BCA 2011 (Contents)

Budget Control Act of 2011

CRS Summary of Debt Increase in the Budget Control Act of 2011

CRS: The Debt Limit Since 2011

The Budget Control Act of 2011

On July 25, 2011, the Budget Control Act of 2011 was introduced in different forms by both House Speaker Boehner (House Substitute Amendment to S. 627) and Majority Leader Reid (S. Amdt. 581 to S. 1323). Subsequently, on August 2, 2011, President Obama signed into law a substantially revised compromise measure (Budget Control Act, BCA; P.L. 112-25), following House approval by a vote of 269-161 on August 1, 2011, and Senate approval by a vote of 74-26 on August 2, 2011.34 This measure included numerous provisions aimed at deficit reduction, and would allow a series of increases in the debt limit of up to $2,400 billion ($2.4 trillion) subject to certain conditions.35 These provisions eliminated the need for further increases in the debt limit until early 2013.

In particular, the BCA included major provisions that

• imposed discretionary spending caps, enforced by automatic spending reductions, referred to as a “sequester”;^[36]
• established a Joint Select Committee on Deficit Reduction, whose recommendations would be eligible for expedited consideration;
• required a vote on a joint resolution on a proposed constitutional amendment to mandate a balanced federal budget;^[37] and
• instituted a mechanism allowing for the President and Treasury Secretary to raise the debt ceiling, subject to congressional disapproval.

Debt Limit Increases Under the BCA

The legislation provides a three-step procedure by which the debt limit can be increased. First, the debt limit was raised by $400 billion, to $14,694 billion on August 2, 2011, following a certification of the President that the debt was within $100 billion of its legal limit.^[38]

A second increase of $500 billion occurred on September 22, 2011, which was also triggered by the President’s certification of August 2. The second increase, scheduled for 50 days after that certification, was subject to a joint resolution of disapproval. Because such a resolution could be vetoed, blocking a debt limit increase would be challenging. The Senate rejected a disapproval measure (S.J.Res. 25) on September 8, 2011, on a 45-52 vote. The House passed a disapproval measure (H.J.Res. 77) on a 232-186 vote, although the Senate declined to act on that measure. The resulting increase brought the debt limit to $15,194 billion.

In late December 2011, the debt limit came within $100 billion of its statutory limit, which triggered a provision allowing the President to issue a certification that would lead to a third increase of $1,200 billion.^[39] By design, that increase matched budget reductions slated to be made through sequestration and related mechanisms over the FY2013-FY2021 period. That increase was also subject to a joint resolution of disapproval. The President reportedly delayed that request to allow Congress to consider a disapproval measure.^[40] On January 18, 2012, the House passed such a measure (H.J.Res 98) on a 239-176 vote. The Senate declined to take up a companion measure (S.J.Res. 34) and on January 26, 2012, voted down a motion to proceed (44-52) on the House-passed measure (H.J.Res 98), thus clearing the way for the increase, resulting in a debt limit of $16,394 billion.

The third increase could also have been triggered in two other ways.^[41]A debt limit increase of $1,500 billion would have been permitted if the states had received a balanced budget amendment for ratification. A measure (H.J.Res. 2) to accomplish that, however, failed to reach the constitutionally mandated two-thirds threshold in the House in a 261–165 vote held on November 18, 2011.^[42] The debt limit could also have been increased by between $1,200 billion and $1,500 billion had recommendations from the Joint Select Committee on Deficit Reduction, popularly known as the Super Committee, been reported to and passed by each chamber. If those recommendations had been estimated to achieve an amount between $1,200 billion and $1,500 billion, the debt limit increase would be matched to that figure. The Joint Select Committee, however, was unable to agree on a set of recommendations.

[36] Sequestration is a mechanism that directs the President to cancel budget authority or other forms of budgetary resources in order to reach specified budget reduction targets. Balanced Budget and Emergency Deficit Control Act of 1985 (P.L. 99-177) …  introduced sequestration procedures into the federal budget process. Those sequestration procedures were modified in subsequent years to address separation of powers issues and other concerns. For details, see CRS Report R41901, Statutory Budget Controls in Effect Between 1985 and 2002, by Megan S. Lynch. Also see The Budget Control Act and Alternate Defense and Non-Defense Spending Paths, FY2012-FY2021, congressional distribution memorandum, November 16, 2012, available from authors upon request.

[37] See CRS Report R41907, A Balanced Budget Constitutional Amendment: Background and Congressional Options, by James V. Saturno and Megan S. Lynch.

[38] White House, Message from the President to the U.S. Congress, August 2, 2011, http://m.whitehouse.gov/the-pressoffice/2011/08/02/message-president-us-congress. [See below below for text of the certification message.]

[39] For example, on December 30, 2011, debt subject to limit was $15,180 billion, just $14 billion below its statutory limit. The U.S. Treasury pays interest to Social Security and certain other trust funds in the form of Treasury securities at the end of June and December, which increases debt subject to limit.

[40] CQ Roll Call Daily Briefing, January 3, 2012.

[41] Congress could have considered a joint resolution of disapproval for this increase

[42] Ratification requires approval by legislatures of three-fourths of the states. Article V specifies other means of amendment involving constitutional conventions as well.

Source: CRS – The Debt Limit Since 2011 (R43389) March 29, 2018, pp. 8-9 

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