Understanding the details of complex budget legislation can be challenging. Yet having clarity on budget laws is vital for informed civic participation.
This article will explain the key provisions and context behind the Bipartisan Budget Act, including its objectives, mechanisms, criticism, and potential impact.
You will gain comprehension of this major budget law - from the motivations spurring its passage, to its deficit implications, to the debates surrounding certain funding provisions.
Introduction to the Bipartisan Budget Act
The Bipartisan Budget Act is federal legislation passed by Congress and signed into law by the President to set overall spending levels and budget priorities for the next two fiscal years.
Understanding the Bipartisan Budget Act
The Bipartisan Budget Act of 2018, officially known as the Consolidated Appropriations Act, 2018, was signed into law on February 9, 2018 as Public Law 115-123. This budget agreement sets federal spending caps and budget targets for fiscal years 2018 and 2019.
Objectives Behind the Budget Agreement
The key objectives behind passing this budget deal included:
- Preventing a government shutdown by setting spending levels to avoid funding gaps
- Suspending the debt ceiling to enable continued borrowing to fund government operations
- Providing relief from sequestration budget cuts
- Allocating funds for defense and domestic programs
- Offering emergency disaster relief funding
Overall, the Bipartisan Budget Act allows Congress and the President to agree on financial priorities and appropriations for the next two years.
What did the bipartisan budget act do?
The Bipartisan Budget Act of 2019 (H.R. 3877) was signed into law on August 2, 2019. This federal budget statute made several changes aimed at increasing spending and avoiding disruptions to government operations:
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It raised discretionary spending limits for defense and non-defense spending in fiscal years 2020 and 2021. This allowed Congress to allocate more funding to these areas without triggering automatic spending cuts under budget control measures.
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It suspended the debt ceiling through July 31, 2021. This avoided the risk of the federal government defaulting on its debt obligations and enabled continued borrowing to fund approved expenditures.
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It modified certain budget enforcement rules and procedures related to adjustments for disaster relief, Overseas Contingency Operations (OCO) spending, and more. This provided greater budget flexibility.
In short, the law enabled increased government spending for two fiscal years while suspending the debt limit. Supporters saw it as a bipartisan compromise to avoid fiscal cliffs, government shutdowns, and budget sequestration. Critics argued it worsened the federal deficit outlook without addressing core fiscal issues.
What is the Bipartisan Congressional Budget Reform Act?
The Bipartisan Congressional Budget Reform Act is a proposed federal statute that would reform the congressional budget process. Some of the key features of this act include:
Moving the Budget Resolution to a Two-Year Cycle
This act would shift the budget resolution from an annual to a biennial (two-year) cycle. However, annual appropriations would still be made each year. The goal is to allow Congress more time to focus on oversight and reviewing federal programs.
Capping Discretionary Spending
The act would set binding caps on discretionary spending for two years at a time. This aims to impose fiscal discipline and give more certainty in the budget process. Exceptions could be made for overseas contingency operations and emergency funds.
Requiring On-Budget OCO Designations
Overseas contingency operations (OCO) funds would need to be designated as such in the congressional budget resolution itself. This aims to limit the use of OCO as a "slush fund" outside of normal budget rules.
The Bipartisan Congressional Budget Reform Act is still in the proposal stages. If passed, it would significantly overhaul the federal budget process. The goals are to make budgets more transparent and impose greater fiscal restraint over a two-year timeframe.
What was the purpose of the budget Reform Act?
The Bipartisan Budget Act of 2018 was passed by Congress and signed into law by the President in February 2018. The main purpose of this federal budget law was to raise spending caps and suspend the debt ceiling in order to prevent a government shutdown and avoid potential economic disruption.
Specifically, the Act aimed to:
- Raise spending limits set by the Budget Control Act of 2011 by about $300 billion over two years
- Suspend the debt ceiling through March 2019 to allow continued borrowing to pay bills
- Allocate nearly $90 billion in emergency funds that don't count toward budget caps
- Provide funding certainty to agencies through an agreed upon spending framework
By raising budget caps and suspending the debt limit, the Act enabled increased investments in both defense and non-defense programs. It also gave Congress more time to negotiate long-term spending decisions.
Overall, the bipartisan budget agreement allowed for more government spending in the near term while providing some fiscal stability for federal agencies. However, critics argued it added too much to the deficit and debt while failing to institute meaningful budget reforms.
What is the BBA bipartisan budget act?
The Bipartisan Budget Act of 2018 (BBA) is a federal statute signed into law by President Donald Trump on February 9, 2018 concerning spending and budgeting in the United States.
The key components of the BBA include:
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Providing funding certainty for federal agencies and programs through fiscal years 2018 and 2019 by setting top-line discretionary spending figures and suspending the debt ceiling. This helped avoid a government shutdown.
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Increasing spending caps for defense and non-defense programs by $296 billion over two years compared to limits set in the Budget Control Act of 2011.
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Allocating $90 billion in disaster relief funding as emergency spending, not subject to spending caps.
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Extending funding for several healthcare programs like CHIP and community health centers.
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Modifying certain revenues and entitlements like the Medicare therapy cap and taxes related to retirement plans.
