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106th Congress                                            Rept. 106-198
  1st Session           HOUSE OF REPRESENTATIVES              Part 1   

=======================================================================




 
                COMPREHENSIVE BUDGET PROCESS ACT OF 1999

                                _______
                                

                  June 24, 1999.--Ordered to be printed

                                _______


 Mr. Young of Florida, from the Committee on Appropriations, submitted 
                             the following



                             ADVERSE REPORT

                        [To accompany H.R. 853]

    The Committee on Appropriations, to whom was referred the 
bill (H.R. 853) to amend the Congressional Budget Act of 1974 
to provide for joint resolutions on the budget, reserve funds 
for emergency spending, strengthened enforcement of budgetary 
decisions, increased accountability for Federal spending, 
accrual budgeting for Federal insurance programs, mitigation of 
the bias in the budget process toward higher spending, 
modifications in paygo requirements when there is an on-budget 
surplus, and for other purposes, having considered the same, 
report thereon with an amendment and recommend that the bill, 
as amended, do not pass.
    The amendment is as follows:
    Strike the entire text of Subtitle D--Automatic Continuing 
Resolution of Title VI beginning on page 91, line 1 down 
through page 95, line 17.

                   COMMITTEE PERSPECTIVE ON H.R. 853

    H.R. 853 was referred to the Committee on the Budget, and 
in addition to the Committees on Rules and Appropriations in 
each case for consideration of such provisions as fall within 
the jurisdiction of the committee concerned. For the Committee 
on Appropriations, the matter within our jurisdiction is the 
automatic continuing resolution. The Committee does not 
recommend that such a provision be included in any 
Congressional Budget Act amendments. H.R. 853 includes several 
other matters that have significant impact on the Committee on 
Appropriations that are not within the Committee's 
jurisdiction. These are a Budget with the Force of Law, Title 
I; Reserve Funds for Emergencies, Title II; and Spending 
Accountability Lock-Box, Subtitle C, Title VI. It is not 
appropriate for the Committee to recommend amendments to 
perfect these matters. Therefore, the Committee recommends that 
even though the bill might be perfected with the amendment the 
Committee is recommending on the automatic continuing 
resolution, the rest of the bill is so flawed that it should 
not pass.

                    AUTOMATIC CONTINUING RESOLUTION

    Subtitle D of Title VI of H.R. 853 contains an automatic 
continuing resolution. It would provide funding anytime there 
was a lapse in appropriations for any project or activity that 
was funded in the preceding fiscal year at the current rate of 
operations. This spending authority would continue until the 
regular appropriations bill or a continuing resolution making 
appropriations for such project or activity were enacted into 
law.
    The effect of this is to have permanently in place an 
appropriation for all ongoing activities at current levels if 
annual appropriations legislation never becomes law or is 
delayed in becoming law. While this might seem to some to be a 
sound appropriations process modification, it would have 
ramifications far beyond the intended goal of avoiding a 
government shutdown. The deadline for action on annual 
appropriations legislation of October 1st would be much less 
meaningful leading to an extension of the appropriations 
process even beyond its current extended completion time frame. 
No longer would appropriations bills be considered ``must 
pass'' legislation. Inaction would favor the status quo. The 
option of doing nothing or stonewalling appropriations bills 
would become a legitimate strategy. Those who would want to 
avoid a funding cut or avoid a funding increase for a program 
or a bill would be strengthened by the existence of an 
automatic continuing resolution. Their goals would not be 
accomplished through the legislative process, as they should 
be, but through a strategy of placing the government on 
automatic pilot.

