U.S. Senate Republican Policy Committee
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No. 51 April 3, 2000
S. Con. Res. 101 - Concurrent Budget Resolution for Fiscal Year 2001

Calendar No. 482

Reported on March 30, 2000, as an original concurrent resolution by the Senate Committee on the Budget by a vote of 12 to 10, strictly along party lines. S. Rept. 106-251. Additional and minority views filed.

NOTEWORTHY

HIGHLIGHTS

See attached listing of spending totals for fiscal years 2001-2005, by function, provided by the Budget Committee.

Surplus

Debt

Tax Cuts

Spending

Education: The Resolution sets total funding for the Department of Education at $48 billion in BA, $13 billion more than last year and $600 million more than the President's budget. An additional $11 billion is dedicated to funding the federal government's commitment under IDEA. Special education funding is increased by $1 billion, while funding for Head Start is increased by $155 million next year. The Resolution rejects the President's 15-percent cut in Impact Aid.

Defense: The Resolution provides $307 billion in BA for fiscal year 2001. This is an increase of almost $17 billion over fiscal year 2000. The Resolution reestablishes the firewall between defense and non-defense spending. The firewall is enforced through a 60-vote point of order.

Kosovo: The Resolution assumes an additional $5.4 billion in fiscal year 2000 for specific items requested by the President related to Kosovo/East Timor, Colombia international narcotics intervention, and continued emergency funding for Hurricane Floyd victim assistance.

Transportation: The Resolution includes full funding for highway and mass transit programs under the Transportation Equity Act (TEA-21) and for aviation programs under the Aviation Investment Act. In total, transportation funding would increase by nearly $4.3 billion in outlays between 2000 and 2001. Total transportation funding in fiscal year 2001 is $59 billion in BA and $51 billion in outlays.

Veterans' Health: The Resolution includes a $1.1 billion increase for veterans' discretionary health programs.

NIH: The Resolution increases funding for NIH by nearly $1.1 billion next year.

Housing: The Resolution fully renews all Section 8 housing contracts in place at the end of 2000.

WIC: The Resolution assumes $50 million in increased funding for the WIC program.

Indian Health: The Resolution also assumes $230 million funding for the Indian Health Service.

ANWR: The Resolution assumes the leasing of the Alaska National Wildlife Reserve which would provide over $1.2 billion in offsets to discretionary spending in 2005.

Reserve Funds

The Resolution includes seven reserve funds designed to accommodate updated budget estimates and legislation that affects spending and revenue levels. Specifically, reserve funds grant the Chairman of the Budget Committee the authority to adjust the spending and revenue levels in the budget resolution once certain conditions have been met. Those conditions might include new budget estimates from the Congressional Budget Office or the adoption of specific legislation by authorizing committees.

Medicare: The Resolution includes a reserve fund of $40 billion for fiscal years 2001- 2005 for legislation which provides fundamental Medicare reform and contains a prescription drug benefit.

Education: The Resolution includes a reserve fund of $200 million for fiscal year 2001 and $1.1 billion for fiscal years 2001-2005 for legislation which increases payments to counties to support school and road systems, otherwise known as PILT payments.

Agriculture: The Resolution includes a reserve fund of $5.5 billion in fiscal year 2000 and $3 billion in fiscal years 2001-2005 for Agriculture-Committee-reported legislation that provides assistance for producers of program crops and specialty crops, and enhancements for agriculture conservation programs.

Budget-Neutral Tax Reduction: The Resolution includes a reserve fund to make tax cuts beyond those included in the reconciliation instructions permissible if they are offset with mandatory savings.

Future Surpluses and Tax Reduction: As previously mentioned, the Resolution includes a reserve fund to allow any further improvement in the on-budget surplus to be available for additional tax cuts.

Additional Debt Reduction: The Resolution includes provisions to reserve the money set aside for Medicare reform (in the preceding reserve fund) and tax cuts (in the reconciliation instructions) for debt reduction if it is not used as specified under the budget.

