Often, legislation other than an annual appropriation act calls for-or “authorizes”-discretionary spending by extending an agency’s authority to operate an existing discretionary program, by authorizing an agency to undertake a new discretionary program or activity, or by changing the way an existing discretionary program is operated. Does other legislation affect discretionary spending? Legislation that changed direct spending would, by itself, affect the budget deficit because no further legislative action would be required for the change in spending to occur. Roughly 60 percent of federal spending in 2012 (other than for the government’s net interest costs) was mandatory. Social Security and some other mandatory spending programs are in effect indefinitely, but some (for example, some agriculture programs) expire at the end of a given period. Outlays for the nation’s three largest entitlement programs (Social Security, Medicare, and Medicaid) and for many smaller programs (unemployment compensation, retirement programs for federal employees, student loans, and deposit insurance, for example) are mandatory spending. Mandatory spending is generally governed by statutory criteria it is not normally set by annual appropriation acts. Mandatory-or direct-spending includes spending for entitlement programs and certain other payments to people, businesses, and state and local governments. As the Congress considers appropriation acts, CBO tallies the budget authority those acts would provide and estimates the outlays that would result. Those appropriations are subject to a set of budget enforcement rules and processes that differ from those that apply to mandatory spending. Most defense, education, and transportation programs, for example, are funded that way, as are a variety of other federal programs and activities. The authority for discretionary spending stems from annual appropriation acts, which are under the control of the House and Senate Appropriations Committees. What is the difference between mandatory and discretionary spending? Federal revenues-effects on federal tax receipts and revenues from other sources (as estimated by the staff of the Joint Committee on Taxation for most tax legislation or by CBO for legislation dealing with certain sources of revenue, such as receipts from customs duties, fees, and fines).Mandatory, or direct spending-that is, spending controlled by laws other than appropriation acts and.Discretionary spending-that is, spending stemming from authority provided in annual appropriation acts.What federal budgetary effects are identified?ĬBO’s cost estimates show how new legislation would affect three primary components of the federal budget ( see the graphic): For more details on the format of formal cost estimates, see CBO's Cost Estimates Explained. Each estimate also includes a statement about the costs of any new federal mandates that the legislation would impose on state, local, or tribal governments or on the private sector. What information is included in a formal estimate?Ĭost estimates show how federal outlays and revenues would change if legislation was enacted and fully implemented as proposed-compared with what future spending and revenues would be under current law. Such cost estimates are intended to ensure that when the House and Senate consider legislation recommended by committees, Members have information about the budgetary consequences of enacting that legislation that can be used to enforce budgetary rules or targets. The Congressional Budget and Impoundment Control Act of 1974, which established the agency, directs CBO to estimate the costs of bills and resolutions approved by Congressional committees other than the House and Senate Appropriations Committees. A printer-friendly version of the faqs is available. The agency’s analysts often provide preliminary estimates to committee staff, helping them weigh different options for achieving legislative goals. The estimates are posted on CBO’s website in chronological order, and they are searchable by bill number, title, committee, and program area each generally includes a description of the legislation, a statement about its estimated budgetary impact, and an explanation of the basis for that estimate.ĬBO also fulfills numerous requests for technical assistance as committees are crafting legislation, as amendments to bills are being debated, and at other stages in the legislative process. Each year, CBO provides the Congress with several hundred cost estimates that analyze the likely effects of proposed legislation on the federal budget.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |