Across-the-Board Spending Cuts in End-of Session Appropriations Acts





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In five recent fiscal years (FY2000-FY2005, excluding FY2002), Congress and the President
brought action on the regular appropriations acts for the fiscal year to a close by incorporating
unfinished acts into an omnibus appropriations measure. For FY2006, all of the regular
appropriations acts were enacted into law separately. Each of the five omnibus acts, and the
Defense Appropriations Act for FY2006 (which was one of the last two regular appropriations
acts enacted that session, on December 30, 2005), included an across-the-board spending cut to
offset part of the cost of annual appropriations acts for the fiscal year. Full-year funding for the
bulk of the FY2007 appropriations was provided at restrictive levels in a continuing resolution,
which did not include an across-the-board spending cut.
The six across-the-board spending cuts enacted previously ranged in size from 0.22% to 1.00% of
covered appropriations, and an estimated $1.1 billion to $8.5 billion in savings:
• the 0.38% cut for FY2000 in P.L. 106-113 saved an estimated $2.4 billion in
budget authority;
• the 0.22% cut for FY2001 in P.L. 106-554 saved an estimated $1.1 billion in
budget authority;
• the 0.65% cut for FY2003 in P.L. 108-7 saved an estimated $2.6 billion in budget
authority;
• the 0.59% cut for FY2004 in P.L. 108-199 saved an estimated $2.8 billion in
budget authority;
• the 0.80% cut for FY2005 in P.L. 108-447 saved an estimated $3.5 billion in
budget authority; and
• the 1.00% cut for FY2006 in P.L. 109-148 saved an estimated $8.5 billion in
budget authority.
The across-the-board cuts may be compared in several ways. First, the range of appropriations
subject to the spending cuts varied under each provision because of variations in the number of
regular appropriations acts covered and the specification of particular exemptions. Second, the
reductions imposed by the percentage cuts had to be made subject to a percentage limitation or a
proportionality requirement. Finally, the size of the percentage cut was reduced significantly
during the course of legislative action in two of the cases.
The significance of the spending cuts differed with regard to budget enforcement: (1) the FY2000
cut was needed to avoid a sequester; (2) the FY2001 cut was not needed to avoid a sequester, but
it contributed to overall discretionary spending being below the statutory limits; (3) the FY2003
and FY2005 cuts were needed to adhere to informal limits reached between congressional leaders
and President Bush in the absence of a budget resolution and the expiration of the statutory limits
on discretionary spending; and (4) the FY2004 and FY2006 cuts contributed to adherence to the
discretionary spending levels assumed in the budget resolutions for those years. This report will
be updated as developments warrant.






Backgr ound ..................................................................................................................................... 1
Discretionary Spending and Annual Appropriations Acts.........................................................1
Constraints on Discretionary Spending.....................................................................................2
Across-the-Board Spending Cuts in FY2000-FY2006....................................................................3
Similarities and Differences in the Five Provisions..................................................................4
FY2000 ...................................................................................................................................... 6
Budgetary Context..............................................................................................................6
Legislative Action...............................................................................................................7
Design and Implementation of the 0.38% Spending Cut...................................................11
FY2001 .................................................................................................................................... 14
Budgetary Context............................................................................................................14
Legislative Action.............................................................................................................15
Design and Implementation of the 0.22% Spending Cut..................................................16
FY2003 .................................................................................................................................... 18
Budgetary Context............................................................................................................18
Legislative Action.............................................................................................................18
Design and Implementation of the 0.65% Spending Cut..................................................21
FY2004 .................................................................................................................................... 23
Budgetary Context............................................................................................................23
Legislative Action.............................................................................................................23
Design and Implementation of the 0.59% Spending Cut..................................................24
FY2005 .................................................................................................................................... 26
Budgetary Context............................................................................................................26
Legislative Action.............................................................................................................27
Design and Implementation of the 0.80% Spending Cut..................................................28
FY2006 .................................................................................................................................... 29
Budgetary Context............................................................................................................29
Legislative Action.............................................................................................................30
Design and Implementation of the 1.00% Spending Cut..................................................30
Table 1. Summary of Across-the-Board Spending Cuts in End-of-Session Appropriations
Acts for FY2000-FY2006............................................................................................................3
Table 2. Coverage of Across-the-Board Spending Cuts for FY2000-FY2006................................4
Table 3. FY2000 Rescissions Made Under the 0.38% Cut............................................................13
Table 4. FY2001 Rescissions Made Under the 0.22% Cut............................................................17
Table 5. FY2003 Rescissions Made Under the 0.65% Cut............................................................22
Table 6. FY2004 Rescissions Made Under the 0.59% Cut............................................................25
Table 7. FY2006 Rescissions Made Under the 1.00% Cut............................................................32





Appendix. Text of the Across-the-Board Spending Cut Provisions..............................................33
Author Contact Information..........................................................................................................37





n five recent fiscal years (FY2000-FY2005, excluding FY2002), Congress and the President
brought action on the regular appropriations acts for the fiscal year to a close by incorporating 1
unfinished acts into an omnibus appropriations measure. For FY2006, all of the regular I


appropriations acts were enacted into law separately. Each of the five omnibus appropriations
acts, and the Defense Appropriations Act for FY2006 (which was one of the last two regular
appropriations acts enacted that session, on December 30, 2005), included an across-the-board 2
spending cut to offset part of the cost of annual appropriations acts for the fiscal year. Full-year
funding for the bulk of the FY2007 appropriations was provided at restrictive levels in a
continuing resolution, which did not include an across-the-board spending cut.
This report examines the use of across-the-board spending cuts in the end-of-session
appropriations acts for FY2000-FY2006 identified above, assessing the budgetary context leading
to the spending cut, recounting the legislative action on the spending cut provision, and reviewing
the provision’s design and implementation.

Discretionary spending, which accounts for roughly one-third of total federal spending, is
spending that is under the control of the House and Senate Appropriations Committees and is
provided in annual appropriations acts. For the most part, discretionary spending funds the
routine operations of the federal government, including the “salaries and expenses” accounts of
most agencies.
Discretionary spending is distinguished from direct spending (also referred to as mandatory
spending), which is controlled by the legislative committees of the House and Senate through
substantive law and funds entitlement and other mandatory programs, such as Medicare, federal
military and civilian retirement, and unemployment compensation. Discretionary spending and
direct spending together make up total federal spending.
Each year, Congress and the President enact discretionary spending in the form of regular 3
appropriations acts, as well as continuing and supplemental appropriations acts. If action is not
completed on all of the regular appropriations acts toward the end of a congressional session,
Congress sometimes will combine the unfinished appropriations acts into an omnibus measure.
An omnibus appropriations act may set forth the full text of each of the regular appropriations
acts included therein, or it may enact them individually by cross-reference. In addition, significant

1 For more information on this topic, see CRS Report RL32473, Omnibus Appropriations Acts: Overview of Recent
Practices, by Robert Keith.
2 The spending cuts also required reductions in obligation limitations for accounts where this was appropriate.
3 The number of regular appropriations acts was fixed at 13 between FY1968 and FY2005; the number of regular
appropriations acts was reduced to 11 for FY2006 and FY2007 following a realignment of subcommittees of the House th
and Senate Appropriations Committees at the beginning of the 109 Congress in 2005. A further realignment in 2007, th
at the beginning of the 110 Congress, increased the number or regular appropriations acts to 12. For more information
on these realignments, see CRS Report RL31572, Appropriations Subcommittee Structure: History of Changes from
1920-2007, by James V. Saturno.



portions of omnibus appropriations acts may deal with substantive legislation rather than 4
appropriations issues.
The House and Senate consider annual appropriations acts, and other budgetary legislation,
within constraints established in a yearly budget resolution required by the Congressional Budget 5
Act of 1974, as amended. Budget resolution policies are enforced by points of order that may be
raised during House and Senate consideration of spending, revenue, and debt-limit legislation. On
occasion, budget policies may be modified by agreements reached between congressional leaders
and the President; such modifications may be accommodated during legislative action through the
use of waivers of points of order, emergency spending designations, and other budgetary or
procedural devices.
During the period covering FY1991-FY2002, legislative action on annual appropriations acts also
was subject to limits on discretionary spending established by the Budget Enforcement Act
(BEA) of 1990 (which amended an underlying law, the Balanced Budget and Emergency Deficit 6
Control Act of 1985). Under this statutory mechanism, separate discretionary spending limits
were applied to two different measurements of spending—budget authority and outlays. Budget
authority represents the legal authority for agencies to incur obligations. Annual appropriations
are perhaps the most well known form of budget authority. Outlays represent the liquidation of
the obligation, usually in the form of an electronic funds transfer or the issuance of a check by the
Treasury Department.
While proposals have been made to renew the discretionary spending limits, efforts to enact them
have been unsuccessful.
The discretionary spending limits were enforced by the sequestration process.7 A sequester
involved automatic, largely across-the-board reductions in discretionary spending in order to
eliminate any breach of the limits. A separate sequestration process entailed automatic reductions
in mandatory spending if the enactment of revenue or mandatory spending measures caused a
violation of a “pay-as-you-go” (PAYGO) requirement. Under the Balanced Budget and
Emergency Deficit Control Act of 1985, as amended, the director of the Office and Management
and Budget (OMB) was charged with determining within 15 days after the close of a
congressional session whether a sequester of either kind was required for the fiscal year.
In order to adhere to restraints imposed by congressional budget resolutions, the discretionary
spending limits, and ad hoc budget agreements between congressional leaders and the President,

4 For more information on this topic, see CRS Report RL30619, Examples of Legislative Provisions in Omnibus
Appropriations Acts, by Robert Keith.
5 The Congressional Budget Act of 1974 is Titles I-IX of P.L. 93-344 (July 12, 1974); see 88 Stat. 297. For a general
discussion of budget enforcement procedures, see CRS Report 98-721, Introduction to the Federal Budget Process, by
Robert Keith.
6 The BEA of 1990 is Title XIII of P.L. 101-508 (November 5, 1990), the Omnibus Budget Reconciliation Act of 1990;
see 104 Stat. 1388-573 through 628. The 1985 act is Title II of P.L. 99-177 (December 12, 1985), a measure increasing
the public debt limit; see 99 Stat. 1037-1101. The statutory limits, and the process used to enforce them, were modified
by subsequent laws.
7 The sequestration process is discussed in detail in CRS Report RL31137, Sequestration Procedures Under the 1985
Balanced Budget Act, by Robert Keith.





or to meet other purposes, Congress and the President from time to time have incorporated
across-the-board cuts in discretionary budget authority into annual appropriations acts. While this
report addresses across-the-board spending cuts in end-of-session appropriations acts, principally
omnibus appropriations acts, the device has been included in other types of appropriations acts
considered at other points during a session as well. For example, Section 1403 (116 Stat. 898-
899) of the Supplemental Appropriations Act for Further Recovery From and Response To
Terrorist Attacks on the United States, 2002 (P.L. 107-206; August 2, 2002), required a $350
million cut in prior appropriations throughout the executive branch for administrative and travel 8
expenses.

During the period covering FY2000-FY2006, Congress and the President enacted into law toward
the end of the session (or early in the following session) five omnibus appropriations acts and one 9
regular appropriations act containing across-the-board spending cuts.
As shown in Table 1, the six acts included across-the-board spending cuts ranging in size from
0.22% to 1.00% of covered appropriations, and an estimated $1.1 billion to $8.5 billion in savings
in budget authority.
Table 1. Summary of Across-the-Board Spending Cuts in End-of-Session
Appropriations Acts for FY2000-FY2006
Total
Congress/ Fiscal Public Law Date Percentage Estimated
Session Year Number Enacted Reduction Savings a
($ billions)
106th / 1st 2000 P.L. 106-113 11/29/99 0.38% 2.4
106th / 2nd 2001 P.L. 106-554 12/21/00 0.22% 1.1
107th / 1st 2002 [none] —
107th / 2nd 2003b P.L. 108-7 02/20/03 0.65% 2.6
108th / 1st 2004b P.L. 108-199 01/23/04 0.59% 2.8
108th / 2nd 2005 P.L. 108-447 12/08/04 0.80% 3.5
109th / 1st 2006 P.L. 109-148 12/30/05 1.00% 8.5
Source: Prepared by the Congressional Research Service.
a. Estimated savings in budget authority. Savings amounts were obtained from the following Office of
Management and Budget “Appropriations 7-Day-After Reports” to Congress, available on the OMB website
at http://www.whitehouse.gov/omb/legislative/7day/index.html: (1) P.L. 106-113, January 3, 2000; (2) P.L.
106-554, January 15, 2001; and (3) P.L. 108-7, March 27, 2003; for FY2004 and FY2005, from the
Congressional Budget Office; and, for FY2006, from the Congressional Record (daily ed.), Dec. 18, 2005, p.