Discretionary Spending: The Resolution includes provisions to increase the Section 302 allocations to the Appropriations Committee upon the enactment of legislation to increase the current discretionary spending caps.

Budget Enforcement

The Resolution includes several provisions designed to ensure Congress complies with the revenue and spending levels established in the Resolution:

Social Security Lock-Box Point of Order: The Resolution establishes a 60-vote point of order against any budget resolution that results in a unified budget deficit.

Emergency Spending Point of Order: The Resolution establishes and makes permanent a 60-vote point of order in the Senate against the use of "emergency designation" in any spending or revenue legislation. This provision is similar to the point of order included in last year's point of order except emergency defense spending is no longer exempt from the point of order.

Defense Firewall: The Resolution provides a firewall for defense and non-defense discretionary spending for fiscal year 2001. Once the statutory spending limits have been increased, this section provides a 60-vote point of order in the Senate against legislation which appropriates more than $307 billion in BA and $295 billion in outlays for defense, or more than $290 billion in BA and $328 billion in outlays for non-defense. An exception is provided in case of declaration of war.

Advanced Appropriations & Delayed Obligations: The resolution creates a new, 60-vote point of order against any appropriation bill that increases the total level of advanced appropriations -- that is, appropriations counted against years beyond the first fiscal year under the resolution -- in excess of $14.2 billion. The resolution also levies a new 60-vote point of order against appropriation bills that include delayed obligations that are not delayed for programmatic reasons.

BACKGROUND

General

As Congress' blueprint for federal spending, the budget resolution sets the binding limits on discretionary and mandatory spending levels and binding floors for revenue collections. For discretionary spending, the budget resolution allocates overall spending levels to the House and Senate Appropriations Committees through the so-called 302(a) allocations. The Appropriations Committee then divides this allocation among its 13 subcommittees.

The budget resolution also directs authorizing committees to make changes in mandatory spending programs or revenues through reconciliation instructions. For example, the pending resolution instructs the Senate Finance Committee by September 22, 2000 to report legislation that reduces revenues over the next five years by $150 billion. In past resolutions, instructions have been included to amend Medicare, Medicaid, agriculture programs, and others.

Enforcement of the budget resolution's provisions are affected through both internal Senate rules as well as statutory caps and other limitations. For discretionary spending, the spending levels adopted in the resolution are enforced through 60-vote Budget Act points of order. Total discretionary spending levels are also subject to statutory spending caps first enacted as part of the 1990 Budget Enforcement Act. Finally, so-called discretionary firewalls divide spending into three categories -- non-defense, defense, and highway funding. Violations of these caps and firewalls are subject to 60-vote points of order.

The reconciliation process is enforced through numerous provisions at both the committee and floor level. Committees failing to adopt legislation meeting the resolution's instructions face the possibility of having the Budget Committee report out the appropriate legislation instead. On the floor, reconciliation bills enjoy protected status, including limited debate on the bill and individual amendments and special points of order against amendments that increase the deficit, amend the Social Security Act, and others. [For a full description of budget and reconciliation rules, see Budget Committee Print 105-67.]

Procedures

Under the Budget Act of 1974, as amended, a budget resolution is a privileged piece of legislation, as outlined below. It is not subject to filibuster and debate time is limited to 50 hours, equally divided. However, this does not mean that Republicans have 25 hours for debate and the offering of amendments. As time is used on debate or amendments, remaining time is equally divided as debate proceeds. In addition, votes do not count against this time limit, nor do quorum calls just prior to votes. [For an explanation of Budget Act points of order, see Riddick's Senate Procedure, revised in 1992, pp. 615-618.]

Amendments to the budget resolution must be germane; otherwise, a point of order lies against the amendment, and 60 votes are required to waive the point of order. Germane amendments are those which:

Debate on first-degree amendments is limited to two hours, one hour to proponents and one hour to opponents. Debate on second-degree amendments is limited to one hour, 30 minutes per side. All debate time on a first-degree amendment must be used or yielded back before a second-degree amendment can be offered.

