99–006

107TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 1st Session 107–338

INTERIM BUDGET CONTROL AND ENFORCEMENT ACT OF

2001

DECEMBER 13, 2001.—Committed to the Committee of the Whole House on the State

of the Union and ordered to be printed

Mr. NUSSLE, from the Committee on the Budget,

submitted the following

R E P O R T

[To accompany H.R. 3084]

[Including cost estimate of the Congressional Budget Office]

The Committee on the Budget, to whom was referred the bill

(H.R. 3084) to revise the discretionary spending limits for fiscal

year 2002 set forth in the Balanced Budget and Emergency Deficit

Control Act of 1985 and to make conforming changes respecting the

appropriate section 302(a) allocation for fiscal year 2002 established pursuant to the concurrent resolution on the budget for fiscal year 2002, and for other purposes, having considered the same,

report favorably thereon without amendment and recommend that

the bill do pass.

INTRODUCTION

The purpose of this bill is to revise two limits on Federal spending: the discretionary spending limits, which are set forth in law

and are enforced through automatic spending cuts, and the levels

in the budget resolution (H. Con. Res. 83) adopted by Congress in

May and which are enforced through points of order.

The increase in the spending limits and allocations is based on

the fiscal year 2002 budget resolution with adjustments to reflect,

under Administration scoring, $18.4 billion in additional budget authority for defense and a recent agreement by the Appropriations

Committees and the Office of Management and Budget [OMB] to

provide non-defense discretionary budget authority of about $3.4

billion above the levels assumed in the budget resolution. It is also

understood under this agreement that the spending limits will be

adjusted by another $2.2 billion for domestic emergencies prior to

the recent terrorist attack on the United States.

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This bill does not extend the discretionary spending limits or the

pay-as-you-go requirements beyond their current expiration date at

the end of fiscal year 2002. Similarly, it does not provide for other

revisions of the fiscal year 2002 budget resolution that Congress

agreed to on May 8, 2001. The bill makes the necessary changes

in the budget resolution to reflect an additional $18.4 billion for defense activities and $3.4 billion for non-defense activities above the

levels initially assumed in the budget resolution.

This bill also makes a number of technical corrections in the Balanced Budget and Deficit Control Act, and adds a new reporting requirement for OMB that is designed to give the Committee an understanding of the amount of expenditures related to the recent

terrorist attacks that will be carried forward into the future.

BACKGROUND AND PURPOSE

TITLE I—REVISING THE DISCRETIONARY SPENDING LIMITS

Background

The level of the discretionary spending limits for fiscal year 2002

was established in 1997 as part of the Balanced Budget Act [BBA].

Under the original limits established by the BBA, total discretionary budget authority was to increase by only $24.2 billion, or

4.6 percent, between fiscal years 1998 and 2002. But these spending limits were increased in the third and fourth years of that fiveyear budget agreement. Most recently, the Foreign Operations Appropriation

Act for Fiscal Year 2001 (P.L. 106–429) raised the fiscal year 2001 limits by $95.9 billion in budget authority and $58.6 billion

in outlays, but left unchanged the limits for fiscal year 2002.

It is unlikely that either Congress or the President would agree

to the magnitude of spending cuts necessary in one year to stay

within a fiscal year 2002 spending limit that was established five

years earlier. Accordingly, the Administration’s budget submission for fiscal year 2002 called for increases of $107.8 billion in budget

authority and $97 billion in outlays from the original statutory limits. Similarly, the Congressional Budget Resolution (H. Con. Res.

83) established a 302(a) allocation for the House Appropriations

Committee that was consistent with increasing the statutory

spending limits from those levels by $108.5 billion in budget authority and $88.1 billion in outlays.

Purpose

The discretionary spending limits need to be increased to accommodate the budget priorities of both the Administration and Congress. The President’s budget submission for fiscal year 2002 rec- ommended increasing the spending limits to $660.6 billion in budget authority and $691.7 billion in outlays, using the Administration’s estimates. Similarly, the fiscal year 2002 Congressional

Budget Resolution (H. Con. Res. 83) established an overall discretionary allocation that implicitly assumed the statutory spending

limits would be raised to $661.3 billion in budget authority and

$682.8 billion in outlays, and additional funding for defense and

other appropriate legislation.

A more immediate reason for increasing the spending limits is to

avoid a sequester. According to the Office of Management and

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Budget, if the spending limits for fiscal year 2002 are not increased, appropriations at the level originally requested by the Administration will exceed the spending limit for budget authority

and trigger a sequester of about $111.3 billion in budget authority.

This would cause most discretionary programs to be reduced in excess of 15 percent.

The spending limits must be raised to reflect the commitment of

both the President and Congress to increase defense spending. In

addition to accommodating a 3 percent increase in discretionary

spending, H. Con. Res. 83 specifically authorized the Budget Committee Chairmen of the House and Senate to increase the appropriate levels in the budget resolution in response to the President’s

National Defense Review. The Administration submitted an

amendment to its budget submission for fiscal year 2002 requesting

an additional $18.4 billion in budget authority and $11.4 billion in

outlays above what was assumed in the budget resolution. Assuming the spending limits were increased to the levels assumed in the

budget resolution as of May, a further increase would be necessary

to accommodate the additional defense spending without triggering

a government-wide sequester.

A further reason for raising the spending limits is to accommodate a recent bipartisan agreement between Congress and the

President. In the wake of the recent terrorist attack and in an effort to forge common 302(b) allocations, the Appropriations Committees and OMB entered into negotiations on a revised level of

discretionary spending acceptable to OMB and the leadership in

the House and the Senate. After several weeks of negotiations, the

parties agreed to increase the discretionary budget authority above

the levels established pursuant to H. Con. Res. 83—about $18.4 billion of the total was earmarked for defense, and slightly more than

$3.4 billion for education and other initiatives. It was understood

that another $2.2 billion in non-terrorist-related spending would be

designated as an emergency.

