Balanced Budget and Emergency Deficit Control Act of 1985

Title II—Deficit Reduction Procedures

PART A—CONGRESSIONAL BUDGET PROCESS

SUBPART II—AMENDMENTS TO TITLE IV OF THE CONGRESSIONAL BUDGET ACT OF 1974

Sec. 211. New spending authority.^[1]

Section 401 of the Congressional Budget Act of 1974 is amended to read as follows:

“BILLS PROVIDING NEW SPENDING AUTHORITY

“Sec. 401. (a) Controls on Legislation Providing Spending Authority.—It shall not be in order in either the House of Representatives or the Senate to consider any bill, resolution, or conference report, as reported to its House which provides new spending authority described in subsection (c)(2) (A) or (B) (or any amendment which provides such new spending authority), unless that bill, resolution, conference report, or amendment also provides that such new spending authority as described in subsection (c)(2)(A) or (B) is to be effective for any fiscal year only to such extent or in such amounts as are provided in appropriation Acts.

“(b) Legislation Providing Entitlement Authority.—

“(1) It shall not be in order in either the House of Representatives or the Senate to consider any bill or resolution which provides new spending authority described in subsection (c)(2)(C) (or any amendment which provides such new spending authority) which is to become effective before the first day of the fiscal year which begins during the calendar year in which such bill or resolution is reported.

“(2) If any committee of the House of Representatives or the Senate reports any bill or resolution which provides new spending authority described in subsection (c)(2)(C) which is to become effective during a fiscal year and the amount of new budget authority which will be required for such fiscal year if such bill or resolution is enacted as so reported exceeds the appropriate allocation of new budget authority reported under section 302(b) in connection with the most recently agreed to concurrent resolution on the budget for such fiscal year, such bill or resolution shall then be referred to the Committee on Appropriations of that House with instructions to report it, with the committee’s recommendations, within 16 calendar days (not counting any day on which that House is not in session) beginning with the day following the day on which it is so referred. If the Committee on Appropriations of either House fails to report a bill or resolution referred to it under this paragraph within such 15day period, the committee shall automatically be discharged from further consideration of such bill or resolution and such bill or resolution shall be placed on the appropriate calendar.

“(3) The Committee on Appropriations of each House shall have jurisdiction to report any bill or resolution referred to it under paragraph (2) with an amendment which limits the total amount of new spending authority provided in such bill or resolution.

“(c) Definitions.—

“(1) For purposes of this section, the term ‘new spending authority’ means spending authority not provided by law on the effective date of this Act, including any increase in or addition to spending authority provided by law on such date.

“(2) For purposes of paragraph (1), the term ‘spending authority’ means authority (whether temporary or permanent)—

“(A) to enter into contracts under which the United States is obligated to make outlays, the budget authority for which is not provided in advance by appropriation Acts;

“(B) to incur indebtedness (other than indebtedness incurred under chapter 31 of title 31 of the United States Code) for the repayment of which the United States is liable, the budget authority for which is not provided in et seq. advance by appropriation Acts;

“(C) to make payments (including loans and grants), the budget authority for which is not provided for in advance by appropriation Acts, to any person or government if, under the provisions of the law containing such authority, the United States is obligated to make such payments to persons or governments who meet the requirements established by such law;

“(D) to forego the collection by the United States of proprietary offsetting receipts, the budget authority for which is not provided in advance by appropriation Acts to offset such foregone receipts; and

“(E) to make payments by the United States (including loans, grants, and payments from revolving funds) other than those covered by subparagraph (A), (B), (C), or (D), the budget authority for which is not provided in advance by appropriation Acts.

Such term does not include authority to insure or guarantee the repayment of indebtedness incurred by another person or government.

