Committee History
- Congressional Budgeting Prior to 1974
- Congressional Budget Act: Need for the law in the 1970's
- The Committee on the Budget
- Changes to the Budget Act since 1974
- Congressional Budgeting Prior to 1974
-
Prior to the enactment of the Budget Act of 1974, Congress often wrestled with how to effectively oversee increasing government expenditures. In the late 19th century and the early 20th century, Congress enacted a number of laws to control and coordinate spending by the executive branch. Similar efforts were made during the 1940's with respect to the legislative branch; however, none of these changes endured. In 1974, Congress enacted the Congressional Budget and Impoundment Control Act to coordinate and control the legislative branch's budget activities and to curb the President's impoundment powers.
The Anti-Deficiency Act
In 1870, the legislative appropriations bill was the vehicle for a number of reforms relating to appropriations practices, including the section later known as the Anti- Deficiency Act. This was the first major effort by Congress to exert more control over Government expenditures. At the time, agencies frequently obligated more funds than they had been appropriated and then submitted "coercive deficiency" requests to Congress to pay their bills. The Anti-Deficiency Act provided that no department could make greater expenditures during a fiscal year than had been provided by Congress. In addition, the departments could not enter into contracts for the future payment of money in excess of appropriations.
The Budget and Accounting Act of 1921
The Budget and Accounting Act of 1921 was enacted in response to the consensus that developed shortly after the turn of the century that a more centralized approach to financial policy and processes was needed, in both the executive and legislative branches. The Act codified the submission of the President's budget and created the Bureau of the Budget (the predecessor to the Office of Management and Budget (OMB)) to oversee the executive budget process. The Act also established the General Accounting Office (GAO) as the government's auditor, responsible only to Congress. The mission of GAO was to provide Congress with an independent audit of executive accounts and to report on violations of the fiscal statutes.
Joint Committee on the Reduction of Federal Expenditures
The Joint Committee was established by the Revenue Act of 1941. Its membership was composed of the members of the House and Senate Appropriations Committees. The staff of the committee tracked Congressional action against the President's budget request, generally using Bureau of the Budget estimates. Scorekeeping reports of Congressional action were published on a regular basis when Congress was in session. The Joint Committee was replaced by the Congressional Budget Office following enactment of the 1974 Act.
Joint Committee on the Legislative Budget
The Legislative Reorganization Act of 1946 created the Joint Committee on the Legislative Budget. Its membership was comprised of members of the House and Senate Appropriations Committees, the Senate Finance Committee and the House Ways and Means Committee. The Joint Committee was to meet at the beginning of each session of Congress and report to their respective Houses a legislative budget for the ensuing fiscal year, including total estimated Federal receipts and expenditures. A concurrent resolution was to accompany the report adopting such a budget, which would fix the maximum amount to be appropriated during the year. If estimated expenditures were to exceed estimated receipts, the resolution was to include a statement that it was the sense of Congress that the public debt would be increased by that amount.
Attempts were made in 1947 and 1948 to carry out the intent of the legislative budget provision. In 1947, conferees were unable to reach a final agreement. In 1948, a joint resolution was adopted by both Houses, but a strongly worded minority report noted basic defects in the procedure. No further attempts were made to comply with the Act after 1949.
President's Commission on Budget Concepts
In 1967, President Johnson appointed a commission to make a thorough study of the federal budget and the manner of its presentation. The Commission's most important recommendation was that a unified budget presentation replace the several competing and confusing measures of the total scope of federal financial activity. The report of the President's Commission on Budget Concepts serves as the foundation for most budgetary concepts used at the present time.
return to top - Congressional Budget Act: Need for the law in the 1970's
-
Two developments provided the impetus for the enactment of the Budget Act in 1974. One development was an increasing realization by Congress that it had no means to develop an overall budget plan. Prior to 1974, Congress responded to the President's budget (which contains the President's many spending and revenue proposals) each year in a piece-meal fashion. There existed no framework for Congress to establish its own spending priorities before work began on specific spending and revenue bills during the spring and summer.
A second, and more immediate, cause for passage of the Budget Act was a dispute in the early 1970's regarding presidential authority to impound money appropriated by Congress. During this time, President Nixon repeatedly asserted authority (as had many of his predecessors) to withhold from Federal agencies money appropriated by Congress. By 1973, it was believed that President Nixon had impounded up to $15 billion of spending previously approved by Congress. A large portion of these funds were to have gone towards the building of highways and pollution control projects. Many in Congress disputed these actions by the President.The authorization for the pollution control projects, for example, had been enacted by Congress in 1972 with a strong vote in both Houses overriding President Nixon's veto. Nonetheless, the President impounded much of this spending. These events led Members of Congress to seek a legislative solution.
