New spending

From Conservapedia

Jump to: navigation, search

New spending, in the absence of a concurrent resolution[1], serves for the chamber passing it as an annual budget resolution for purposes of establishing enforceable budget levels for a budget cycle.

New spending allocations provide target levels to the appropriations committees, but they also can set new higher aggregate budget levels, increased spending, and provide revised spending allocations relative to other House and Senate committees.[2]

Contents

Congressional Budget Act of 1974 and subsequent rulings

A conventional authorization establishes or continues a government agency or program, and while it may place a limit on the amount of budget authority that may be appropriated for that purpose (Deschler Ch 25 Sec. 2.13), the authorized funds are available only to the extent provided for in appropriation acts originated by the Appropriations Committee. Spending legislation which circumvents the appropriations process is called "backdoor spending." Restrictions against such legislation are found in the Congressional Budget Act of 1974. With certain exceptions, new spending authority[3] is to be "effective" only as provided in appropriation acts. "Spending authority" is defined by the Act to include contract authority and borrowing authority.

The Act has been construed to prohibit the consideration of a measure containing new spending authority to incur indebtedness, if the budget authority therefor is not provided in advance by appropriation acts.

The "spending authority" referred to in Sec. 401(a) does not apply to bills that provide legislative authorizations that are subject to the appropriations process.

Whether or not an amendment to a pending measure provides new spending authority for a program is determined by its marginal effect on the pending measure rather than current law.

The House may adopt a resolution reported from the Committee on Rules waiving points of order against the consideration of a conference report containing an amendment providing new spending authority not subject to amounts provided in advance by appropriation acts in violation of Sec. 401(a) of the Budget Act.

New vs old spending authority

Section 401 of the Congressional Budget Act of 1974 both defines and limits the use of spending authority. The term "spending authority" is used to describe legislation which authorizes the obligation of funds outside of, or prior to the appropriations process—contract or borrowing authority are onlu two examples. This type of financing mechanism is also referred to as backdoor authority, and becomes permanent, or uncontrollable, spending authority outside the appropriations process.

The intent of section 401 was to control the use of backdoor authority by treating both contract and borrowing authority the same as regular authorizations which made funds available only to the extent provided in appropriations acts. A grandfather clause exists that distinguishes between new spending authority, which became law after the effective date of the Congressional Budget Act of 1974 (July 12, 1974) and subject to this provision, and old spending authority which is not subject to this provision.

When this section was enacted, it was assumed that old spending authority would be used up at some time in the future. Thus, the use of contract and borrowing authority as backdoor financing mechanisms would be eliminated.

But insured and guaranteed loans were not included. Section 401(c) provides that the term "spending authority, ... does not include authority to insure or guarantee the repayment of indebtedness incurred by another person or government."

Revolving fund programs which conduct their operations through insured or guaranteed loans, or are converted from making direct loans to this mechanism, were not subject to the required appropriations action on new spending authority. The reasoning is that insuring or guaranteeing loans does not require the immediate use of budget authority to carry out program objectives and that budget authority is only needed to cover losses from program operations, such as defaults on loans which are accounted for when the loss occurs.

Another form of spending authority covered by section 401 is entitlement authority. Procedures for control of entitlement authority differ, however, from those applied to contract and borrowing authority.

Section 401(d) lists other exceptions to the requirement subjecting new spending authority to amounts provided in appropriations acts. Included in this section is the following which relates to numerous public enterprise revolving funds:

"(3) Subsections (a) and (b) shall not apply to new spending authority to the extent that—(A) the outlays resulting therefrom are made by an organization which is (i) a mixed-ownership Government corporation (as defined in section 201 of the Government Corporation Control Act), or (ii) a wholly owned Government corporation (as defined in section 101 of such Act) which is specifically exempted by law from compliance with any or all of the provisions of that Act."

The effect of section 401's provisions on the remaining public enterprise revolving funds which are not exempted in any way from its provisions is questionable. Although treating contract or borrowing authority as an authorization subject to amounts approved in appropriations acts appears on the surface to be exerting budgetary control, the approach was not always effective.

See also

References

  1. The Congressional Budget and Impoundment Control Act of 1974 requires the adoption each year of a concurrent resolution on the budget.
  2. See Deeming Resolution.
  3. A Guide to the Rules, Precedents and Procedures of the House, p. 189. U.S. Government Printing Office, www.gpo.gov
Personal tools