                    HISTORY OF GOVERNMENT SHUTDOWNS

    A review of the causes of recent government shutdowns shows 
that the funding policy included in short term continuing 
resolutions was not the reason for a presidential veto that 
lead to a shutdown. Rather, the reasons for shutdowns were the 
inclusion of extraneous matters in short term CRs that were 
objectionable to the President.
    During late 1995 and early 1996, the funding for most of 
the government lapsed twice--first, due to the veto of a short 
term continuing resolution because it included a Medicare Part 
B Premium issue and, second, due to the inability of the 
Congress and the President to come to an agreement on the terms 
for submitting a seven year balanced budget plan. Neither of 
these instances of disagreement was related to the rates of 
operation included in the CRs. Both could have been easily 
avoided by eliminating or modifying the extraneous issues, 
which was eventually done.
    President Reagan vetoed a short term CR in 1986 over the 
issue of rehiring air traffic controllers that had been 
terminated. President Bush vetoed a short term CR because the 
budget summit agreement of 1990 had not passed Congress in a 
timely manner. Both of these instances resulted in preparations 
for a government shutdown that were never fully implemented 
because subsequent, clean CRs were quickly passed and signed 
into law.
    In all of the instances cited, the result was accession to 
the President. The demands of the President were met, and a 
subsequent CR was signed absent the offending provision. As a 
political tool for leveraging an issue with the President, the 
CR has been a dismal failure for the Congress. Aside from not 
achieving the desired, political results, Congress also has 
received criticism for allowing the government to shutdown, not 
the President.
    It could be argued that if CRs did not have to be enacted 
to keep government operating because of the existence of a 
permanent, automatic CR, then the opportunity for attaching 
controversial, political matters to short term CRs would be 
eliminated and government would never shut down. However, since 
the time of the Civiletti decision that said that government 
could not operate in the absence of appropriations in 1978, 
there have been a very large number of continuing resolutions 
that have been free of controversial, extraneous matters; have 
been signed into law; and have kept the government operating in 
a smooth, low key manner. All it takes is for Congress to 
maintain sufficient discipline to avoid attaching these matters 
to must pass CRs. Automatic continuing resolutions are not 
required, just clean CRs that respond to current conditions.

                  IMPACT ON THE APPROPRIATIONS PROCESS

    The existence of an automatic continuing resolution would 
cause a massive change in the approach to developing annual 
appropriations bills. This is because all ongoing programs and 
projects would already have a funding level identical to the 
current year in place before the process even begins. Any new 
appropriations bill would not have to be evaluated solely on 
its own merits, but could be evaluated in light of status quo 
fallback funding compared to the new bill.
    This might result in a funding priority bias towards the 
status quo. It might be easier to defeat attempts to reduce 
funding by using the tactic of not taking action on a new 
appropriations bill. Similarly, it might be easier to defeat 
attempts to increase funding by resorting to these same 
tactics. This would be especially true in the Senate where an 
individual Senator can have a major impact on the consideration 
of an individual bill. If there were no automatic CR, then the 
issues would have to be confronted more directly, and could not 
as easily be avoided because the new bill would still be a must 
pass bill in order to keep government operating.
    Any program or activity operating under an automatic CR 
would be doing so under the last year's terms and conditions. 
This means that whatever special guidance was included in last 
year's bill would then be in effect for the new fiscal year. 
This would be a major shift in power to the President. If the 
President wanted to avoid new restrictions or maintain old 
ones, then vetoing any new bills would be all that was 
required. It would be even more difficult for Congress to 
influence policy matters through new and timely restrictions in 
spending appropriations. This is a major element of 
appropriations bills. The most significant and most 
controversial elements in appropriations bills recently have 
been limitations. The issues that have been involved range all 
the way from abortion to war, or from agriculture commodity 
programs to foreign policy. This has been a major policy tool 
Congress has used to have a large role in the policy 
development of government. An automatic CR would seriously 
undercut the use of this tool.
    In addition, the ability to change the priorities of 
spending for individual activities would be reduced under the 
influence of an automatic CR. By using tactics to assure the 
kick in of an automatic CR by an element of Congress or the 
President, new initiatives and projects can be avoided. This 
would also be a major shift in power to the President. The 
President could decide which projects to undertake 
administratively within existing authority, but the Congress 
would have a reduced capability to direct the spending of 
resources on individual projects. A strong power of the purse 
for Congress is something that the Constitution envisions. An 
automatic CR would cause contrary effects.
    Because of the existence of an automatic CR, the importance 
of the timely completion of appropriations legislation would be 
less critical. The beginning of the fiscal year would have less 
significance. This might lead to even longer appropriations 
cycles and sessions of Congress. If there is anything needed in 
budget process reform, it is change that will make the process 
move quicker and be completed in a shorter time period. The 
automatic CR would cause the reverse.

