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Hearings of the House Committee on Rules

Points of Order That Guarantee Spending Levels


DATE: July 21, 1999

TIME: 10:00 AM

ROOM: H-313 The Capitol



Panel 1:

  • Hon. Bud Shuster (R-PA), Chairman, Committee on Transportation and Infrastructure
  • Hon. James Oberstar (D-MN), Ranking Member, Committee on Transportation and Infrastructure

Panel 2:

  • Hon. Bill Young (R-FL), Chairman, Committee on Appropriations
  • Hon. David Obey (D-WI), Ranking Member, Committee on Appropriations

Panel 3:

  • Hon. John Kasich (R-OH), Chairman, House Committee on the Budget

Panel 4:

  • Susan Irving, Associate Director for Budget Issues, General Accounting Office (GAO)


Recently, several committees in the House have begun to explore new proposals to address budgeting uncertainties resulting from tight spending constraints. A proposal of concern to the Rules Committee is one that seeks to enforce a minimum level of spending through points of order in the House. The purpose of the hearing is to obtain information from interested committee's about the procedural, institutional and policy implications of new House rules which seek to enforce guaranteed levels of spending for Federal programs.



There has been a debate over the last couple of years about maintaining the integrity of various federal trust funds. Central to this debate involves deciding how much trust fund money should be spent and on what types of programs. Some trust funds collect and dispense money without annual Congressional input, such as the Social Security trust fund. However, Congress has set up other trust funds with the intent to decide annually the amount and manner in which the trust fund money should be spent. The transportation trust funds (highway, aviation, and harbor) are examples of such trust funds.

The difference in treatment of the various federal trust funds may be explained by the underlying programs. Social Security is an entitlement program and is designed to function without annual Congressional review. Highway and aviation programs, on the other hand, are discretionary programs that are usually adjusted annually to reflect changed circumstances and changed Congressional priorities.

The question of how a trust fund's money should be spent is different from the question of how much of a trust fund's money should be spent. A guaranteed spending point of order confuses this distinction because it requires a discretionary program to be treated like an entitlement program. Although program funding is considered in the context of discretionary spending rules, a guaranteed spending point of order does not let Congress make the annual adjustments that are assumed by discretionary spending rules.

The TEA21 Point of Order

In the 105th Congress, the Transportation and Infrastructure Committee included a new point of order in the conference report to accompany the Transportation Equity Act for the 21st Century (TEA21) (P.L. 105-178). That point of order guaranteed minimum spending levels for highway and transit projects. That point of order has yet to be interpreted by the Parliamentarians or implemented in the House. As a result, during consideration of the FY99 Transportation Appropriation bill last year, an amendment to cut a highway project would have been difficult, if not impossible, to consider.

In response to the difficulty encountered during consideration of the FY99 Transportation Appropriation Bill, the Appropriations Committee included language on how to interpret the point of order in the Omnibus Appropriations Bill for FY99 (P.L.105-277). This language states that spending levels for TEA21 projects shall be interpreted in light of the Department of Transportation's program management practices. There has not been an occasion for the TEA21 point of order, with the Omnibus language, to be interpreted and implemented on the House Floor, since no amendment that might have triggered the application of the point of order was offered during consideration of the FY 2000 Transportation Appropriations bill.

The dearth of legislative history further complicates the TEA21 point of order, as affected by the Omnibus language. Both were inserted into conference reports, with only a vague indication of legislative intent and purpose and with no legislative history on application. Furthermore, the Rules Committee, which has jurisdiction over the point of order, was not consulted on whether a point of order would be the most effective way to guarantee trust fund monies would be completely used for trust fund programs.

The AIR21 Point of Order

As introduced, H.R. 1000, the Aviation Investment and Reform Act for the 21st Century (AIR21), contained a point of order guaranteeing certain funding levels for aviation spending. This point of order was substantially similar to the one contained in TEA21. During the Transportation and Infrastructure Committee markup on May 27, 1999, the point of order was removed from the bill, but language taking the aviation trust fund off-budget remained. H.R. 1000 passed the House with no changes to the off-budget language and with no point of order language in the bill. The Senate has not yet acted on its aviation bill, but it currently does not contain any point of order or off-budget language.

