Revenue Reconciliation Directives to the Senate Finance Committee in Congressional Budget Resolutions

Revenue Reconciliation Directives to the
Senate Finance Committee in Congressional
Budget Resolutions
Robert Keith
Specialist in American National Government
Government and Finance Division
Summary
During the more than 30 years that the congressional budget process has been in
effect, the Senate Finance Committee has been subject to revenue reconciliation
directives in a budget resolution on 18 occasions. Nine instances involved directives to
reduce revenues, while the remaining nine instructed the committee to increase
revenues. In all but three of the 18 instances, revenue reconciliation directives to the
committee were accompanied by spending reconciliation directives.
The revenue reconciliation directives varied in their time frame, from single-year
coverage (in the FY1976, FY1981, and FY1990 budget resolutions) to 11-year coverage
(in the FY2002 and FY2004 budget resolutions). Further, the amount of required
revenue changes ranged from less than $5 billion in a single year to $1.250 trillion over

11 years. The eight budget resolutions agreed to by the House and Senate over the 11-

year period covering FY1996-FY2007 (no budget resolution was agreed to for FY1999,
FY2003, FY2005, or FY2007) all included reconciliation directives to reduce revenues.
This report will be updated as developments warrant. (For additional information,
see CRS Report RS21993, Spending Reconciliation Directives to the Senate Finance
Committee in Congressional Budget Resolutions, by Robert Keith and Bill Heniff Jr.)
The budget reconciliation process is an optional procedure under the Congressional
Budget Act of 1974 (P.L. 93-344, as amended) that operates as an adjunct to the annual
budget resolution process. The 1974 act first became effective for FY1976, and Congress
has completed action on at least one budget resolution each year, except for FY1999,
FY2003, and FY2005.
The chief purpose of the reconciliation process is to enhance Congress’s ability to
change current law in order to bring revenue, spending, and debt-limit levels into
conformity with the policies of the budget resolution. Accordingly, reconciliation
probably is the most potent budget enforcement tool available to Congress for a large
portion of the budget.

Reconciliation is a two-stage process in which reconciliation directives are included
in the budget resolution, directing the appropriate committees to develop legislation
achieving the desired budgetary outcomes, and the resultant legislation (usually
incorporated into an omnibus bill) is considered under expedited procedures in the House
and Senate. No reconciliation legislation can be developed or considered unless a budget
resolution containing reconciliation directives is adopted by both chambers.¹ Each
directive to a committee is specified as discrete dollar amounts of spending (budget
authority, outlays, or both), revenues, deficit reduction (any combination of spending and
revenues), or the debt limit to be increased or reduced for a fiscal year or a range of fiscal
years.
Reconciliation was first used by the House and Senate in calendar year 1980 for
FY1981.² As an optional procedure, it has not been used every year. During the more
than 30 years that the congressional budget process has been in effect, 18 reconciliation
measures were enacted into law and three were vetoed.³
In recent years, there has been heightened interest in the Senate in several aspects of
reconciliation procedure and precedents. In particular, there has been some public
discussion regarding the appropriateness of including in a budget resolution reconciliation
directives intended to reduce, rather than increase, revenues.⁴ In order to provide some
background relevant to this issue, Table 1 sets forth information on revenue reconciliation
directives to the Senate Finance Committee in the budget resolutions adopted by
Congress.

¹ The House and Senate sometimes have put budget enforcement procedures into effect in the
absence of a budget resolution by means of a “deeming resolution.” Although a deeming
resolution has not been used to trigger action on a reconciliation measure, presumably this course
of action remains an option for the House and Senate. If a consensus did not exist to support a
budget resolution, however, it might likely not exist to support reconciliation legislation either.
For more information on deeming resolutions, see CRS Report RL31443, The “Deeming
Resolution”: A Budget Enforcement Tool, by Robert Keith.
² The Senate considered a revenue-reduction bill for FY1976 (H.R. 5559) under reconciliation
procedures in December 1975. It was initiated under a second budget resolution for that fiscal
year and was not considered to be a reconciliation bill in the House; the bill did not become law.
³ For an identification of individual reconciliation measures, see CRS Report RL30458, The
Budget Reconciliation Process: Timing of Legislative Action, by Robert Keith.
⁴ See, for example: Bureau of National Affairs, Daily Report for Executives, “House Passes GOP
Budget Resolution; Domenici to Unveil His Budget March 29,” by Bud Newman, no. 61,
Thursday, Mar. 29, 2001, p. GG-1; and National Journal, CongressDaily, “Daschle Seeks to
Delay Budget Debate Beyond Recess,” by Geoff Earle and Lisa Caruso, Thursday, Mar. 29,
2001, p. 1. In 1996, the Senate considered a parliamentary challenge to a budget resolution on
the ground that it included reconciliation directives to reduce revenues such that the deficit would
increase; the challenge was defeated (see the remarks of Senators Daschle, Domenici, and others
in the Congressional Record of May 21, 1996, at pp. S5415-S5431).