8 For further information on this spending cut, see OMB Bulletin 02-05 (July 29, 2002), Rescissions of Funds in
Administrative and Travel Accounts.
9 Another measure, which may be considered an “omnibus” appropriations act, was enacted into law during this period.
P.L. 106-377 combined the FY2001 VA-HUD Appropriations Act with the FY2001 Energy and Water Development
Appropriations Act. The measure is excluded from this analysis because it did not include an across-the-board cut.





H12260. The estimated savings differ from amounts provided by OMB in follow-up reports to Congress, as
indicated in tables presented later in this report.
b. Action on the regular appropriations acts for FY2003 and FY2004 occurred mainly in 2002 and 2003,
respectively, but the omnibus appropriations act bringing the process to a close in each year was not
enacted until early in the following session.
Following a brief discussion of the similarities and differences between the six spending-cut
provisions, each of them is discussed in more detail below.
In addition to the size of the percentage cut and the total amount of savings, as shown in Table 1,
the six across-the-board spending cuts may be compared in other ways.
First, the types of funding covered by the spending cuts varied under each provision (see Table
2). Initially (for FY2000 and FY2001), discretionary budget authority provided for the fiscal year
in the applicable appropriations acts, and obligation limits imposed in the acts, was covered. The
coverage of the spending cuts was expanded, beginning with FY2003, to advance appropriations
for the fiscal year provided in prior-year appropriations acts, as well as to contract authority for
the fiscal year subject to limitations set forth in the covered annual appropriations acts.
Table 2. Coverage of Across-the-Board Spending Cuts for FY2000-FY2006
Subject to Spending Cut:
Fiscal Year Types of Number of Regular Exemptions From Spending Cut
Funding Appropriations
Acts
2000 • FY2000 discretionary BA 13 • FY2000 military personnel accounts
(P.L. 106-113) • FY2000 obligation limits
2001 • FY2001 discretionary BA 12 • FY2001 military personnel accounts
(P.L. 106-554) • FY2001 obligation limits • FY2001 Labor-HHS-Education
appropriations act
• Specified FY2000 supplementals
2003 • FY2003 discretionary BA 11 • FY2003 Defense appropriations act
(P.L. 108-7) • FY2003 obligation limits • FY2003 Military Construction
• FY2003 advance appropriations appropriations act
in prior acts • Women, Infants, and Children (WIC)
• Certain FY2003 contract program
authority • Head Start program
• Veterans’ medical care
• NASA’s space shuttle program
2004 • FY2004 discretionary BA 11 • FY2004 Defense appropriations act
(P.L. 108-199) • FY2004 obligation limits • FY2004 Military Construction
• FY2004 advance appropriations appropriations act
in prior acts • Any FY2004 supplemental





Subject to Spending Cut:
Fiscal Year Types of Number of Regular Exemptions From Spending Cut
Funding Appropriations
Acts
• Certain FY2004 contract appropriations act
authority
2005 • FY2005 discretionary BA 10 • FY2005 Defense appropriations act
(P.L. 108-447) • FY2005 obligation limits • FY2005 Homeland Security
• FY2005 advance appropriations appropriations act
in prior acts • FY2005 Military Construction
• Certain FY2005 contract appropriations act
authority • Any FY2005 supplemental
appropriations act
2006 • FY2006 discretionary BA 11 • FY2006 Veterans Affairs accounts
(P.L. 109-148) • FY2006 obligation limits • FY2006 emergency spending
• FY2006 advance appropriations
in prior acts
• Certain FY2006 contract
authority
Source: Prepared by the Congressional Research Service.
Second, the number of regular appropriations acts covered by the spending cuts also varied under
each provision, ranging from 10 acts (for FY2005) to 13 acts (for FY2000).
Two of the spending cuts applied to all of the regular appropriations acts, whether they were
enacted separately or included in an omnibus appropriations act: (1) the FY2000 spending cut
covered the five acts incorporated into the omnibus measure for that year, as well as the eight acts
that had been enacted as freestanding laws; and (2) the FY2006 spending cut applied to all of the
then-11 regular appropriations acts for that year. The coverage of the spending cuts was expanded
by making them apply to funding provided for that fiscal year “in this or any other Act” (or
similar language).
In the remaining instances, between one and three of the regular appropriations acts were
exempted from the spending cuts: the Labor-HHS-Education appropriations act was exempted for
FY2001; the Homeland Security appropriations act was exempted for FY2005; and the Defense
and Military Construction appropriations acts were exempted for FY2003, FY2004, and 10
FY2005. Further exemptions were provided for specified accounts and programs and
supplemental appropriations acts. Military personnel accounts, for example, were exempted
specifically from the spending cuts for FY2000 and FY2001 (these accounts also were exempted
in subsequent years by virtue of the exclusion of the entire Defense appropriations act), and
appropriations for the Department of Veterans Affairs were exempted from the FY2006 spending
cut.

10 Exempted appropriations acts were referenced explicitly in the spending cut provisions, except for FY2003; in that
year, the spending cut was made applicable to the 11 regular appropriations acts covered by the omnibus measure, but
not to the Defense and Military Construction appropriations acts, which had been enacted as freestanding measures.





Third, the reductions imposed by the percentage cuts were made subject to a proportionality
requirement or a percentage limitation. The FY2000 cut required that defense accounts be
reduced uniformly; with regard to nondefense accounts, proportional cuts were not required, but
no program, project, or activity (PPA) within an account could be reduced by more than 15%. The
cuts for the other five years required proportional reductions to all accounts and PPAs.
Fourth, the size of the percentage cut was reduced significantly during the course of legislative
action in two instances. For FY2000, President Clinton first vetoed an appropriations act
providing for a 0.97% cut before agreeing to the omnibus legislation requiring a 0.38% cut.
During consideration of the FY2003 omnibus legislation, the Senate at one point had endorsed a
2.9% cut, which ultimately was reduced to 0.65%. In a third instance (for FY2005), the cut was
reduced slightly, from 0.83% to 0.80%, as a technical adjustment.
Fifth, the significance of the spending cuts differed with regard to budget enforcement. The
FY2000 cut was an integral component of the plan that successfully avoided a sequester at the
end of the session. The FY2001 cut contributed to overall discretionary spending being below the
statutory limits, but the across-the-board proved to be unnecessary in avoiding a sequester. With
regard to the FY2003 and FY2005 cuts, the House and Senate did not reach agreement on a
budget resolution for those years (and the statutory discretionary limits no longer were in effect);
nonetheless, the across-the-board cut was necessary in adhering to an informal limit reached
between congressional leaders and President Bush and in avoiding a veto of the omnibus
appropriations legislation. The FY2004 and FY2006 cuts contributed to keeping overall
discretionary spending within constraints established by the budget resolutions for those years, as
modified by agreements between congressional leaders and President Bush.
Finally, the FY2000 and FY2001 cuts instructed the OMB director to report to Congress (in the
President’s annual budget submission) on the implementation of the reductions, while the
FY2004 and FY2006 cuts instructed the OMB director to report such information to the House
and Senate Appropriations Committees within 30 days after enactment. The FY2003 and FY2005
cuts did not include any reporting requirement.
As the federal budget process for FY2000 unfolded in 1999, during the first session of the 106th
Congress, a policy emerged of keeping the level of discretionary spending within the statutory
limits while at the same time not “using” the Social Security surplus (i.e., incurring an on-budget 11
deficit). One of the purposes in adhering to the discretionary spending limits was to avoid a 12
sequester at the end of the session.
In order to enhance its efforts in trying to stay within the discretionary spending limits, Congress
and President Clinton used various budgetary devices and techniques, including emergency

11 This issue is discussed in more depth in CRS Report RL30353, Discretionary Spending Limits and the Social
Security Surplus, by Robert Keith.
12 The application of the process for this fiscal year is explained in detail in CRS Report RL30363, The Sequestration
Process and Across-the-Board Spending Cuts for FY2000, by Robert Keith.





spending designations, advance appropriations, rescissions, offsets in mandatory programs, 13
obligation and payment delays, and directed scoring. These devices either resulted in upward
adjustments in the limits, as was the case with the emergency spending designations, or were
counted as savings for the fiscal year. According to OMB, the adjustments and savings from these
devices amounted to tens of billions of dollars and averted the need for a sequester; in the
aggregate, discretionary spending enacted for FY2000 was $1.6 billion under the budget authority 14
limit and $3.5 billion under the outlay limit.
The Congressional Budget Office (CBO) also issued sequestration estimates, but they were only
advisory in nature; only the determinations made by the OMB director could have triggered a
sequester. For FY2000, CBO indicated that discretionary spending exceeded the limits by $6.7
billion in budget authority and $15.2 billion in outlays, which would have necessitated an across-15
the-board cut of about 4%.
One of the devices used to prevent the violation of the discretionary spending limits was the
inclusion of an across-the-board cut in the omnibus appropriations act used to wrap up
consideration of the regular appropriations acts for FY2000. According to estimates made by
OMB following the measure’s enactment, the 0.38% cut was expected to yield savings of $2.351 16
billion in budget authority and $1.356 billion in outlays for the fiscal year. (In the Final
Sequestration Report for FY2000, OMB increased its estimate of the savings in budget authority
to $2.357 billion.)
The provision requiring an across-the-board spending cut was included in a “miscellaneous
appropriations” portion of the omnibus appropriations act that contained other offsets. Savings
from the across-the-board cut, combined with the savings from the other offsets, amounted to
$6.827 billion in budget authority and $9.465 billion in outlays for FY2000.
Without the enactment of the 0.38% spending cut (or comparable offsets), the FY2000 limit for
discretionary budget authority would have been exceeded by about $0.8 billion and a sequester
would have occurred.
House and Senate interest in an across-the-board spending cut surfaced relatively late in the
session, after much of the annual appropriations process had been completed. Legislative action
on across-the-board cut proposals encompassed several different annual appropriations measures,
beginning with S. 1650 and including H.R. 3064 and H.R. 3194. The formulation of the proposal
evolved through the different stages of legislative action, from a sense-of-the-Senate statement, to
a 0.97% cut, and finally to a 0.38% cut.

13 These budgetary devices and techniques are discussed in (1) Congressional Budget Office, The Economic and
Budget Outlook: Fiscal Years 2001-2010, January 2000, pp. 76-77; and (2) Office of Management and Budget, OMB
Final Sequestration Report to the President and Congress for Fiscal Year 2000, January 25, 2000 (see especially Table
2 on pp. 4-6).
14 OMB Final Sequestration Report, ibid., Table 6, pp. 13-14.
15 Congressional Budget Office, Final Sequestration Report for Fiscal Year 2000, December 2, 1999, p. 1.
16 See the Office of Management and BudgetsAppropriations 7-Day-After Report” to Congress on P.L. 106-113,
available on the OMB website at http://www.whitehouse.gov/omb/legislative/7day/index.html.





