H. Con. Res. 71 (115th Congress)

Concurrent Resolution on the Budget for Fiscal Year 2018

 Subtitle A—Budget Enforcement
sec. 311. prohibition on use of federal reserve surpluses as an offset.

In the House of Representatives, any provision of a bill or joint resolution, or amendment thereto or conference report thereon, that transfers any portion of the net surplus of the Federal Reserve System to the general fund of the Treasury shall not be counted for purposes of enforcing the Congressional Budget Act of 1974, this concurrent resolution, or clause 10 of rule XXI.[1] of the Rules of the House of Representatives.

Counsel notes

The Federal Reserve is not simply andoff-budgetagency but rathernon-budgetary“.  Through it’s operations, it generates annual income, primarily interest earned from banking institutions, which is then turned over to the Federal Government at the end of each year. As a matter of practice, “the Fed” retains an amount of these profits as a contingency fund. In 1993, Congress mandated the amount in this fund to be transferred to the Federal Government and the Congressional Budget Office, under pressure, scored this as an new revenue. In reality it was nothing more than an intragovernmental transfer, since the net position of the Government was unchanged.

This provision was likely added due to the enactment of the “FAST Act”, H.R. 22 (114th Congress) as Pub. L. 114-94.[1] 

This was the the transportation enacted in 2015 that used the transfer and the Budget Committees failed to prevent the spurious “offset” from being used.

See the Federal Reserve for more information on the “Fed Surplus” for more information.


[1] This clause of rule XXI is known as theCutgo Rule“.

House Budget Committee Report on Budget Resolution
(H. Rept. 115-240, Report on H. Con. Res. 71 (115th Congress))

Section 311. Prohibition on Use of Federal Reserve Surpluses as an Offset.

Section 311 provides that the proceeds from transfers of surpluses held by the Federal Reserve to the Department of the Treasury shall not be counted for purposes of budget enforcement. The Committee on the Budget views the transfer of the Federal Reserve’s surpluses as essentially a timing shift and not a substantive change in the Federal government’s fiscal posture and therefore should not be used to offset new financial obligations.


Section 310. (HCR71)


Sec. 312. (HCR71)

[BCD  § 010.43]


Supplemental Counsel Notes

[1] Legislative Text from the Fast Act (Pub. L. 114-94, 129 Stat. 1312). See page 1739 of that volume:  


Section 7(a) of the Federal Reserve Act (12 U.S.C. 289(a)) is amended by adding at the end the following:


‘‘(A) IN GENERAL.—The aggregate amount of the surplus funds of the Federal reserve banks may not exceed $10,000,000,000.

‘‘(B) TRANSFER TO THE GENERAL FUND.—Any amounts of the surplus funds of the Federal reserve banks that exceed, or would exceed, the limitation under subparagraph (A) shall be transferred to the Board of Governors of the Federal Reserve System for transfer to the Secretary of the Treasury for deposit in the general fund of the Treasury.’’.