It is also necessary to increase the statutory limits in order to

permit Senate consideration of the appropriation bills. Under the

Congressional Budget Act, an appropriation bill that exceeds the

statutory spending limits is subject to a point of order in the Senate. For that reason, the levels established in H. Con. Res. 83 (as

opposed to the levels printed in the accompanying Joint Statement

of Managers) complied with the statutory spending limits. H. Con.

Res. 83, however, directed the Senate Budget Committee Chairman

to increase the appropriate levels in the budget resolution to the

levels agreed to in the Joint Statement upon the enactment of legislation increasing the spending limits. Accordingly, it is necessary

to eliminate any points of order that could impede Senate consideration of appropriation bills.

Finally, by bringing the spending limits into alignment with the

appropriation bills, the committee hopes to restore the spending restraints imposed by the statutory spending limits. But as noted

above, circumstances have changed drastically since then—especially with the events of September 11. Rigidly adhering to spending levels that do not accommodate clearly unforseen events would

weaken the relevance of the spending limits themselves.

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TITLE II—REVISING THE FY 02 BUDGET RESOLUTION

Background

H. Con. Res. 83 assumed an overall discretionary spending level for fiscal year 2002 of $661.3 billion in budget authority and $682.8

billion in outlays. This represented an increase over the fiscal year

2001 level, which was also increased as part of H. Con. Res. 83, by

$19.3 billion or 3 percent and $35.7 billion in outlays or 5.5 percent.

Under section 302(a) and (f) of the Congressional Budget Act, the

Senate is prohibited from making an allocation that is higher than

the current level of the discretionary spending limits.

The Senate also may not consider any appropriation bill that exceeds these statutory levels. For this reason, the levels set forth in

H. Con. Res. 83 are less than those envisioned by the conferees,

which were printed in the Joint Statement of Managers.

Purpose

A key reason for revising the budget resolution is to enable Con- gress to approve an increase in defense spending of $18.4 billion.

Although H. Con. Res. 83 permitted the Budget Committee chairmen to make this adjustment, it is appropriate for the entire Congress to vote on a change of this magnitude. It also would remove

procedural obstacles to the timely consideration of the appropriation bills. Under the terms of H. Con. Res. 83 and the Congressional Budget Act, the Senate is prohibited from considering appropriation bills at the total level envisioned in the Joint Statement

of Managers (H. Con. Res. 83) until legislation is enacted to increase the discretionary spending limit.

Modifying the budget resolution, and increasing the spending

limit, will accommodate the recent agreement between the Appropriations Committees and OMB to increase discretionary spending

by $5.6 billion beyond the levels envisioned by the budget resolution.

More importantly, no one could have envisioned the unprecedented terrorist attack on the United States, and the magnitude of

resources required to respond to those attacks. In the wake of these

events, Congress has provided more than $56 billion in emergency

assistance. Obviously and necessarily, this assistance is beyond

what was contemplated in May. According to most economists, the

terrorist attacks further weakened an already weak economy. Now

the Congress is considering stimulus-related legislation that may

exceed $195 billion over 5 years.

The fiscal concerns of the Committee ought to be balanced with

due attention to the state of the economy and the war on terrorism.

By modifying the budget resolution to reflect the recent agreement

on discretionary spending, it is hoped that this bill will eliminate

one obstacle preventing the timely conclusion of the appropriations

process. This, in turn, will allow Congress and the Administration

to focus their efforts on waging a war against international terrorism.

For procedural convenience, the Committee chose to report revisions to the spending limits under the BBA and the budget resolution in the same legislative vehicle. Necessarily, this procedure required including revisions to the budget resolution in a bill that

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may be signed by the President rather than a concurrent resolution

that is not. In choosing to revise the budget resolution in this manner, the Committee on the Budget did not intend to endorse the

formal involvement of the executive branch in the consideration of

future budget resolutions.

TITLE III—TECHNICAL CORRECTIONS

Background

Since the Balanced Budget and Deficit Control Act of 1985 was

enacted it has been amended a number of times. During the 15

years since that time, a number of incorrect cross references and

typographical errors have accumulated.

Purpose

The purpose of this title is to make various technical corrections

in the Balanced Budget and Deficit Control Act of 1985, which sets

forth the discretionary spending limits, the pay-as-you-go requirements, and sequestration-related procedures for their enforcement.

LEGISLATIVE HISTORY

The Interim Budget Control and Enforcement Act of 2001 revises

the fiscal year 2002 discretionary spending limits to reflect the recent agreement between the President and Congress and makes

conforming changes in the budget resolution. This bill also makes

various technical revisions to the Balanced Budget and Emergency

Deficit Control Act of 1985.

The discretionary spending limits were first established as part

of a budget agreement between Congress and the President and

were included in the Budget Enforcement Act of 1990 (Public Law

101–508). These discretionary spending limits were revised and extended in 1993 as part of the Omnibus Budget Reconciliation Act

(Public Law 103–66). The levels were extended by this act through

fiscal year 1998. The discretionary spending limits were revised for

fiscal year 1998 and extended for fiscal years 1999 through 2002

by the Balanced Budget Act of 1997 (Public Law 105–33).

Since the overall limits on discretionary spending were established in 1990, separate spending limits have been adopted for certain classes of discretionary programs. A separate limit for programs for the Violent Crime Reduction Act, originally put in place

as part of the Violent Crime Reduction Act of 1994 (Public Law

103–322), lapsed after fiscal year 2000 and programs formerly subject to that limit are now under the general purpose discretionary

limit. Included within the 1998 highway authorization bill (Transportation Equity Act for the 21st Century or TEA 21, Public Law

105–178) were separate categories for highway and mass transit

spending for fiscal years 1999 through 2003. In addition, the Department of the Interior and Related Agencies Appropriations Act

of 2001 (Public Law 106–291) created a new spending limit specifically for a conservation category of discretionary appropriations.

While the overall discretionary spending limits lapse after fiscal

year 2002, the conservation category spending limits extend

through fiscal year 2006.