On September 29, 1999, the Senate began consideration of S. 1650, its initial version of the
Labor-HHS-Education Appropriations Act for FY2000. On October 1, Senator Don Nickles, the
assistant majority leader, offered an amendment (number 1851) to the bill stating the sense of the
Senate that an across-the-board cut in appropriations should be adopted, if necessary, to avoid
incurring an on-budget deficit. On October 6, he offered a further amendment (number 1889) to
his underlying amendment. Amendment number 1889 was similar to the underlying amendment
and focused on “protecting Social Security surpluses,” stating the sense of the Senate that
Congress should ensure that the fiscal year 2000 appropriations measures do not result in an
on-budget deficit (excluding the surpluses generated by the Social Security trust funds) by
adopting an across-the-board reduction in all discretionary appropriations sufficient to 17
eliminate such deficit if necessary.
In describing his amendments, Senator Nickles indicated that an across-the-board cut of 1% of
discretionary appropriations might be needed to eliminate an estimated overage of about $5
billion; other Senators provided estimates that the overage might be much larger and that a cut of
5.5% might be needed. On October 6, the Senate adopted amendment number 1889 by a vote of
54-46. After tabling another amendment dealing with the issue, offered by Senator Frank
Lautenberg, Senator Nickles withdrew his underlying amendment. The Senate passed the bill the
next day without an across-the-board cut provision.
Following a veto by President Clinton on September 28 of the first District of Columbia
Appropriations Act for FY2000, the House and Senate developed a second version, H.R. 3064,
which also included the Labor-HHS-Education appropriations for FY2000. The conferees on the
measure inserted an across-the-board cut provision in Section 1001 of Division C of the act. The
House agreed to the conference report on the measure on October 28 by a vote of 218-211; the
Senate agreed to it on November 2 by a vote of 49-48.
Unlike the language that the Senate had considered earlier, Section 1001 set in place the
requirement for a specific cut in discretionary appropriations—0.97% of the total provided for
each account. The section also provided that the pay of Members of Congress, a permanent rather
than an annual appropriation, would be subject to the cut. (Under the sequestration process, the
pay of Members of Congress was not subject to reduction.)
Senator Ted Stevens, chairman of the Senate Appropriations Committee, described the provision
as a placeholder—in the face of a certain veto—until the final necessary reductions could be
negotiated with the Clinton Administration:
We have included ... against my best wishes, an across-the-board cut. That is primarily
because only the administration can identify some of the areas we can reduce safely without
harming the programs, and I am confident when we come to what we call the final period to
devise a bill, we will work out with the administration some offsets that will take care of the

17 The text of amendments number 1851 and 1889, and the accompanying remarks of Senator Nickles, are found in the
Congressional Record (daily ed.), vol. 145, no. 131, October 1, 1999, pp. S11774-S11780 and S11808.





bill. I am hopeful we will have no across-the-board cut, but if it comes, it will not be as large 18
as the one in this bill right now.
President Clinton vetoed H.R. 3064 on November 3.19 In his veto message to Congress, he stated:
I am vetoing H.R. 3064 because the bill, including the offsets section, is deeply flawed. It
includes a misguided 0.97 percent across-the-board reduction that will hurt everything from
national defense to education and environmental programs ... The bill is clearly
unacceptable. I have submitted a budget that would fund these priorities without spending
the Social Security surplus, and I am committed to working with the Congress to identify
acceptable offsets for additional spending for programs that are important to all Americans.
The House’s third version of a measure providing FY2000 appropriations for the District of
Columbia, H.R. 3194, became, in conference, a vehicle for four additional regular appropriations
acts and several legislative measures. In addition to dramatically expanding the scope of H.R. 20

3194, the conferees changed its title to the Consolidated Appropriations Act for FY2000.


The House adopted the conference report on November 18, 1999, by a vote of 296-135; the
Senate adopted it the next day by a vote of 74-24. President Clinton signed the measure into law 21
on November 29 as P.L. 106-113 (113 Stat. 1501-1537).
P.L. 106-113 was divided into two parts. Division A set forth the full text of the FY2000
appropriations for the District of Columbia. Division B provided appropriations for the remaining
four regular appropriations acts (in Section 1000(a)). Instead of including the full text of each act,
however, the subsection enacted individual measures by cross-reference. Each of the four acts, in
a form reflecting the final budget agreement reached between President Clinton and Congress,
was introduced as a separate bill on November 17, 1999; these four bills were cross-referenced as
introduced on that date.
Section 1000(a) of Division B also enacted five other measures by cross-reference. Each of these
measures also was introduced as a separate bill on November 17. The first of these other cross-
referenced measures, H.R. 3425, dealt with “miscellaneous appropriations” and included in Title
III (Fiscal Year 2000 Offsets and Rescissions) many of the savings required by the budget
agreement. In particular, Section 301 of H.R. 3425 (113 Stat. 1501A-303 and 304) required a
government-wide cut of 0.38% in discretionary appropriations.

18 See the remarks of Senator Ted Stevens in the Congressional Record (daily ed.), vol. 145, no. 152, November 2,
1999, p. S13623.
19 See District of Columbia Appropriations Act, 2000—Veto Message From the President of the United States
(H.Doc.No. 106-154) in the Congressional Record (daily ed.), vol. 145, no. 153, November 3, 1999, pp. H11441-
H11443.
20 For more detailed information on the contents and structure of the act, see CRS Report RS20403, FY2000
Consolidated Appropriations Act: Reference Guide, by Robert Keith.
21 On November 19, the House and Senate both passed H.Con.Res. 239, a measure making a technical correction in the
enrollment of the Consolidated Appropriations Act. The correction dealt solely with a portion of H.R. 3194 containing
State Department authorizations.





The remaining cross-referenced measures dealt with (1) amendments to the Balanced Budget Act
of 1997 pertaining to Medicare and related programs; (2) authorizations for the State Department;
(3) the federal Milk Marketing Orders program; and (4) the Intellectual Property and
Communications Omnibus Reform Act of 1999.
While the across-the-board cut provision sparked some strong criticism during House and Senate
floor debate on the conference report, its legislative history is relatively sparse. The joint
explanatory statement accompanying the conference report on the measure merely indicated: 22
“The conference agreement includes several offsets and rescissions.”
In the House, Speaker Dennis Hastert and other House leaders discussed it briefly in the context
of reducing waste, fraud, and abuse:
• Speaker Dennis Hastert
This bill also takes a very important first step in eliminating government waste. Every year
our government spends billions and billions of dollars, and we are saying in this bill, let us
take 38 cents out of every $100 that the Federal Government spends and find waste and
abuse. I think that is doable, and I think next year we ought to do the same thing, over and
over again, because that is what the American people expect us to do.
The across-the-board spending cut in this bill will force the agencies of government to take a
close look at their budget and see what frivolous spending can be eliminated. Taxpayers
deserve to have their money spent responsibly, and this bill will save the American taxpayers
from over $1 billion in excess spending. (Congressional Record (daily ed.), vol. 145, no.
164, November 18, 1999, p. H12800.)
• Majority Leader Richard Armey
Beginning in 1998, fiscal year 1999, and now with this budget agreement in fiscal year 2000,
we will have retired a third of a trillion dollars worth of debt for the American people. We
will have stopped the raid on Social Security forever. We will have enforced this with an
across-the-board spending reduction that acknowledges truly it is time now to be disciplined
to eliminate waste, inefficiency, fraud in the use of the taxpayers dollars. A new
commitment of good government in government. (Congressional Record (daily ed.), vol.
145, no. 164, November 18, 1999, p. H12766.)
• Majority Whip Tom DeLay
We tried to cut waste by just suggesting a 1 percent across-the-board cut. Incredibly, the
Democrats maintain that a measly 1 percent of waste could not be found in the Federal
Government. Well, even the President eventually agreed with us. Now we have an across-
the-board spending cut. (Congressional Record (daily ed.), vol. 145, no. 164, November 18,
1999, p. H12767.)
Representative David Obey, the ranking minority member of the House Appropriations
Committee, was sharply critical of the provision. In the course of asserting that the FY2000
appropriations measures involved about $45 billion in “gimmicks,” he observed:

22 See H.Rept. 106-479 in the Congressional Record (daily ed.), vol. 145, no. 163, pt. II, November 17, 1999, pp.
H12230-H12609 (especially p. H12503).





Another issue at the center of negotiations was whether to include a small across-the-board
cut. This cut was not necessary to reach the offset targets to make sure the bill was paid for;
more than enough money was available from other sources. It is simply an attempt by the
majority to create a symbol that could be used to pretend that in the midst of this orgy of
gimmickry in spending, that they are continuing to be fiscally responsible. (Congressional
Record (daily ed.), vol. 145, no. 164, November 18, 1999, p. H12742.)
There was hardly any discussion of the provision during Senate consideration of the conference
report. Senator John McCain suggested that it represented an abdication of budgetary
responsibility: “It resorts to an across-the-board budget cut to avoid dipping into the Social 23
Security surplus, rather than making the hard choices among other spending priorities.”
In his statement made upon signing H.R. 3194 into law on November 29, President Clinton did 24
not make any reference to the across-the-board cut.
In fashioning the 0.38% spending cut, Congress included several important features (the text of
the provision is provided in the 0). First, reductions made pursuant to the provision were to take
the form of rescissions of FY2000 budget authority (i.e., appropriations and offsetting
collections). Rescissions permanently cancel budget authority.
Second, the required spending cuts were to be applied only to the total discretionary budget
authority made available to each department and agency. Any mandatory resources made
available to a department or agency (e.g., permanent appropriations to fund an entitlement
program) would not be affected by the requirement.
Third, reductions were to be applied uniformly to each account for the Department of Defense
(and the defense activities of the Department of Energy), except that no reductions were to be
made in military personnel accounts. With regard to nondefense activities, there was no stated
requirement that reductions be applied uniformly to each department’s or agency’s accounts.
However, there was a requirement that no “program, project, or activity” (PPA) within an account 25
be reduced by more than 15%.
Finally, the OMB director was instructed to include in the President’s budget for FY2001 a report
specifying the reductions made to each account under the requirement.
Unlike the earlier provision in H.R. 3064 providing for a 0.97% cut, pay for Members of
Congress was not made subject to the reductions.

23 See the remarks of Senator John McCain in the Congressional Record (daily ed.), vol. 145, no. 165, pt. II, November
19, 1999, p. S15036.
24 See his statement in the Weekly Compilation of Presidential Documents, vol. 35, no. 48, December 6, 1999, pp.
2458-2465.
25 In the case of accounts funded by annual appropriations acts, the PPAs are defined in the acts and accompanying
reports. Generally, PPAs are listed in the Presidents budget under the “Program and Financing” schedule for each
account.





On November 24, 1999, OMB issued Bulletin 00-01, Rescission of FY2000 Discretionary Budget
Authority, providing guidance to agencies in how to comply with the requirement for the 0.38%
cut. OMB advised agencies to observe the following guidelines beyond those specified in the act:
• Reductions should be taken from the least critical funding available to the
agency;
• Reductions should be considered from enacted funding above the President’s
request;
• Wherever possible, no reductions should be taken that would require reductions-
in-force; and
• Agencies should make targeted recommendations rather than an across-the-board
funding cut.
The report required of the OMB director was part of the budget that President Clinton submitted
to Congress on February 7, 2000. The 17-page report was included in the Analytical Perspectives 26
volume as a separate chapter.
According to the report, a total of $2,356,909,000 in discretionary budget authority was rescinded
in 492 accounts (see Table 3). This included $9.7 million for the legislative branch and $14.0
million for the judicial branch.
Reductions in individual accounts ranged from $2 thousand for the “U.S. Commission for the
Preservation of America’s Heritage Abroad” account, to $116.4 million for the “Operation and
Maintenance, Navy” account. The largest share of the cuts, amounting to $1.055 billion and
involving 70 accounts, was allocated to military activities of the Department of Defense. The
other departments with cuts in excess of $100 million included the Departments of Transportation
($179.6 million), Health and Human Services ($166.8 million), and Education ($108.6 million).
On January 10, 2000, the OMB communications office issued a fact sheet giving a preliminary
assessment regarding implementation of the cuts at the sub-account level. According to media
reports based on the fact sheet, OMB indicated that the cuts would be applied to three broad
areas: (1) programmatic cuts amounting to $1.7 billion; (2) reductions in 2,372 congressional
earmarks amounting to $478 million; and (3) cuts in salaries and expenses amounting to $193 27
million. The three agencies with the largest numbers of cuts to earmarked projects were the
Department of Transportation (nearly 600 projects amounting to $61 million), the Environmental
Protection Agency (more than 300 projects amounting to $23 million), and the Department of
Housing and Urban Development (nearly 500 projects amounting to $19 million).
The OMB factsheet indicated that agencies intended to avail themselves of the authority to cut
individual programs and projects within accounts by as much as 15% in order to spare others
from any reduction and to target less-critical ones. Programs expected to be completely protected
from reduction included the Head Start pre-school program; the Women, Infants, and Children

26 See the section in Office of Management and Budget, Budget of the United States Government, Fiscal Year 2001,
Analytical Perspectives, February 2000, Section 21, “Report on the Government-Wide Rescissions in the Consolidated
Appropriations Act, 2000 (P.L. 106-113),” pp. 381-397.
27 BNA, Inc., “Appropriations: White House Cuts Under FY2000 Budget Trim Spending by 0.38% or $2.35 Billion,”
Daily Report for Executives, Tue., January 11, 2000.





(WIC) program; Superfund, the Lands Legacy program; and the Clean Water Action Plan, among
others. In making many of the cuts in the Department of Transportation, infrastructure programs
were expected to be cut in order to protect safety-sensitive programs, including operations of the
Federal Aviation Administration and the Coast Guard. Cuts to 180 highway projects were
expected to range from 5% to 12%, while 409 transit projects were expected to be cut uniformly 28
by 0.38%.
Table 3. FY2000 Rescissions Made Under the 0.38% Cut
Number of Rescissions
Category Accounts ($ millions)
Legislative branch 21 9.733
Judicial branch 9 13.961
Department of Agriculture 33 95.927
Department of Commerce 18 32.691
Department of Defense—Military 70 1,054.939
Department of Education 9 108.643
Department of Energy 21 66.340
Department of Health and Human Services 45 166.847
Department of Housing and Urban Development 2 91.040
Department of the Interior 31 31.346
Department of Justice 15 70.344
Department of Labor 9 33.219
Department of State 25 25.441
Department of Transportation 16 179.638
Department of the Treasury 17 47.117
Department of Veterans’ Affairs 1 79.519
Corps of Engineers 1 15.690
Environmental Protection Agency 7 28.848
Executive Office of the President 15 1.151
Federal Emergency Management Agency 4 12.734
General Services Administration 1 20.022
International Assistance Programs 20 52.495
National Aeronautics and Space Administration 3 51.881
National Science Foundation 4 14.866
Small Business Administration 2 3.280
Social Security Administration 3 24.083

28 See Daily Report for Executives, ibid., and, in the same issue, “Transportation: OMB Targets 590 Earmarked
Projects For Cuts as Part of 0.38 Percent Reduction.”





Number of Rescissions
Category Accounts ($ millions)
All other accounts 90 25.114
Total 492 2,356.909
Source: Office of Management and Budget, Budget of the United States Government, Fiscal Year 2001, Analytical
Perspectives, February 2000, Section 21, “Report on the Government-Wide Rescissions in the Consolidated
Appropriations Act, 2000 (P.L. 106-113),” pp. 381-397.
During the second session of the 106th Congress, President Clinton and Congress began the
budget cycle for FY2001 by recommending discretionary spending levels well above the existing 29
statutory limits. The assumption was made that the statutory limits eventually would be raised to
accommodate the new levels. The positions reflected in part the fact that spending for the prior
fiscal year, FY2000, was expected to exceed the existing limits for FY2001 by a substantial
margin, and that estimates of the on-budget surplus for FY2001 and subsequent years were larger
than first anticipated.
The FY2001 budget resolution, adopted by the House and Senate in April 2000, envisioned total
discretionary spending for the fiscal year at about $600 billion in budget authority and $625
billion in outlays. During the following six months, Congress considered the regular
appropriations acts for FY2001 without enacting the necessary revisions in the discretionary
spending limits. On October 18, 2000, the Republican leadership in Congress proposed increasing
the FY2001 limits in order to accommodate total discretionary spending of $637 billion in budget
authority and $645 billion in outlays, considerably more than had been envisioned by the budget
resolution. After a brief period of negotiation between the parties, the proposal was incorporated
into the conference report on the Foreign Operations Appropriations Act for FY2001, which
President Clinton signed into law on November 6 (P.L. 106-429).
The Foreign Operations Appropriations Act was the eighth of the 13 regular appropriations acts to
be enacted for the fiscal year. The increase in the limits provided by P.L. 106-249 provided
sufficient leeway for the House and Senate to consider the remaining appropriations measures,
particularly the Labor-HHS-Education Appropriations Act, which was transformed into an th
omnibus appropriations act (the Consolidated Appropriations Act for FY2001). The 106
Congress adjourned on December 15, 2000, having completed the annual appropriations process
for FY2001.
The final sequestration report for FY2001, issued by the OMB director on January 16, 2001,
indicated that discretionary spending in total was $6.545 billion in budget authority and $2.487 30
billion in outlays below the limits and that no sequester was necessary. CBO’s advisory final

29 Legislative action on discretionary spending for FY2001 is discussed in detail in CRS Report RL30696,
Discretionary Spending Limits for FY2001: A Procedural Perspective, by Robert Keith.
30 See Office of Management and Budget, OMB Final Sequestration Report to the President and Congress For Fiscal
Year 2001, January 16, 2001 (especially Table 4 on pp. 9 and 10).





sequestration report, issued on December 29, 2000, also indicated that no sequester was 31
necessary.
The Consolidated Appropriations Act for FY2001 included an across-the-board cut of 0.22%,
yielding savings of about $1.1 billion in budget authority. Unlike the year before, the cut was not
necessary in order to avoid sequestration.
The annual appropriations process in 2000 was brought to a close by incorporating three of the 13
regular appropriations acts for FY2001, as well as a number of legislative measures, into an 32
omnibus bill. The Consolidated Appropriations Act for FY2001, H.R. 4577, enacted the Labor-
HHS-Education, Legislative Branch, and Treasury-Postal Service appropriations acts by cross-
reference. In addition, H.R. 4577 enacted by cross-reference a Miscellaneous Appropriations Act
and the following legislative measures: the Commodity Futures Modernization Act of 2000 (H.R.
5660); the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000
(H.R. 5661); the Community Renewal Tax Relief Act of 2000 (H.R. 5662); the New Markets
Venture Capital Program Act of 2000 (H.R. 5663); and the Small Business Reauthorization Act of

2000 (H.R. 5667).


President Clinton signed the Consolidated Appropriations Act for FY2001 into law on December
21, 2000 (P.L. 106-554; 114 Stat. 2763-64). The House had agreed to the conference report on the
measure on December 15, 2000, by a vote of 292-60; the Senate had agreed to it the same day by
voice vote.
As initially sent to conference, H.R. 4577 provided FY2001 appropriations only for the
Departments of Labor, Health and Human Services, and Education. In conference, the coverage
of the bill was expanded to cover the Legislative Branch and Treasury-Postal Service
appropriations bills. Prior to the national election, negotiators from Congress and the Clinton
Administration reached a tentative agreement on total spending included in the bill, including a
funding level for Labor-HHS-Education programs well in excess of the President’s request.
Legislative consideration of the measure was delayed, however, in part because of lingering
disagreement over an associated provision dealing with the promulgation of an ergonomics
regulation by the Department of Labor.
When House and Senate conferees resumed their negotiations on H.R. 4577 after the election
break, they faced mounting concern over the cost of the bill and the level of FY2001
appropriations generally. Although the discretionary spending limits for FY2001 had been raised
earlier in the session to accommodate FY2001 spending of about $640 billion, many Members 33
expressed a desire to hold total appropriations well below this level. In response to this concern,
the negotiators scaled back total appropriations by several billion dollars, including significant
reductions in appropriations for Labor-HHS-Education programs. As Representative David Obey,

31 See Congressional Budget Office, Final Sequestration Report for Fiscal Year 2001, December 29, 2000, 13 pp.; it
also was released as H.Doc. 107-7 (January 3, 2001).
32 For more information, see CRS Report RS20756, FY2001 Consolidated Appropriations Act: Reference Guide, by
Robert Keith (archived; available from author).
33 For information on actions pertaining to the discretionary spending limits for FY2001, see CRS Report RL30696,
Discretionary Spending Limits: A Procedural Assessment, by Robert Keith.





ranking minority member of the House Appropriations Committee, noted during House
consideration of the conference report on H.R. 4577:
To get an agreement in the last week, we had to cut $3.7 billion from the earlier agreement,
we had to take $1.4 billion from advance funding for LIHEAP, we had to take $257 million
out of handicapped education, $127 million out of efforts to reduce class size, $180 million 34
out of after-school programs and $200 million out of biomedical research.
An important part of the reductions in FY2001 appropriations was the across-the-board cut of

0.22%. The provision was included in one of the measures enacted by cross-reference, H.R.


5666(the Miscellaneous Appropriations Act), which also included other savings provisions. The
conference report on the Consolidated Appropriations Act made only a brief reference to the 35
spending-cut provision, and the provision was not discussed during floor consideration in the
House and Senate. President Clinton did not refer to the spending cut in his remarks upon signing 36
the bill into law.
Section 1403 of H.R. 5666 applied the cut, in the form of rescissions, to all discretionary
appropriations except for military personnel spending provided in Title I of P.L. 106-259 (the
Defense Appropriations Act for FY2001), activities funded under the Labor-HHS-Education
Appropriations Act for FY2001, and defense and nondefense emergency supplemental
appropriations for FY2000 provided in Division B of P.L. 106-246 (the Military Construction
Appropriations Act for FY2001).
According to preliminary estimates prepared at the time of enactment by the Office of
Management and Budget (OMB), the provision was expected to save $1.1 billion. Roughly half
of the cuts had to be made in defense spending.
Under Section 1403, the cuts were to be applied on a pro rata basis to each applicable program,
project, and activity. The section instructed the OMB director to report on these reductions in the
President’s budget submission for FY2002. (The text of Section 1403 is provided in the 0.)
On January 5, 2001, OMB issued Bulletin 01-03, Rescission of FY2001 Discretionary Budget
Authority, providing guidance to agencies in how to comply with the requirement for the 0.22%
cut.
The report required of the OMB director was part of the budget that President Bush submitted to
Congress on April 9, 2001. The 20-page report was included in the Analytical Perspectives 37
volume as a separate chapter.

34 See the remarks of Representative Obey in the Congressional Record (daily ed.), vol. 146, pt. II, December 15, 2000,
pp. H12444-12445.
35 See the reference, under the headingChapter 14,” in H.Rept. 106-1033, December 15, 2000, p. 621.
36 See his statement in the Weekly Compilation of Presidential Documents, vol. 36, no. 52, December 22, 2000, pp.
3167-3174.
37 See the section in Office of Management and Budget, Budget of the United States Government, Fiscal Year 2002,
Analytical Perspectives, April 2001, Section 21, “FY2001 Government-Wide Rescission, Consolidated Appropriations
Act,” pp. 339-358.





