The term off-budget generally means that language is placed in law removing a program, project or activity from the Congressional Budget Act of 1974, the Balanced Budget and Emergency Deficit Control Act of 1985, and the President’s Budget submission under section 1105 of the Title 31 of the U.S. Code. A typical construction can be found in section 13301 of the Budget Enforcement Act of 1990, which is one of the provisions removing Social Security from budgetary policy.
Those budgetary accounts (either federal or trust funds) designated by law as excluded from budget totals. As of the date of this glossary, the revenues and outlays of the two Social Security trust funds (the Old-Age and Survivors Insurance Trust Fund and the Disability Insurance Trust Fund) and the transactions of the Postal Service are the only off-budget accounts. The budget documents routinely report the on-budget and off-budget amounts separately and then add them together to arrive at the consolidated government totals.
Section 406 (CBA) was redesignated as section 405 (CBA) by the Budget Enforcement Act of 1997 (Pub. L. 105-33). It was added to the Congressional Budget Act of 1974 by section 214 (BBEDCA). Before its enactment, a number of agencies were treated as “off-budget” but this amendment brought all government entities back on budget, except for the Social Security program.
Definition of “Off-Budget” Added by BBEDCA
Section 201 (BBEDCA) made significant changes to the Congressional Budget Act of 1974. Among them was the addition of a definition to section 3 (CBA) for “off-budget” that read as follows: Definition of “Off-Budget” included in
(8) The term “off-budget Federal entity” means any entity (other than a privately-owned Government-sponsored entity)—
(A) which is established by Federal law, and
(B) the receipts and disbursements of which are required by law to be excluded from the totals of—
(i) the budget of the United States Government submitted by the President pursuant to section 1105 of title 31, United States Code, or
(ii) the budget adopted by the Congress pursuant to title III of this Act.
Joint Explanatory Statement of Managers description of the above definition:
(3) Off-budget Federal entity.—Current law does not contain a definition of off-budget Federal entity”.
The House amendment did not define “off-budget Federal entity”.
The Senate amendment did not define “off-budget Federal entity”.
The conference agreement defines “off-budget Federal entity” as any entity (other than a privately-owned Government-sponsored entity) which is established by Federal law, and the budget receipts and disbursements of which would, but for this Act, be required to be excluded from the President’s budget and the congressional budget. (See also discussion of “Off-Budget Federal Entities”.
BBEDCA Conference Report Explanation of Off-Budget Entities
Joint Explanatory Statement of Managers (H. Rept. 99-433)
Balanced Budget and Emergency Deficit Control Act of 1985
m. Off-Budget Entities
The House amendment required that off-budget activities be included in both the President’s budget and concurrent budget resolutions. The House amendment also required that receipts and disbursements of the Federal Financing Bank (FFB) with respect to loan obligations of another Federal agency be included in the accounts of that agency.
The Senate amendment included substantially similar provisions.
Sections 201(a), 214, 223, and 261 of the conference agreement include language regarding the treatment of Federal agencies or accounts with “off-budget” status. In general, off-budget Federal entities are to be treated as on-budget for the purposes of this Act and the Congressional Budget Act.
Definition of Off-budget; past Budget treatment. Section 201(a) includes a definition of “off-budget”, based upon Senate language. The definition is intended to conform with existing usage of the term. The term is not intended to cover Government-sponsored enterprises, which are privately owned and are therefore not part of the Federal Government.
Off-budget entities to be treated as on-budget entities. The deficit targets-the Maximum Deficit Amounts-are intended to include both on-budget and off-budget entities.
Section . Off-Budget Agencies, Programs, and Activities.
Section [405(a)] provides that budgetary activities of federal agencies, including budget authority, credit authority, and estimates of outlays and receipts, which are off-budget immediately prior to enactment of this section, shall be included in the President’s and the Congress’ budgets.
Section [405(b)] provides that all receipts and disbursements of the Federal Financing Bank with respect to any obligations issued, sold, or guaranteed by a Federal agency shall be treated as a means of financing such agency.
(See also discussions of the treatment of Social Security and “Off-Budget Federal Entities”.)
Definition of Off-budget Federal Entity
Off-budget Federal Entity: Any Federal fund or trust fund whose transactions are required by law to be excluded from the totals of President’s budget submission and Congress’ budget resolution, despite the fact that these are part of the government’s total transactions. Current law requires that the Social Security trust funds (the Federal Old Age, Survivors, and Disability trust fund) and the Postal Service be off-budget. However, these entities are reflected in the budget in that they are included in calculating the deficit in order to derive the total government deficit that must be financed by borrowing from the public or by other means. All other federal funds and trust funds are on budget.(See Unified Budget.)
[The Congressional Budget Process: An Explanation, Appendix J (Glossary), Committee on the Budget of the U.S. Senate, S. Prt. 105-67 (Revised December 1998).]
Social Security As Off-Budget
The Social Security program is considered “off-budget” as that term relates to the outlays and receipts of its benefits. Though its administrative functions are provided through annual appropriations, this normally requires a special authority, which is included in annual budget resolutions. Below is how the “off-budget” language appears in the Social Security Act, though other language appears in the Congressional Budget Act of 1974 and in section 13301 (BEA 1990).
Section 710 of the Social Security Act (42 U.SC. 911) currently reads as follows:
Section 710. Budgetary Treatment of Trust Fund Operations.
(a) The receipts and disbursements of the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund and the taxes imposed under sections 1401 and 3101 of the Internal Revenue Code of 1986 shall not be included in the totals of the budget of the United States Government as submitted by the President or of the congressional budget and shall be exempt from any general budget limitation imposed by statute on expenditures and net lending (budget outlays) of the United States Government.
(b) No provision of law enacted after December 12, 1985 (other than a provision of an appropriation Act that appropriated funds authorized under this chapter as in effect on December 12, 1985) may provide for payments from the general fund of the Treasury to any Trust Fund specified in subsection (a) of this section or for payments from any such Trust Fund to the general fund of the Treasury.”