The Congress may not adjourn sine die until it has completed action on the second resolution and the reconciliation process. Furthermore, after adoption of the second resolution and completion of the reconciliation process, it is not in order in either House to consider any new spending legislation that would cause the aggregate levels of total budget authority or outlays adopted in that resolution to be exceeded, nor to consider a measure that would reduce total revenues below the levels in the resolution. Such legislation is subject to a point of order.

Of course, Congress may adopt a revision of its most recent resolution at any time during the fiscal year. In fact, the framers of the Budget Act anticipated that, in addition to the May and September resolutions, Congress may adopt at least one additional resolution each year, either in conjunction with a supplemental appropriations bill or in the event of sharp revisions in revenues or spending estimates brought on by major changes in the economy.

On or before Oct. 1..

Action to be completed

Fiscal year begins.

The completion of reconciliation action brings the budget timetable to a close, 5 days before the start of the fiscal year on October 1.

AUTOMATIC BINDING BUDGET RESOLUTION

During the evolution of the budget process Congress found that adoption of two budget resolutions, one "nonbinding" and one "binding," within 3 or 4 months of each other, created an unnecessary legislative burden. Usually, the policy decisions embodied in the resolution approved by Congress in the spring had not substantially changed by late summer to warrant a complete revision at this point. Also, other legislation, primarily appropriations bills, were competing for floor time with the Second Budget Resolution. In response to this situation, Congress informally streamlined the budget process by providing that the overall spending and revenue levels set forth in the "first" budget resolution would become binding when the new fiscal year begins. This obviates formal congressional action on a second resolution in order to establish a spending ceiling and revenue floor for a particular fiscal year.

Budget resolutions, beginning with the First Concurrent Resolution on the Budget for Fiscal Year 1983, have included provisions which provide that the overall spending and revenue levels in the resolution will become binding on October 1. This is commonly designated as the "automatic second budget resolution" provision. It eliminates the requirement that Congress adopt a second budget resolution; however, it does not eliminate the option to revise the pending resolution if Congress so chooses. And in fact, the levels are usually adjusted in the spring of that fiscal year at the same time that Congress is adopting its budget resolution for the coming fiscal year.

It should be noted that the Congressional Budget Act of 1974 has not been amended to reflect this modified procedure. Rather, Con

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gress in adopting a budget resolution for a fiscal year which includes an automatic second provision is temporarily modifying the budget process pursuant to that particular budget resolution.

THE RECONCILIATION PROCESS (LEGISLATIVE SAVINGS AND REVENUE

REFORM-SECTION 310)

Section 310 of the Act provides for the reporting of a reconciliation bill or resolution when called for in a budget resolution.

In general, reconciliation language directs one or more committees of the Congress to submit legislation increasing or decreasing revenues, spending or the limit on the public debt. The purpose of the reconciliation process is to require committees to implement the spending and tax policy decisions agreed to in the budget resolution. If the reconciliation directive involves more than one committee in each House, then all committees affected by the directive are to submit their recommendations to the Budget Committee which will assemble, without substantive revision, all the recommendations into one package for action by the House or Senate.

Reconciliation language in a budget resolution deals only with total spending (including entitlement programs) and/or revenues and not with specific program reductions or specific tax measures. Of course, language in the committee report may amplify the committee's intent with respect to programs and functions affected by the reconciliation process.

The reconciliation process has not always been implemented exactly as envisioned by the Congressional Budget Act. Instead the process has evolved, partially because the Budget Act does not spell out every detail about the process, but more importantly because of the year-to-year experiences with reconciliation and the goals of each budget resolution. In retrospect, however, reconciliation in practice has not strayed very far from the original premise-it is still based on the fundamental principles set forth in the Act.

One major variation from the Budget Act's reconciliation procedure has been the use of reconciliation instructions in the first budget resolution. Placing reconciliation in the first resolution came early in the process in 1980 (fiscal year 1981), both to allow enough time for passage of a reconciliation bill before the end of the year and because of the perceived necessity to act early in the year to reverse the economic downturn. It was generally believed that large reconciliation bills could not be developed, reported out of committee, considered on the floor and agreed to in conference with the Senate in the time normally remaining at the end of the year after passage of a second budget resolution.

For a full discussion of the reconciliation process and the history of its use, see Budget Process Task Force, House Committee on the Budget, A Review of the Reconciliation Process (CP-9, 1984).

THE PUBLIC DEBT LIMIT

An amendment to the Standing Rules of the House, Public Law 96-78, enacted September 29, 1979, provides that the debt limit for a fiscal year will be the amount specified in the most recently approved conference report to accompany the budget resolution for such fiscal year.

The procedure on the House side, first applied in the First Budget Resolution for Fiscal Year 1981, integrates the public debt limit into the congressional budget process which, by setting the budget totals, will determine what amount of debt may be incurred and the total amount of debt outstanding.

The level approved in the budget resolution then becomes the substance of a joint resolution that is "deemed to be passed" by the House and is sent to the Senate for its approval.

In the Senate, the Senate Finance Committee retains jurisdiction over the initiation and consideration of this matter although the budget resolution reported from the Senate Budget Committee would continue to include, as one of the aggregates, the appropriate level of the public debt for a given fiscal year. Accordingly, the Senate Finance Committee and/or the Senate could amend the joint resolution and, therefore, require further action by the House. After final action by the Congress, the joint resolution is forwarded to the President for his signature.

Notwithstanding this procedure for consideration of the public debt in the House, the Ways and Means Committee still retains general legislative jurisdiction over the debt and can, if the situation warranted it, undertake specific legislative action.