According to the OMB report, a total of $1,088.962 million in discretionary spending was
rescinded in 632 accounts (see Table 4). This included $5.941 million for the legislative branch
and $8.763 million for the judicial branch.
Reductions in individual accounts ranged from $2 thousand for the “White House repair and
restoration” account to $51.234 million for the “Operation and Maintenance, Navy” account. The
largest share of the cuts, amounting to $487.6 million and involving 67 accounts, was allocated to
military activities of the Department of Defense. The other departments with cuts in excess of $50
million included the Departments of Transportation ($125.1 million) and Housing and Urban
Development ($68.8 million).
Table 4. FY2001 Rescissions Made Under the 0.22% Cut
Category Number of Accounts Rescissions ($ millions)
Legislative branch 28 5.941
Judicial branch 11 8.763
Department of Agriculture 70 42.589
Department of Commerce 24 11.712
Department of Defense—Military 67 487.594
Department of Education 0 0
Department of Energy 28 44.503
Department of Health and Human Services 7 8.642
Department of Housing and Urban Development 25 68.753
Department of the Interior 50 22.547
Department of Justice 34 46.212
Department of Labor 0 0
Department of State 23 16.573
Department of Transportation 55 125.143
Department of the Treasury 30 30.925
Department of Veterans’ Affairs 14 49.337
Corps of Engineers 8 10.013
Environmental Protection Agency 8 17.222
Executive Office of the President 15 0.658
Federal Emergency Management Agency 9 5.368
General Services Administration 7 1.470
International Assistance Programs 32 29.070
National Aeronautics and Space Administration 4 31.430
National Science Foundation 5 9.736
Office of Personnel Management 5 0.462
Small Business Administration 4 1.983
Export-Import Bank of the United States 1 2.039





Category Number of Accounts Rescissions ($ millions)
Smithsonian Institution 9 1.270
All other accounts 59 9.007
Total 632 1,088.962
Source: Office of Management and Budget, Budget of the United States Government, Fiscal Year 2002, Analytical
Perspectives, April 2001, Section 21, “FY2001 Government-Wide Rescission, Consolidated Appropriations Act,”
pp. 339-358.
The budgetary context for FY2003 differed quite markedly in two key respects from the ones in
effect for FY2000 and FY2001. First, the statutory limits on discretionary spending expired at the
end of FY2002. For the first time in more than a decade, Congress and the President did not have
to contend with the threat of a discretionary spending sequester at the end of the session.
Second, the House and Senate were unable to agree on a budget resolution for FY2003. This
marked only the second time in the history of the congressional budget process that the House
and Senate had failed to agree on a budget resolution. Although the House put a “deeming
resolution” into effect as a basis for the enforcement of discretionary spending and other 38
budgetary levels, the Senate took no comparable action.
Differences regarding the appropriate level of discretionary spending for FY2003—the Senate
advocated spending about $9 billion more for discretionary programs than did the House—helped
stymie action on most of the regular appropriations acts during the 2002 session. Following the
November elections, which signaled that the Republicans would regain control of the Senate in

2003, congressional leaders worked out a plan with the administration to complete the 39


appropriations process for FY2003 early in 2003, at the beginning of the next Congress.
Toward the beginning of the first session of the 108th Congress, the House and Senate brought the
consideration of the regular appropriations acts for FY2003 to a close by incorporating the
remaining 11 bills into a single bill, H.J.Res. 2, the Consolidated Appropriations Resolution for 40
FY2003. Two of the regular appropriations acts for that fiscal year were enacted in 2002, during

38 House and Senate practices regarding the use of a “deeming resolution as a substitute for a budget resolution are
discussed in CRS Report RL31443, The “Deeming Resolution: A Budget Enforcement Tool, by Robert Keith.
39 BNA, Inc. Daily Report for Executives, “Republican Appropriators Begin Work of Paring Down FY2003 Spending
Bills,” by Adam Wasch, Wed., December 4, 2002.
40 For more information, see CRS Report RS21433, FY2003 Consolidated Appropriations Resolution: Reference
Guide, by Robert Keith.





the second session of the 107th Congress, just after the start of the fiscal year.41 In its final form, 42
H.J.Res. 2 provided $397.4 billion in discretionary budget authority.
The House passed H.J.Res. 2 by voice vote on January 8, 2003. In its House-passed form,
H.J.Res. 2 was a continuing resolution for FY2003 providing for the continuation of stop-gap
funding through January 31, 2003. It was anticipated, however, that the Senate would use the
measure as a vehicle for incorporating the remaining regular appropriations acts. The Senate did
so, and passed the measure as amended on January 23 by a vote of 69-29. The House and Senate
agreed to the conference report (H.Rept. 108-10) on February 13, by votes of 338-83 and 76-20,
respectively. H.J.Res. 2 was presented to President Bush on February 19 and he signed it into law
on February 20, as P.L. 108-7 (117 Stat. 11-554).
The act was organized by division, with each division (A through K) corresponding to one of the
regular appropriations acts. Further, there were five other divisions (L thorough P), which
involved such matters as additional emergency funding, amendments to the Homeland Security
Act of 2002 and the Price-Anderson Act, and the United States-China Economic and Security
Review Commission.
In order to offset part of the costs of the act, an across-the-board cut of 0.65% was included in
Section 601 of Division N (the Division is referred to as the Miscellaneous Appropriations Act for 43
FY2003). In final form, the cut was expected to yield $2.647 billion in savings.
The across-the-board cut provision originated on January 15, 2003, during the first day of Senate
consideration of H.J.Res. 2. It was included as part of a substitute amendment offered by 44
Appropriations Committee Chairman Stevens and agreed to by unanimous consent. In its initial
form, the provision required an across-the-board cut of 1.6%.
The following day, January 16, the Senate adopted Gregg Amendment number 19, providing
additional funds to finance innovative State and local programs dealing with education and other
matters. Part of the amendment provided a mechanism for increasing the across-the-board cut in 45
Section 601 of Division N by an amount sufficient to offset the additional funds. Senator Ted
Kennedy, one of the sponsors of the amendment, indicated that it would increase the across-the-46
board cut by another 1.3%, resulting in a total across-the-board cut of 2.9%.

41 The Department of Defense Appropriations Act for FY2003 (P.L. 107-248) and the Military Construction
Appropriation Act for FY2003 (P.L. 107-249) were enacted into law on October 23, 2002.
42 See the remarks of Representative C.W. Bill Young, the chairman of the House Appropriations Committee, during
consideration of H.J.Res. 2 in the Congressional Record (daily ed.), vol. 149, no. 27, February 13, 2003, pp. H558-
H559.
43 See the table inserted by Representative C.W. Bill Young, the chairman of the House Appropriations Committee, in
the Congressional Record (daily ed.), vol. 149, no. 27, February 13, 2003, p. H658. The Senate included an across-the-
board cut of nearly 3% in the version of H.J.Res. 2 which it passed on January 23, 2003. According to the table on page
H658, the larger cut would have yielded savings of $11.392 billion.
44 The text of Stevens Amendment number 1 is set forth in the Congressional Record (daily ed.), vol. 149, no. 7,
January 15, 2003, pp. S867-S992. The across-the-board spending cut, contained in Section 601 of Division N of the
amendment, may be found at page S992.
45 The text of the amendment may be found in the Congressional Record (daily ed.), vol. 149, no. 8, January 16, 2003,
p. S1036.
46 See the remarks of Senator Kennedy in the Congressional Record (daily ed.), vol. 149, no. 8, January 16, 2003, pp.
S1037-S1037.





The 2.9% cut generated considerable controversy during Senate consideration of the measure. On
January 17, Senator Robert Byrd, ranking minority member of the Senate Appropriations
Committee, offered an amendment (number 36) to strike it. Chairman Stevens explained that the
purpose of the spending cut was to accommodate two unforeseen needs while staying within the
overall limit agreed to earlier with President Bush:
The offsets listed in title VI, which Senator Byrd would strike, are offsets that are necessary
to achieve basically two things: One is the full funding for the amount that can be spent of
the election reform bill in the 7½ to 8 months that are remaining, a bill that is absolutely
necessary to be funded and put into place if we are to avoid, or at least try to avoid the
problems of the election in the year 2000 ...
Secondly, the tremendous drought disaster areas of the country demand help. We faced a
problem of how to deal with that, so we added the monies for drought and disaster to this bill 47
and we offset it by an across-the-board cut in all programs.
Senator Byrd explained that his objection to the across-the-board cut stemmed from his concern
about its impact on a wide range of domestic programs and his concern that discretionary
spending should not be reduced to offset increases in mandatory spending included in the
omnibus appropriations act:
This country is faced with a cut of 2.9 percent, or $11.4 billion, in domestic spending. This is
no technical adjustment. This is a real cut. Nor can it be characterized as capturing the
savings from agencies operating under a continuing resolution for 4 months. Don’t you
believe that. The Presidents budget for fiscal year 2003 was simply inadequate when it came
to critical domestic programs ...
Approximately $4 billion of the $11.4 billion across-the-board cut is included in the bill to
pay for increased mandatory spending in Medicare, in assistance for needy families, and for
drought relief ...
Once we start down this road of paying for increases in mandatory programs by cutting 48
domestic funding, where will it stop?
On February 13, 2003, the House and Senate agreed to the conference report on H.J.Res. 2.49
During consideration of the conference report, House Members did not address the across-the-
board cut. In the Senate, Chairman Stevens indicated that various concessions had been made that
allowed the across-the-board cut to be reduced from 2.9% down to 0.65% while retaining
increased spending for several crucial items, including aid for agricultural disasters. He further
indicated that the 0.65% cut was necessary to keep the cost of the measure within the limit
negotiated with President Bush, thereby avoiding a veto:
There is a .65 percent across-the-board cut to all discretionary accounts in this bill to assure
that the total remains within the top line that was agreed to by myself, House Chairman Bill
Young, and the President. This is [an] arbitrary line, I will admit, but in order to get the bill
signed, if we joined them together, it was my judgment we could not risk a final veto from

47 See the remarks of Senator Stevens in the Congressional Record (daily ed.), vol. 149, no. 9, January 17, 2003, pp.
S1108-S1109.
48 See the remarks of Senator Byrd in the Congressional Record (daily ed.), vol. 149, no. 9, January 17, 2003, pp.
S1106-S1107.
49 See H.Rept. 108-10, February 13, 2003, which includes a brief description of the across-the-board cut on page 1504.





the President of the United States after working so hard to put them all through in one
package. So we have worked as closely as possible with all concerned to try and make 50
certain that the bills will be in a form the President could sign it.
In the statement made upon signing H.J.Res. 2 into law, President Bush expressed concern about
excessive spending in several components of the measure but did not specifically comment on the 51
across-the-board cut.
Section 601(a) imposed the cut on the regular appropriations provided in Divisions A-K, as well
as to advance appropriations for FY2003 that were enacted in prior appropriations acts. The text
of Section 601 is provided in the 0.
Section 601(b) provided that the 0.65% cut be applied on a proportionate basis to each account,
and to each program, project, and activity within an account.
Finally, Section 601(c) exempted from the reductions the budget authority provided in the act for
specified programs in the following amounts:
• $4.696 billion for the Special Supplemental Nutrition Program for Women,
Infants, and Children (WIC);
• $6.668 billion for the Head Start program;
• $23.889 billion for the Veterans’ Medical Care program; and
• $3.836 billion for NASA’s space shuttle program.
Unlike the across-the-board spending cut provisions for FY2000 and FY2001, Section 601 did
not impose a reporting requirement on the OMB director.
On February 21, 2003, OMB issued Bulletin 03-02, Across-the-Board Rescission in H.J.Res. 2,
providing guidance to agencies on how to comply with the requirement for the 0.65% cut.
Although the OMB director was not required to report to Congress on the implementation of the
spending cut, data furnished by OMB indicate that a total of $2,225 million in discretionary
spending was rescinded (see Table 5). This included $21 million for the legislative branch and
less than $0.5 million for the judicial branch. Reductions ranged from $1 million for the National
Endowment for the Humanities and several other agencies to $395 million for the Department of
Health and Human Services.

50 See the remarks of Senator Stevens in the Congressional Record (daily ed.), vol. 149, no. 27, February 13, 2003, pp.
S2428-S2429.
51 See his statement in the Weekly Compilation of Presidential Documents, vol. 39, no. 8, February 20, 2003, pp. 227-
228.





Table 5. FY2003 Rescissions Made Under the 0.65% Cut
Rescissions
Category ($ millions)
Legislative Branch 21
Judicial Branch 0
Department of Agriculture 100
Department of Commerce 33
Department of Education 334
Department of Energy 150
Department of Health and Human Services 395
Department of Housing and Urban Development 234
Department of Justice 130
Department of Labor 76
Department of State 57
Department of the Interior 151
Department of the Treasury 70
Department of Transportation 98
Department of Veterans Affairs 19
Broadcasting Board of Governors 3
Corporation for National and Community Service 5
Corporation for Public Broadcasting 3
Corps of Engineers-Civil Works 30
Environmental Protection Agency 52
Export-Import Bank of the United States 4
General Services Administration 3
International Assistance Programs 93
National Aeronautics and Space Administration 75
National Science Foundation 35
Small Business Administration 4
Smithsonian Institution 5
Social Security Administration 39
All others 6
Total 2,225
Source: Table derived from unpublished data furnished by the Office of Management and Budget.





The budgetary context for FY2004 differed from the context in effect for the preceding year. As
was the case for the FY2003, the statutory discretionary spending limits had previously expired;
however, unlike FY2003, the House and Senate reached agreement on a budget resolution for the
fiscal year.
The conference report on the FY2004 budget resolution was agreed to by the House and Senate 52
on April 11, 2003. The measure assumed a level of discretionary budget authority of about $785 53
billion for FY2004, the level requested by the Bush Administration. As the legislative strategy
for consideration of the regular appropriations acts for FY2004 developed, congressional leaders
reached an agreement with administration officials to modify the allocation of defense and
nondefense discretionary spending for the year. By shifting funds between fiscal years, the
agreement effectively accommodated roughly $5 billion dollars in additional nondefense 54
appropriations for FY2004 without raising the overall limit.
In developing the omnibus appropriations act for FY2004, congressional leaders and
administration officials agreed to accommodate about $4.5 billion dollars in additional initiatives
and to offset their costs, thereby abiding by the overall limit on discretionary spending agreed to
earlier, with $1.8 billion in rescissions of defense spending and across-the-board cuts in 55
nondefense discretionary spending amounting to about $2.8 billion. According to a press release
of the House Appropriations Committee, some of the additional initiatives included:
... $350 million for the Millennium Challenge Corporation, $1 billion for Election Reform,
$1.3 billion for Veterans Medical Care, $1.65 billion for priority education programs and
$50 million for security expenses at the national party conventions in Boston and New York 56
City.
In the waning days of the first session of the 108th Congress, the House and Senate had cleared
six of the 13 regular appropriations acts for FY2004 and President Bush had signed them into 57
law. Congressional leaders decided to bring action on the remaining seven regular

52 See the report to accompany H.Con.Res. 95, H.Rept. 108-71, April 10, 2003.
53 SeeWith Budget Completed, Action on Spending Bills Will Take Center Stage, by Joseph J. Schatz, in CQ Today,
April 24, 2003.
54 See (1) “Bush Tentatively Backs Adding $5.2 Billion to Get Spending Process Started,” by Andrew Taylor and
Joseph J. Schatz, in CQ Today, June 10, 2003; and (2) “After Getting Green Light, Appropriators Release 302(b)
Allocations,” by Cheryl Bolen, in BNAs Daily Report for Executives, June 12, 2003.
55 The Congressional Budget Office estimated that the 0.59% across-the-board spending cut will yield savings for
FY2004 of $2.761 billion in budget authority and $1.407 billion in outlays.
56 See the November 25, 2003 press release of the House Appropriations Committee,Highlights of the FY2004
Consolidated Appropriations,” available at http://appropriations.house.gov.
57 The FY2004 regular appropriations acts signed into law were as follows: (1) Legislative Branch, P.L. 108-83
(September 30, 2003); (2) Defense, P.L. 108-87 (September 30, 2003); (3) Homeland Security, P.L. 108-90 (October 1,
2003); (4) Interior, P.L. 108-108 (November 10, 2003); (5) Military Construction, P.L. 108-132 (November 22, 2003);
and (6) Energy and Water Development, P.L. 108-137 (December 1, 2003).





appropriations acts for FY2004 to a close by incorporating them into a single bill, H.R. 2673, the
Consolidated Appropriations Act for FY2004. The act, which passed the House on July 14, 2003,
and the Senate on November 6, initially provided appropriations only for the Department of
Agriculture and related agencies. It was expanded at the conference stage to cover the other six
regular appropriations acts (see the conference report, H.Rept. 108-401, November 25, 2003).
The House passed the conference report on H.R. 2673 on December 8, 2003 (the last day the
chamber was in session), by a vote of 242-176. The Senate considered the conference report the
next day, but did not complete action on the matter. Final Senate action was delayed until the th
following month, after the start of the second session of the 108 Congress. The Senate resumed
consideration of the conference report on January 20, 2004, and agreed to it on January 22, by a
vote of 65-28. President signed the measure into law on January 23 (P.L. 108-199; 118 Stat. 3-

457).


The Consolidated Appropriations Act for FY2004 provided $328 billion in discretionary
spending. In addition, $492 billion in mandatory spending was provided by the act, bringing the 58
total spending in the measure to $820 billion.
The act was organized into eight divisions, with each of the first seven divisions (A through G)
corresponding to one of the unfinished regular appropriations acts. The last division, Division H,
pertained to “Miscellaneous Appropriations and Offsets.” As mentioned previously, the costs of
some initiatives in the act were offset by requirements for rescissions in both defense and
nondefense spending. These requirements were set out in Section 168 of Division H.
Section 168(b) required an across an across-the-board cut of 0.59% in all FY2004 appropriations,
except for funding provided in the Defense and Military Construction Appropriations Acts and
supplemental appropriations acts. In addition, the cut applied to advance appropriations for
FY2004 provided in prior appropriations acts and certain contract authority. According to an
estimate made by the Congressional Budget Office, the 0.59% cut was expected to yield about
$2.8 billion in savings.
Rescissions made under the 0.59% across-the-board cut had to be made proportionately at the
account and PPA level (Section 168(c)). Additionally, the OMB director was required to submit a
report to the House and Senate Appropriations Committees “specifying the account and amount
of each rescission” made pursuant to the requirement for the across-the-board cut (Section
168(d)). The OMB report was due within 30 days after enactment of the Consolidated
Appropriations Act.
In addition to the across-the-board cut in nondefense spending required by Section 168(b) of the
act, Section 168(a) required that rescissions of $1.8 billion be made in Defense appropriations,
including unobligated balances made available in two prior appropriations acts, P.L. 107-38 (the
emergency supplemental appropriations act enacted into law three days after the terrorist attacks
of September 11, 2001) and P.L. 107-117 (the Defense Appropriations Act for FY2002). The
subsection exempted from this requirement funds for disaster recovery and assistance for New
York, Virginia, and Pennsylvania relating to the terrorist attacks provided in P.L. 107-38 (“by the

58 House Appropriations Committee, November 25, 2003 press release, ibid.





seventh proviso under the heading ‘Emergency Response Fund’”). All rescissions were required
to take effect no later than September 30, 2004, the last day of the fiscal year. Section 168(a) was
repealed by Section 9003(c) of the Defense Appropriations Act for FY2005, which President
Bush signed into law on August 5, 2004, as P.L. 108-287 (118 Stat. 951 et. seq.).
Pursuant to Section 168(a), the director of the Office of Management and Budget, in consultation
with the House and Senate Appropriations Committees and the Secretary of Defense, was
required to determine the amounts to be rescinded from each affected account; unlike the
reductions in nondefense spending, the defense reductions did not have to be made uniformly.
Further, the director was required to notify the Appropriations Committees 30 days prior to
making the rescissions, indicating which programs, projects, and activities (PPAs) were to have
been cut.
The text of Section 168 is provided in the 0.
On January 29, 2004, OMB issued Bulletin 04-02, Guidance on Implementing Across-the-Board
Reductions in the Consolidated Appropriations Act, 2004 (H.R. 2673), providing guidance to
agencies on how to comply with the requirement for the 0.59% cut.
On March 4, 2004, the OMB director submitted the required report to the House and Senate
Appropriations Committees regarding the implementation of the spending cut. The OMB report
indicated that a total of $2,674.691 million in discretionary spending was rescinded (see Table 59

6). The spending reductions in accounts, grouped in the OMB report by appropriations act,


ranged from $2.751 million for the Legislative Branch Appropriations Act to $821.974 million for
the Labor-HHS-Education Appropriations Act.
Table 6. FY2004 Rescissions Made Under the 0.59% Cut
Rescissions
Category ($ millions)
Agriculture and Rural Development Appropriations 105.032
Commerce, Justice, State Appropriations 210.442
District of Columbia Appropriations 3.208
Energy and Water Development Appropriations 158.414
Foreign Operations Appropriations 35.265
Homeland Security Appropriations 217.163
Interior Appropriations 124.032
Labor-HHS-Education Appropriations 821.974
Legislative Branch Appropriations 2.751
Treasury-Transportation Appropriations 418.485

59 The OMB estimate of total spending reductions is $87 million less than the CBO estimate, which may be explained
largely by the omission of some accounts from the OMB report; for example, the General Accounting Office was the
only entity for which cuts were identified under the Legislative Branch Appropriations Act although other legislative
entities reported cuts in subsequent budget submissions.





Rescissions
Category ($ millions)
VA-HUD Appropriations 577.926
Total 2,674.691
Source: Office of Management and Budget, FY2004 Government-wide Reduction, Mar. 1, 2004, pp. 1-20, available
on the OMB website at http://www.whitehouse.gov/omb
The budgetary context for FY2005 was similar in two key respects to the one in effect for
FY2003. First, the statutory limits on discretionary spending, which had expired at the end of
FY2002, had not been renewed. Congress and the President, therefore, did not have to deal with
the possibility of a discretionary spending sequester at the end of the session.
Second, the House and Senate were unable to agree on a budget resolution for the third time in
the history of the congressional budget process. A conference report on the FY2005 budget
resolution, which recommended total discretionary appropriations for the year of $821 billion,
was filed in the House on May 19 (H.Rept. 108-498). Although the House agreed to the
conference report on May 19, the Senate did not consider it.
The House considered the conference report on the FY2005 budget resolution under the terms of
a special rule, H.Res. 649 (H.Rept. 108-500, May 19, 2004); the special rule was adopted on May
19 by a vote of 220-204. In anticipation of the possibility that final Senate approval of the budget
resolution might be delayed, or might not occur at all, a “deeming resolution” provision was
included in Section 2 of H.Res. 649.
By adopting H.Res. 649, the House put into effect the budget policies embodied in the conference
report on S.Con.Res. 95 as adopted by the House, as well as the procedures under Title III of the
1974 Congressional Budget Act used to enforce them. Accordingly, in the House regular
appropriations acts for FY2005 and other budgetary measures were subject to aggregate spending
ceilings and revenue floors, as well as allocations of spending to committees.
For the two months following House action on the deeming resolution provision, the Senate did
not consider the conference report on the FY2005 budget resolution nor act on a deeming
resolution. During this period, however, Senate action on the regular appropriations acts for
FY2005 was subject to a ceiling of $814 billion on total appropriations for that year included in
the prior year’s budget resolution, which remained in effect.
The $814 billion ceiling for FY2005 presented the Senate with two problems. First, the
conference agreement on the FY2005 budget resolution revised the recommended level of
appropriations for that fiscal year upward by $7 billion to a new total of $821 billion. In order for
the Senate to consider regular appropriations acts for FY2005 at a level comparable to House
action, the $7 billion difference would have to be accommodated through a procedure such as
designating an equivalent amount of appropriations to be emergency spending, a course of action
that was considered less desirable. Second, the $814 billion ceiling applied to total appropriations
only; it did not provide a basis for the enforcement of spending levels during the consideration of





individual acts (unless all 13 of the individual acts were packaged together into a single, omnibus
act).
On July 22, 2004, the Senate resolved these problems by adopting the conference report on H.R.
4613, the Defense Appropriations Act for FY2005. President Bush signed the measure into law on
August 5, 2004, as P.L. 108-287 (118 Stat. 951 et. seq.). Section 14007 of the act, which took
effect upon enactment, established the revised level of $821 billion as the allocation of new
budget authority to the Senate Appropriations Committee for purposes of Section 302(a) of the

1974 act (and repealed the outdated limit of $814 billion in the prior year’s budget resolution).