No debate is allowed on a point of order made against any amendment under the Budget Act. Instead, a motion to waive the Budget Act must be made. Debate on any motion to waive a point of order is limited to one hour equally divided.

Amendments can be offered at any time.

Recent Activity

Recent budget resolutions have been characterized by confrontation between the Republican-controlled Congress and the Democrat President. While the President does not sign budget resolutions, he does sign or veto the bills that conform to the resolution's limits. Over the past five years, the President has vetoed 12 individual spending bills adopted by Congress. The failure of Congress and the President to get together on the appropriations process has necessitated that Congress pass 34 stop-gap spending bills -- or continuing resolutions -- during the past five years.

Another unique characteristic of recent budget resolutions is the budget surplus. The modern budget process was established by the 1974 Budget Act. From 1975 to 1998, every budget adopted by Congress projected deficits for the first fiscal year it covered. That trend ended in fiscal year 1999, when the Republican-controlled Congress adopted a resolution that called for -- and resulted in -- a balanced unified federal budget.

The last time the budget was balanced not counting Social Security was in 1960. The pending resolution produces an on-budget surplus -- not counting Social Security -- of $8 billion. This is the third on-budget surplus in a row. Three consecutive on-budget surpluses have not occurred since 1947-1949 (Republicans controlled both houses of Congress in 1947-48).

The two primary factors leading to the current budget surpluses are the spending restraints imposed by the Republican Congress over the past five years and the remarkable growth in tax revenues flowing into the Treasury. Overall federal spending over the past five years has grown at 3.1 percent per year. Non-defense discretionary spending has been held to 3.3 percent growth. For comparison, total annual federal spending increased by 12 percent in the 1970s and 8 percent in the 1980s. While these are nominal comparisons, in real terms federal spending growth has slowed considerably under the Republican Congress.

On the revenue side, taxes and other receipts collected by the Treasury have increased dramatically. For 1995 through 1999, revenue collected by the federal government increased annually by 7.7 percent. For comparison, revenues collected during the previous five-year period grew at an annual 4.9 percent rate. The good news resulting from this revenue growth is the current budget surplus. The bad news is federal revenues are consuming record portions of our total national income. From 1995 through 1999, revenues measured against GNP grew from 18.5 to 20.0 percent. The tax relief included in the pending budget resolution would reduce collections by $150 billion over five years, or just 1.4 percent of collections over that time.

President's Alternative

The series of eight budgets submitted by President Clinton have been characterized by a slow process of conversion. The President failed to submit a "balanced" federal budget until last year, seven years into his presidency. Moreover, until the most recent submission, every budget submitted by President Clinton has spent the Social Security surplus for non-Social Security programs. In 1999, President Clinton pledged to "Save Social Security first," but his budget of that year spent $158 billion of the Social Security Trust Fund.

Another interesting feature of the President's budgets over the past six years has been his on-again, off-again support of tax cuts. Of the eight budgets submitted by President Clinton, four (1994, 1995, 1999, and 2000) called for net tax increases averaging $134 billion over five years, while the other four (1996, 1997, 1998, and 2001) have called for net tax cuts averaging $42 billion. In a bizarre twist, as the tax overpayment by Americans has grown, the President's support for tax relief has declined.

Finally, President Clinton's most recent budget continues his "Spend Now, Save Later" philosophy of budgeting. The President's budget calls for an increase in spending for fiscal year 2001 of $58 billion. Meanwhile, faced with a record unified budget surplus of $192 billion, his budget would increase taxes collected next year by $12 billion.

Amendments Offered in the Budget Committee

The following amendments were offered during the Senate Budget Committee's markup of the fiscal year 2001 Budget Resolution:

Amendments Adopted

1) Abraham, Grams, Nickles, and Frist: To create a 60-vote point of order on any future budget resolution that results in a budget deficit. [Adopted by voice vote]

2) Grams and Abraham: To provide a look-back mechanism to protect Social Security. [Amendment adopted 12-10]

3) Murray: Sense of the Senate amendment to increase function 500 to reduce class size as modified by the Gregg second-degree amendment. [Adopted by a voice vote]

4) Gregg (second degree to Murray): To use increase in function 500 to fully fund IDEA. [Amendment adopted 12-10]

5) Boxer and Smith: Sense of the Senate to eliminate the growing international problem of tuberculosis. [Adopted by a voice vote.]

