The President’s Budget: Overview and Timing of the Mid-Session Review
Released: 2016-08-02T00:00:00

Background

The Budget and Accounting Act of 1921 (P.L. 67-13; 42 Stat. 20-27) established for the first time the requirement that the President annually submit a budget proposal to Congress. The President's budget proposal, or the Budget of the United States Government as it is referred to in Section 1105(a) of the U.S. Code , consists of estimates of spending, revenues, borrowing, and debt; policy and legislative recommendations; detailed estimates of the financial operations of federal agencies and programs; and other information supporting the President's recommendations. Initially, the 1921 act required the President to include budget information for the upcoming fiscal year, as well as for the most recently completed and current fiscal years.

Under the 1921 act, the deadline for submission was set as "the first day of each regular session" of Congress. Budgets during the Administrations of Presidents Harding, Coolidge, and Hoover were submitted in December; during the Administrations of President Franklin D. Roosevelt and subsequent Presidents, budgets were submitted in January or February. The deadline was changed in 1950, 1985, and 1990, but always required that the budget be submitted either in January or February. Under current law (31 U.S.C. §1105(a)), the President is required to submit the annual budget on or after the first Monday in January, but no later than the first Monday in February.

Origin of the Mid-Session Review

For nearly half a century after the 1921 act took effect, Presidents submitted their annual budgets to Congress toward the beginning of the session but were not required to update the budget submissions later in the session. As the federal budget became larger, more complex, and more dynamic, Congress felt a greater need for more extensive and updated budgetary information from the President. This view was expressed by the House Rules Committee in its report on the Legislative Reorganization Act of 1970 (P.L. 91-510; 84 Stat. 1140):

Very often, as the appropriations process moves forward, conditions relating to the President's budget change. Frequently, Members are not fully informed about such changes and what effect they will have on the total Budget. No official Executive pronouncements are made subsequent to the Budget submission; no supplementary budgetary information is presented; no firm foundation except the January Budget is available in the Congress. This inexact, imprecise, and haphazard system must be substantially improved if the Congress is to analyze effectively the President's program and, with any degree of accuracy, forecast the expenditure and revenue levels of the National Government.

The Legislative Reorganization Act of 1970 made several changes in the federal budget process in response to Congress's request for more budgetary information from the President, chiefly by requiring that the President's budget cover not just the upcoming fiscal year but also the four ensuing fiscal years.

In addition, Section 221(b) of the act requires the President to submit to Congress an update of the budget in the middle of the legislative session. The requirement, which was first effective in 1972, is codified at 31 U.S.C. §1106 (see this report's Appendix for the current text of the statutory requirement). The update is commonly referred to as the mid-session r eview (or MSR), but sometimes is referred to as the supplemental summary of the b udget . The most current mid-session review (FY2017) is available at https://www.whitehouse.gov/omb/budget/MSR .

Subsequent Modifications

Congress and the President have made two changes since 1972 pertinent to the requirement for a mid-session review. First, in conjunction with a change in the start of the fiscal year from July 1 to October 1, made by the Congressional Budget Act of 1974 (CBA, P.L. 93-344 ; 88 Stat. 299-300), the deadline for submission of the mid-session review was changed from June 1 to July 15. The CBA also provided for a transition quarter "commencing July 1, 1976, and ending on September 30, 1976" for which the President was required to prepare, as soon as practicable, budget estimates "in such formal detail as he may determine."

The second change pertained to the budget enforcement procedures established on a temporary basis by the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA). Under Section 241 of BBEDCA, the President was required, in the preparation of the annual budget, to adhere to statutory deficit targets that w ere enforced by sequestration. Section 242 of BBEDCA extended the same constraint to the preparation of the mid-session review. The restriction expired at the end of FY1995, along with the deficit targets themselves.

Content of the Mid-Session Review

Under 31 U.S.C. §1106, the mid-session review must include, in part

(A) substantial changes in or reappraisals of estimates of expenditures and receipts; (B) substantial obligations imposed on the budget after its submission; (C) current information on matters referred to in section 1105(a)(8) and (9)(B) and (C) of this title; and (D) additional information the President decides is advisable to provide Congress with complete and current information about the budget and current estimates of the functions, obligations, requirements, and financial condition of the United States Government.

The content and structure of the mid-session review has varied by President. Generally, Presidents have included both required and optional elements such as (1) technical re-estimates of expenditures and receipts, (2) updates to economic assumptions and forecasts, (3) changes to the estimated condition of the Treasury, (4) revised versions of select the summary tables from the original budget request, and (5) discussion of the potential effects of enacted and proposed appropriations. It is not uncommon for legislative or economic changes to occur close to the deadline for submission of the mid-session review. In such cases, the President may be unable to provide a detailed review of the effects they may have on the estimates included in the President's original budget submission.

