Consideration of Budgetary Legislation During Presidential Transition Years: A Brief Overview
Released: 2009-07-20T00:00:00

When a presidential transition occurs, the incoming President usually submits the budget for the upcoming fiscal year (under current practices) or revises the budget submitted by his predecessor (under past practices). Under either circumstance, the details of the President's budgetary proposals typically are provided to Congress about two months later than would be the case in a non-transition year. Consequently, concerns arise over the potential impact of delayed budget submission on the timetable for budgetary actions taken by the House and Senate.

This report examines the timing of presidential budget submissions during the past five transition years—including submissions by Presidents Jimmy Carter in 1977, Ronald Reagan in 1981, George H.W. Bush in 1989, Bill Clinton in 1993, and George W. Bush in 2001—and the timeliness of House and Senate actions in those years regarding the consideration of budgetary measures.

Background

When a new Congress convenes in January, one of its first orders of business is to receive the annual budget submission of the President for the upcoming fiscal year, which begins later in the session. The President's budget consists of a set of proposals pertaining to spending, revenue, and debt levels. In the course of responding to the President's budget, Congress may accept, reject, or modify the proposals as it sees fit. While much of the spending and revenue in the federal budget is derived automatically each year from existing law, the remainder is provided through the enactment of legislation.

The deadline for submission of the budget has changed several times over the years, as is discussed in more detail below. Currently, the deadline is the first Monday in February.

Following receipt of the President's budget, Congress begins the consideration of the budget resolution and other budgetary legislation. The budget resolution, which takes the form of a concurrent resolution, reflects the agreement of the House and Senate on a budgetary "blueprint" that guides and constrains the subsequent consideration of individual spending, revenue, and debt measures. The consideration of significant spending, revenue, and debt measures by the House and Senate during a session may entail action on dozens of separate measures.

In establishing and revising the deadline for submission of the President's budget, Congress has sought to reconcile two conflicting objectives. First, Congress is motivated to set the deadline as early as possible in order to maximize the time available to it for completing action on the budget resolution and other budgetary legislation before the new fiscal year begins. Although the completion of some budgetary legislation typically carries over into the period beyond the start of the fiscal year, the goal is to enact as much significant budgetary legislation as possible in a timely manner.

Second, Congress also is impelled to afford the President as much time as necessary to finalize his budget submission following the completion of legislative action in the prior session. In recent decades, the House and Senate sometimes have not completed action on significant budgetary legislation until December; in some instances, several major bills spanning hundreds of pages have been finalized in the last few days of the year.

Seeking to draw a balance between the two competing motivations, Congress has set the deadline as early as the first week in January and as late as the first week in February. Under current law, the President may submit the budget as early as the first Monday in January, but he must submit it no later than the first Monday in February. Beginning with the FY1992 budget, Presidents have taken advantage of the full amount of time afforded them under law and submitted their budgets on the first Monday in February.

The Congressional Budget Act of 1974, as amended, establishes an annual timetable for congressional action on budgetary legislation, beginning with the adoption of a budget resolution by the House and Senate no later than April 15. In an effort to provide Congress with more time to process budgetary legislation during the session, Section 501 (88 Stat. 321) of the act moved the start of the fiscal year from July 1 to October 1. The change became effective for FY1976, following a three-month transition quarter. The congressional budget process established by the 1974 act became fully effective in 1976 for FY1977, following a "dry run" in the prior year.

Presidential Submission of Transition Budgets

During the period that the congressional budget process under the 1974 act has been in effect, five persons have assumed the presidency – Jimmy Carter in 1977, Ronald Reagan in 1981, George H.W. Bush in 1989, Bill Clinton in 1993, and George W. Bush in 2001. The requirements for budget submission applicable to these Presidents and the record of pertinent actions is discussed briefly below.

Submission Requirements for Transition Budgets

The transition from one presidential administration to another raises special issues regarding the annual budget submission. Key questions include, which President—the outgoing President or the incoming one—is required to submit the budget, and how will the transition affect the timing and form of the submission?

The deadline for submission of the budget, first set in 1921 as "on the first day of each regular session," has changed several times over the years:

in 1950, to "during the first 15 days of each regular session"; in 1985, to "on or before the first Monday after January 3 of each year (or on or before February 5 in 1986)"; and in 1990, to "on or after the first Monday in January but not later than the first Monday in February of each year."