Overall, the BBA provided short-term certainty in federal spending and temporarily suspended fiscal restraints to increase expenditures. Supporters saw it as a bipartisan compromise while critics argued it worsened the deficit.
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Historical Prelude to the Bipartisan Budget Act
The Bipartisan Budget Act of 2018 has its roots in earlier budget legislation and fiscal policy debates. To understand the context around the 2018 Act, we must look at key historical events.
The Budget Control Act of 2011 and Its Legacy
The Budget Control Act of 2011 was signed into law by President Obama on August 2, 2011. This legislation came about due to a fiscal policy debate between Republicans and Democrats over raising the federal debt ceiling. The main components of the 2011 Budget Control Act included:
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Establishing caps on discretionary spending for defense and non-defense programs. This was intended to reduce the deficit over 10 years.
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Implementing a sequester mechanism if Congress failed to produce a plan to reduce spending on its own accord. The sequester involved automatic, across-the-board spending cuts to reach the established spending caps.
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Creating a bipartisan Congressional committee tasked with proposing ways to reduce the deficit by $1.5 trillion over 10 years. The committee did not come to an agreement, which triggered sequester budget cuts starting in 2013.
The legacy of the Budget Control Act of 2011 has been a consistent battle in Congress over sequester relief and attempts to adjust or eliminate spending caps through temporary agreements. This leads up to the 2018 Bipartisan Budget Act.
Evolving Budget Agreements: 2013 and 2015 Acts
In the years following the 2011 Budget Control Act, Congress passed temporary budget agreements to provide sequester relief:
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The Bipartisan Budget Act of 2013 provided sequester relief for 2014 and 2015 by establishing new higher spending caps for defense and non-defense discretionary spending.
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The Bipartisan Budget Act of 2015 again raised spending caps and suspended the debt limit into 2017. Over $80 billion in sequester relief was provided over two years.
These temporary measures set the stage for further budget debates and the 2018 Bipartisan Budget Act. The 2018 Act aimed to build on previous budget agreements to deliver sequester relief, adjust spending caps, and prevent government shutdowns.
Analyzing the Provisions of the Bipartisan Budget Act
The Bipartisan Budget Act made several key changes to federal discretionary spending caps and mandatory programs. This section provides an in-depth breakdown.
Navigating Discretionary and OCO Funding Levels
The Act raised discretionary spending caps for both defense and non-defense for fiscal years 2018 and 2019. This gave Congress more flexibility in setting funding levels through the annual appropriations process.
Specifically, the defense discretionary cap was raised by $80 billion and the non-defense discretionary cap by $63 billion over two years. The Act also included nearly $90 billion in Overseas Contingency Operations (OCO) funding, which serves as an addendum to the discretionary caps.
Some critics argued the additional OCO funding was a “slush fund” or accounting trick to bypass spending caps. However, supporters contended the increased funds were necessary to support ongoing military operations abroad.
Mandatory Spending Adjustments and Social Security Act Amendments
The Act included several adjustments to major mandatory programs:
- Delayed cuts to Medicaid disproportionate share hospital (DSH) payments until 2020.
- Provided additional funding for community health centers through fiscal 2019.
- Extended funding for the Children’s Health Insurance Program (CHIP) for 10 years.
- Included various reforms to Medicare and Medicaid aimed at program integrity and reducing waste/fraud.
Additionally, the Act amended Title XVI of the Social Security Act to make changes to child and family services programs. This included the new Family First Prevention Services Act providing funding for prevention/intervention services to assist families at risk of entering foster care.
In summary, the Bipartisan Budget Act provided short-term relief from discretionary spending caps while making adjustments to mandatory programs and social services. The long-term impact remains to be seen.
Critical Analysis of Reception and Impact
Policymaker Responses and Budgetary Opinions
The Bipartisan Budget Act received mixed reactions from policymakers. Supporters argued it would provide much-needed funding for defense and domestic priorities. For example, Speaker Paul Ryan said the Act "achieves our top priority – a strong national defense – while boosting other key priorities that will help create more jobs and build a stronger economy for all Americans."
However, critics raised concerns about rising budget deficits. Senator Rand Paul commented: "I cannot in good conscience vote to add more than $300 billion to the deficit. Both parties will use this big government spending blueprint to justify even more spending down the road." Similarly, Maya MacGuineas, President of the Committee for a Responsible Federal Budget said: "This budget deal would serve as a budget buster, not a budget deal," arguing it trades near-term military spending for long-term fiscal challenges.
Overall, while the Act received bipartisan support, some fiscal conservatives argued it worsened America's debt situation without making needed reforms to major entitlement programs driving long-term spending.
Budget Deficits and Government Spending Trends
The Bipartisan Budget Act is expected to raise budget deficits by over $300 billion from 2018-2027. In 2018, the federal budget deficit rose to $779 billion, 17% higher than the previous year. Experts attribute some of this increase to higher spending levels authorized by the Act.
Additionally, the Act's use of Overseas Contingency Operations (OCO) funding to bolster defense budgets raised transparency concerns. OCO funding is intended for emergency war costs but has been used by Congress as a "slush fund" to get around Budget Control Act spending caps. Some critics argue this accounting trick masks the true impact of defense spending.