The Nuclear Waste Policy Act of 1999

As reported by the Committee on Commerce, H.R. 45, the Nuclear Waste Policy Act of 1999, contains a provision taking the Nuclear Waste Fund off budget. H.R. 45 retains the current mandatory nuclear waste fee which is paid by every nuclear utility, but excludes all receipts and disbursements of the Nuclear Waste Fund from the unified federal budget. Congressional appropriations would be required for all expenditures from the Nuclear Waste Fund, but the appropriations would not be subject to budget caps. The House has not yet acted on the bill, in part due to the controversy surrounding the off-budget language.

The Affect on the Budget Process

Every year, through the Congressional budget resolution, Congress establishes its federal fiscal priorities for that year. Part of the Congressional budget process includes the establishment of limits (or "caps") on discretionary spending, which currently exist through FY 2002. The current limits on discretionary spending were established in the Balanced Budget Act of 1997.

At various times, Congress has divided the discretionary spending caps into categories of spending, such as defense, non-defense, domestic and international. These categories set spending limits based on broad classes of spending, and such spending cannot be transferred from one category to the other. For example, Congress cannot cut defense spending to pay for non-defense domestic spending and vice versa. The Balanced Budget Act of 1997 established three categories of spending: Violent Crime Reduction, Defense, and Non-defense.

The TEA21 point of order changed the appropriations and budget process by creating new budget categories and setting statutory levels on spending. TEA21 amended the Balanced Budget and Emergency Deficit Control Act of 1985 to create two new budget categories: highway and mass transit. TEA21 also created a minimum statutory level of spending for those categories. The effect of these two changes in the appropriations and budget process is the creation of a guaranteed level of funding for highway and transit programs, which are separated from the rest of the discretionary budget in a way that prevents the use of these funds for other purposes. In other words, TEA21 spending receives priority under the spending caps, before any other spending. Even if the caps are lowered, spending for highway and mass transit programs will remain the same.

The concern is that a guaranteed spending point of order is rigid and balkanizes the budget process. The purpose of the budget process is to allow Congress to set overall fiscal priorities, year by year. In that way, Congress can react to the changing needs of the country. But a guaranteed spending point of order requires that certain amount of money be spent for a specific program, no matter the circumstances.

Concerns and Questions Raised by Guaranteed Spending Points of Order

Guaranteed spending points of order are one of several ways to require Congress to spend a certain amount of money on a specific program. The same result can be accomplished by making the program an entitlement, by taking the funding off-budget, or simply by Congress deciding each year that the appropriated level of funds should be the authorized level of funds. However, guaranteed spending points of order raise several unique questions that need to be addressed, especially since there is a possibility the AIR21 conference report may contain such a point of order.

First, with a TEA21- or AIR21-type point of order, who determines when the point of order is triggered? The point of order is triggered by any amendment, bill, or conference report that would "cause" total budget authority and obligation limitations to go below a certain designated level. But who determines when the spending level has gone down? The CBO does not score obligation limits and there is no procedural history to determine who will decide when obligation limits have been reduced.

Second, for the Parliamentarians to interpret and implement a TEA21- or AIR21-type point of order, political, not procedural decisions, will need to be made by others in the future. Some of those political decisions governing House procedure will be made by the Executive Branch because the point of order funding level will be adjusted by OMB each year. Does the House want the Administration to have input in the application of House rules?

Third, does the House want to burden non-FAA funding bills with the point of order? The Parliamentarians are concerned that the point of order contained in AIR21 as introduced is broad enough to lay against any general spending bill, including an automatic continuing resolution proposal or any short-term appropriations continuing resolution.

Forth, the point of order is enforceable only in the House, not the Senate. This may create substantial friction during any House-Senate conference concerning FAA funding or general appropriation measure, similar to the friction created by the Byrd Rule. Inquiries into how the TEA21 point of order has affected the appropriations process should clarify this concern.

Finally, the point of order creates an "entitlement like" program that covers both general fund money and trust fund money. Does the House want to allow transportation programs preference for general fund money? Is that fair to all the other worthy discretionary programs, like education programs or veterans' programs, that must compete for general fund money only after transportation programs has been fully funded?