The President's mid-session review may include changes to the amount of budget authority requested in the original budget submission. Any such changes must be accompanied by a statement of the potential effects of those changes and "supporting information as practicable." The mid-session review may also include discussion of the potential effects of pending budgetary reforms or other legislative proposals that have not been enacted.

Finally, the mid-session review may include other legislative proposals or administration initiatives. For example, President George W. Bush's FY2003 mid-session review included a chapter discussing the President's management agenda and other government-wide management initiatives, including several E-Government reforms. President Barack Obama's FY2013 mid-session review included a section discussing the effects of several enacted and proposed initiatives intended to create jobs and economic growth, such as the Hiring Incentives to Restore Employment Act ( P.L. 111-147 ; 124 Stat. 71).

Timing of Submission: FY1973-FY2017

Since the first year the mid-session review was required (FY1973), each President has submitted at least one mid-session review on time and at least one late. Controversy has occasionally surfaced regarding the timing of its submission to Congress. On more than one occasion, some Members of Congress have suggested that the President has timed submission of the mid-session review in order to gain a political or legislative advantage over Congress.

Table 1 provides information on the timing of submission of the mid-session review for FY1973-FY2017. The 45-year period identified in Table 1 covers all or part of the Administrations of eight Presidents, including the last three years of the Nixon Administration; the full terms of the Ford, Carter, Reagan, George H. W. Bush, Clinton, and George W. Bush Administrations; and the eight years of the Obama Administration. During this period, the mid-session review was submitted, on average, 7.80 calendar days late.

For FY1973, FY1974, and FY1975, the deadline for submission of the mid-session review was June 1. The Congressional Budget Act of 1974 (CBA), enacted on July 12, 1974, changed the deadline for submission of the mid-session review from June 1 to July 15. In addition, Section 502 of CBA established a transition period "commencing July 1, 1976, and ending on September 30, 1976" for which the President was required to prepare, as soon as practicable, budget estimates "in such form and detail as he may determine."

Delayed Submission of the Mid-Session Review

Since the first year the mid-session review was required it was submitted, on average, 8 calendar days late. In 23 of the 45 years, the mid-session review was submitted after the deadline, with delays ranging from 1 to 52 calendar days. When the mid-session review was late, it was delayed, on average, three weeks (20.96 calendar days).

Timely and Accelerated Submission of the Mid-Session Review

In 22 of the 45 years, the mid-session review was submitted on or before the deadline. Seven of the 22 timely submissions were made on the deadline. In 11 instances, the mid-session review was submitted fewer than 10 days before the deadline. In the remaining four instances, the mid-session review was submitted at least two weeks before the deadline. For FY1978, FY2000, and FY2001, the mid-session review was submitted in late June—16, 17, and 19 calendar days ahead of the deadline, respectively. For FY1999, it was submitted on May 26, 1998—50 calendar days before the deadline.

Figure 1 shows the number of days the mid-session review was submitted before or after the deadline for each year from FY1973-FY2017.

Circumstances of Selected Delayed Submissions

The submission of the mid-session review was delayed for more than three weeks on nine occasions:

FY1985, FY1986, FY1987, and FY1988 under the Reagan Administration; FY1994 and FY1998 under the Clinton Administration; FY2002 under the George W. Bush Administration; and FY2010 and FY2012 under the Obama Administration.

The delays for FY1994, FY2002, and FY2010 occurred in presidential transition years. The circumstances surrounding the instances where submission was delayed longer than three weeks are discussed in further detail below.

President Ronald Reagan: FY1985-FY1988

During the first three years of his Administration, President Reagan submitted the mid-session review either on time or no more than 15 days late. During the next four years of his Administration, however, growing and persistent deficits made his relationship with Congress on budgetary matters especially turbulent, marked by delay and gridlock in all phases of legislative action on the budget. The mid-session reviews for four consecutive years, FY1985-FY1988, were submitted between 22 and 46 days late.

On September 29, 1987, the Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987 (Title I of P.L. 100-119 ) was enacted, which in part amended the Balanced Budget and Emergency Deficit Control Act of 1985 (Title II of P.L. 99-177 ) to modify the sequestration process. A requirement was added that the President include in the mid-session review preliminary sequestration estimates as well as the economic and technical assumptions that would be used in the initial sequestration report for the fiscal year due in August.