On 29 November 1999, as part of the Consolidated Appropriations Act for fiscal year 2000 (Public Law 106–113), Appropriations

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Conferees inserted language intended to avoid breaching the general purpose spending limits and thereby triggering a sequester.

The language directed OMB to score the costs of certain mandatory

provisions under PAYGO instead of against the spending limits.

On 13 July 2000, the enforcement of the fiscal year 2000 spending limits through sequestration was barred by a provision contained in the supplemental appropriations bill for fiscal year 2000

(Public Law 106–246). The supplemental appropriations bill for

that year would have otherwise triggered a mid-session sequester.

On 6 November 2000, the discretionary spending limits for fiscal

year 2001 were increased in the omnibus appropriations act for fiscal year 2001 (Public Law 106–429). The adjustment averted a sequester that would otherwise have been triggered by the final appropriation bill of that year.

On 21 December 2000, language that directed OMB to score the

costs of certain mandatory provisions under PAYGO instead of

against the spending limits was included in the Consolidated Appropriations Act for Fiscal Year 2001 (Public Law 106–554) to ensure that certain mandatory provisions that would otherwise have

resulted in a breach of the spending limits and resulted in a sequester, be scored against PAYGO.

On 21 March 2001, the House Budget Committee ordered reported H. Con. Res. 83, the Budget Resolution for Fiscal Year 2002.

On 23 March 2001, the House Budget Committee reported the resolution to the House (House Report 107–26). The Budget Committee

report noted that discretionary spending in 2002 ‘‘will be significantly higher than the current law spending limits.’’ On 28 March

2001, the House of Representatives considered and agreed to the

resolution. The Senate took up the resolution on 3 April 2001, and

on 6 April 2001, agreed to the resolution with an amendment.

On 9 April 2001, the President submitted his budget for fiscal

year 2002. In his budget, the President proposed raising the discretionary spending limit for fiscal year 2002 to $660.6 billion. The

President also proposed to extend the spending limits through fiscal year 2005.

On 8 May 2001, conferees filed the conference report on H. Con.

Res. 83 with the House (House Report 107–60). On 9 May 2001,

the House agreed to the conference report and on 10 May 2001, the

Senate agreed to the conference report.

H. Con. Res. 83, as agreed to in the conference report, established the overall level of discretionary budget authority at $661.3

billion. This discretionary spending level exceeded the discretionary

spending limit under the Budget Enforcement Act for fiscal year

2002, which was $552.8 billion at the time.

On 27 June 2001, the Committee on the Budget held a hearing

on the Forthcoming Extension/Modification of the Budget Enforcement Act. At the hearing, the Director of the Office of Management

and Budget, Mitchell E. Daniels, Jr., testified that he supported

raising the 2002 discretionary spending limits to $679 billion—a

level that according to Mr. Daniels reflected the President’s full

budget recommendation.

On 2 October 2001, the Administration and congressional appropriators reached an agreement on the level of Federal discretionary

spending for fiscal year 2002. This level has been reported to be

$686 billion, which includes $2.2 billion of emergency spending,

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$1.8 billion of conservation funding, and $600 million of non-emergency required spending.

SECTION-BY-SECTION ANALYSIS

Section 1. Short title

Section 1 gives the bill the following short title: the ‘‘Interim

Budget Control and Enforcement Act of 2001.’’

Section 2. Purpose

Section 2 states that this act has the following purposes: to revise the discretionary spending limits for fiscal year 2002 to reflect

the recent agreement between the President and Congress; to revise the 302(a) allocation to the Appropriations Committee for fiscal year 2002; and to make various technical corrections in the Balanced Budget and Emergency Deficit Control Act of 1985, commonly known as the Deficit Control Act [DCA].

TITLE I

Title I amends the DCA, which contains the discretionary spending limits, pay-as-you-go requirements, and related enforcement

procedures, to reflect an increase in the discretionary spending limits for fiscal year 2002.

Section 101. Amendments to section 251

Subsection (a) amends section 251 of the Deficit Control Act of

1985 to increase the general purpose discretionary spending limits,

as currently adjusted for fiscal year 2002. The new discretionary

levels are set at $681.4 billion in new budget authority and $670.4

billion in outlays.

The difference between the proposed spending limit on budget authority of $681.4 billion and the $686 billion that was cited in

press accounts at the time of the agreement is due to conservationrelated spending, anticipated emergencies, and other cap adjustments. The proposed cap on budget authority does not include $1.8

billion for conservation, $2.2 billion for non-terrorist-related domestic emergencies, and around $600 million for Earned Income Tax

Credit compliance, continuing disability reviews, and adoption incentive payments. Under current law, the proposed cap will be

automatically increased by each of these amounts.

While subsection (a) changes the level for the general purpose

discretionary spending limit in fiscal year 2002, it makes no

changes in the separate discretionary spending limits for highways,

mass transit, and conservation. Nor does it extend any of the limits

beyond their current expiration dates. Finally, the bill does not

change the process under section 251 of the Deficit Control Act

whereby the discretionary spending limits are automatically increased by certain emergency designated appropriations and other

specific classes of appropriations such as disability reviews under

the Supplemental Security Income program, the Earned Income

Tax Credit compliance initiative, and incentive payments for the

adoption assistance program.

Subsection (b) updates the ‘‘General Statement of Budget Enforcement’’ in section 251 of the DCA from that of enforcing H.

Con. Res. 84 in the first session of the 105th Congress to enforcing

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H. Con. Res. 83 in the first session of the 107th Congress. This reflects the fact that, upon the enactment of this bill, the levels of

the discretionary spending limits will approximate the 302(a) allocation to the Appropriations Committee, which were set pursuant

to the budget resolution. Holding constant for scoring differences

between the Congressional Budget Office and the Office of Management and Budget, any bill that breaches the 302(a) allocations and

becomes law will trigger an automatic sequester since it will also

breach the discretionary spending limits.