In 2004, during the second session of the 108th Congress, the House and Senate cleared four of
the 13 regular appropriations acts for FY2005 individually and President George W. Bush signed 60
them into law. Congress and the President brought action on the remaining nine regular
appropriations acts for FY2005 to a close through the enactment of a single bill, H.R. 4818, the
Consolidated Appropriations Act for FY2005. The act, which first passed the House on July 12,
2004, and the Senate on September 21, initially provided appropriations only for Foreign
Operations, Export Financing, and Related Programs. It was expanded at the conference stage to
cover the other eight regular appropriations acts. The conference report, H.Rept. 108-792, was
reported on November 19, 2004.
The House agreed to the conference report on H.R. 4818, by a vote of 344-51, on November 20,

2004. The conference report was considered pursuant to the terms of a special rule, H.Res. 866, 61


that had been reported by the House Rules Committee earlier that day (H.Rept. 108-794).
During House consideration of the special rule, it was amended to provide for automatic adoption
in the House of a measure (discussed below) providing for enrollment corrections in H.R. 4818.
The Senate agreed to the conference report, by a vote of 65-30, later that day.
On December 6, 2004, the House completed action on H.Con.Res. 528, a measure correcting the
enrollment of H.R. 4818, thus clearing the bill for the President’s approval. Among other things,
the enrollment correction measure removed from the bill a controversial provision pertaining to
congressional access to income tax returns. The provision, originally found in Division H
(Transportation-Treasury Appropriations Act), Title II, Section 222, read as follows:
Sec. 222. Hereafter, notwithstanding any other provision of law governing the disclosure
of income tax returns or return information, upon written request of the Chairman of the
House or Senate Committee on Appropriations, the Commissioner of the Internal Revenue
Service shall allow agents designated by such Chairman access to Internal Revenue Service 62
facilities and any tax returns or return information contained therein.

60 The four FY2005 regular appropriations acts signed into law individually earlier in 2004 were (1) Defense, P.L. 108-
287 (August 5, 2004); (2) Military Construction, P.L. 108-324 (October 13, 2004); (3) Homeland Security, P.L. 108-
334 (October 18, 2004); and (4) District of Columbia, P.L. 108-335 (October 18, 2004).
61 House consideration of H.Res. 866 is found in the Congressional Record (daily ed.), vol. 150, no. 135, November 20,
2004, pp. H10087-H10098.
62 Section 222, as contained in the conference report on H.R. 4818, is set forth in the Congressional Record (daily ed.),
vol. 150, no. 134, bk. II, November 19, 2004, p. H10352.





As automatically adopted by the House on November 20, pursuant to Section 3 of H.Res. 866, the
enrollment correction measure provided for two changes in H.R. 4818: (1) substituting new
language for Division H, Title VI, Section 643, pertaining to debt collection procedures; and (2)
changing the across-the-board reduction percentage in Division J, Section 122 from 0.83% to
0.80%. Later that day, the Senate by unanimous consent adopted H.Con.Res. 528 with an
amendment (Stevens amendment no. 4076) removing the provision relating to income tax returns,
and then returned the measure to the House. Earlier on November 20, the Senate had passed by
unanimous consent S.J.Res. 42, a measure declaring that the tax return provision “shall have no
force and effect.” Senate action on H.Con.Res. 528, however, superseded its earlier passage of
S.J.Res. 42.
President Bush signed the bill into law on December 8, as P.L. 108-447 (118 Stat. 2809 et. seq.).
In order to offset part of the costs of the act in order to keep total discretionary appropriations
within the FY2005 limit of $821 billion, Division J, Section 122, required that FY2005
appropriations (and obligation limitations), with certain exceptions, be cut across the board. (The
exceptions pertain to funding provided in the Defense, Homeland Security, and Military
Construction Appropriations Acts enacted earlier in the session, as well as any supplemental
appropriations for FY2005.) In addition, the cut applied to advance appropriations for FY2005
provided in prior appropriations acts and certain contract authority. Under the enrollment
correction measure, the across-the-board reduction percentage was changed from 0.83% to
0.80%. According to estimates made by the Congressional Budget Office, the across-the-board
cut was expected to yield savings of about $3.5 billion in budget authority and $1.9 billion in
outlays for FY2005.
Pursuant to Section 122, rescissions made under the 0.80% across-the-board cut had to be made
proportionately at the account and program, project, and activity (PPA) level. Unlike across-the-
board cut provisions included in past consolidated appropriations acts, there was no requirement
that the director of OMB report to Congress on the implementation of the cuts. OMB Bulletin 05-

01, issued on December 16, 2004, provided guidance to agencies on implementing the 0.80% cut, 63


as well as the other spending cuts discussed below. The text of Section 122, as it was modified
by H.Con.Res. 528 and enacted into law, is provided in the 0.
In his statement on the act, Chairman Young indicated that the across-the-board cut in Section
122 and two other provisions in the act were involved in constraining total funding to the capped
level:
All additional spending is paid for by an across the board cut of .80% in all non-defense
and non-homeland security spending, [a] $300 million rescission in non-war, non-emergency
defense funds, [and ]$283 million from limitations on expenditures from the Crime Victims 64
Fund.
The Consolidated Appropriations Act for FY2005 also included three other provisions requiring
across-the-board spending cuts focused on particular divisions of the act. The cuts had to be made

63 The bulletin may be found on the OMB website at http://www.whitehouse.gov/omb/bulletins/fy05/b05-01.pdf.
64 See the Congressional Record, ibid., p. H10186.





on a proportionate basis and were expected to yield total savings of about $367 million in budget
authority for FY2005.
First, Division B (Commerce-Justice-State-the Judiciary Appropriations Act), Section 640
rescinded 0.54% of discretionary appropriations for FY2005 provided in the act. According to the
House Appropriations Committee, savings from the cut were estimated at $229 million in budget 65
authority.
Second, Division E (Interior Appropriations Act), Section 501 rescinded 0.594% of discretionary
appropriations for FY2005 provided in the act, as well as advance appropriations for FY2005
provided in the Interior Appropriations Act for FY2004. The estimated savings from the cut, 66
according to the House Appropriations Committee, were $120.024 million in budget authority.
Finally, Division F (Labor-HHS-Education Appropriations Act), Section 519 reduced amounts
made available under the act for administrative and related expenses for departmental
management (except for the Food and Drug Administration and the Indian Health Service) by $18 67
million.
On December 16, 2004, OMB issued Bulletin 05-01, Guidance on Implementing Across-the-
Board Reductions in the Consolidated Appropriations Act, 2005 (H.R. 4818), providing guidance
to agencies on how to comply with the requirement for the government-wide cut of 0.80% in
Division J of the act, as well as the departmental cuts in Division E and Division F.
OMB did not publish data on the implementation of the 0.80% across-the-board spending cut.
The House and Senate considered the FY2006 appropriations acts within the framework of a
budget resolution for that year. As was the case for the preceding several years, however, the
discretionary spending limits that had lapsed in statute were not renewed.
The conference report on the FY2006 budget resolution was agreed to by the House and Senate 68
on April 28, 2005, by votes of 214-211 and 52-47, respectively. The measure assumed a level of
discretionary budget authority of $843 billion for FY2006 (excluding an additional $50 billion for

65 The Congressional Record (daily ed.), vol. 150, no. 134, bk. II, November 19, 2004, sets forth the text of Section 640
on p. H10265 and the pertinent portion of the joint explanatory statement on p. H10476. The estimated savings from
Section 640 are set forth in materials inserted by Chairman Young in the Congressional Record (daily ed.), vol. 150,
no. 135, November 20, 2004, p. H10117.
66 The Congressional Record (daily ed.), vol. 150, no. 134, bk. II, November 19, 2004, sets forth the text of Section 501
on p. H10317 and the pertinent portion of the joint explanatory statement on p. H10609. The estimated savings from
Section 501 are set forth in materials inserted by Chairman Young in the Congressional Record (daily ed.), vol. 150,
no. 135, November 20, 2004, p. H10137.
67 The Congressional Record (daily ed.), vol. 150, no. 134, bk. II, November 19, 2004, sets forth the text of Section 519
on p. H10331 and the pertinent portion of the joint explanatory statement on p. H10700. The required savings are
specified in the text of the provision and included in the cost data in materials inserted by Chairman Young in the
Congressional Record (daily ed.), vol. 150, no. 135, November 20, 2004, p. H10158 (see line code 50240).
68 See the report to accompany H.Con.Res. 95, H.Rept. 109-62, April 28, 2005.





the war in Iraq and Afghanistan), an amount equivalent to the total level requested by the Bush 69
Administration.
As indicated previously, at the beginning of the 109th Congress, in early 2005, the House and
Senate Appropriations Committees realigned their subcommittees. In doing so, they reduced the
number of regular appropriations acts from 13 to 11 (the Senate considered a separate regular
appropriations act for the District of Columbia, but it was incorporated into another
appropriations act later in the legislative process).
In conjunction with this change, the Appropriations Committee chairmen committed to enacting
all of the regular appropriations acts for FY2006 separately, thus avoiding the use of an omnibus
appropriations act to wrap up action at the end of the session.
Two of the regular appropriations acts for FY2006 (the Interior and Environment Appropriations
Act and the Legislative Branch Appropriations Act) were enacted into law on August 2, 2005,
well before the start of the fiscal year. Seven more regular appropriations acts were enacted into
law in October and November. The final two acts for FY2006, the Defense Appropriations Act
(P.L. 109-148) and the Labor-HHS-Education Appropriations Act (P.L. 109-149), were signed
into law by President George W. Bush on December 30, thus concluding action on the regular
appropriations acts for the session.
Although the House and Senate Appropriations Committees did not use an omnibus
appropriations act for FY2006, the Defense Appropriations Act (H.R. 2863) became a vehicle for 70
carrying several major non-defense matters. In addition to providing defense appropriations (in
Division A), H.R. 2863, which became P.L. 109-148, included a division (Division B) dealing
with supplemental appropriations for relief and reconstruction associated with Hurricanes Katrina
and Rita and with pandemic influenza, and another (Division C) containing the Public Readiness
and Emergency Preparedness Act. On December 18, the conference report on H.R. 2863 was filed
(H.Rept. 109-359). The House agreed to the conference report early in the morning on December

19, by a vote of 308-106, and the Senate agreed to it on December 21, by a vote of 93-0.


One point of controversy pertained to the inclusion of two divisions in H.R. 2863 dealing with the
opening of the Arctic National Wildlife Refuge to oil drilling and the distribution of the proceeds.
The two divisions, originally Division C (American Energy Independence and Security Act of
2005) and Division D (Distribution of Revenues and Disaster Assistance), were removed from the
measure at the enrollment stage pursuant to S.Con.Res. 74. The Senate adopted S.Con.Res. 74 on
December 21, by a vote of 48-45, and the House passed it on December 22, without objection.
In addition to providing about $400 billion for defense activities, P.L. 109-148 provided $29
billion for hurricane recovery efforts and $3.8 billion for avian flu preparedness. The 1% across-

69 Ibid., p. 31.
70 The full title of P.L. 109-148 is the Department of Defense, Emergency Supplemental Appropriations to Address
Hurricanes in the Gulf of Mexico, and Pandemic Influenza Act, 2006.





the-board spending cut, required by Section 3801 of the act, was an important component in
offsets to these additional amounts, as explained by Representative Jerry Lewis:
The conference report funds the DoD at $403.5 billion plus a bridge fund of $50 billion for
military operations in Iraq and Afghanistan. The conference report also includes a total of
$29 billion for disaster assistance to hurricane damaged areas as well as $3.8 billion for avian
flu preparedness. The conference report includes no new net spending for hurricane
assistance and avian flu. Any additional expenditures are offset by the following: reallocating
previously appropriated funds in FEMA’s Disaster Relief Fund, rescissions of unobligated
balances, and a one percent across-the-board reduction applied to all FY06 discretionary 71
spending with the exception of VA funding.
As indicated in a status report submitted by Representative Jim Nussle, Chairman of the House
Budget Committee, early in the following session, total discretionary spending provided in the
regular appropriations acts for FY2006 was about $9.6 billion below the cap of $843 billion 72
reflected in the budget resolution.
Section 3801(a) required an across an across-the-board cut of 1.00% in all FY2006 discretionary
appropriations, except for appropriations for the Department of Veterans Affairs and
appropriations designated as emergency requirements under procedures set forth in Section 402
of the FY2006 budget resolution. In addition, the cut applied to advance appropriations for
FY2006 provided in prior appropriations acts and certain contract authority.
According to an estimate furnished by the House Appropriations Committee, the 1.00% cut was
expected to yield about $8.5 billion in savings.
Rescissions made under the across-the-board cut had to be made proportionately at the account
and program, project, and activity level (Section 3801(b)). Additionally, the OMB director was
required to submit a report to the House and Senate Appropriations Committees “specifying the
account and amount of each rescission” made pursuant to the requirement for the across-the-
board cut (Section 3801(d)). The OMB report was due within 30 days after enactment of P.L.