“(d) Exceptions.—

“(1) Subsections (a) and (b) shall not apply to new spending authority if the budget authority for outlays which will result from such new spending authority is derived—

“(A) from a trust fund established by the Social Security Act (as in effect on the date of the enactment of this Act); or

“(B) from any other trust fund, 90 percent or more of the receipts of which consist or will consist of amounts (transferred from the general fund of the Treasury) equivalent to amounts of taxes (related to the purposes for which such outlays are or will be made) received in the Treasury under specified provisions of the Internal Revenue Code of 1954.

“(2) Subsections (a) and (b) shall not apply to new spending authority which is an amendment to or extension of the State and Local Fiscal Assistance Act of 1972, or a continuation of the program of fiscal assistance to State and local governments provided by that Act, to the extent so provided in the bill or resolution providing such authority.

“(3) Subsections (a) and (b) shall not apply ·to new spending authority to the extent that—

“(A) the outlays resulting therefrom are made by an organization which is (i) a mixed-ownership Government corporation (as defined in section 201 of the Government Corporation Control Act), or (ii) a wholly owned Government corporation (as defined in section 101 of such Act) which is specifically exempted by law from compliance with any or all of the provisions of that Act, as of the date of enactment of the Balanced Budget and Emergency Deficit Control Act of 1985; or

“(B) the outlays resulting therefrom consist exclusively of the proceeds of gifts or bequests made to the United States for a specific purpose.”.

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Counsel Notes

[1] Sec. 211 of BBEDCA amended section 401 of the Congressional Budget Act of 1974, In section 401(c)(2), it established and defined the term “new spending authority”; this term was replaced by “entitlement authority” when section 401 (CBA) was amended by the Budget Enforcement Act of 1997. In particular section 401, as amended by section 211, defined “spending authority” as the authority to enter into obligations “not provided in advance by appropriation Acts;”. Section 211 (BBEDCA) amended  section 401 (CBA) to read as follows:

“(c) Definitions.—

“(1) For purposes of this section, the term ‘new spending authority’ means spending authority not provided by law on the effective date of this Act, including any increase in or addition to spending authority provided by law on such date.

“(2) For purposes of paragraph (1), the term ‘spending authority’ means authority (whether temporary or permanent)—

“(A) to enter into contracts under which the United States is obligated to make outlays, the budget authority for which is not provided in advance by appropriation Acts;

“(B) to incur indebtedness (other than indebtedness incurred under chapter 31 of title 31 of the United States Code) for the repayment of which the United States is liable, the budget authority for which is not provided in et seq. advance by appropriation Acts;

“(C) to make payments (including loans and grants), the budget authority for which is not provided for in advance by appropriation Acts, to any person or government if, under the provisions of the law containing such authority, the United States is obligated to make such payments to persons or governments who meet the requirements established by such law;

“(D) to forego the collection by the United States of proprietary offsetting receipts, the budget authority for which is not provided in advance by appropriation Acts to offset such foregone receipts; and

“(E) to make payments by the United States (including loans, grants, and payments from revolving funds) other than those covered by subparagraph (A), (B), (C), or (D), the budget authority for which is not provided in advance by appropriation Acts.

Such term does not include authority to insure or guarantee the repayment of indebtedness incurred by another person or government.

Summary of Amendment to Section 402 by Congressional Research Service

The amendment of section 401 (CBA) and its merger with section 402 (CBA) was summarized by CRS as follows:

Sections 401 and 402 of the CBA established controls over “backdoor spending.” Specifically, the sections prohibit the consideration of legislation providing new spending authority or new credit authority unless such authority is made effective only to the extent or in such amounts as are provided in annual appropriations acts. Section 10116 of the [BEA 1997] updates and consolidates these controls. It merges the two sections together into a new Section 401; Section 402 is repealed and subsequent sections are renumbered accordingly.

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LEGISLATIVE HISTORY NOTES

Public Laws

Pub. L. 99–177, title II, Resolving clause, Dec. 12, 1985, 99 Stat. 1056 (Balanced Budget and Emergency Deficit Control Act of 1985). 

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[BCR § 200.211]