Section 102. Presidential report

Section 102 directs the President to include with his budget submission for fiscal year 2003, which must be submitted by the first

Monday in February, a report identifying all expenditures related

to the recent terrorist attacks on the United States on September

11, 2002 that are ongoing or recurring in nature.

This report is intended to assist Congress as it develops its priorities in the context of the budget resolution to determine which

budget authority provided in the wake of the events of September

11 should be incorporated into the budget resolution and any future discretionary spending limits for fiscal year 2003 and subsequent years. While the Committee anticipates that certain expenditures provided in the wake of the recent terrorist attacks will require further funds in subsequent years, it recognizes that most expenditures related to the cleanup and rebuilding are essentially

one-time events.

TITLE II

Title II revises certain levels and amounts that were initially established by the Concurrent Resolution on the Budget for fiscal

year 2002 (H. Con. Res. 83) to levels equivalent to the revised levels for discretionary spending limits established under Title I.

Section 201. Amendments to FY 2002 budget resolution

Section 201 increases the recommended levels of new budget authority for fiscal year 2002, which were initially established by section 101(1)(B) of H. Con. Res. 83. The new level is set at $1.65 trillion. It also increases the recommended outlay levels for each of fiscal years 2002 through 2005 to reflect the anticipated spend out

rate of the additional budget authority. The adjustment is roughly

equivalent to the revised levels of the discretionary spending limits

under Title I except that it reflects CBO scoring of the outlays.

Under Section 311(a) of the Congressional Budget Act, any bill that

exceeds the levels set in the Budget Resolution is subject to a point

of order that precludes further consideration of the measure in both

the House of Representatives and the Senate.

Section 201 also makes corresponding and conforming changes in

H. Con. Res. 83 by setting forth revised levels of the surplus, public

debt, debt held by the public, and interest for fiscal year 2002.

In order to ensure that the budgetary totals equal the sum of the

functional categories, paragraph (2) makes an equivalent change in

allowances (function 920) for fiscal year 2002. No effort was made

to distribute this increase among the budget functions because

these changes have already been made through the appropriations

process.

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The Committee believes that it is fully appropriate to revise the

budget resolution. Revisions in the budget resolution are not only

sanctioned under existing law but were once routine. Under Section

304 of the Budget Act, Congress is free to revise at any time the

budget resolution. Until 1986, Congress routinely adopted a second

budget resolution in the fall of each year. Even in the conference

report adopted in May, Congress revised the levels for fiscal year

2001 that were established in the budget resolution for the preceding year.

Section 202. Additional requirements respecting fiscal year 2002

budget resolution

Section 202(a) directs the chairmen of the Budget Committees of

each respective House to make corresponding and conforming

changes in H. Con. Res. 83 by setting forth new levels of total

budget authority, total budget outlays, the surplus or deficit, public

debt, debt held by the public, net interest (function 900), and allowances (function 920) for fiscal years 2003 through 2011 as appropriate. It clarifies that these levels shall be treated as if they were

adopted by Congress. Under the Congressional Budget Act, however, these levels are not enforced by points of order.

Subsection (b)(1) expresses the intent of the bill that the allocations set forth pursuant to Section 302(a) of the Congressional

Budget Act for fiscal year 2002 will be increased to $683.2 billion

in new budget authority and $702.8 billion in outlays.

Subsection (b)(2) directs each such chairman to make a corresponding change in the 302(a) allocation that was issued to the

Committee on Appropriations pursuant to H. Con. Res. 83. As required under Section 302(b) of the Congressional Budget Act, the

Appropriations Committee will be required to subdivide this revised allocation among each of its 13 subcommittees. It will be

these revised levels that will be subsequently enforced through Section 302(f) of the Congressional Budget Act, which limits the total

level of appropriations provided by the bill to each subcommittee’s

302(b) allocation.

Subsection (c) stipulates that these changes must be submitted

for printing in the Congressional Record. This is consistent with

the current practice of submitting all spending level adjustments

into the Record.

Subsection (d) repeals a section of H. Con. Res. 83 that directs

the presiding officer of the House to use the levels set forth in the

spending table included in the joint statement of managers accompanying the conference report instead of the levels in the actual

budget resolution to enforce budget-related points of order.

TITLE III

Section 301. Technical corrections to Balanced Budget Act

Section 301 makes various technical corrections in the Balanced

Budget and Deficit Control Act of 1985, which sets forth the discretionary spending limits, the pay-as-you-go requirements, and sequestration-related procedures for their enforcement. These

changes are not substantive and, in many cases, reflect the accumulation of 15 years worth of incorrect cross-references and typographical errors.

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EXPLANATION OF AMENDMENTS

The bill was reported without amendment.

APPLICATION OF LAW TO THE LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the

terms and conditions of employment or access to public services or

accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act (Public Law 104–1).

UNFUNDED MANDATE STATEMENT

Section 423 of the Congressional Budget and Impoundment Control Act (as amended by Section 101(a)(2) of the Unfunded Mandates Reform Act, P.L. 104–4) requires a statement of whether the

provisions of the reported bill include unfunded mandates. This bill

has the following purposes: to revise the discretionary spending

limits for fiscal year 2002 to reflect the recent agreement between

the President and Congress; to revise the 302(a) allocation to the

Appropriations Committee for fiscal year 2002; and to make various technical corrections in the DCA. As such, the bill does not

contain any unfunded mandates.

ROLLCALL VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the committee report to include for each record vote

on a motion to report the measure or matter and on any amendments offered to the measure or matter the total number of votes

for and against and the names of the Members voting for and

against. No recorded votes were taken on H.R. 3084. The bill was

ordered reported by voice vote.

STATEMENT OF OVERSIGHT FINDINGS AND RECOMMENDATIONS OF

THE COMMITTEE

In compliance with clause 3(c)(1) of rule XIII and clause (2)(b)(1)

of rule X of the Rules of the House of Representatives, the Committee’s oversight findings and recommendations are reflected in the

body of this report.

COMMITTEE ESTIMATE

Clauses 3(d)(2) of rule XIII of the Rules of the House of Representatives requires an estimate and a comparison by the Committee of the costs that would be incurred in carrying out H.R.

