House of Representatives Budget Resolution for FY2013

1. House of RepresentativesBudget Resolution for FY2013

2. On March 23 Chairman of the House Budget Committee, Paul Ryan (R-WI) introduced H. Con. Res. 112 CONCURRENT RESOLUTION ON THE BUDGET-- FISCAL YEAR 2013

3. On March 23 House Budget Committee reported the measure to the full House on a vote of 19-18. Two Republicans on the Budget Committee voted not, Huelskamp and Amash, because the resolution did not go far enough in cutting spending.

4. On March 29 the Full House Passed H. Con. Res 112 by a vote of 228 to 191

5. What policy recommendations are contained in H. Con. Res. 112? How do these recommendations fit into the Budget Control Act and what the President recommended in February?

6. H. Con. Res. 112 House Concurrent Budget Resolution for FY2013 Sets a FY 2013 discretionary budget cap lower than the one set by the Budget Control Act

7. H. Con. Res. 112 House Concurrent Budget Resolution for FY2013 Cancels the January 2013, BCA-mandated sequester of discretionary and mandatory spending in order to shield defense spending from cuts.

8. H. Con. Res. 112 House Concurrent Budget Resolution for FY2013 Sequestration is replaced with cuts to non-defense discretionary and mandatory spending (which would be accomplished through budget reconciliation).

9. H. Con. Res. 112 House Concurrent Budget Resolution for FY2013 Calls for reforming state grant programs, with Medicaid and the Supplemental Nutrition Assistance Program (SNAP) specifically identified for possible conversion to block grants.

10. H. Con. Res. 112 House Concurrent Budget Resolution for FY2013 It also calls for a deficit-neutral overhaul of the tax code, with two personal income tax rates replacing the current structure and the repeal of unspecified tax preferences. It also would reduce the top corporate tax rate.

11. H. Con. Res. 112 House Concurrent Budget Resolution for FY2013 April 3, President Obama characterized the Ryan budget as “Social Darwinism” . The survival of the fittest basically at the expense of others.

12. Behind the NumbersHow Does All This Work Together? House Budget Senate Budget President’s Budget Budget Control Act Sequestration Reconciliation Appropriations

13. The Congressional Budget Process

14. Congressional Budget Act of 1974

15. Congressional Budget Act of 1974 Establishes A Timetable For Congress To Consider Bills 15th Day After A New Session Congress Begins President Submits Administration's Budget (Feb 2, 2012)

16. Congressional Budget Act of 1974 Establishes A Timetable For Congress To Consider Bills April 15—House And Senate Budget Committees Report Budget Resolution

17. Congressional Budget Act of 1974 Establishes A Timetable For Congress To Consider Bills May 15—Congress Completes Action On Budget Resolution

18. Congressional Budget Act of 1974 September 15—Congress completes action on bills and resolutions providing new budget authority and new spending authority.

19. Congressional Budget Act of 1974 Establishes A Timetable For Congress To Consider Bills October 1—Beginning of Fiscal Year

20. What Does A Budget Resolution Do?

21. The Budget Resolution is a concurrent resolution, meaning it is not sent to the President for approval or disapproval. Does not have the force of law. It is solely a Congressional mechanism used to help both the House and Senate come to agreement on overall spending and tax levels prior to drafting of appropriation bills or revenue measures for the upcoming fiscal year. It also sets spending and revenue policies for the next ten fiscal years. What Does A Budget Resolution Do?

22. What Is Contained In A Budget Resolution?

23. What Is Contained In A Budget Resolution? The amount, if any, of the surplus or the deficit in the budget

24. What Is Contained In A Budget Resolution? The recommended level of Federal revenues and the amount, if any, by which the aggregate level of Federal revenues should be increased or decreased.

25. What Is Contained In A Budget Resolution? The appropriate level of the public debt, and the amount, if any, by which the statutory limit on the public debt should be increased or decreased.