The 20 th Amendment to the Constitution, ratified in 1933, requires each new Congress to convene on January 3 (unless the date is changed by the enactment of a law) and provides a January 20 beginning date for a new President's four-year term of office. Therefore, under the legal framework for the beginning of a new Congress, the beginning of a new President's term, and the deadline for the submission of the budget, all outgoing Presidents prior to the 1990 change were obligated to submit a budget. All incoming Presidents before 1990, except for Roosevelt, Truman, and Johnson, modified their predecessor's policies by submitting budget revisions within a few months after taking office. The 1990 change in the deadline made it possible for an outgoing President to leave the annual budget submission to his successor.

Budget Submissions During the Past Five Transitions

During the period covering the past five presidential transitions, the three outgoing Presidents required to submit a budget during this period (Ford, Carter, and Reagan) did so on or before the statutory deadline. Two of the incoming Presidents during this period, Carter and Reagan, submitted budget revisions and one, George H. W. Bush, did not. The FY1978 revisions by President Carter (a 101-page document) were submitted on February 22, 1977, and the FY1982 revisions by President Reagan (an initial 159-page document and a subsequent 435-page document) were submitted on March 10 and April 7, 1981, respectively.

Because President George H. W. Bush chose not to submit a budget for FY1994 (and was not obligated to do so), President Clinton submitted the original budget for FY1994 rather than budget revisions. Similarly, the budget for FY2002 was submitted by the incoming President George W. Bush, rather than by outgoing President Clinton. Presidents Clinton and George W. Bush submitted the original budgets for FY1994 and FY2002 on April 8, 1993 and April 9, 2001, respectively.

The experience with transition budgets during the period that the congressional budget process has been in operation is roughly comparable, in terms of timing, with the experience of earlier years. Presidents Eisenhower, Kennedy, and Nixon submitted their revised budget messages to Congress on April 30, March 24, and April 12 of their first year as President, respectively.

Although Presidents Reagan, Clinton, and George W. Bush did not submit detailed budget proposals during their transitions until early April, each of them advised Congress regarding the general contours of their economic and budgetary policies in special messages submitted to Congress in February concurrently with a presentation made to a joint session of Congress:

on February 18, 1981, President Reagan submitted a document containing an economic plan and initial budget proposals for FY1982, America's New Beginning: A Program for Economic Recovery , in conjunction with an address to a joint session of Congress. on February 17, 1993, President Clinton submitted to Congress a budgetary document, A Vision of Change for America , to accompany his address to a joint session of Congress. The 145-page document outlined the President's economic plan and provided initial budget proposals in key areas. on February 28, 2001, President George W. Bush submitted a 207-page budget summary to Congress, A Blueprint for New Beginnings: A Responsible Budget for America's Priorities , the day after his address to a joint session of Congress.

Although President George H. W. Bush did not submit a revision of President Reagan's FY1990 budget, he submitted a 193-page message to Congress ( Building a Better America ) in conjunction with a joint address to Congress on February 9, 1989. The message included revised budget proposals.

Overview of Budgetary Actions by Administration

In a typical year, the unfolding of the federal budget process reflects both instances of cooperation and instances of conflict between the President and Congress (as well as between the House and the Senate, and between factions within each chamber). Cooperation promotes timely and successful action on budgetary legislation, while conflict leads to delay and ultimately may prevent the enactment of such legislation.

In order to fully advance his budgetary agenda, a President must reach agreement with Congress on legislation in several different phases of the budget process. Congress responds to the President's budgetary proposals by adopting an annual budget resolution, and then implements budget resolution policies through the enactment of separate spending, revenue, and debt legislation.

No President can be judged to be successful with respect to his budgetary agenda unless the House and Senate complete action on the requisite legislation, with timely rather than tardy enactment of legislation usually signifying greater success.

Table 1 summarizes legislative action on the major phases of the budget process during the past five transition years. As Table 1 shows, Congress and the President successfully completed action on key budgetary legislation during each presidential transition year, with many, but not all, actions completed in a timely manner:

in each instance, the House and Senate reached final agreement on the annual budget resolution, and did so no later than May 21; the optional budget reconciliation process was invoked in four of five years, leading to the enactment of four budget reconciliation acts; regular, supplemental, and continuing appropriations acts were enacted in each year, although few (or none) of the regular appropriations acts were enacted by October 1 (the first day of the fiscal year) in four instances; in each instance, a major revenue bill was enacted (three of the five bills were reconciliation measures); and between one and three debt-limit measures were enacted each year, except during the George W. Bush Administration (when no such measures were needed).