3084. However, clause 3(d)(3)(B) of that rule provides that this requirement does not apply when the Committee has included in its

report a timely submitted cost estimate of the bill prepared by the

Director of the Congressional Budget Office under section 402 of

the Congressional Budget Act.

NEW BUDGET AUTHORITY AND CONGRESSIONAL BUDGET OFFICE

COST ESTIMATE

With respect to the requirements of clause 3(c)(2) of rule XIII of

the House of Representatives and Section 308(a) of the Congressional Budget Act of 1974, and with respect to requirements of

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3(c)(3) of rule XIII of the House of Representatives and Section 402

of the Congressional Budget Act of 1974, the Committee has received the following cost estimate for H.R. 3084 from the Director

of the Congressional Budget Office:

U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, October 16, 2001.

Hon. JIM NUSSLE,

Chairman, Committee on the Budget,

House of Representatives, Washington, DC.

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 3084, the Interim Budget

Control and Enforcement Act of 2001.

If you wish further details on this estimate, we will be pleased

to provide them. The CBO staff contact is Sandy Davis.

Sincerely,

BARRY B. ANDERSON

(For Dan L. Crippen, Director).

Enclosure.

H.R. 3084—Interim Budget Control and Enforcement Act of 2001

H.R. 3084 would increase the limits on discretionary spending for

2002 in the Balanced Budget and Emergency Deficit Control Act of

1985 (the Deficit Control Act) and make conforming changes in the

recommended levels of discretionary spending for that year in the

Congressional budget resolution to reflect the recent bipartisan

agreement on appropriations reached between the President and

Congressional leaders. By itself, the bill would not directly affect

spending or revenue levels; it would simply modify certain budget

control procedures. Thus, pay-as-you-go procedures would not

apply. Although the bill would make possible higher discretionary

spending than current law allows, that increase in spending would

be attributable to the appropriation acts that provide the spending

authority. The bill contains no intergovernmental or private-sector

mandates as defined in the Unfunded Mandates Reform Act and

would not affect the budgets of state, local, or tribal governments.

Discretionary spending is provided in annual appropriation acts

under the jurisdiction of the House and Senate Appropriations

Committees. Those laws generally are controlled by two parallel

sets of enforcement procedures. First, the Deficit Control Act, as

amended, sets annual limits on total budget authority and outlays

for discretionary spending. The discretionary spending limits are

enforced automatically by across-the-board cuts in spending (known

as sequestration) that are implemented, if necessary, after the end

of the Congressional session. The current limits expire after 2002.

Second, the Congressional Budget Act of 1974 provides for allocations of total discretionary spending to the House and Senate Appropriations Committees at levels recommended in the most recent

concurrent resolution on the budget. Those allocations generally

are enforced by points of order, or procedural objections, that can

be raised by Members of Congress when the appropriation bills are

considered by the House or Senate if the bills are inconsistent with

the applicable allocations.

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The Balanced Budget Act of 1997 amended the Deficit Control

Act to establish the discretionary spending limits for fiscal years

1998 through 2002. The statutory limit for new discretionary budget authority for 2002, as currently adjusted, is about $550 billion;

the current limit for discretionary outlays is $572 billion. However,

the President’s 2002 budget and the 2002 Congressional budget

resolution recommended total new discretionary budget authority

of about $661 billion for the year. Both budget plans acknowledged

that the statutory limits for discretionary budget authority and

outlays would have to be increased. On October 2, 2001, the President and Congressional leaders announced a bipartisan agreement

to raise the recommended level of total discretionary budget authority for 2002 to $686 billion, an amount that incorporates additional funds for defense, education, and contingent emergencies

that were not included in their original budget plans for the year.

The main purpose of H.R. 3084 is no modify the discretionary

spending limits and the Congressional budget resolution to reflect

the bipartisan agreement on appropriations for 2002. Under H.R.

3084, the new limits for the overall discretionary category would be

$681.4 billion in budget authority and $670.4 billion in outlays.

(For technical reasons, approximately $4.6 billion in discretionary

budget authority covered by the budget agreement is excluded from

the proposed new limits. That amount includes up to $2.2 billion

in appropriations for future emergencies and $0.6 billion for adoption incentive payments, continuing disability reviews, and an

earned income tax compliance initiative; the Deficit Control Act requires the Office of Management and Budget to adjust the limits

automatically for those appropriations after they have been enacted

into law. Another $1.8 billion covers appropriations for land conservation programs that are covered by separate limits specified in

the Deficit Control Act.)

The bill would also change the aggregate levels in the 2002 budget resolution and certain functional categories in the resolution by

amounts that are consistent with the recommended increases in

the discretionary spending limits. The Chairmen of the House and

Senate Budget Committees would be authorized to increase the allocations of discretionary spending of the House and Senate Appropriations Committees consistent with those new levels. The annual

appropriation acts, which are within the jurisdiction of the Appropriations Committees, will provide the actual new discretionary

budget authority for 2002.

In addition, H.R. 3084 would require the President, when he submits his budget for 2003, to submit a report to the Congress that

identifies spending designated as an emergency under the Deficit

Control Act that is related to the terrorist attacks of September 11,

2001, and is of an ongoing or recurring nature. It also would make

a series of technical and conforming changes in the Deficit Control

Act.

The CBO staff contact for this estimate is Sandy Davis. This estimate was approved by Robert A. Sunshine, Assistant Director for

Budget Analysis.

STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

In accordance with clause (3)(c)(4) of House Rule XIII, the goals

of H.R. 3084 are to revise the discretionary spending limits for fisVerDate 11-MAY-2000 18:32 Dec 16, 2001 Jkt 099006 PO 00000 Frm 00012 Fmt 6659 Sfmt 6602 E:\HR\OC\HR338.XXX pfrm02 PsN: HR338
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cal year 2002 to reflect the recent agreement between the President

and Congress; to revise the 302(a) allocation to the Appropriations

Committee for fiscal year 2002; and to make various technical corrections in the DCA.

