The Budget Control Act of 2011

The Budget Control Act of 2011
Description of Updates to the Legislation
July 27, 2011

The Budget Control Act has been updated to make certain that House Republicans fulfill their pledge to cut spending more than we increase the debt limit.  Congressional Budget Office numbers confirm that the updated legislation adheres to this pledge: no new taxes; no blank check for the President; spending cuts greater than the size of the debt limit increase.

The bill has been revised to increase outlay savings, according to the Congressional Budget Office.  The Budget Control Act caps budget authority each of the fiscal years from 2012 to 2021.  Budget authority – the authority Congress provides to agencies to spend each year – is set at a fixed level for the next decade under the Budget Control Act.   Budget authority eventually results in the actual spending of money, which are recorded as outlays.  Outlays are recorded when agencies spend out the money they’ve been provided through budget authority.

The updated legislation makes no changes to the annual budget authority caps, but removes a limitation on outlay calculations that was included in the first version of the bill. This adjustment allows the Congressional Budget Office to provide a more accurate measure of the likely rate of spending.  In their new analysis of the Budget Control Act, the CBO estimates that the bill will reduce the deficit by $22 billion in FY 2012, and by $917 billion between 2012 and 2021. Under the bill, the President is given authority to increase the debt, under certain conditions, by up to $900 billion.  Based on CBO estimates, the spending savings exceed the amount of this debt increase.

The revised bill will also include a point of order against consideration of a measure that would violate the discretionary spending caps put in place by the bill, which in the Senate would require a three-fifths vote in the Senate to waive.  In addition, three provisions from the original bill are modified to address technical timing issues with respect to resolutions of disapproval.

For a review of discretionary spending next year under the Budget Control Act, showing real cuts relative to FY2011, and spending cuts far closer to the House-passed budget as opposed to the President’s request to increase government spending:

 Discretionary Spending
(Billions of $; excludes war funding)
    BA   OT
 FY 2011 Enacted  1,050  1,289
 FY 2012 President's Request  1,139  1,333
 FY 2012 House Budget Resolution  1,019  1,224
 FY 2012 Budget Control Act  1,043  1,241
 FY 2012 Reid Proposal  1,045  1,243

Read the Congressional Budget Office cost estimate of “The Budget Control Act of 2011" here.