109-148.


The text of Section 3801 is provided in the 0.
On January 5, 2006, OMB issued Bulletin 06-02, Guidance on Implementing the Government-
wide Across-the-Board Reduction in the Department of Defense Appropriations Act, 2006 (H.R.

2863), providing guidance to agencies on how to comply with the requirement for the 1.00% cut.


On February 8, 2006, the OMB director submitted the required report to the House and Senate
Appropriations Committees regarding the implementation of the spending cut. The OMB report
indicated that a total of $9,045.988 million in discretionary spending was rescinded (see Table 73

7).



71 See the remarks of Representative Lewis in the Congressional Record (daily ed.) of December 18, 2005, at p.
H12260.
72 See the remarks of Representative Nussle in the Congressional Record (daily ed.) of February 1, 2006, at pp. H129-
H132, especially the table at the bottom of p. H130.
73 Office of Management and Budget, FY2006 Government-wide Reduction, Feb. 8, 2006, pp. 1-48, available on the
OMB website at http://www.whitehouse.gov/omb.





The spending reductions in accounts, grouped in the OMB report by appropriations act, ranged
from $23.4 million for the Legislative Branch Appropriations Act to $1,703.0 million for the
Transportation-Treasury-HUD-Judiciary-D.C. Appropriations Act.
Table 7. FY2006 Rescissions Made Under the 1.00% Cut
Rescissions
Category ($ millions)
Agriculture and Rural Development Appropriations 188.142
Defense Appropriations 3,928.689
Energy and Water Development Appropriations 311.153
Foreign Operations Appropriations 130.539
Homeland Security Appropriations 307.123
Interior and Environment Appropriations 261.438
Labor-HHS-Education Appropriations 1,429.287
Legislative Branch Appropriations 23.362
Military Quality of Life-Veterans Affairs Appropriations 125.583
Science-State-Justice-Commerce Appropriations 637.727
Treasury-Transportation-HUD-Judiciary-D.C. Appropriations 1,702.956
Total 9,045.998
Source: Office of Management and Budget, FY2006 Government-wide Reduction, Feb. 8, 2006, pp. 1-48, available
on the OMB website at http://www.whitehouse.gov/omb







Sec. 301 of H.R. 3425, as Cross-Referenced in P.L. 106-113, the Consolidated Appropriations
Act for FY2000
(113 Stat. 1501A-303 and 304)
Sec. 301. (a) Government-Wide Rescissions.—There is hereby rescinded an amount equal to 0.38 percent of the
discretionary budget authority provided (or obligation limit imposed) for FY2000 in this or any other Act for each
department, agency, instrumentality or entity of the Federal Government.
(b) Restrictions.—In carrying out the rescissions made by subsection (a),—
(1) no program, project or activity of any department, agency, instrumentality or entity may be reduced by more
than 15 percent (with “programs, projects, and activities” as delineated in the appropriations Act or
accompanying report for the relevant account, or for accounts and items not included in appropriations Acts, as
delineated in the most recently submitted President’s budget),
(2) no reduction shall be taken from any military personnel account, and
(3) the reduction for the Department of Defense and Department of Energy Defense Activities shall be applied
proportionately to all Defense accounts.
(c) Report.—The Director of the Office of Management and Budget shall include in the President’s budget submitted
for FY2001 a report specifying the reductions made to each account pursuant to this section.
Division A, Section 1403 of H.R. 5666, as Cross-Referenced in P.L. 106-554, the
Consolidated Appropriations Act for FY2001
(114 Stat. 2763A-214)
Sec. 1403. (a) Government-Wide Rescissions.—There is hereby rescinded an amount equal to 0.22 percent of the
discretionary budget authority provided (or obligation limit imposed) for FY2001 in this or any other Act for each
department, agency, instrumentality, or entity of the Federal Government, except for those programs, projects, and
activities which are specifically exempted elsewhere in this provision: Provided, That this exact reduction percentage
shall be applied on a pro rata basis only to each program, project, and activity subject to the rescission.
(b) Restrictions.—This reduction shall not be applied to the amounts appropriated in Title I of P.L. 106-259: Provided,
That this reduction shall not be applied to the amounts appropriated in Division B of P.L. 106-246: Provided further,
That this reduction shall not be applied to the amounts appropriated under the Departments of Labor, Health and
Human Services, and Education, and Related Agencies Appropriations Act, 2001, as contained in this act, or in prior
Acts.
(c) Report.—The Director of the Office of Management and Budget shall include in the President’s budget submitted
for FY2002 a report specifying the reductions made to each account pursuant to this section.
Notes: In P.L. 106-259, the Department of Defense Appropriations Act for FY2001, Title I (114 Stat. 656-658)
pertained to military personnel accounts. In P.L. 106-246, the Military Construction Appropriations Act for FY2001,
Division B (114 Stat. 525-583) pertained to defense and nondefense emergency supplemental appropriations for
FY2000.





Division N, Section 601 of P.L. 108-7, the Consolidated Appropriations Resolution for
FY2003
(117 Stat. 550-551)
Sec. 601. (a) Across-the-Board Rescissions.—There is hereby rescinded an amount equal to 0.65 percent of—
(1) the budget authority provided (or obligation limitation imposed) for FY2003 for any discretionary account in
divisions A through K of this joint resolution;
(2) the budget authority provided in any advance appropriation for FY2003 for any discretionary account in any
prior fiscal year appropriations Act; and
(3) the contract authority provided in FY2003 for any program subject to limitation contained in this joint
resolution.
(b) Proportionate Application.—Any rescission made by subsection (a) shall be applied proportionately—
(1) to each discretionary account and each item of budget authority described in subsection (a); and
(2) within each such account and item, to each program, project, and activity (with programs, projects, and
activities as delineated in the appropriation Act or accompanying reports for the relevant fiscal year covering
such account or item, or for accounts and items not included in appropriation Acts, as delineated in the most
recently submitted President’s budget).
(c) The rescission in subsection (a) shall not apply to budget authority appropriated or otherwise made available by
this joint resolution in the following amounts in the following activities or accounts:
$4,696,000,000 provided for the Special Supplemental Nutrition Program for Women, Infants, and Children
(WIC) in the Department of Agriculture in division A;
$6,667,533,000 provided for the Head Start Act in the Department of Education in division G;
$23,889,304,000 provided for medical care in the Department of Veterans Affairs in division K; and
$3,836,000,000 provided for the Shuttle program in the National Aeronautics and Space Administration in
division K.





Division H, Section 168 of P.L. 108-199, the Consolidated Appropriations Act for FY2004
(118 Stat. 456-457)
Sec. 168(a). Rescissions.—From unobligated balances of amounts made available in P.L. 107-38, and in P.L. 107-117,
and in appropriations Acts for the Department of Defense, $1,800,000,000 is hereby rescinded: Provided, That the
Director of the Office of Management and Budget, after consultation with the Committees on Appropriations of the
House and Senate and the Secretary of Defense, shall determine the amounts to be rescinded from each account that
is to be so reduced: Provided further, That the rescissions shall take effect no later than September 30, 2004: Provided
further, That the Director of the Office of Management and Budget shall notify the Committees on Appropriations of
the House and Senate 30 days prior to rescinding such amounts: Provided further, That such notification shall include
the accounts, programs, projects and activities from which the funds will be rescinded: Provided further, That this
section shall not apply to any amounts appropriated or otherwise made available by the seventh proviso under the
heading “Emergency Response Fund” in P.L. 107-38.
(b) Across-the-Board Rescissions.—There is hereby rescinded an amount equal to 0.59 percent of—
(1) the budget authority provided (or obligation limitation imposed) for FY2004 for any discretionary account in
divisions A through H of this act and in any other FY2004 appropriation Act (except any FY2004 supplemental
appropriation Act, the Department of Defense Appropriations Act, 2004, or the Military Construction
Appropriations Act, 2004);
(2) the budget authority provided in any advance appropriation for FY2004 for any discretionary account in any
prior fiscal year appropriation Act; and
(3) the contract authority provided in FY2004 for any program subject to limitation contained in any division or
appropriation Act subject to paragraph (1).
(c) Proportionate Application.—Any rescission made by subsection (b) shall be applied proportionately—
(1) to each discretionary account and each item of budget authority described in such subsection; and
(2) within each such account and item, to each program, project, and activity (with programs, projects, and
activities as delineated in the appropriation Act or accompanying reports for the relevant fiscal year covering
such account or item, or for accounts and items not included in appropriation Acts, as delineated in the most
recently submitted President’s budget).
(d) OMB Report.—Within 30 days after the date of the enactment of this section the Director of the Office of
Management and Budget shall submit to the Committees on Appropriations of the House of Representatives and the
Senate a report specifying the account and amount of each rescission made pursuant to subsection (b).





Division J, Section 122 of P.L. 108-447, the Consolidated Appropriations Act for FY2005
(118 Stat. 3348)
Sec. 122 (a) Across-the-Board Rescissions.—There is hereby rescinded an amount equal to 0.80 percent of—
(1) the budget authority provided (or obligation limitation imposed) for FY2005 for any discretionary account in
divisions A through J of this Act and in any other FY2005 appropriation Act (except any FY2005 supplemental
appropriation Act, the Department of Homeland Security Appropriations Act, 2005, the Department of Defense
Appropriations Act, 2005, or the Military Construction Appropriations Act, 2005);
(2) the budget authority provided in any advance appropriation for FY2005 for any discretionary account in any
prior fiscal year appropriation Act; and
(3) the contract authority provided in FY2005 for any program subject to limitation contained in any division or
appropriation Act subject to paragraph (1).
(b) Proportionate Application.—Any rescission made by subsection (a) shall be applied proportionately—
(1) to each discretionary account and each item of budget authority described in such subsection; and
(2) within each such account and item, to each program, project, and activity (with programs, projects, and
activities as delineated in the appropriation Act or accompanying reports for the relevant fiscal year covering
such account or item, or for accounts and items not included in appropriation Acts, as delineated in the most
recently submitted President’s budget).





Division B, Section 3801 of P.L. 109-148, the Department of Defense, Emergency
Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico, and Pandemic
Influenza Act for FY2006
(119 Stat. 2791-2792)
Sec. 3801 (a) Across-the-Board Rescissions.—There is hereby rescinded an amount equal to 1 percent of—
(1) the budget authority provided (or obligation limitation imposed) for FY2006 for any discretionary account of
this Act and in any other FY2006 appropriation Act;
(2) the budget authority provided in any advance appropriation for FY2006 for any discretionary account in any
prior fiscal year appropriation Act; and
(3) the contract authority provided in FY2006 for any program subject to limitation contained in any FY2006
appropriation Act.
(b) Proportionate Application.—Any rescission made by subsection (a) shall be applied proportionately—
(1) to each discretionary account and each item of budget authority described in such subsection; and
(2) within each such account and item, to each program, project, and activity (with programs, projects, and
activities as delineated in the appropriation Act or accompanying reports for the relevant fiscal year covering
such account or item, or for accounts and items not included in appropriation Acts, as delineated in the most
recently submitted President’s budget).
(c) Exceptions.—This section shall not apply—
(1) to discretionary budget authority that has been designated pursuant to section 402 of H.Con.Res. 95 (109th
Congress), the concurrent resolution on the budget for FY2006; and
(2) to discretionary authority appropriated or otherwise made available to the Department of Veterans Affairs.
(d) OMB Report.—Within 30 days after the date of the enactment of this section the Director of the Office of
Management and Budget shall submit to the Committees on Appropriations of the House of Representatives and the
Senate a report specifying the account and amount of each rescission made pursuant to this section.
Robert Keith
Specialist in American National Government
rkeith@crs.loc.gov, 7-8659