The Committee expects the Office of Management and Budget to

comply with H.R. 3084 and implement the changes to the law in

accordance with these stated goals.

CONSTITUTIONAL AUTHORITY STATEMENT

Pursuant to clause 3(d)(1) of rule XIII of the Rules of the House

of Representatives, the Committee finds that the constitutional authority for this legislation is provided in article I, section 8, clause

18, which grants Congress the general legislative power to make all

laws necessary and proper for carrying into execution the enumerated powers of Congress.

In addition, the Committee finds that the constitutional authority for Title II of this legislation is also provided in article I, section

5, clause 3, which provides that each House may determine the

rules of its proceedings.

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the

House of Representatives, changes in existing law made by the bill,

as reported, are shown as follows. In addition, changes to the concurrent resolution on the budget for fiscal year 2002 (H. Con. Res.

83, 107th Congress, 1st session) are also shown. (New matter is

printed in italic and existing law in which no change is proposed

is shown in roman):

BALANCED BUDGET AND EMERGENCY DEFICIT

CONTROL ACT OF 1985

* * * * * * *

PART C—EMERGENCY POWERS TO ELIMINATE

DEFICITS IN EXCESS OF MAXIMUM DEFICIT AMOUNT

SEC. 250. TABLE OF CONTENTS; STATEMENT OF BUDGET ENFORCEMENT THROUGH SEQUESTRATION; DEFINITIONS.

(a) TABLE OF CONTENTS.—

Sec. 250. Table of contents; budget enforcement statement; definitions.

Sec. 251. Enforcing discretionary spending limits.

* * * * * * *

Sec. 256. øGENERAL AND SPECIAL SEQUESTRATION RULES¿ General and

special sequestration rules.

* * * * * * *

ø(b) GENERAL STATEMENT OF BUDGET ENFORCEMENT THROUGH

SEQUESTRATION.—This part provides for budget enforcement as

called for in House Concurrent Resolution 84 (105th Congress, 1st

session).¿

(b) GENERAL STATEMENT OF BUDGET ENFORCEMENT THROUGH

SEQUESTRATION.—This part provides for budget enforcement as

called for in House Concurrent Resolution 83 (107th Congress, 1st

session).

(c) DEFINITIONS.—

As used in this part:

14

(1) * * *

* * * * * * *

(4)(A)***

* * * * * * *

(F) The term ‘‘Federal and State Land and Water Conservation Fund sub-category’’ means discretionary appropriations for activities in the accounts described in subparagraph (E)(i)–(E)(iv) or portions thereof.

(G) The term ‘‘State and Other Conservation sub-category’’ means discretionary appropriations for activities in

the accounts described in subparagraph (E)(v)–(E)(ix), with

the exception of Urban and Community Forestry as described in subparagraph (E)(ix), or portions thereof.

(H) The term ‘‘Urban and Historic Preservation sub-category’’ means discretionary appropriations for activities in

the accounts described in subparagraph (E)(ix)–(E)(xii),

with the exception of Forest Legacy and Smart Growth

Partnerships as described in subparagraph (E)(ix), or portions thereof.

(I) The term ‘‘Payments in Lieu of Taxes sub-category’’ means discretionary appropriations for activities in the account described in subparagraph (E)(xiii) or portions thereof.

(J) The term ‘‘Federal Deferred Maintenance sub-category’’ means discretionary appropriations for activities in

the account described in subparagraph (E)(xiv) or portions

thereof.

(K) The term ‘‘Coastal Assistance sub-category’’ means

discretionary appropriations for activities in the accounts

described in subparagraph (E)(xv)–(E)(xvii) or portions

thereof.

* * * * * * *

(18) The term ‘‘deposit insurance’’ refers to the expenses of

the Federal deposit insurance agencies, and other Federal

agencies supervising insured depository institutions, resulting

from full funding of, and continuation of, the deposit insurance

guarantee commitment in effect under current estimates.

* * * * * * *

SEC. 251. ENFORCING DISCRETIONARY SPENDING LIMITS.

(a) * * *

(b) ADJUSTMENTS TO DISCRETIONARY SPENDING LIMITS.— (1) PREVIEW REPORT.— (A) CONCEPTS AND DEFINITIONS.—When the President

submits the budget under section 1105 of title 31, United

States Code, OMB shall calculate and the budget shall include adjustments to discretionary spending limits (and

those limits as cumulatively adjusted) for the budget year

and each outyear to reflect changes in concepts and definitions. Such changes shall equal the baseline levels of new

budget authority and outlays using up-to-date concepts

and definitions minus those levels using the concepts and

definitions in effect before such changes. Such changes

may only be made after consultation with the øcommitVerDate 11-MAY-2000 18:32 Dec 16, 2001 Jkt 099006 PO 00000 Frm 00014 Fmt 6659 Sfmt 6601 E:\HR\OC\HR338.XXX pfrm02 PsN: HR338
15

tees¿ Committees on Appropriations and the Budget of the

House of Representatives and the Senate and that consultation shall include written communication to such committees that affords such committees the opportunity to

comment before official action is taken with respect to such

changes.

* * * * * * *

(C)(i) In addition to the adjustment required by subparagraph (B), when the President submits the budget under section 1105 of title 31, United States Code, for fiscal øyears¿ year

2000, 2001, 2002, or 2003, OMB shall calculate and the budget

shall include for the budget year and each outyear an adjustment to the limits on outlays for the highway category and the

mass transit category equal to—

(I) * * *

* * * * * * *

(D)(i)***

(ii) When the President submits the budget under section

1105 of title 31, United States Code, for fiscal øyears¿ year

2000, 2001, 2002, or 2003, OMB shall adjust the estimates

made in clause (i) by the adjustments by subparagraphs (B)

and (C).

