The making of the federal budget.

• Author: Desimone, Daniel C.
• Position: Federal Focus - Brief Article

In some years, the congressional budget resolution can be among the most important pieces of legislation Congress considers. In other years--this may be one--the budget resolution may not matter much at all. In fact, the common wisdom is that the Republican-controlled House and the Democratic-controlled Senate will fail to reach agreement on a budget resolution this year. If this scenario plays itself out, it would mark only the second time (the first was in 1998) that Congress has failed to produce a budget resolution since the federal budget process was established by the 1974 Congressional Budget Act (PL 93-344).

The budget resolution is Congress' annual response to the president's budget proposal. It is a concurrent resolution, meaning that both chambers of Congress approve it. While binding on Congress, the budget resolution does not become law. Like the president's budget, the congressional budget resolution is a blueprint that includes recommended spending levels for both discretionary appropriations and mandatory programs such as Social Security. It also outlines changes in taxes and other revenues.

Budget resolutions carry relatively little weight in guiding the actual tax-and-spending decisions formalized in subsequent legislation. But budget resolutions can include critical "reconciliation" instructions that permit Congress to subsequently pass difficult tax or deficit-reduction bills under special filibuster-proof procedures in the Senate (reconciliation bills require only a simple majority to pass the Senate, instead of the 60 votes needed to halt a filibuster). President George W. Bush's tax cut (PL 107-16) passed as a reconciliation bill, as did President Bill Clinton's 1993 deficit-reduction measure (PL 103-66), which included tax-and-spending changes from 13 committees in the House and 12 in the Senate.

For those years in which the budget resolution does not spawn a reconciliation bill, adopting the budget resolution becomes less important. The other key element of the budget resolution is a limit on discretionary spending, which caps the amount of money available to the Appropriations committees. Although these appropriations ceilings are supposed to be enforced by points of order, Congress has exceeded them every year since fiscal 1998, further minimizing the importance of the budget resolution.

The Power of the Purse

The United States Congress is distinguished from nearly every other legislative body in the world by the degree to which it exercises control over the government's budgetary policies. Defined by the Constitution, this so-called "power of the purse" establishes Congress' primary role in fiscal policy; that is, taxation, borrowing, and spending decisions.

As American society has grown and become ever more complex, and as the role of the federal...