26. What Is Contained In A Budget Resolution? The appropriate level of total budget outlays and total budget authority.

27. What Is Contained In A Budget Resolution? May include reconciliation instructions (more on this later)

28. The Congressional Budget Process Once the House and Senate have agreed on a final version of the Budget Resolution, the House and Senate Appropriation Committees are given aggregatecaps on discretionaryspending. Called 302(a) allocations

29. The Congressional Budget Process 302(a) allocations represent the maximum amount budget authority contained in all appropriations bills in the upcoming Fiscal Year. Entitlement programs--often called direct spending or mandatory spending--do not get their budget authority through an appropriations bill and are therefore not covered by 302(a) allocations

30. The Congressional Budget Process 302(a) allocations are further divided up among the 12 appropriation subcommittees Called 302(b) allocations

31. The Congressional Budget Process 302(a) allocations are further divided up among the 12 appropriation subcommittees Called 302(b) allocations Each Subcommittee of the Appropriations Committee is responsible for making policy decisions on what programs to fund and what their funding levels are in order to comply with the 302(b) allocations

32. How is a Budget Resolution Different from the Budget Control Act?

33. The Budget Control Act • Enacted in 2011 as part of the compromise to raise the national debt • Established the Joint Select Committee on Deficit Reduction • JSCDR goal was to report a bill that would cut federal deficit over 10 years by $1.2 trillion • Established 302(a) caps in discretionary spending from FY2013 until FY2021

34. The Budget Control Act • It does not contain any provisions dealing with revenues • Unless Congress acts the Budget Control Act would allow the Bush-era tax cuts to be reinstated in full • It does not distinguish between programs considered a priority and those of lesser importance • It contains no policy recommendation on how to achieve budget savings

35. The Budget Control Act • Mandates that 50 percent of all discretionary spending cuts must come from the Defense Department’s budget • Mandatory and discretionary spending are cut proportionally • Mandates sequestration starting with FY2013 and ending in 2021 • Exempted many, but not all, human service programs from sequestration

36. What is Sequestration? January 2, 2013 sequestration is an across-the-board cut in each non-exempt account of both mandatory and discretionary spending that occurs. Between FY2014 and FY2021 sequestration applies only to discretionary spending. It was included in the BCA as a incentive to the Joint Select Committee on Deficit Reduction to avoid that Committee not act.

37. What is Sequestration? It was passed with the intention that it never would happen. Today many members of Congress and the Administration want to avoid sequestration because it cuts priority programs as well as non-priority programs by about 7.5% in January 2013.

38. How Sequestration Works The automatic spending reduction process entails three key steps:

39. How Sequestration Works The amount of spending reduction required for each year is calculated and divided equally between two categories—Defense and non-Defense categories

40. How Sequestration Works 2. The annual amount of spending reductions required each year in each of these categories is further divided proportionally between discretionary appropriations and direct spending programs (excluding certain programs and activities) within each category; and

41. How Sequestration Works The spending reductions required in each year (FY2013-FY2021) are achieved through a combination of sequestration and a downward adjustment of the revised discretionary spending limits.

42. Discretionary Spending Caps: Post-Sequester(Budget Authority in Billions) FY2013 Budget Control Act Pre Sequester $1,047 Defense $ 546 Non--‐Defense $ 501 Sequester $ -98 Defense $ ‐55 Non-Defense $ ‐43 Budget Control Act Post--‐Sequester $949 Defense $491 Non-Defense $458

43. 302(a) Allocations in Budget Control Act (In billions) Fiscal Year Original Limits on all Discretionary 2013 $1,047

44. 302(a) Allocations in After Sequestration (In billions) Fiscal Year Original Limits on all Discretionary 2013 $ 950

45. 302(a) Allocations in H. Con Res. 112 (In billions) Fiscal Year Original Limits on all Discretionary 2013 $1,028

46. 302(a) Allocations in H. Con Res. 112 (In billions) Fiscal Year Original Limits on all Discretionary 2013 $1,028 To achieve additional savings the House Budget Resolution includes what are know as reconciliation instructions

47. What is Reconciliation?

48. What is Reconciliation? A special procedure to give expedited consideration to bills enacting the spending, revenue, and debt policies contained in the budget resolution.

49. What is Reconciliation? A special procedure to give expedited consideration to bills enacting the spending, revenue, and debt policies contained in the budget resolution. In order to qualify for these special expedited procedures, both the House and Senate must agree on the same budget resolution and it must include reconciliation instructions.

50. What is Reconciliation? To trigger these expedited procedures, the budget resolution must include reconciliation instructions calling on specific committees to achieve specified amounts of savings in programs within their jurisdictions.