* * * * * * *

(c) DISCRETIONARY SPENDING LIMIT.—As used in this part, the

term ‘‘discretionary spending limit’’ means—

(1) * * *

* * * * * * *

(5) with respect to fiscal year 2001— (A) for the discretionary category: $637,000,000,000 in new budget authority and $612,695,000,000 in outlays;

(B) for the highway category: $26,204,000,000 in outlays;

and

(C) for the mass transit category: $5,190,000,000 in outlays;

(6) with respect to fiscal year 2002— ø(A) for the discretionary category: $551,074,000,000 in

new budget authority and $560,799,000,000 in outlays;¿

(A) for the discretionary category: $681,441,000,000 in

new budget authority and $670,447,000,000 in outlays;

* * * * * * *

SEC. 252. ENFORCING PAY-AS-YOU-GO.

(a) * * *

(b) SEQUESTRATION.—

(1) * * *

(2) CALCULATION OF DEFICIT INCREASE.—OMB shall calculate

the amount of deficit increase or decrease by adding—

(A) * * *

(B) the estimated amount of savings in direct spending

programs applicable to the budget year resulting from the

prior year’s sequestration under this section or section 253,

16

if any, as published in OMB’s final sequestration report for

that prior year; and

* * * * * * *

(c) ELIMINATING A DEFICIT INCREASE.—(1) The amount required

to be sequestered in a fiscal year under subsection (b) shall be obtained from non-exempt direct spending accounts from actions

taken in the following order:

(A) * * *

* * * * * * *

(C) THIRD.—(i) If additional reductions in direct spending accounts are required to be made, each remaining non-exempt direct spending account shall be reduced by the uniform percentage necessary to make the reductions in direct spending required by øparagraph (1)¿ subsection (b); except that the medicare programs specified in section 256(d) shall not be reduced

by more than 4 percent and the uniform percentage applicable

to all other direct spending programs under this paragraph

shall be increased (if necessary) to a level sufficient to achieve

the required reduction in direct spending.

* * * * * * *

SEC. 254. REPORTS AND ORDERS.

(a) * * *

* * * * * * *

(c) SEQUESTRATION PREVIEW REPORTS.—

(1) * * *

* * * * * * *

(3) PAY-AS-YOU-GO SEQUESTRATION REPORTS.—The preview

reports shall set forth, for the current year and the budget

year, estimates for each of the following:

ø(A) The amount of net deficit increase or decrease, if

any, calculated under subsection 252(b).¿

(A) The amount of the sequestration, if any, calculated

under section 252(b).

* * * * * * *

(f) FINAL SEQUESTRATION REPORTS.—

(1) * * *

* * * * * * *

(4) EXPLANATION OF DIFFERENCES.—The OMB report shall

explain any differences between OMB and CBO estimates of

the amount of any net deficit change calculated under øsubsection¿ section 252(b), any excess deficit, any breach, and any

required sequestration percentage. The OMB report shall also

explain differences in the amount of øsequesterable¿

sequestrable resources for any budget account to be reduced if such difference is greater than $5,000,000.

* * * * * * *

SEC. 255. EXEMPT PROGRAMS AND ACTIVITIES.

(a) * * *

* * * * * * *

17

(g) OTHER PROGRAMS AND ACTIVITIES.— (1)(A)***

(B) The following Federal retirement and disability accounts

and activities shall be exempt from reduction under any order

issued under this part:

Black Lung Disability Trust Fund (20–8144–0–7–601);

* * * * * * *

Railroad supplemental annuity pension fund (60–8012–

0–7–602);

* * * * * * *

(2) Prior legal obligations of the Government in the following

budget accounts and activities shall be exempt from any order

issued under this part:

Biomass energy development (20–0114–0–1–271);

* * * * * * *

Rail service assistance (69–0122–0–1–401); and

* * * * * * *

(h) LOW-INCOME PROGRAMS.—The following programs shall be

exempt from reduction under any order issued under this part:

Block grants to States for temporary assistance for needy

families;

Child nutrition programs (with the exception of special milk

programs) (12–3539–0–1–605);

Temporary assistance for needy families (75–1552–0–1–609);

Contingency fund (75–1522–0–1–609);

Child care entitlement to States (75–1550–0–1–609);

Commodity supplemental food program (12–3512–0–1–605);

Food stamp programs (12–3505–0–1–605 and 12–3550–0–1–

605);

Grants to States for Medicaid (75–0512–0–1–55l);

Supplemental Security Income Program (75–0406–0–1–609);

øand¿

Special supplemental nutrition program for women, infants,

and children (WIC) (12–3510–0–1–605); and

Family support payments to States

(75–1501–0–1–609)ø;¿ .

* * * * * * *

SEC. 256. GENERAL AND SPECIAL SEQUESTRATION RULES.

(a) * * *

* * * * * * *

(k) EFFECTS OF SEQUESTRATION.—The effects of sequestration

shall be as follows:

(1) Budgetary resources sequestered from any account shall

be permanently cancelled, except as provided in paragraph

ø(5)¿ (6).

* * * * * * *

SEC. 257. THE BASELINE.

(a) * * *

18

(b) DIRECT SPENDING AND RECEIPTS.—For the budget year and

each outyear, the baseline shall be calculated using the following

assumptions:

(1) * * *

(2) EXCEPTIONS.—(A)(i) No program established by a law enacted on or before the date of enactment of the Balanced Budget Act of 1997 with estimated current year outlays greater

than $50,000,000 shall be assumed to expire in the budget year

or the outyears. The scoring of new programs with estimated

outlays greater than $50,000,000 a year shall be based on scoring by the Committees on Budget or OMB, as applicable. OMB,

CBO, and the Budget Committees shall consult on the scoring

of such programs where there are ødifferenes¿ differences between CBO and OMB.

* * * * * * *

SEC. 258. SUSPENSION IN THE EVENT OF WAR OR LOW GROWTH.

