[Back to top] Authorizing Legislation: Legislation enacted by Congress that sets up or continues the operation of a Federal program or agency indefinitely or for a specific period of time. Authorizing legislation may limit the amount of budget authority which can be appropriated for a program or may authorize the appropriation of "such sums as are necessary." (See Budget Authority; Entitlement.) [Back to top] Backdoor Spending: (See Direct Spending or Mandatory Spending.)
[Back to top] Budget Authority: The authority Congress gives to Government agencies, permitting them to enter into obligations which will result in immediate or future outlays. Budget authority may be classified in several ways. It may be classified by the form it takes: appropriations, borrowing authority, or contract authority. Budget authority may also be classified by the determination of amount: definite authority or indefinite authority. Finally budget authority may be classified by the period of availability: 1-year authority, multi-year authority, or no-year authority (available until used).
Forms of Budget Authority
- Appropriations.--An act of Congress that permits Federal agencies
to incur obligations and to make payments out of the Treasury for
specified purposes. An appropriations act is the most common means of
providing budget authority.
Borrowing Authority.--Statutory authority that permits a Federal
agency to incur obligations and to make payments for specified purposes
out of money borrowed from the Treasury, the Federal Financing Bank, or
the public. The Budget Act in most cases requires that new authority to
borrow must be approved in advance in an appropriation act.
Contract Authority.--Statutory authority that permits a Federal
agency to enter into contracts in advance of appropriations. Under the
Budget Act, most new authority to contract must be approved in advance
in an appropriation act.
Offsetting collections and receipts.--Income from the public which
is displayed in the budget as negative budget authority. (See
Offsetting Collections and Offsetting Receipts. [Back to top]
[Back to top] Budget Deficit: The amount by which the Government's total outlays exceed its total revenues for a given fiscal year. (See Outlays; Revenues.)
[Back to top] Budget Resolution: A concurrent resolution passed by both Houses of Congress setting forth, reaffirming, or revising the congressional budget for the U.S. Government for a fiscal year. A budget resolution is a concurrent resolution of Congress. Concurrent resolutions do not require a presidential signature because they are not laws. Budget resolutions do not need to be laws because they are a legislative device for the Congress to regulate itself as it works on spending and revenue bills. [Back to top] (Unified) Budget Surplus: The amount by which the Government's revenues exceed its outlays for a given fiscal year. The "on-budget surplus" excludes spending and revenues of the Social Security Trust Fund, and the Postal Service. (See Outlays; Revenues.) [Back to top] Capital Budget: A budget that segregates capital spending from all other spending, what is usually considered the ``operating budget.'' In a capital budget, spending and receipts in the capital budget are excluded from the operating budget and are not included in the operating budget's deficit or surplus calculations. A capital budget would include spending only for capital assets. Capital assets are usually defined to be limited to land, structures, equipment, and intellectual property that are owned and used by the Federal government and have a useful life of more than 2 years. However, some proponents of capital budgeting have suggested that capital should be defined to include Federal ``investment'' spending that yields long-term benefits. President Clinton established a Commission to Study Capital Budgeting by issuing Executive Order 13037 on March 3, 1997. The Commission is required to issue its report by December 17, 1998. [Back to top] Congressional Budget: (See Budget Resolution.) [Back to top] Continuing Resolution: Appropriations legislation enacted by Congress to provide temporary budget authority for Federal agencies to keep them in operation when their regular appropriation bill has not been enacted by the start of the fiscal year. A continuing resolution is a joint resolution, which has the same legal status as a bill. A continuing resolution frequently specifies a maximum rate at which obligations may be incurred, based on the rate of the prior year, the President's budget request, or an appropriation bill passed by either or both chambers of Congress. However, there have been instances when Congress has used a continuing resolution as an omnibus measure to enact a number of appropriation bills. A continuing resolution is a form of appropriation act and should not be confused with the budget resolution. [Back to top] Credit Authority: Authority to incur direct loan obligations or to incur primary loan guarantee commitments. Under the Budget Act, new credit authority must be approved in advance in an appropriation act. [Back to top] Crosswalk: Also known as "committee allocation" or "section 302 allocation." The means by which budget resolution spending totals are translated into binding guidelines with respect to budget authority and outlays for committee action on spending bills. The Budget Committees allocate the budget resolution totals among the committees by jurisdiction, Crosswalk allocations of budget authority and outlays to the committee appear in the joint explanatory statement accompanying a conference report on the budget resolution.
