Daily Report for Executives provides in-depth coverage of unfolding legislative, regulatory, and judicial news from the nation’s capital, the states, and around the world. This daily news service...
By Jonathan Nicholson
April 3 — If the Senate budget resolution is to be believed, lawmakers have made provisions for important issues like dealing with the discretionary budget caps and overhauling health care, but also things like preserving the northern long-eared bat and encouraging federal agencies to use empty space before renting or leasing new spaces.
Welcome to the wonderful world of budget “reserve funds,” budgetary placeholder provisions in the already largely symbolic House and Senate budget resolutions. As deficits have dwindled and neither congressional Republicans nor the White House are willing to step up with concrete legislation to tackle the debt, reserve funds have proliferated like legislative kudzu, as lawmakers seek a way to go on record for being in favor of something but with no requirement to lay out how they would pay for it.
The provisions sound impressive, implying a “reserve” of money somewhere in the budget outlines for the favored issue, and they often spawn press releases from the sponsoring lawmaker touting their achievement in being adopted. But with the funds' proliferation, their value as even political markers for future legislation may be called into question.
“I looked at it and I thought, holy cow!” said Bill Hoagland, a former Republican Senate budget staffer and veteran budget watcher, when he saw the Senate resolution.
“It's exploded here, from my perspective,” said Hoagland, senior vice president of the Bipartisan Policy Center.
The budget resolution (S. Con. Res. 11) as passed by the Senate March 27 contains 183 deficit-neutral or spending-neutral reserve funds, while the House blueprint (H. Con. Res. 27) contains a relatively modest, by comparison, 12 reserve funds, covering topics as diverse as overhauling the tax system to improving graduate medical education. The House plan, though, also includes an additional 20 “policy statements,” which have less practical effect than the reserve funds.
In theory, reserve funds are meant to give flexibility to the chairmen of the House and Senate Budget committees for later legislation. Most of the budget is composed of aspirational targets for outlays, organized by broad categories, revenues and deficits. If later legislation would result in a change in those aggregates, the reserve fund provision is meant to be an explicit out for the chairmen to update those aggregate numbers, provided the legislation deals with the subject of the reserve fund and meets any conditions of the fund, such as deficit neutrality or spending neutrality.
On a more practical level, the reserve funds allow lawmakers to say they got Congress to take a stand about an issue of local importance. The long-eared bat reserve fund, for example, would allow changes in budget aggregates to allow for legislation that “may include requirements that State conservation plans relating to the northern long-eared bat are given maximum flexibility to be successful so as to preserve and protect local and rural economies.” The Fish and Wildlife Service has listed the bat as threatened under the Endangered Species Act.
“This amendment puts the Senate on record opposing the FWS’s proposal to list the long-eared bat,” said Sen. John Thune (R-S.D.) in a statement issued March 27. “The forest management restrictions imposed due to the ESA listing would not only be devastating to forest health and combating the pine beetle epidemic, but would also jeopardize the more than 1,500 timber industry jobs and $119 million in revenue to local Black Hills economies.”
Hoagland said the idea originated back in the 1980s, when then-House Budget Chairman Bill Gray, a Pennsylvania Democrat, was negotiating a budget conference report with then-Senate Budget Chairman Pete Domenici, a New Mexico Republican. “It was a Bill Gray concept,” he said.
But over time the number of funds have proliferated. According to the Congressional Research Service, there was one reserve fund in the fiscal 1984 final budget resolution and two in 1987's resolution. In fiscal 1995, the first budget conference resolution under Republican congressional control, there were 13 reserve funds. When Democrats retook control in 2007, their first conference resolution contained 23 funds, a figure that grew to 48 in the fiscal 2010 conference report, the last budget conference.
In 2009, the Senate Budget Committee Republicans' “Informed Budgeteer” publication noted the increased number of deficit-neutral reserve funds: “In effect, DNRFs have become the latest incarnation of Sense of the Senate (SoS) amendments—non-binding, throwaway, hand-waving provisions. SoS provisions used to be a favorite way for Senators to express a notion on the Senate floor that the numbers in a budget resolution ‘supported' some favorite policy, but the Chairman and ranking member of the Senate Budget Committee have collaborated to keep SoS provisions out of the budget resolution. DNRFs have come rushing in to replace the vacuum.”
Hoagland said he basically agrees with that view and said they should be barred as amendments, as the “sense of Senate” statements were. Even as political markers, their value may be falling as they have flourished. They had value in the early days, he said, but are of marginal benefit politically now.
“As the supply increases, the price goes down,” Hoagland said.
To contact the reporter on this story: Jonathan Nicholson in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Heather Rothman at email@example.com
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)