6) Snowe, Murray and Abraham: Sense of the Senate to increase funding for child care and development block grant. [Adopted by voice vote]

7) Snowe, Smith, and Abraham: Sense of the Senate that tax reconciliation legislation passed in fiscal year 2001 include tax relief for college education. [Adopted by a voice vote.]

8) Snowe (as modified by Boxer): Sense of the Senate on increasing funding for the National Institutes of Health. [Adopted by voice vote]

9) Durbin (as modified by Domenici): To amend reconciliation instructions to reduce revenues by $483 billion for fiscal years 2001-2005. [Adopted by voice vote]

10) Domenici (second degree to Durbin): Sense of the Senate regarding the impact reducing wasteful spending and enjoying better-than-expected economic performance has on future surpluses. [Amendment adopted 12-10]

11) Johnson and Snowe: Sense of the Senate on the inadequacy of the payments for skilled nursing care. [Adopted by voice vote]

12) Johnson, Boxer, and Sarbanes (as modified by Domenici): To create a budget-neutral reserve fund for outer continental shelf (OCS) receipts. [Adopted by voice vote]

13) Domenici (second degree to Johnson): Sense of the Senate amendment on the CARA Programs. [Amendment adopted 13-9]

14) Johnson (as modified by Domenici): To increase function 750 veterans for adequate medical care. [Adopted by voice vote]

15) Domenici (second degree to Johnson): Sense of the Senate that the resolution assumes increased funding for veterans' medical care. [Amendment adopted 12-10]

16) Johnson: Sense of the Senate on impact aid. [Adopted by voice vote]

17) Johnson: Sense of the Senate on funding for increased acreage under the Conservation Reserve Program and the Wetlands Reserve Program. [Adopted by voice vote]

18) Feingold (as modified by Domenici): Sense of the Senate on tax simplification. [Adopted by voice vote]

19) Grassley, Conrad, and Feingold: Sense of the Senate on antitrust enforcement by the Department of Justice and the Federal Trade Commission regarding agriculture mergers and anticompetitive activity. [Adopted by voice vote]

20) Conrad and Grassley: Sense of the Senate regarding fair markets for American agricultural producers. [Adopted by voice vote]

21) Murray: To increase function 400 to maintain necessary funding for the Office of Pipeline Safety. [Adopted by voice vote]

22) Murray and Snowe: Sense of the Senate on women and social security reform. [Adopted by voice vote]

23) Murray: Sense of the Senate on reauthorizing the Violence Against Women Act of 1994. [Adopted by voice vote]

24) Grassley and Conrad: Sense of the Senate on the use of the False Claims Act in combatting Medicare fraud. [Adopted by voice vote]

25) Feingold: Sense of the Senate on military readiness. [Adopted by voice vote]

26) Feingold: Sense of the Senate on the National Guard. [Adopted by voice vote]

27) Feingold: Sense of the Senate on compensation for the Chinese Embassy bombing in Belgrade. [Adopted by voice vote]

28) Boxer: Sense of the Senate to support full funding for digital opportunities. [Adopted by voice vote]

29) Durbin: Sense of the Senate on tax credits for small businesses that provide health insurance to low-income employees. [Adopted by voice vote]

30) Durbin: Sense of the Senate on immunization funding. [Adopted by voice vote]

31) Durbin, Boxer, and Lautenberg (as modified by Domenici): Sense of the Senate on providing adequate funding for enforcement of gun laws. [Adopted by voice vote]

32) Domenici (second degree to Durbin): Sense of the Senate on funding for the justice system. [Amendment adopted 12-10]

33) Smith, Snowe, Abraham, and Feingold: Sense of the Senate on Pell Grant funding. [Adopted by voice vote]