ENROLLMENT OF SPENDING BILLS (SECTION 301 (B) (1)) AND

MISCELLANEOUS MATTERS (SECTION 301 (B) (2))

Section 301(b)(1) of the Act provides as an option that all or certain spending bills, including both appropriation and entitlement bills shall not be enrolled until after the adoption of the second budget resolution (and accompanying reconciliation, if any) for such fiscal year. Bills which were consistent with the first budget resolution allocations were sent to the President for signature immediately.

This procedure was implemented for the first time in the First Budget Resolution for Fiscal Year 1981. It was directed only at bills which exceeded their section 302(b) subdivisions. Its primary purpose was to bring spending measures under effective control of the budget process. Bills which were consistent with the first budget resolution allocations were sent to the President for signature immediately. Variations of the deferred enrollment procedure have been part of the First Budget Resolutions for Fiscal Years 1981, 1982, 1983, and 1984.

Section 301(b)(2) of the Act provides for the inclusion in budget resolutions of any other procedure which is considered appropriate to carry out the purposes of a resolution. Pursuant to this authority, budget resolutions have in the past included various matters such as aggregrate and functional targets for direct loan obligations and loan guarantee commitments, outyear aggregate and functional totals, an automatic Second Budget Resolution, and sense of the Congress language pertaining to various studies and budget process issues.

SPECIAL PROCEDURES FOR BACKDOOR SPENDING LEGISLATION (SECTION

401)

In addition to the budget timetable, Section 401 of the Budget Act provides controls over the three forms of "backdoor" spending-entitlements, contract authority, and borrowing authority. Under the Budget Act reforms, a bill or resolution containing contract or borrowing authority is subject to a point of order unless it also provides that the authority is effective only to the extent provided in an appropriation act. In effect, the Budget Act closes the door to new contract and borrowing authority outside the appropriations process. It does not apply to contract or borrowing authority in effect prior to January 1976.

With respect to entitlement legislation, the Budget Act provides two major constraints. First, any bill or resolution containing a new entitlement is subject to a point of order (Section 401(b)(1)) unless the entitlement is to take effect on or after the first day of the fiscal year which begins in the calendar year in which the bill or resolution is reported. The point of order lies against the entire bill, not just the provision containing the entitlement. Secondly, any new entitlement which requires new budget authority in excess of the amounts allocated to committees for new entitlements must be referred to the Appropriations Committee for a period not to exceed 15 days (Section 401(b)(2)). The Appropriations Committee may recommend an amendment to the entitlement bill in order to limit the total amount of new spending authority provided.

The backdoor spending restrictions of Section 401 do not apply to social security trust funds, 90 percent self-financed trust funds, certain government corporations, and general revenue sharing legislation (to the extent it is exempted in renewal legislation).

The congressional budget timetable, together with the new controls on backdoor spending, establishes a tightly woven yet flexible set of new budget procedures. Despite the relatively large number of statutory deadlines, the Act does not specify every important date the reporting of the second resolution, for example. Much is left to be worked out on the basis of experience and the development of practical and flexible procedures.

Yet it was essential, in view of the drafters of the Act, to set firm dates for key elements of the process. Certain parts of the budget process cannot move ahead unless other actions are completed. For example, appropriations cannot be considered until the first budget resolution is adopted and necessary authorizations have been enacted. Thus, failure to complete a particular action on schedule affects later actions as well. In short, the four main phases of the budget process (authorizations, budget resolutions, spending measures, and reconciliations) must be completed by the dates assigned to them in the Act.

BUDGET INFORMATION, PROGRAM EVALUATION, AND EFFECTIVE

DATES

Titles V through IX of the Act provide for a change in the fiscal year; make various improvements in budget terminology and matters to be included in the President's budget; provide for improved

program review and evaluation procedures; and specify the effective dates for various provisions of the Act.

A new fiscal year

Title V of the Budget Act shifted the fiscal year from the July 1June 30 to October 1-September 30. The 3-month transitional period was accommodated between the Second Budget Resolution for Fiscal Year 1976 and the First Budget Resolution for Fiscal Year 1977.

The President's budget

Title VI of the Act requires additional information to be contained in the President's budget:

(1) the same matters required to be included in concurrent resolutions on the budget;

(2) variances during the past fiscal year between actual and estimated revenues and between actual and estimated uncontrollable outlays;

(3) cost information with respect to any program for which advance appropriations are proposed;

(4) a presentation in terms of national needs, agency missions, and basic programs; and

(5) a 5-year projection of various budget matters.

The President's budget is to be updated twice annually-on April 10 and July 15 7-and accompanied by a statement of all amendments or revisions proposed after submission of the initial budget.

In addition, the Act requires the Executive to submit no later than May 15 of the previous calendar year requests for authorizing legislation for the fiscal year following the immediately ensuing fiscal year. For example, authorizing legislation for programs to begin in fiscal year 1983 (October 1, 1982) must be submitted to the Congress no later than May 15, 1981. Title VI also provides for submission of the current services budget, the purpose and content of which was described in the context of the congressional budget timetable.

Program review and evaluation

Title VII of the Act authorizes House and Senate committees to conduct program testing or analytic activities or to require agencies to evaluate programs and report the results to them. It also expands the program review and evaluation authority of the General Accounting Office to enable it to provide additional assistance to the Congress. The results of improved program review and evaluation efforts will assure more informed congressional budget decisions.

Studies

Several provisions of the Act direct the undertaking of important studies of various aspects of the budget process:

(1) the Budget Committees are directed to study additional budget reform proposals, improved information for program

7 The President's budget updates have generally been submitted earlier in order to accommodate markup of budget resolutions.