THE CONGRESSIONAL BUDGET AND IMPOUNDMENT CONTROL ACT OF 1974

Increased spending for programs initiated or expanded during the ``Great Society'' era of President Johnson, combined with escalating expenditures to support military efforts in Vietnam, heightened concern in Congress about budget deficits and spending controls. During the 1972 election campaign, President Nixon asked Congress for authority to cut Federal spending at his own discretion so as to stay under a proposed $250 billion ceiling for FY 1973. Congress refused to go along with such an open-ended grant of authority. Congress and the White House ultimately clashed sharply over President Nixon's aggressive impoundment of (refusal to spend) appropriated monies.

The escalation of legislative-executive budget confrontations triggered another effort at congressional budgetary reform. In 1972 Congress created a Joint Study Committee on Budget Control, composed of members from the House and Senate appropriations and tax committees as well as two at-large members from each Chamber. The Joint Study Committee heard from 37 witnesses in the course of conducting 7 days of hearings in March 1973. Their report represented both a continuation and an extension of the work of the two previous joint reorganization committees. Chief among their recommendations was improving ``the opportunity for the Congress to examine the budget from an overall point of view, together with a congressional system of deciding priorities.'' The report went on to state that it was ``important to recognize that the budget deficit be no larger (or the surplus no smaller) than the Congress considers appropriate for economic or other reasons.''

The Joint Study Committee's recommendations were reviewed and further refined by the House Rules Committee, the Senate Governmental Affairs Committee, and, finally, the Senate Rules and Administration Committee. In addition, consideration of legislation to codify and limit presidential impoundment authority was merged with efforts to enhance legislative budgetary controls. (The House Rules Committee and the Senate Judiciary Committee had earlier conducted 13 days of hearings on impoundment control during 1973).

In response to both the frustration generated by the fragmented nature of the congressional budget process and the perceived encroachment of the executive onto the budgetary turf of Congress, Congress passed the Congressional Budget and Impoundment Control Act of 1974. The major purposes of this Act were to reassert the congressional role in budgeting, to add some centralizing influence to the Federal budget process, and to constrain the use of impoundments.

The Act attempted to strengthen the congressional role in the making of the budget by beefing up and centralizing its budgetary capacity. It provided for additional committees and staff. The House and Senate Budget Committees were created to coordinate the congressional consideration of the budget, and the Congressional Budget Office was established as a source of nonpartisan analysis and information relating to the budget and the economy. Indeed, perhaps the most important early role for CBO was to provide an alternate economic forecast to the Congress.

In an effort to impose some order, the Act laid out a specific timetable for action on the budget. The instrument created to coordinate various portions of the budget was the concurrent budget resolution, a form of congressional decision that can bind congressional action but does not require a Presidential signature. This resolution, which the budget committees were to formulate by April 15 and the Congress was to pass no later than May 15 each year, was seen as an opportunity for the Congress to act on the budget as a unified whole, and provide a general budget blueprint for the authorizing and appropriations committees. Once the resolution was passed, the Congress reverted to its old procedures, but the committees were largely forced to live within the parameters set by the resolution.

The Act also codified the President's impoundment authority (in Title X, also known as the Impoundment Control Act), dividing impoundments into two distinct classes with different procedures for congressional consideration: rescissions, (or permanent cancellations, of budget authority (which would require congressional approval), and temporary deferrals of expenditures (which would remain in force unless rejected by Congress). Jurisdiction over both rescissions and deferrals was assigned to the Appropriations Committees of the House and Senate.12

There is general agreement that the Congressional Budget Act has led to a reassertion of the congressional role in budgeting, increased the attention of the Congress to the whole budget, and resulted in the control of impoundments. However, it is not viewed as an overwhelming success in other respects. First, it has not brought the order and timeliness to congressional budget action for which advocates had hoped. Deadlines for enacting budget resolutions and the passing of appropriation bills have routinely been missed. Second, establishing the Budget Committees and a centralized decisionmaking process may have increased the level of budgetary conflict in the Congress. Authority and power were not significantly redistributed among committees and the leadership; rather new layers of responsibilities and procedures were added to those that already existed. The result has been to create a good deal of repetition where the same issue -- for example, the fate of the B-2 bomber -- can be debated three times (during consideration of the budget resolution, the defense authorization bill, and the defense appropriation bill).

In part because of these perceived shortcomings, the interest of the Congress in budget process reform did not stop with the passage of the 1974 Act. In 1982, the House Rules Committee set up a Task Force on the Budget Process (known as the Beilenson Task Force), which was charged with making a comprehensive evaluation of the operation of the congressional budget process and making recommendations for improvements. The Task Force held 4 days of hearings in September 1982, followed by an additional hearing in April 1983 and finally 2 more days of hearings in February 1984. In addition, a number of business meetings took place at which budget specialists gave presentations on various aspects of the process.

The chief focus of the Task Force's efforts was the structure of the budget process, including the timing of budget resolutions and budget legislation, budget control, and coordination of activities by various committees. The Task Force examined diverse, even radical, alternatives to budgetary change, but their chief recommendations took a more evolutionary approach. They centered on a single budget resolution that would be binding upon adoption (the 1974 Budget Act had permitted two budget resolutions -- one to be adopted in May and another in September). Although the Task Force's 1984 recommendations were reported by the Rules Committee, the House took no action.

One of the most important developments to emerge from the 1974 Act has been reconciliation, (a process whereby Congress changes existing laws to conform with tax and spending levels set in a budget resolution), which developed into an important procedure for implementing the policy decisions and assumptions embraced in the budget resolution, in a way that was unforeseen when the Budget Act was written. Under the original design of the 1974 Budget Act, reconciliation had a fairly narrow purpose. It was expected to be used in conjunction with the second resolution adopted in the fall, and was to apply to a single fiscal year and be directed primarily at spending and revenue legislation acted on between the adoption of the first and second budget resolutions. Congress has subsequently used the procedure to enact far-reaching omnibus budget bills, first in 1981, but most recently in 1990 and 1993.



FOOTNOTES

12 The Senate Budget Committee also exercises jurisdiction over the macroeconomic implications of rescissions, their impact on priorities and aggregate spending levels, and their legality.


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