34) Smith and Sarbanes: Sense of the Senate on providing adequate foreign affairs funding. [Adopted by voice vote]

35) Smith and Murray: Sense of the Senate on comprehensive public education reform. [Adopted by voice vote]

36) Feingold and Frist: Sense of the Senate on the HIV/AIDS crises. [Adopted by voice vote]

37) Snowe, Wyden, and Smith: To create a reserve fund for prescription drugs coverage. [Adopted by voice vote]

38) Conrad: Sense of the Senate on tribal colleges. [Adopted by voice vote]

39) Grassley and Feingold: To create a reserve fund to foster the health of children with disabilities and the employment and independence of their families. [Adopted by voice vote]

Amendments Defeated

1) Conrad (second degree to Abraham/Grams/Nickles/Frist which was adopted): To create a 60-vote point of order to require on-budget surpluses. [Amendment defeated 10-12]

2) Feingold: Sense of the Senate amendment on moving to a biennial budget. (Amendment defeated 11-11)

3) Conrad: To increase the amount of debt reduction by $75 billion over 5 years. [Amendment defeated 10-12]

4) Boxer: Sense of the Senate that the resolution does not include revenues or receipts from drilling in the Arctic National Wildlife Refuge (ANWR). [Amendment defeated 11-11]

5) Smith (second degree to Boxer): Sense of the Senate amendment on exporting oil from ANWR. [Amendment defeated 11-11]

6) Wyden: To create a $40 billion reconciliation instruction to increase Medicare spending for prescription drug coverage, reduce the tax reduction by $20 billion, and remove the requirement for Medicare reform to access the additional spending. [Amendment defeated 10-12]

7) Johnson, Murray, and Abraham: To create a reserve fund for military retirees health care. [Amendment defeated 11-11]

8) Domenici (second degree to Johnson): Sense of the Senate on military retirees' health care. [Amendment defeated 11-11]

9) Gramm: To increase gasoline and diesel fuel taxes by $1.50 per gallon by July 1, 2000 and an additional $1.50 by 2005 as part of "a coordinated global program to accomplish the elimination of the internal combustion engine." [Tabled 22-0]

10) Durbin (second degree to Gramm): Amendment with reconciliation instructions to reduce revenues by $483 billion for the period of fiscal years 2001-2005. [Tabled 21-1]

11) Grams: Sense of the Senate on the legal right to Social Security benefits. [Amendment defeated 10-12]

12) Grams: To use the fiscal year 2000 surplus for debt reduction. [Amendment defeated 5-17]

13) Boxer: Sense of the Senate to ensure that the President's after-school initiative is fully funded for fiscal year 2001. [Amendment defeated 11-11]

14) Lautenberg: To institute 10-year budgeting. [Amendment defeated 10-12]

15) Lautenberg: Democratic substitute budget for fiscal year 2001. [Amendment defeated 10-12]

Withdrawn Amendments

Durbin: Sense of the Senate amendment on the deductibility of health insurance costs of self-employed individuals.

POSSIBLE AMENDMENTS

In addition to amendments that may be similar to or identical to amendments offered during the committee's markup (see listing, above, beginning on page 9), the following amendments are possible. We will update you as we learn of additional amendments.

Allard: To lock in debt reduction by set amounts each year until the entire public debt is retired.

Gregg: Regarding federal education programs.

Ashcroft: Sense of Senate rejecting the President's proposal for the federal government to directly invest Social Security surpluses.

Ashcroft: Social Security and Medicare lockbox.

Roth: Strike ANWR provision.

Murkowski: Regarding escalating energy prices.

DeWine: Regarding drugs.

Byrd: Sense of the Senate to strike gas tax assumption.

Kennedy: Food stamp reserve.

Kennedy: Minimum wage.

Dodd: Child care funding (shift from mandatory to discretionary).

Schumer: To grant Smith & Wesson preference over other gun makers when bidding on federal contracts.

Lieberman: Regarding Individual Development Accounts.

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