                TECHNICAL PROBLEMS WITH AN AUTOMATIC CR

    No matter how well written an automatic CR might be, there 
will always be special funding situations that must be 
addressed to maintain total continuity of government 
operations. This can easily be seen by reviewing the content of 
the continuing resolutions that have been used for the last 20 
years. Each year, different anomalies have caused special 
funding provisions to be included. These are for initiatives 
that must be started, terminations that need to be implemented, 
new account structures, new projects, or expiring legislation. 
The various issues can not be predicted so as to be included in 
an automatic CR, but different ones spring up each 
yeardepending on the issues in the budget. While an automatic CR would 
cover nearly all of government operations in the short term, a 
supplemental CR would need to be developed each year for the anomalies 
described above.
    The impact of not doing a supplemental would result in a 
mini government shutdown. Doing a supplemental CR would take 
the same amount of floor time as a full blown CR. It would also 
give rise to the same misuses of a full blown CR that lead to 
government shutdowns that an automatic CR is trying to prevent. 
The goal of avoiding a government shutdown would still not be 
achieved.

          OTHER PROVISIONS OUTSIDE APPROPRIATIONS JURISDICTION

Budget with the force of law

    H.R. 853 includes a provision called Budget with the Force 
of Law at Title I. This provision would change the Budget 
Resolution legislative vehicle from a concurrent resolution to 
a joint resolution, requiring signature by the President. This 
is intended to encourage agreement between the White House and 
the Congress early in the budget process so appropriations and 
tax bills could proceed under agreed to spending levels. While 
the Committee is supportive of process changes that will make 
the discretionary allocation more realistic and less political, 
we doubt the proposal included in this bill would achieve those 
goals.
    The current process has produced Budget Resolutions for the 
past several years that have included unrealistic discretionary 
allocations. This results in end of year spending increases 
beyond the allocation level or beyond the spending control 
mechanism that is intended to ensure fiscal discipline. It has 
become predictable that if the initial discretionary allocation 
level is too low, there will inevitably be an uncontrolled 
increase at the end of the process. There is general consensus 
that these year end increases are larger than they would have 
been had more modest increases been provided at the beginning 
of the process. More realistic spending plan could have been 
developed with all the control mechanisms in place throughout 
the process.
    The current process has also produced Budget Resolutions 
for the past several years that have been very political 
documents. Rather than being restricted to only basic 
allocations necessary to develop spending and tax bills, Budget 
Resolutions have gone beyond providing allocations and included 
policy positions on appropriations and revenue matters that 
should have been left for appropriations and tax bills. 
Including these policy positions needlessly incites political 
wrangling that detracts from the development of the basic 
allocations. What then becomes paramount is the defense of the 
political rhetoric, and the allocations, which must eventually 
be translated into real appropriations and real cuts to real 
programs, become secondary and unrealistic.
    Budget Resolutions need to be developed in a realistic and 
nonpolitical manner. The Committee favors any process change 
that would accomplish this. It is not at all clear that any 
process change could achieve these goals. It is also not at all 
clear that the current process can not achieve these goals. 
Perhaps all that is needed is for a rededication by the 
Committee on the Budget to proceed to accomplish its work in a 
realistic manner.
    The intended goal of H.R. 853 is to achieve a more 
realistic Budget Resolution by changing the format of the 
Budget Resolution to a joint resolution requiring Presidential 
concurrence. This may have validity, if one believes that will 
produce a more coherent budget process. We doubt it. The first 
problem with the H.R. 853 proposal is that it also allows for a 
fallback legislative vehicle if the President vetoes the joint 
resolution. Under this scenario, the Congress would take the 
vetoed joint resolution and introduce and pass it as a 
concurrent resolution. The mere existence of the fallback 
procedure will almost certainly guarantee its use. Because the 
Budget Resolution would not have to be enacted into law, the 
Congress would not be motivated to reach agreement with the 
President. Rather, for political reasons Congress would be 
motivated to present the President with a Budget Resolution 
that would provoke a veto. Then the Congress could use the 
fallback procedure to pass a concurrent resolution that would 
implement the provisions of the vetoed joint resolution.
    Process changes that force all parties to compromise and 
reach agreement might be constructive, but if the process 
change includes an escape hatch, then the motivation to 
compromise is not real. If H.R. 853 were amended to include a 
straight forward joint resolution, then the motivation to reach 
agreement would be present. The problem with this option is 
that it would increase the probability that more matters beyond 
the basic spending and revenue allocations would be inserted 
into the BudgetResolution. This is based on the experience of 
budget summitry. Budget summits tend to produce mini-appropriations and 
tax bills rather than just budget allocations. Historically, budget 
summits included fire walls for special programs and special 
allocations for certain programs. These are the jurisdiction of the 
Committee on Appropriations.
    If the annual Budget Resolution required Presidential 
concurrence, then the Budget Committees and the President would 
be motivated to lock up as much of their spending and revenue 
priorities as they could in the Budget Resolution rather than 
waiting for appropriations bills and tax bills. This is the 
second major problem with the joint resolution proposal 
included the bill. This could produce an even more confusing, 
chaotic, undisciplined, and unfathomable budget process. It 
would also be a major short circuiting of the process leading 
to a further intrusion into the jurisdictions of Appropriations 
and Ways and Means.
    Again, it is not clear that this problem can be solved with 
a process change. Congressional Budget Resolutions can be 
developed in a way that can be successful under the current 
process if there is a desire to do so. Conversely, changing the 
process to a joint resolution can also be successful if there 
are tight restrictions on what matters are allowed in such a 
Budget Resolution. Without a ``Byrd type rule'' on the Budget 
Resolution that would restrict the content of a joint 
resolution to only the basic allocation levels, the joint 
resolution option would be worse than the current situation.

