§296d. Bipartisan Budget Act of 2019 (General)

BBA 2019 (Contents)

Bipartisan Budget Act of 2019

Bipartisan Budget Act of 2019, Pub. L. 116-37; 133 Stat. 1049; August 2, 2019; H.R. 3877 (116th Congress)

General

The Bipartisan Budget Act of 2019 was enacted on [xxx], 2019 .

The Bipartisan Budget Act of 2019 was negotiated between the Congress and the President in late July of 2019, and replicated the previous three agreements in form and the content, while varying in the specifics, was similar in the subjects they addressed to the BBA 2013, BBA 2015, and BBA 2018. Media reports indicated that the Treasury Secretary Steven Mnuchin negotiated the deal with Speaker Pelosi. Budget negotiations vary as to those who take the lead in coming to the terms, colloquially called being “at the table.” In this case, it appears the House Republicans were largely shunted aside, with some conservative Members maintaining the spending limits should be observed and that spending should be reduced in relation to increasing the debt limit.

This bill increases discretionary spending limits, suspends the debt limit, and modifies budget enforcement procedures.

The bill increases the FY2020 and FY2021 discretionary spending limits for defense and nondefense spending. The bill also (1) specifies limits for Overseas Contingency Operations funding, which is exempt from discretionary spending limits; and (2) requires the FY2020 discretionary spending limits to be adjusted to accommodate specified funding for the 2020 Census.

The bill suspends the public debt limit through July 31, 2021. On August 1, 2021, the limit will be increased to accommodate obligations issued during the suspension period.

The bill also includes provisions that

set forth procedures for enforcing spending and revenue levels consistent with this bill as if they were included in congressional budget resolutions for FY2020 and FY2021;
specify limits on advance appropriations;
extend the sequestration (automatic spending cuts) for certain mandatory spending programs through FY2029;
extend the authority to collect certain customs user fees through FY2029;
extend and modify Senate points of order regarding advance appropriations, certain changes in mandatory programs (CHIMPs), and designations of funds for Overseas Contingency Operations; and
reset the balances on the Pay-As-You-Go (PAYGO) scorecards established by the Statutory Pay-As-You-Go Act of 2010.

Discretionary Spending Amendment

TITLE I—BUDGET ENFORCEMENT

Section 101(a) of Title I of the Act is the central aspect of the bill because it raises the discretionary spending limits for fiscal years 2020 and 2021. For accuracy, this entails four discrete spending limits: Each year has one limit for budget authority on defense spending, defined as those programs in Function 050; and one for non-defense spending, defined as everything else. These are increased from the OMB revised discretionary spending limits. See table below:

	FY2020		FY2021
	Preview Report	BBA 2019	Preview Report	BBA 2019
Defense	$576.175 billion	$666.5 billion	$644.0 billion	$671.5 billion
Non-Defense	$543.193 billion	$621.5 billion	$590. billion	$626.5 billion

Section 102 of the Act resets the pay-as-you-go balances to zero. This is done to avoid a sequestration should one be necessary due to increases in spending or decreases in revenue that cause deficits to be higher. This only applies to sequestrations ordered pursuant to the Statutory Pay-As-You-Go Act of 2010 (Pub. L. 111-139), not those ordered under section 251A of the Balanced Budget and Emergency Deficit Control Act of 1985, often referred to as the “BCA Sequester” after the Budget Control Act of 2011 (Pub. L. 112-25), the law that amended BBEDCA to cause their imposition.

TITLE II—Establishing A Congressional Budget

This title sets forth deeming language that provides enforcement procedures for the Congress in the stead of an actually formal budget resolution adopted pursuant to section 301 of the Congressional Budget Act of 1974.

Debt Limit Increase

TITLE III —TEMPORARY EXTENSION OF PUBLIC DEBT LIMIT

The BBA 2019 increases the debt limit but does not directly amend title 31 of the U.S. Code, section 301 (BBA 2019) deactivates the applicable section of law that imposes the debt limit. It reads as follows: “Section 3101(b) of title 31, United States Code, shall not apply for the period beginning on the date of the enactment of this Act and ending on July 31, 2021.”

The rest of the section limits the Federal Government from running at a higher level of spending in order to build up some form of reserve in order to cushion the effect of the debt limit when it is reimposed on August 1, 2021.

Offsets

Title IV—Offsets

The BBA 2019 includes two offsets set forth in section 401 and section 402:

Section 401. Customs user fees.

The BBA 2019 extends the passenger and conveyance processing fees and the merchandise processing fee through September 30, 2029. Extensions of Customs user fees were included in the BBA 2013, the Highway and Transportation Funding Act of 2014, have been included in Senate unemployment insurance bills, and various others. The fees periodically expire, and though it is common knowledge they will be extended to keep current policy the same, because they expire, technically they fall out of the baseline and hence extending them is an easy way to generate receipts in ten years as an offset for whatever bill they are included.

This generates an increase in receipts of $15,584 between fiscal years 2027 through 2029.

Section 402. Extension of Direct Spending Reductions Through Fiscal Year 2029.

This section continues the sequestration first imposed under the amendments made by the Budget Control Act of 2011 (Pub. L. 112-25). It requires the President to sequester the same percentage of direct spending in 2028 and 2029 as has been sequestered since 2021. This is an across-the-board reduction in resources for all non-exempt direct spending programs. Under section 255 (BBEDCA) virtually all such programs are removed from the “sequester base” and special rules apply for certain other programs. For example Medicare, while subject to the reduction, is capped at 2 percent of program costs (while sequestration under the Statutory Pay-As-You-Go Act of 2011, the maximum is 2 percent).

CBO Estimate: Table for Direct Spending Effects