The joint explanatory statement accompanying the conference report on the 1987 act noted:

For FY 1989 and beyond, the President's July 15 mid-session budget report must provide an estimate of the deficit excess and net deficit reduction computed using the economic and technical assumptions that he will use in the initial sequestration report for that fiscal year. It is imperative that the Director of OMB actually deliver this mid-session report by July 15. When he issues the initial sequestration report, he is required to use those same economic and technical assumptions.

The increased significance given to the mid-session review by virtue of this change in the sequestration process may account, in part, for the improved record of submission beginning with FY1989. President Reagan's mid-session review for that year was 13 days late. The improved record of submission continued for all four years of the George H. W. Bush Administration, covering FY1990-FY1993.

The requirement under the 1985 Balanced Budget Act was effective for three years (FY1989-FY1991), but was terminated under revisions made by the Budget Enforcement Act (BEA) of 1990.

President Bill Clinton: FY1994

On July 15, 1993, the Clinton Administration notified Congress that it would delay the submission of the mid-session review for FY1994 so that it would reflect the impact of the Omnibus Budget Reconciliation Act (OBRA) of 1993, which was then pending before the House and Senate. On that date, the Administration provided preliminary mid-session estimates of the deficit. President Clinton signed OBRA of 1993 into law on August 10 (as P.L. 103-66 ) and transmitted the mid-session review for FY1994 to Congress on September 1, 48 days late.

President Clinton's action stirred controversy in Congress, in part, because some Members wanted an updated assessment of the budgetary situation before voting on the conference report on OBRA of 1993. On July 20, 1993, the Senate tabled an amendment (by a vote of 56 to 43) offered by Senator Pete Domenici to H.R. 20 , the Hatch Act Reform Amendments. Senator Domenici's amendment stated:

It is the sense of the Senate that the President should submit the supplementary budget as required by law no later than July 16 and the requisite information therein required, but in no event later than July 26, 1993.

Senator Larry Craig discussed various patterns in the timing of submission of the mid-session review during years in which the House and Senate considered reconciliation legislation.

President Clinton used the mid-session review for FY1994 in part to recount the actions that led to the enactment of OBRA of 1993 and to discuss the features of that act.

President Bill Clinton: FY1998

As had been the case for FY1994, the submission of the mid-session review for FY1998 was delayed until after Congress completed action on reconciliation legislation. The delay in this case, until September 5, 1997, was the longest incurred in the more than 25-year history of the mid-session review—52 days. Unlike the experience for FY1994, however, the delay was not accompanied by controversy.

In May 1997, the Clinton Administration and congressional leaders reached agreement on a plan to balance the budget by FY2002. On August 5, President Clinton signed into law the two reconciliation acts that implemented most of the balanced-budget policies. The delayed issuance of the mid-session review for FY1998 allowed President Clinton to render a final accounting with respect to the budgetary impact of the two measures, which amounted to $247 billion in savings over five years (yielding an estimated surplus of $63 billion for FY2002).

President George W. Bush: FY2002

The issuance of the mid-session review again was associated with controversy in 2001, although possibly more for its contents than the timing of its release. President George W. Bush submitted his transition budget for FY2002 to Congress on April 9 (reflecting the delay that typically occurs in a presidential transition year). His budget recommended, among other things, that Congress enact a 10-year tax cut of approximately $1.6 trillion while at the same time preserving the entire surplus in the Social Security trust funds.

In May, Congress adopted the budget resolution for FY2002 ( H.Con.Res. 83 ), affirming its commitment to a somewhat smaller tax cut (about $1.35 billion) and to preserving the Social Security surplus. The on-budget surplus, which excludes the transactions of the Social Security trust funds, was estimated at that time to be about $30 billion for FY2001 and $48 billion for FY2002. These amounts represented the resources that could be allocated during the remainder of the session for additional defense spending and other budget priorities (principally under "reserve fund" procedures) without violating the pledge to preserve the Social Security surplus.

Following the adoption of the budget resolution, the House and Senate agreed to a revenue reconciliation measure providing the recommended level of tax cuts; President Bush signed it into law on June 7. During the remainder of June and into July, the House and Senate focused on the consideration of the regular appropriations bills.

The FY2002 mid-session review was issued on August 22 (38 days late), while the House and Senate were in recess. It indicated that, owing largely to unexpected weakness in the economy, the estimates of the on-budget surpluses for FY2001 and FY2002 had dropped to $1 billion for each year. Accordingly, the amount available for allocation to defense spending and other priorities had been reduced significantly. The returning House and Senate faced the prospect of completing action on the regular appropriations measures for FY2002 with less than a month before the beginning of the fiscal year (on October 1) and under much tighter budgetary constraints than had previously been assumed.

