economic conditions and assumptions and congressional actions.5 The Congressional Budget Act (CBA) of 1974 (Titles I-IX of P.L. 93-344, 88 Stat. 297-332) established the congressional budget process, including a timetable for congressional action on budget legislation (see Table 1). The process is centered around the adoption of an annual concurrent resolution on the budget. The budget resolution sets forth aggregate spending and revenue levels, and spending levels by major functional area, for at least five fiscal years. Because the budget resolution is a concurrent resolution, it is not presented to the President for his signature, and thus does not become law. Instead, it is an agreement between the House and Senate on a congressional budget plan, providing a framework for subsequent legislative action on the budget during each congressional session. Table 1. The Congressional Budget Process Timetable Date Action to be completed First Monday in February President submits budget to Congress. February 15 Congressional Budget Office submits economic and budget outlook report to Budget Committees. Six weeks after President Committees submit views and estimates to Budget submits budget Committees. April 1 Senate Budget Committee reports budget resolution. April 15 Congress completes action on budget resolution. May 15 Annual appropriations bills may be considered in the House, even if action on budget resolution has not been completed. 5 The President's budget documents are available on OMB's website, at [http://www.whitehouse.gov/omb/budget/fy2004/], visited on Jan. 29, 2004. CRS-4 Date Action to be completed June 10 House Appropriations Committee reports last annual appropriations bill. June 15 House completes action on reconciliation legislation (if required by budget resolution). June 30 House completes action on annual appropriations bills. July 15 President submits mid-session review of his budget to Congress. October 1 Fiscal year begins. Source: Section 300 of the Congressional Budget Act of 1974, as amended (P.L. 93-344, 2 U.S.C. 631). Note: Dates serve as guidelines, except the first and last, which are required by law. Budget resolution policies are implemented through the enactment of revenue and debt-limit legislation, appropriations and other spending measures, and, if required by the budget resolution, one or more reconciliation bills (see Table 2). Congress enforces budget resolution policies through points of order on the floor of each chamber and the reconciliation process. For example, any legislation that would cause the aggregate levels to be violated is prohibited from being considered. Further, the total budget authority and outlays set forth in the budget resolution are allocated among the House and Senate committees having jurisdiction over specific spending legislation. Any legislation, or amendment, that would cause these committee allocations to be exceeded is prohibited. Finally, the House and Senate Appropriations Committees subdivide their allocations among their respective 13 subcommittees. A point of order may be raised against any appropriations act, or amendment, that would cause one of these subdivisions to be exceeded.6 The budget resolution also contains spending levels by functional categories (e.g., national defense), but these are not enforceable. Congress also may use reconciliation legislation (discussed further below) to enforce direct spending, revenue, and debt- limit provisions of a budget resolution. For FY1991 through FY2002, Congress and the President also were constrained by statutory limits on discretionary spending and a "pay-as-you-go" (PAYGO) requirement for direct spending and revenue legislation.7 Unlike the enforcement procedures associated with the budget resolution, which are employed while legislation is considered on the floor of each chamber, the discretionary spending limits and PAYGO requirement were enforced by a sequestration process generally after legislative action for a session of Congress ended. These budget enforcement mechanisms, however, expired at the end of FY2002 (i.e., September 30, 2002). 6 For more detailed information on these points of order and their application, see CRS Report 97-865, Points of Order in the Congressional Budget Process, by James V. Saturno. 7 These constraints were first established by the Budget Enforcement Act (BEA) of 1990 (Title XIII of P.L. 101-508, Omnibus Budget Reconciliation Act of 1990, 104 Stat. 1388- 573-1388-630), which amended the Balanced Budget and Emergency Deficit Control Act of 1985 (Title II of P.L. 99-177, 99 Stat. 1038-1101). CRS-5 Table 2. Mapping Spending and Revenue Legislation through the Congressional Budget Process The annual budget resolution is the centerpiece of the congressional budget process by setting forth aggregate spending and revenue levels for at least five fiscal years. Budget resolution policies are implemented through the enactment of appropriations and other spending measures, revenue legislation, and, if required by the budget resolution, one or more reconciliation bills. Spending amounts are allocated among each House and Senate committee with jurisdiction over specific spending legislation. Discretionary spending Mandatory spending and revenues and appropriated entitlements