[Back to top] Current Services Budget: A section of the President's budget, required by the Budget Act, that sets forth the level of spending or taxes that would occur if existing programs and policies were continued unchanged through the fiscal year and beyond, with all programs adjusted for inflation so that existing levels of activity are maintained. (See Baseline.) [Back to top] Deferral of Budget Authority: An action by the executive branch that delays the obligation of budget authority beyond the point it would normally occur. Pursuant to the Congressional Budget and Impoundment Control Act of 1974, the President must provide advanced notice to the Congress of any proposed deferrals. A deferral may not extend beyond the end of the fiscal year in which the President's message proposing the deferral is made. Congress may overturn a deferral by passing a law disapproving the deferral. [Back to top] Deficit: The amount by which the government's total budget outlays exceeds its total receipts for a fiscal year. [Back to top] Direct Spending: A term defined in the Budget Enforcement Act of 1990 to include entitlement authority, the food stamp program, and budget authority provided in law other than appropriations acts. From the perspective of the appropriations process, all direct spending is classified as mandatory as opposed to discretionary spending. New direct spending is subject to pay-as-you-go requirements. Direct spending is synonymous with mandatory spending. (See Mandatory Spending and Entitlement.) [Back to top] Discretionary Spending: A category of spending (budget authority and outlays) subject to the annual appropriations process. (See Appropriations Acts.) [Back to top] Entitlement: Programs that are governed by legislation in a way that legally obligates the Federal government to make specific payments to qualified recipients. Payments to persons under the Social Security, Medicare, and veterans' pensions programs are considered to be entitlements. (See Direct Spending and Mandatory Spending.) [Back to top] Emergency Spending: As provided in the Budget Enforcement Act, a provision of legislation designated as an emergency by both the President and the Congress. As a result, this additional spending is not subject to the discretionary caps or the pay go requirements and thus will not cause a sequester. In addition, emergency legislation is effectively exempt from Budget Act points of order. There is no specific criteria in the law for emergency spending. However, the following criteria were contained in a June 1991 report prepared by the Office of Management and Budget--as required by Pub. L. No. 102-55 for the determination of whether to designate spending as an emergency spending:
- Necessary expenditure.--an essential or vital expenditure,
not one that is merely useful or beneficial;
Sudden.--quickly coming into being, not building up over
time;
Urgent.--pressing and compelling need requiring immediate
action;
Unforseen.--not predictable or seen beforehand as a coming
need (an emergency that is part of an aggregate level of
anticipated emergencies, particularly when normally estimated
in advance, would not be "unforseen"); and
Not permanent.--the need is temporary in nature. [Back to top]
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Debt held by the government.--Represents the holdings of debt
by federal trust funds and other special government funds. For
example, when a trust fund is in surplus as is presently the
case with Social Security, the law requires that this surplus
be invested in government securities.
Debt held by the public.--Represents the holdings of debt by
individuals, institutions, other buyers outside the federal
government, and the Federal Reserve System. The change in debt
held by the public in any given year closely tracks the unified
budget deficit for that year.
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[Back to top] Functional Classification: A system of classifying budget resources by major purpose so that budget authority, outlays, and credit activities can be related in terms of the national needs being addressed (for example, national defense, health) regardless of the agency administrating the program. There are currently 20 functions. A function may be divided into two or more subfunctions depending upon the complexity of the national need addressed by that function. (See Budget Authority; Outlays.) (See Appendix A.) [Back to top] Impoundment: A generic term referring to any action or inaction by an officer or employee of the U.S. Government that precludes the obligation or expenditure of budget authority in the manner intended by Congress. (See Deferral of Budget Authority; Rescission of Budget Authority.) [Back to top] Joint Committee on Taxation (JCT): Section 8001 of the Internal Revenue Code authorized the creation of the Joint Committee on Taxation. By statute, it is composed of five members from the Committee on Finance (three majority, two minority) chosen by such Committee and five members from the Committee on Ways and Means (three majority, two minority) chosen by such Committee. In practice, the Chairmanship and Vice Chairmanship of the Joint Committee on Taxation has rotated between the Chairman of the Committee on Finance and the Chairman of the Committee on Ways and Means with each new Congress. Among other things, the JCT's duties are to investigate the operation and effects of the federal tax system. [Back to top] Mandatory Spending: Refers to spending for programs the level of which is governed by formulas or criteria set forth in authorizing legislation rather than by appropriations. Examples of mandatory spending include: Social Security, Medicare, veterans' pensions, rehabilitation