Congressional Action on Major Budgetary Legislation

The budgetary legislation typically considered by the House and Senate during a session may be divided into several categories: budget resolutions, budget reconciliation acts, annual appropriations and other spending acts, and revenue and debt-limit acts. Information on the timing of House and Senate action on budgetary measures during each of the past five transition years is provided below by category of legislation.

Budget Resolutions

The Congressional Budget and Impoundment Control Act of 1974 ( P.L. 93-344 , as amended) requires that the House and Senate reach agreement each year on a concurrent resolution on the budget. Originally, the act set a deadline of May 15 for completion of action on the budget resolution; in 1985, the deadline was revised to April 15. During the period from 1984 through 1990, actions on several budget resolutions was not completed until August or October. In four instances, the House and Senate were not able to reach agreement on a budget resolution.

As Table 2 (at the end of the report) shows, the House and Senate reached final agreement on a budget resolution in each of the five transition years. In four years, final agreement was reached in May (no later than May 21). During the first year of the Clinton Administration, the two chambers reached agreement even earlier, on April 1. In this case, the agreement on the budget resolution was reached a week before President Clinton submitted his budget to Congress, but extensive negotiations between Congress and the President ensured that the budget resolution accommodated his major budgetary proposals.

Budget Reconciliation Acts

The budget reconciliation process is an optional procedure under the Congressional Budget and Impoundment Control Act of 1974 that operates as an adjunct to the annual budget resolution process. The chief purpose of the reconciliation process is to enhance Congress's ability to change current law in order to bring revenue and spending levels into conformity with the policies of the budget resolution. Accordingly, reconciliation probably is the most potent budget enforcement tool available to Congress for a large portion of the budget.

Reconciliation was first used by the House and Senate in calendar year 1980 for FY1981. As an optional procedure, it has not been used every year. During the period from 1980 to 2008, 19 reconciliation measures were enacted into law and three were vetoed.

The congressional budget process timetable prescribes June 15 as the deadline for completing action on any required reconciliation legislation, but there is no explicit requirement to that effect. The record of experience with all 22 reconciliation measures passed by the House and Senate since 1980 indicates considerable variation in the time needed to process such measures. The interval from the date the reconciliation instructions take effect (upon final adoption of the budget resolution) until the resultant reconciliation legislation is approved or vetoed by the President ranged from a low of 27 days (for the Omnibus Budget Reconciliation Act of 1990) to a high of 384 days (for the Tax Increase Prevention and Reconciliation Act of 2005). On average, the process was completed in nearly five months, more than twice the amount of time contemplated by the congressional budget process timetable.

With respect to the five transition years, Table 3 (at the end of the report) shows that reconciliation was used in four of the five instances. Reconciliation was not used during the Carter transition. In three instances, an omnibus budget reconciliation act was enacted into law between the spring and the summer recess. In 1989, an omnibus budget reconciliation was enacted late in the session, on November 22.

Annual Appropriations Acts

Total federal spending encompasses discretionary spending, which is provided in annual appropriations acts under the jurisdiction of the House and Senate Appropriations Committees, and mandatory spending, which stems from substantive law under the jurisdiction of the legislative committees of the House and Senate. This section provides information on the three categories of annual appropriations legislation—regular, supplemental, and continuing appropriations acts; information on mandatory spending legislation is excluded.

Under the congressional budget process timetable, the House and Senate begin consideration of the regular appropriations acts following the adoption of the budget resolution with the aim of completing action on them by the start of the fiscal year on October 1. In addition, the two chambers act on at least one supplemental appropriations act, typically before consideration of the regular appropriations acts begins. Finally, the House and Senate usually consider at least one continuing resolution to provide stop-gap funding after the start of the fiscal year until action on all of the regular appropriations acts is completed.

During the period that the congressional budget process has been in effect, the House and Senate have completed action on the regular appropriations acts before the start of the year only four times (for FY1977, FY1989, FY1995, and FY1997); action on unfinished regular appropriations acts usually is completed by the end of the calendar year, but sometimes carries over into the following session. Accordingly, multiple continuing resolutions are enacted in a typical year.