President Barack Obama: FY2010

The FY2010 mid-session review was issued on August 25 (41 days late), while the House and Senate were in recess. It showed a reduction in the FY2009 deficit estimate in the May budget submission of $262 billion (from $1.841 trillion to $1.580 trillion), owing largely to a $250 billion reduction in the placeholder for a financial stabilization reserve, but an increase of $243 billion in the FY2010 deficit estimate (to $1.502 trillion, an amount equal to 10.4% of the Gross Domestic Product).

The timing of budget submissions by President Obama in 2009 for FY2010 was affected by several factors. First, 2009 was a presidential transition year, which led to the President submitting his budget proposal on May 7. OMB also claimed that rapidly changing economic conditions made it difficult to develop stable economic assumptions or reliable budgetary estimates. Some Members, however, expressed the view that the announced delay in the submission of the mid-session review until the August recess reflected an effort to withhold unfavorable news about economic and budgetary developments that could impede the consideration of priority legislation.

President Barack Obama: FY2012

Many of the economic and fiscal conditions that existed during President Obama's first year in office had persisted, to varying degrees, until the submission of the FY2012 mid-session review. In addition, the submission deadline for the FY2012 mid-session review coincided with the negotiations between the President and Congress over the debt ceiling, which culminated in the enactment of the Budget Control Act of 2011 (BCA, P.L. 112-25 ) on August 2, 2011. The FY2012 mid-session review was submitted on September 1, 2011, one month after the enactment of the BCA, and reflected, in part, the changes resulting from that legislation.

The FY2012 mid-session review projected a lower deficit for FY2012 and each of the following 9 years covered by the 10-year budget window than the President's budget had estimated in February. According to the mid-session review, the reductions in projected deficits were due primarily to the terms of the BCA.

Circumstances of Selected Accelerated Submissions

The mid-session review was submitted more than three weeks before the deadline on one occasion: FY1999 under the Clinton Administration.

In 1998, President Clinton submitted the mid-session review for FY1999 nearly two months (50 days) early—on May 26. In February 1998, the President's budget for FY1999 estimated a $10 billion deficit for the current year, FY1998. The mid-session review revised this estimate to a surplus of $39 billion, which the Administration referred to as "an historic achievement" in a press statement announcing the release of the FY1999 mid-session review.

The prospect of the first surplus in nearly three decades, and growing surpluses in the following years, sparked congressional interest in acting on sizeable tax-cut legislation during the session. President Clinton argued instead that the budget surpluses should be "reserved" until changes could be made in the Social Security program to strengthen its long-term financial soundness, and some have suggested that, by releasing the mid-session review early, President Clinton was able to use the favorable budgetary news to improve his position during policy negotiations with Congress.

Appendix. Statutory Requirement for a Mid-Session Review of the President's Budget (31 U.S.C. §1106)

Section 1106. Supplemental budget estimates and changes.—

(a) Before July 16 of each year, the President shall submit to Congress a supplemental summary of the budget for the fiscal year for which the budget is submitted under section 1105(a) of this title. The summary shall include—

(1) for that fiscal year—

(A) substantial changes in or reappraisals of estimates of expenditures and receipts;

(B) substantial obligations imposed on the budget after its submission;

(C) current information on matters referred to in section 1105(a)(8) and (9)(B) and (C) of this title;

and (D) additional information the President decides is advisable to provide Congress with complete and current information about the budget and current estimates of the functions, obligations, requirements, and financial condition of the United States Government;

(2) for the 4 fiscal years following the fiscal year for which the budget is submitted, information on estimated expenditures for programs authorized to continue in future years, or that are considered mandatory, under law; and

(3) for future fiscal years, information on estimated expenditures of balances carried over from the fiscal year for which the budget is submitted.

(b) Before July 16 of each year, the President shall submit to Congress a statement of changes in budget authority requested, estimated budget outlays, and estimated receipts for the fiscal year for which the budget is submitted (including prior changes proposed for the executive branch of the Government) that the President decides are necessary and appropriate based on current information. The statement shall include the effect of those changes on the information submitted under section 1105(a)(1)-(14) and (b) of this title and shall include supporting information as practicable. The statement submitted before July 16 may be included in the information submitted under subsection (a)(1) of this section.

(c) Subsection (f) of section 1105 shall apply to revisions and supplemental summaries submitted under this section to the same extent that such subsection applies to the budget submitted under section 1105(a) to which such revisions and summaries relate.