Since the inception of the congressional budget process, the Senate Finance
Committee has been subject to revenue reconciliation directives in a budget resolution on
18 occasions (see Table 1). Nine of the resolutions directed the Finance Committee to
reduce revenues, while the remaining nine instructed the committee to increase revenues.
There has been an ongoing controversy as to whether the directive for FY1976 to
reduce revenues by $6.4 billion properly constituted a reconciliation directive, but
Riddick’s Senate Procedure indicates that the resultant legislation was considered under
the reconciliation procedures set forth in the 1974 Congressional Budget Act, so the
directive is listed in Table 1.⁵
The nine instances in which reconciliation directives applied to revenue increases
occurred between FY1981 and FY1994, when deficit reduction was the overriding focus
of federal budget policy. Deficit estimates during this period generally ranged from a
little below $100 billion to nearly $300 billion per year. In each instance, the Finance
Committee also was subject to reconciliation directives to reduce spending.
Aside from the FY1976 experience, the reconciliation directives that involved
revenue decreases occurred during eight of the past 12 fiscal years, excluding FY1999,
FY2003, FY2005, and FY2007, when no budget resolution was agreed to by the House
and Senate. During this period, the deficit first declined markedly (in FY1996 and
FY1997) compared to levels in immediately preceding years, then the first surpluses in
many years occurred (in FY1998-FY2001), and finally the budget returned to deficit.
For FY2000 and FY2001, unlike the practice for the preceding two decades, the
Finance Committee was subject only to revenue reconciliation directives; no spending
reconciliation directives were included for the Finance Committee or any other
committee. For FY2002, the reconciliation directives included a $100 billion increase in
outlays, as well as revenue reductions of $1.250 trillion, over the period covering
FY2001-FY2011. For FY2004, the reconciliation directives included a $27.5 billion
increase in outlays, as well as revenue reductions of $522.5 billion, over the period
covering FY2003-FY2013. The reconciliation directives to increase outlays were
intended to accommodate related tax policy changes.
The revenue reconciliation directives varied in their time frame, from single-year
coverage (in the FY1976, FY1981, and FY1990 budget resolutions) to 11-year coverage
(in the FY2002 and FY2004 budget resolutions). Further, the amount of required revenue
changes ranged from less than $5 billion in a single year to $1.250 trillion over 11 years.

⁵ See Riddick’s Senate Procedure: Precedents and Practices (revised edition), by Floyd M.
Riddick and Alan S. Frumin, S.Doc.No. 101-28 (Washington: 1992), pp. 622-623.

Table 1. Revenue Reconciliation Directives to the Senate Finance Committee
in Congressional Budget Resolutions: FY1976-FY2007
FiscalCongress/Budget^aConferenceReportAmount of Revenue Increase (+)^bInstructions to
YearSessionResolution (H.Rept.)or Decrease (-) Change Spending?
197694/1H.Con.Res. 46694-698-$6.4 billion (FY1976)No

1977[no reconciliation directives]

1978[no reconciliation directives]

1979[no reconciliation directives]

1980[no reconciliation directives]

198196/2H.Con.Res. 30796-1051+$4.2 billion (FY1981)Yes
ⁱ^{ki/CRS-RS20870}
^g/w198297/1H.Con.Res. 11597-46[no revenue reconciliation directives]Yes
^s^.or
^le^ak198397/2S.Con.Res. 9297-614+$20.9 billion (FY1983)Yes
+$36.0 billion (FY1984)
^://wiki+$41.4 billion (FY1985)
^h^ttp
198498/1H.Con.Res. 9198-248+$12.0 billion (FY1984)Yes
+$15.0 billion (FY1985)
+$46.0 billion (FY1986)

1985[no reconciliation directives]

198699/1S.Con.Res. 3299-249+$1.8 billion (FY1986)Yes
+$3.0 billion (FY1987)
+$3.6 billion (FY1988)

198799/2S.Con.Res. 12099-664+$3.5 billion (FY1987)Yes

+$2.6 billion (FY1988)
+$2.4 billion (FY1989)

FiscalCongress/BudgetConferenceReportAmount of Revenue Increase (+)Instructions to
YearSessionResolution ^a(H.Rept.)or Decrease (-) ^bChange Spending?
1988100/1H.Con.Res. 93100-175+$19.3 billion (FY1988)Yes
+$22.0 billion (FY1989)
+$23.0 billion (FY1990)

1989[no reconciliation directives]

1990101/1H.Con.Res. 106101-50+$5.3 billion (FY1990)Yes
1991101/2H.Con.Res. 310101-820+$13.225 billion (FY1991)Yes
+$118.800 billion (FY1991-FY1995)

1992[no reconciliation directives]

1993[no reconciliation directives]

ⁱ^{ki/CRS-RS20870}
^g/w1994103/1H.Con.Res. 64103-48+$27.293 (FY1994)Yes
^s^.or+$272.105 (FY1994-FY1998)
^le^ak1995[no reconciliation directives]
^://wiki1996104/1H.Con.Res. 67104-159-$50.0 billion (FY2002)Yes
^h^ttp-$245.0 billion (FY1996-FY2002)
1997104/2H.Con.Res. 178104-612-$122.4 billion (FY1997-FY2002)Yes
1998105/1H.Con.Res. 84105-116-$20.5 billion (FY2002)Yes
-$85.0 billion (FY1998-FY2002)

1999[no budget resolution]

2000106/1H.Con.Res. 68106-91-$0 (FY2000)No
-$142.315 billion (FY2000-FY2004)
-$777.868 billion (FY2000-FY2009)
2001106/2H.Con.Res. 290106-577-$11.6 billion (FY2001)No
-$150.0 billion (FY2001-FY2005)

2002107/1H.Con.Res. 83107-60-$1,250.0 billion (FY2001-FY2011)Yes

FiscalCongress/BudgetConferenceReportAmount of Revenue Increase (+)Instructions to
YearSessionResolution ^a(H.Rept.)or Decrease (-) ^bChange Spending?

2003[no budget resolution]

2004108/1H.Con.Res. 95108-71-$522.524 billion (FY2003-FY2013)Yes

2005[no budget resolution]

2006109/1H.Con.Res. 95109-62-$11.0 billion (FY2006)Yes
-$70.0 billion (FY2006-2010)

2007[no budget resolution]

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