In 1974 Congress enacted the Congressional Budget and Impoundment Control Act to establish procedures for developing an annual congressional budget plan and achieving a system of impoundment control. The Budget Act also created, for the first time, congressional standing committees devoted solely to the budget. It also created the Congressional Budget Office (CBO) to serve as the ``scorekeeper'' for Congress. CBO is responsible for producing an annual economic forecast, formulating the baseline, reviewing the President's annual budget submission, scoring all spending legislation reported from committee and passed by the Congress, and preparing reports in compliance with the Unfunded Mandates Reform Act. CBO's policy with respect to providing estimates is set out in Appendix B. The Joint Committee on Taxation scores all revenue measures.
return to top - The Committee on the Budget
-
The Budget Act created the Budget Committees of the Senate and House and gave them the responsibility to draft Congress' annual budget plan and monitor action on the budget for the Federal Government. For the first time, congressional institutions were in place whose unique concern would be Federal budgetary policy. As a result, the Budget Committee was, and remains today, uniquely focused on the details of our Federal budget, the drafting of the budget resolution, and the compilation of reconciliation legislation.
The Budget Committee has jurisdiction over the congressional budget process and the operation of CBO. The jurisdiction of the Senate Budget Committee is set out in Rule 25 of the Standing Rules of the Senate and in two standing orders adopted by unanimous consent of the Senate. The text of these sources of jurisdiction are set out in Appendix C. Most recently, the Budget Committee (along with the Committee on Governmental Affairs) has been responsible for the passage of the Unfunded Mandates Reform Act of 1995 and the Line Item Veto Act of 1996. The membership of the Senate Budget Committee, since its inception, is set out in Appendix D.
return to top - Changes to the Budget Act since 1974
-
Gramm-Rudman-Hollings 1985 and 1987
In the face of ever increasing budget deficits, in 1985 Congress enacted the Balanced Budget and Emergency Deficit Control Act. This Act is known as Gramm-Rudman-Hollings--named after the Senate authors of the original bill (Senators Phil Gramm of Texas, Warren Rudman of New Hampshire, and Ernest F. Hollings of South Carolina).
Gramm-Rudman-Hollings established ``maximum deficit amounts.'' If the deficit exceeded these statutory limits, the President was required to issue a sequester order that would reduce all non-exempt spending by a uniform percentage. Gramm- Rudman-Hollings also made a number of changes to the congressional budget process to enforce maximum deficit amounts and to strengthen congressional budget enforcement procedures. The most significant change was to increase the margin necessary to waive certain points of order from a simple majority vote to a three-fifths margin in the Senate.
In July of 1986 in Bowsher v. Synar (478 U.S. 714, 1986), the Supreme Court held that the provision of Gramm-Rudman- Hollings which vested certain powers in the General Accounting Office violated the separation of powers doctrine of the Constitution. This was due to the Office's (a creature of Congress) role in implementing sequester orders. The Court found it unacceptable from a constitutional perspective for Congress to vest in a congressional entity a duty of the executive branch--the responsibility for executing a law. In 1987, Congress enacted the Balanced Budget and Emergency Deficit Control Reaffirmation Act which corrected the constitutional flow in Gramm-Rudman-Hollings by assigning all the sequester responsibilities to the Office of Management and Budget (OMB). OMB is part of the executive branch. The 1987 Act also extended the system of deficit limits through fiscal year 1992.
The Budget Enforcement Act of 1990
It was not long, however, before Congress realized that despite Gramm-Rudman-Hollings procedures, the deficit continued to increase. In the spring of 1990, it became clear that the deficit was going to exceed the Gramm-Rudman's maximum deficit limit by nearly $100 billion. Later that year, OMB estimated that a sequester of $85 billion would be necessary to eliminate this excess deficit amount. Because Congress had exempted most of the budget from the sequester process, such a sequester order was going to require a 32 percent reduction in defense programs and a 35 percent reduction in non-defense programs. To respond to growing deficits, President Bush and the congressional leadership agreed to convene negotiations on the budget in May of 1990. Six months later, President Bush signed into law the Omnibus Budget Reconciliation Act of 1990, which represented the budget agreement negotiated between the Bush Administration and Congress.
Title XIII of this reconciliation act, the Budget Enforcement Act, constituted the enforcement provisions of the agreements. The 1990 Budget Enforcement Act (BEA) effectively replaced the Gramm-Rudman-Hollings system of deficit limits with two independent enforcement regimens: caps on discretionary spending and a pay-as-you-go requirement for direct spending and revenue legislation. The BEA also provided for enforcement by both the congressional and executive branch of the discretionary caps and the pay-as-you-go requirement.
Amendments Since 1990
The budget disciplines of the BEA were extended in the Omnibus Budget Reconciliation Act of 1993 and the Balanced Budget Act of 1997 and expired at the end of FY 2002. In addition to extending spending discipline through FY 2002, the Balanced Budget Act of 1997 also made a number of changes to the Congressional Budget Act of 1974. These changes were largely technical in nature and were intended to conform the Act to reflect updated congressional practices and precedents.
return to top