What the Budget Resolution Is, and Isn’t

As the House and Senate Budget Committees process their respective versions of the budget resolution this month, it’s useful to remind ourselves exactly what this document is about. And what it isn’t about. Here’s a quick and dirty primer:

What the Budget Resolution is:
• A blueprint, in the broadest terms, on what the federal government should both spend and take in in revenue the next fiscal year, tracked out over 5 or 10 years (both chambers are looking at 10 year time frames this year)
• A document that limits discretionary spending with a top-line cap, known as the 302(a) allocation (although allocations have already been set forth in statute by the 2011 Budget Control Act)
• A statement of the party’s budget priorities—in this year’s case, Republican priorities in the House version and Democratic priorities in the Senate
• A way to instruct committees of jurisdiction to work on changes in tax law or mandatory spending programs

But more importantly, what it isn’t:
• A law—the budget resolution itself is not binding (it doesn’t go to the president for his signature)—it is meant only as a blueprint for congressional action on budgetary matters
• A detailed document—the resolution is a relatively short document and contains few details on what should be done with government programs, and to the extent there are specifics they are not binding anyway

The budget resolution can be very important, under certain conditions
The two conditions:
#1 – It needs to be agreed upon by the two chambers—known as a concurrent budget resolution. We haven’t had one since 2009.
#2 – The agreed to resolution needs instructions for authorizing committees to work on major changes in existing mandatory programs or tax law, and/or gives budgetary space to certain committees to create new programs. These instructions can be particularly effective if they are in the form of reconciliation instructions, which give a way forward that precludes filibusters in the Senate on some tax and mandatory spending measures.

The bottom line
A concurrent budget resolution can lay the groundwork for major changes in tax law and mandatory spending. This has happened many times in the past—paving the way for everything from tax increases and spending cuts (1993), to tax cuts (2001, 2003), to major new medical entitlements (2003, 2009). This year it may also reduce discretionary caps below the BCA level.

The problem, though, this time around, is that the versions in the two chambers are profoundly different in every important respect. If a compromise is achieved, it will be headline news.

But to be clear, while a concurrent budget resolution would make major changes in fiscal policy easier to pass, these policies can be enacted without one.