Going forward, rising entitlement costs and interest payments on the national debt may make it difficult to sustain the higher spending levels in the Act. From 2017 to 2027, spending on Social Security, healthcare, and interest on the debt is projected to rise from 10.1% to 13.1% of GDP. Without reforms, these major drivers of spending growth could contribute to persistent budget deficits in the long run.
Controversial Aspects and Criticisms
The Bipartisan Budget Act contains some controversial elements that have sparked debate. This section explores two key areas of contention.
The 'Slush Fund' Allegation and OCO Controversy
Critics argue that the Overseas Contingency Operations (OCO) funding levels within the Act essentially serve as a "slush fund" to bypass statutory budget caps.
The Bipartisan Budget Act raises the OCO spending cap by $77 billion through 2028. OCO funds are intended for overseas military operations but do not count towards budget caps. Some policy analysts claim this additional OCO funding allows more defense spending while technically adhering to Budget Control Act spending limits.
Opponents state that excess OCO funds can be redirected towards purposes unrelated to overseas operations, becoming a "slush fund" for pet projects. Supporters counter that OCO flexibility is necessary to address evolving global threats.
Debate Over Defense Strategy and Capabilities Funding
The Act aims to align defense spending with the objectives laid out in the 2018 National Defense Strategy, which prioritizes readiness for great power competition with countries like China and Russia.
However, some military leaders and analysts argue that the Act fails to provide adequate growth in funding needed to modernize capabilities highlighted as critical in the Defense Strategy. For example, funding for new technologies like hypersonic weapons and artificial intelligence is well below requested amounts.
Supporters of the Act say it makes progress in correcting defense budget shortfalls while also increasing non-defense funding. But critics state the Act falls short of the significant, sustained defense growth needed to maintain military superiority.
In summary, while the Bipartisan Budget Act funds critical military and domestic priorities, disagreements remain regarding the sufficiency and strategic alignment of its defense spending provisions. The balance of security and non-security investments continues to foster healthy debate.
Legislative Mechanics and the Budget Process
An overview of the legislative process for the Bipartisan Budget Act, including the role of continuing resolutions and emergency funds.
From Budget Request to Bipartisan Agreement
The budget process begins each year when the President submits a budget request to Congress. This outlines the administration's spending priorities for the coming fiscal year.
Congress then works on passing budget resolutions, which set overall spending limits for federal agencies and programs. Because Congress often fails to agree on detailed spending bills, continuing resolutions are passed to temporarily fund the government based on previous years' funding levels.
When broader budget agreements are reached on top-line spending figures, the Bipartisan Budget Act incorporates these negotiated funding levels. The Act raises budget caps set under the Budget Control Act of 2011, avoiding automatic "sequestration" budget cuts.
The Bipartisan Budget Act of 2018 set spending levels for fiscal years 2018 and 2019, providing over $300 billion in new budget authority. This additional funding included increases for both defense and non-defense programs.
The Role of Continuing Resolutions in Bridging Funding Gaps
When annual appropriations bills that fund government operations are not enacted before the fiscal year begins on October 1, continuing resolutions (CRs) provide stopgap funding to avoid government shutdowns.
CRs typically maintain spending levels from the previous fiscal year for a temporary period, buying more time for Congress to negotiate detailed appropriations.
For example, prior to passing the Bipartisan Budget Act in February 2018, Congress enacted multiple short-term CRs to keep the government running. These temporary funding measures bridged funding gaps while budget negotiations continued.
The Bipartisan Budget Act finally set top-line funding levels for 2018 and 2019, avoiding further short-term CRs. The Act provided budget stability and prevented projected sequestration cuts through September 30, 2019.
Conclusion: Reflecting on the Bipartisan Budget Act's Legacy
Summarizing the Act's Key Takeaways
The Bipartisan Budget Act made important changes to government spending and revenue policies. Key takeaways include:
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The Act increased spending caps and suspended the debt ceiling into March 2019, avoiding a government shutdown. This provided short-term fiscal stability.
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It included nearly $300 billion in extra spending over two years which added to the federal deficit. There were no significant revenue increases to offset this additional spending.
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The Act addressed several expiring health care policies like CHIP funding and therapy caps under Medicare. This provided continuity of coverage for vulnerable groups.
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It made reforms like changes to IRS operations and mortgage insurance premium deductions which aimed to generate savings or increase revenues.
Assessing Long-Term Implications for Federal Budgets
The Bipartisan Budget Act was a short-term compromise on fiscal issues. It did not address structural problems in the federal budget process. Key implications include:
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Increased deficit spending without corresponding revenue measures is unsustainable long-term. This risks higher debt burdens for future generations.
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Stopgap measures on discretionary spending caps and the debt ceiling set up future fiscal policy conflicts between political parties.
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Bipartisan deals to increase spending while cutting revenues underscore deep divisions on fiscal priorities. This leads to rising deficits and debt levels over time.
In conclusion, while the Act avoided disruptive outcomes in the near-term, its legacy is one of postponed debates on major budget reforms. Underlying fiscal issues remain unresolved.