Reserve funds for emergencies

    H.R. 853 includes a provision that would establish a 
reserve fund for emergency appropriations. The level of this 
fund would be the 5-year historical average of emergency 
appropriations. This proposed process change is for an area 
where major meaningful reform is needed and overdue.
    For the past several years, the Committee has experienced 
major problems with the development of emergency 
appropriations. The Congressional Budget Act includes a 
procedure for making such appropriations, however, the will of 
the body was that emergency appropriations should be offset and 
even though they did not break the discretionary allocation. 
The major motivation for this position was that emergency 
appropriations increased the deficit and the way to avoid this 
was to reduce a like amount of previously appropriated 
spending.
    The proposed process change in H.R. 853 would overcome this 
problem. Because a certain level of emergency spending would 
now be recognized and provided for in the Budget Resolution, 
any emergency appropriations would not be increasing the 
deficit. This would be a major improvement. However, there are 
some problems with the proposal.
    First, the proposal would impose a definition for emergency 
requirements. There is a growing concern about what are proper 
emergency appropriations. There is a feeling that a definition 
of emergency appropriations should be specified in statute. 
While the Committee does not have any specific problem with the 
proposed definition, this is an area where caution should be 
exercised. The Committee believes that the House floor is the 
best place to evaluate whether a proposed emergency 
appropriation is proper. This should be the ultimate test of 
propriety. If the House doesn't agree with the proposed 
appropriation, it can be stricken. Definitions in the Budget 
Act should not be so tight as to hinder Congress from quickly 
responding to these types of special needs. Congress should 
continue to rely on the striking amendment as the true test of 
emergency requirements.
    Another potential problem with the emergency appropriations 
proposal is that when emergency appropriation proposals exceed 
the 5-year historical average, the bill would be referred to 
the Committee on the Budget. That committee would then report 
the bill within three days with a recommendation as to whether 
the additional emergency spending should be exempt from the 
caps.
    The problem with this is that it may consume needless time 
in responding to a serious emergency. The very nature of using 
a 5-year average means that one half of the years, the 
emergency reserve will be exceeded. The event that triggers 
spending beyond the historic 5-year average will probably be a 
major event requiring fast response. This would not be the time 
for Congress to delay a response. The Committee believes that 
another mechanism should be developed to permit emergency 
appropriations beyond the 5-year reserve level. Perhaps the 
rule governing consideration of the emergency appropriations 
should be required to automatically require a separate vote on 
exceeding the reserve level. Perhaps the emergency bill should 
include a special provision authorizing an increase to the 
reserve that would be subject to striking on the floor. 
Theseprocesses would not consume important response time, and would 
offer the House the ability to speak on whether to exceed the 5-year 
average.

Spending accountability lock-box

    H. R. 853 includes a provision called the Spending 
Accountability Lock-Box at Subtitle C of Title VI. This 
provision would reduce the overall allocation to the Committee 
if a cutting amendment were adopted to an appropriations bill 
and the Member offering the amendment stated that some portion 
of the reduction should be credited towards the lock-box. The 
understood goal of this provision is that when a cut is made, 
the lock-box would help assure that the cut could be sustained 
all the way through the process.
    The discretionary budget allocation process has its 
foundation in the Budget Resolution. This is the control that 
gives both the House and Senate Appropriations identical 
overall allocations. The proposed lock-box would have the 
affect of unilaterally lowering the allocation through the 
floor amendment process. While the motivation to have the 
action of one bicameral legislative body dictate the outcome in 
the other body might have some political and procedural 
advantages in certain situations depending on which side is 
being impacted, this is typically not considered a legitimate 
parliamentary process for a bicameral legislature. The result 
could be stalemates because there is no process included to 
undo any lock-box action.
    From a more practical standpoint, if one body cuts $1 
billion for the XX Bomber putting it in the lock-box and the 
other body cuts $1 billion for the YY Destroyer putting it in 
the lock-box, both allocations are lowered. In conference both 
bodies insist that some portion of the respective cuts the 
other body made be restored. Yet there is insufficient 
allocation for any compromise between the bodies without 
cutting other objects that neither body reduced in their floor 
consideration. The cuts would be very difficult to restore 
regardless of the merits of restoring them. This situation 
shows how quickly this problem can be magnified. While the 
controlling allocation is not any lower than if only one body 
had made the cut, there is now twice the need to restore the 
allocation.
    Setting the discretionary allocation level is one of the 
functions of the Budget Resolution. If one body makes 
unilateral adjustments to the allocation, then that has an 
undue effect on the other body and will result in improper 
impacts and delays for which there is no process that could 
provide relief. Conferencing appropriations bills at a common, 
unreduced allocation is difficult enough. Conferencing bills 
with reduced allocations when the bills are even more disparate 
through lock-box actions will result in major problems. Aside 
from the difficult process problems, it is difficult to see why 
either body of this legislature would want to subject itself to 
the decisions of the other.

                      recorded votes in committee

    During consideration of H.R. 853, there were no recorded 
votes taken in the Committee.

                   CONSTITUTIONAL AUTHORITY STATEMENT

    Pursuant to clause 3(d)(2) of rule XIII of the Rules of the 
House of Representatives, the Committee finds the 
Constitutional authority for this legislation in Article I, 
clause 8, section 18, that grants Congress the power to make 
all laws necessary and proper for carrying out the powers 
vested by Congress in the Government of the United States or in 
department or officer thereof.

                          OVERSIGHT STATEMENT

    No summary of oversight findings and recommendations made 
by the Committee on Government Reform, as provided for in 
clause 3(c)(4) rule XIII of the Rules of the House of 
Representatives, was available to the Committee with reference 
to the subject matter specifically addressed in the Committee 
amendment to H.R. 853.

                      COMMITTEE OVERSIGHT FINDINGS

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee on Appropriations' 
oversight findings and recommendations are reflected in the 
body of this report.

                      ADVISORY COMMITTEE STATEMENT

    No advisory committee within the meaning of section 5(b) of 
the Federal Advisory Committee Act will be created by the 
amendment recommended by the Committee on this legislation.

                APPLICABILITY TO THE LEGISLATIVE BRANCH

    The Committee finds that the recommended amendment to 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).

                       FEDERAL MANDATES STATEMENT

    The amendment recommended by the Committee on this 
legislation contains no unfunded mandates.

                        CHANGES IN EXISTING LAW

    The amendment recommended by the Committee on this 
legislation would make no change in existing law.

                        CONGRESSIONAL BUDGET ACT

    With respect to the requirement of clause 3(c)(2) of rule 
XIII of the Rules of the House of Representatives, and section 
308(a) of the Congressional Budget Act of 1974, the Committee 
amendment would not result in the provision of any new budget 
authority.