(a) PROCEDURES IN THE EVENT OF A LOW GROWTH REPORT.— (1) TRIGGER.—Whenever CBO issues a low-growth report

under section ø254(j)¿ 254(i), the Majority Leader of the House

of Representatives may, and the Majority Leader of the Senate

shall, introduce a joint resolution (in the form set forth in

paragraph (2)) declaring that the conditions specified in section

ø254(j)¿ 254(i) are met and suspending the relevant provisions

of this title, titles III and VI of the Congressional Budget Act

of 1974, and section 1103 of title 31, United States Code.

(2) FORM OF JOINT RESOLUTION.— (A) The matter after the resolving clause in any joint

resolution introduced pursuant to paragraph (1) shall be

as follows: ‘‘That the Congress declares that the conditions

specified in section ø254(j)¿ 254(i) of the Balanced Budget

and Emergency Deficit Control Act of 1985 are met, and

the implementation of the Congressional Budget and Impoundment Control Act of 1974, chapter 11 of title 31,

United States Code, and part C of the Balanced Budget

and Emergency Deficit Control Act of 1985 are modified as

described in section 258(b) of the Balanced Budget and

Emergency Deficit Control Act of 1985.’’.

* * * * * * *

SEC. 258B. FLEXIBILITY AMONG DEFENSE PROGRAMS, PROJECTS,

AND ACTIVITIES.

(a) * * *

* * * * * * *

(c) The President may not exercise the authority provided by this

øparagraph¿ section for a fiscal year unless—

(1) * * *

* * * * * * *

(3) a joint resolution affirming or modifying the changes proposed by the President pursuant to this øparagraph¿ section

becomes law.

(d) Within 5 calendar days of session after the President submits

a report to Congress under subsection (c)(1) for a fiscal year, the

majority leader of each House of Congress shall (by request) introVerDate 11-MAY-2000 18:32 Dec 16, 2001 Jkt 099006 PO 00000 Frm 00018 Fmt 6659 Sfmt 6601 E:\HR\OC\HR338.XXX pfrm02 PsN: HR338
19

duce a joint resolution which contains provisions affirming the

changes proposed by the President pursuant to this øparagraph¿

section.

* * * * * * *

HOUSE CONCURRENT RESOLUTION 83, 107TH

CONGRESS

(Concurrent Resolution on the Budget for Fiscal Year 2002)

TITLE I—RECOMMENDED LEVELS AND

AMOUNTS

SEC. 101. RECOMMENDED LEVELS AND AMOUNTS.

The following budgetary levels are appropriate for the fiscal

years 2001 through 2011:

(1) * * *

(2) NEW BUDGET AUTHORITY.—For purposes of the enforcement of this resolution, the appropriate levels of total new

budget authority are as follows:

Fiscal year 2001: $1,653,681,000,000.

øFiscal year 2002: $1,510,948,000,000.¿

Fiscal year 2002: $1,648,921,000,000.

* * * * * * *

(3) BUDGET OUTLAYS.—For purposes of the enforcement of

this resolution, the appropriate levels of total budget outlays

are as follows:

Fiscal year 2001: $1,600,529,000,000.

øFiscal year 2002: $1,476,841,000,000.¿

Fiscal year 2002: $1,611,036,000,000.

* * * * * * *

(4) SURPLUSES.—For purposes of the enforcement of this resolution, the amounts of the surpluses are as follows:

Fiscal year 2001: $29,933,000,000.

øFiscal year 2002: $161,361,000,000.¿

Fiscal year 2002: $27,166,000,000.

* * * * * * *

(5) PUBLIC DEBT.—The appropriate levels of the public debt

are as follows:

Fiscal year 2001: $5,660,699,000,000.

øFiscal year 2002: $5,603,812,000,000.¿

Fiscal year 2002: $5,738,007,000,000.

* * * * * * *

(6) DEBT HELD BY THE PUBLIC.—The appropriate levels of the

debt held by the public are as follows: Fiscal year 2001: $3,243,211,000,000.

øFiscal year 2002: $2,924,234,000,000.¿

Fiscal year 2002: $3,058,429,000,000.

* * * * * * *

20

SEC. 102. MAJOR FUNCTIONAL CATEGORIES.

Congress determines and declares that the appropriate levels of

new budget authority, budget outlays, new direct loan obligations,

and new primary loan guarantee commitments for fiscal years 2002

through 2011 for each major functional category are:

(1) * * *

* * * * * * *

(18) Net Interest (900):

Fiscal year 2001:

(A) New budget authority, $275,467,000,000.

(B) Outlays, $275,467,000,000.

øFiscal year 2002:

ø(A) New budget authority, $259,162,000,000.

ø(B) Outlays, $259,162,000,000.¿

Fiscal Year 2002:

(A) New budget authority, $262,639,000,000.

(B) Outlays, $262,639,000,000.

* * * * * * *

(19) Allowances (920):

Fiscal year 2001:

(A) New budget authority, $84,528,000,000.

(B) Outlays, $84,697,000,000.

øFiscal year 2002:

ø(A) New budget authority, ¥$103,548,000,000.

ø(B) Outlays, ¥$99,379,000,000.¿

Fiscal Year 2002:

(A) New budget authority, $15,948,000,000.

(B) Outlays, $16,340,000,000.

* * * * * * *

TITLE II—BUDGET ENFORCEMENT AND

RULEMAKING

* * * * * * *

Subtitle C—Miscellaneous Provisions

SEC. 221. APPLICATION AND EFFECT OF CHANGES IN ALLOCATIONS

AND AGGREGATES.

(a) * * *

* * * * * * *

(d) ENFORCEMENT IN THE HOUSE.—

(1) * * *

ø(2) APPROPRIATE LEVELS.—For purposes of enforcement of

the Congressional Budget Act of 1974 in the House of Representatives, the appropriate levels of total new budget authority and total budget outlays for fiscal years 2002 through 2011

prescribed by this resolution pursuant to section 301(a)(1) of

such Act shall be based upon the table entitled ‘‘Conference Report Fiscal Year 2002, Budget Resolution Total Spending and

21

Revenues’’ in conjunction with the provisions of title II of this

resolution.¿

* * * * * * *

Æ