Table 4 , Table 5 , and Table 6 (at the end of the report) provide information regarding congressional action on supplemental, regular, and continuing appropriations acts, respectively.

Table 4 shows that a total of 15 supplemental appropriations acts were enacted during the five transition years, ranging from two to four such acts each year. All but four of the acts were enacted between February and July; one was enacted in August and three were enacted in September.

Table 5 shows that while all thirteen of the regular appropriations bills were enacted during the transition years of the Carter, George H.W. Bush, Clinton, and George W. Bush administrations, and nine of the thirteen were enacted during the transition year of the Reagan administration, not all of this was accomplished in the prescribed timeframe. During the Carter administration, 10 appropriations acts were enacted by October 1, but the during the other administrations, the number enacted by this date were none (Reagan, G.W. Bush), one (G.H.W. Bush), or two (Clinton). While the appropriations process was completed under most administrations by the end of the calendar year, the process extended into January under the G.W. Bush administration.

Table 6 shows that continuing appropriations acts were used in transition years during all five administrations. Under the Carter, Regan, G.H.W. Bush, and Clinton administrations, three continuing resolutions were enacted each year, while under the G.W. Bush administration eight continuing resolutions were enacted. In the case of the G.W. Bush administration, the final continuing resolution, enacted December 20, provided funding into January, when the last of his regular appropriations acts were completed.

Revenue Acts

As required by the Constitution, legislation affecting revenues originates in the House of Representatives, but the Senate has latitude to amend any revenue bills received from the House. Most laws that establish revenue sources are permanent and continue each year without legislative action, but in most years, Presidents propose changes in revenue law to alter tax rates, modify the distribution of the tax burden, or make other changes in revenue policy.

Revenue acts can also be initiated through the reconciliation process provided for in the Congressional Budget and Impoundment Control Act of 1974. The act provides for the adoption of a budget resolution (discussed above), which may contain reconciliation directives instructing the relevant congressional committees to report changes to existing revenue legislation to meet the recommended levels of revenues. The reconciliation process was used to enact revenue legislation under the G.H.W. Bush, Clinton, and G.W. Bush administrations.

The timing of action on major revenue legislation may vary considerably from one measure to the next. Some revenue measures may be enacted after only a few months of consideration, while the enactment of other revenue measures may not occur until well into the following year. This pattern also holds true for revenue measures considered under the reconciliation process.

Table 7 illustrates that a major revenue measure was enacted into law during the transition year of each of the five administrations. Three of these revenue acts, under G.H.W. Bush, Clinton, and G.W. Bush, were reconciliation measures. Congressional action was fairly timely in four instances (with enactment occurring between May and August), but the 1989 legislation (under President G.H.W. Bush) was not enacted until November 22.

Debt-Limit Acts

Almost all borrowing by the federal government is conducted by the Treasury Department, within the restrictions established by a single, statutory limit on the total amount of debt that may be outstanding at any time. Most adjustments to the debt limit have been increases, but sometimes the change has been a reduction.

The annual budget resolution includes recommended levels of the public debt limit for each fiscal year covered by the resolution. Because a budget resolution does not become law, Congress and the President must enact legislation in order to implement budget resolution policies. The House and Senate may develop and consider legislation adjusting the debt limit in any one of three ways: (1) under regular legislative procedures in both chambers, either as freestanding legislation or as a part of a measure dealing with other topics; (2) pursuant to House Rule XXVII (the so-called Gephardt rule); or (3) as part of the budget reconciliation process provided for under the Congressional Budget Act of 1974. During the period from 1940 to the present, Congress and the President have enacted a total of 88 measures adjusting the public debt limit—70 under regular legislative procedures in both chambers, 14 under the Gephardt rule, and 4 under reconciliation procedures.

The timing of legislative action on measures adjusting the debt limit is not as predictable as the timing of action on other types of budgetary legislation. Legislative action can occur at any point in the session as the need to adjust the debt limit requires.

Table 8 shows that between one and three debt limit measures were enacted during each transition year, except during the G.W. Bush administration. All three methods of adjusting the debt limit were employed, but only one of the measures (in 1993 during the Clinton transition year) was a reconciliation act.