Difference between revisions of "Backdoor spending authority"
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*Another backdoor strategy is to authorize agencies to borrow funds from the Treasury or from the public. Borrowing authority outside the appropriations process has been authorized since this backdoor was opened in 1932. | *Another backdoor strategy is to authorize agencies to borrow funds from the Treasury or from the public. Borrowing authority outside the appropriations process has been authorized since this backdoor was opened in 1932. | ||
| − | *The third and most prevalent form of backdoor is a mandatory entitlement of specified payments to eligible beneficiaries. Most entitlements are open-ended: their cost depends on the varying number of claimants and amounts allowable to each, rather than on current legislative decisions. Most entitlements are also in the form of permanent appropriations that bypass the appropriations committees altogether. Even when the entitlements go through the regular appropriations process (as is the case with public assistance and veterans' benefits) the appropriations committees have no real say over the amounts that are to be spent. <ref>[http://people.brandeis.edu/~woll/schickbudget.pdf The Battle of the Budget], Allen Schick, ''Proceedings of the Academy of Political Science'', Vol. 32, No. 1, Congress against the President, (1975), pp. 51-70. Published by: The Academy of Political. JSTOR.</ref> | + | *The third and most prevalent form of backdoor is a mandatory entitlement of specified payments to eligible beneficiaries. Most entitlements are open-ended: their cost depends on the varying number of claimants and amounts allowable to each, rather than on current legislative decisions.<ref>See [[Discretionary spending]]</ref> Most entitlements are also in the form of permanent appropriations that bypass the appropriations committees altogether. Even when the entitlements go through the regular appropriations process (as is the case with public assistance and veterans' benefits) the appropriations committees have no real say over the amounts that are to be spent. <ref>[http://people.brandeis.edu/~woll/schickbudget.pdf The Battle of the Budget], Allen Schick, ''Proceedings of the Academy of Political Science'', Vol. 32, No. 1, Congress against the President, (1975), pp. 51-70. Published by: The Academy of Political. JSTOR.</ref> |
The Congressional Budget and Impoundment Control Act of 1974 originally was intended to limit and reform backdoor authority<ref>http://www.gao.gov/assets/210/202440.html</ref><ref>http://appropriations.house.gov/about/</ref>, however by 2010, [[President Obama]]'s Simpson-Bowles Commission reported the that tax code had become riddled with $1.1 trillion (roughly equal to annual projected deficits) in backdoor spending as hidden "[[tax expenditure]]s.<ref>[http://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/TheMomentofTruth12_1_2010.pdf The Moment of Truth: Report of the National Commission on Fiscal Responsibility and Reform]. December 2010. The White House. P. 29, pdf.</ref> | The Congressional Budget and Impoundment Control Act of 1974 originally was intended to limit and reform backdoor authority<ref>http://www.gao.gov/assets/210/202440.html</ref><ref>http://appropriations.house.gov/about/</ref>, however by 2010, [[President Obama]]'s Simpson-Bowles Commission reported the that tax code had become riddled with $1.1 trillion (roughly equal to annual projected deficits) in backdoor spending as hidden "[[tax expenditure]]s.<ref>[http://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/TheMomentofTruth12_1_2010.pdf The Moment of Truth: Report of the National Commission on Fiscal Responsibility and Reform]. December 2010. The White House. P. 29, pdf.</ref> | ||
Revision as of 05:27, January 11, 2013
Backdoor spending authority in the federal budget is budget authority to incur obligations that evades the normal Congressional appropriations process because it is provided in legislation other than appropriation acts. Spending authority is the technical term for backdoor authority[1], and defined in section 401(c)(2) of the Congressional Budget Act of 1974, as amended, as various types of authority to obligate the United States to make payments, the budget authority for which is not provided in advance in appropriations acts.
Various types of backdoor spending authority include authority to enter into contracts; to incur indebtedness; to make payments (including loans, grants and entitlements) to persons or governments who meet requirements established by law; to allow United States government executive departments and agencies to forgo collection of proprietary offsetting receipts[2]; and to make any other payments (including loans, grants, and payments from revolving funds).
From the perspective of the appropriations committees, funding by these forms of spending authority slips away from their control through legislative back doors. However, the Congressional Budget Act of 1974 gave those committees some control over new borrowing and contract authority.
Origins and issues
Originally created by a parliamentary ruling of the House of Representatives in 1949, "backdoor spending" devices have been held not to constitute appropriations. The ruling permitted legislative committees, which are specifically prohibited from handling appropriations matters, to authorize agencies to obtain funds via the "backdoor" method. In some cases these spending authorizations do not come before the appropriations committees for review.[3]
- One type of backdoor is contract authority which permits an agency to obligate funds in advance of appropriations. The matter comes before the appropriations committees only when money is needed to liquidate the obligation, too late for them to exercise any meaningful control.
- Another backdoor strategy is to authorize agencies to borrow funds from the Treasury or from the public. Borrowing authority outside the appropriations process has been authorized since this backdoor was opened in 1932.
- The third and most prevalent form of backdoor is a mandatory entitlement of specified payments to eligible beneficiaries. Most entitlements are open-ended: their cost depends on the varying number of claimants and amounts allowable to each, rather than on current legislative decisions.[4] Most entitlements are also in the form of permanent appropriations that bypass the appropriations committees altogether. Even when the entitlements go through the regular appropriations process (as is the case with public assistance and veterans' benefits) the appropriations committees have no real say over the amounts that are to be spent. [5]
The Congressional Budget and Impoundment Control Act of 1974 originally was intended to limit and reform backdoor authority[6][7], however by 2010, President Obama's Simpson-Bowles Commission reported the that tax code had become riddled with $1.1 trillion (roughly equal to annual projected deficits) in backdoor spending as hidden "tax expenditures.[8]
See also
- ↑ Glossary of Terms in the Federal Budget Process, Louise M. Slaughter.
- ↑ collection of some taxes, fees and debts justly due.
- ↑ pp. 13-14 pdf.
- ↑ See Discretionary spending
- ↑ The Battle of the Budget, Allen Schick, Proceedings of the Academy of Political Science, Vol. 32, No. 1, Congress against the President, (1975), pp. 51-70. Published by: The Academy of Political. JSTOR.
- ↑ http://www.gao.gov/assets/210/202440.html
- ↑ http://appropriations.house.gov/about/
- ↑ The Moment of Truth: Report of the National Commission on Fiscal Responsibility and Reform. December 2010. The White House. P. 29, pdf.