services, Members' pay, judges pay and the payment of interest of the public debt. Many of these programs are considered entitlement. (See Direct Spending.) [Back to top] Mark-Up: Meetings where congressional committees work on language of bills or resolutions. At Budget Committee mark-ups, the House and Senate Budget Committees work on the language and numbers contained in budget resolutions and legislation affecting the congressional budget process. [Back to top] Monetary Policy: Management of the money supply, under the direction of the Board of Governors of the Federal Reserve system, with the aim of achieving price stability and full employment. Government actions in guiding monetary policy, include currency revaluation, credit contradiction or expansion, rediscount policy, regulationof bank reserves and the purchase and sale of Government securities. (See Fiscal Policy.) [Back to top] Net Deficit Reduction: Savings below the defined budget baseline achieved for the upcoming fiscal year because of laws enacted or final regulations promulgated since January 1. CBO and OMB independently estimate these savings in their initial and final sequester reports. [Back to top] Offsetting Collections: Income from the public that results from the government engaging in ``business-like'' activities with the public, such as the sale of products or the rendering of a service. Examples include proceeds funds derived from the sale of postage stamps. Offsetting collections are credited against the level of budget authority or outlays associated with a specific program or account. (See Offsetting receipts.) [Back to top] Offsetting Receipts: Income from the public that results from the government engaging in ``business-like'' activities with the public such as the sale of products or the rendering of services. Examples include proceeds from the sale of timber from Federal lands or entrance fees paid at national parks. Rather than being credited against the spending of a particular program or account, (as in the case with offsetting collections) offsetting receipts are deducted from total budget authority and outlays rather than added to Federal revenues even though they are deposited in the Treasury as miscellaneous receipts. Generally offsetting receipts are associated with mandatory spending. (See Offsetting collections.) [Back to top] Off-budget Federal Entity: Any Federal fund or trust fund whose transactions are required by law to be excluded from the totals of President's budget submission and Congress' budget resolution, despite the fact that these are part of the government's total transactions. Current law requires that the Social Security trust funds (the Federal Old Age, Survivors, and Disability trust fund) and the Postal Service be off-budget. However, these entities are reflected in the budget in that they are included in calculating the deficit in order to derive the total government deficit that must be financed by borrowing from the public or by other means. All other federal funds and trust funds are on budget. (See Unified Budget.) [Back to top] Outlays: Outlays are disbursements by the Federal Treasury in the form of checks or cash. Outlays flow in part from budget authority granted in prior years and in part from budget authority provided for the year in which the disbursements occur. [Back to top] Outlay Rates: The ratio of outlays (actual government disbursements) in a fiscal year relative to new budgetary resources in that fiscal year. In estimating the budget baseline and baseline deficit for their sequestration reports, CBO and OMB use outlay rates for projecting levels of spending resulting from available budget authority. Pay-as-you-go: Arises in two separate contexts: a point of order in the Senate and a sequester order from OMB.
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Pay-as-you-go in the Senate.--Since fiscal year 1994, the budget
resolution has included a pay-as-you-go rule in the Senate. The rule
provides a 3/5ths vote point of order in the Senate against
consideration of legislation that would cause a net increase in the
deficit over a ten year period. It applies to all legislation except
appropriations legislation. To determine a violation, CBO measures the
budget impact of a direct spending or revenue bill combined with the
budget impact of all direct spending and revenue legislation enacted
since the latest budget resolution's adoption to see if the legislation
would result in a net deficit increase for any one of three time
periods (the first year, the sum of years 1 through 5, and the sum of
years 6 through 10.) The pay-go rule sunsets at the end of fiscal year
2002.
Pay-as-you-go and sequestration under the BEA.--The Budget
Enforcement Act requires OMB to also enforce a "pay-as-you-go"
requirement which has a similar effect as the Senate's point of order:
Congress is required to "pay for" any changes to programs which
result in an increase in direct spending, or in this case risk a
sequester. If OMB estimates that the sum of all direct spending and
revenue legislation enacted since 1990 will result in a net increase in
the deficit for the fiscal year, then the President is required to
issue a sequester order reducing all non-exempt direct spending
accounts by a uniform percentage in order to eliminate the net deficit
increase. Most direct spending is either exempt from a sequester order
or operates under special rules that minimize the reduction that can be
made in direct spending. Social Security is exempt from a pay-as-you-go
sequester and Medicare cannot be reduced by more than 4 percent. [Back to top]
Overview Budget Timetable Committee Members
Democratic Senators Republican Senators
Committee History
Jurisdiction
Committee Rules
Glossary of Budget Terms