Generally, the budget resolution establishes an annual agreement between the House and Senate on budgetary levels for the upcoming fiscal year (and at least four additional years). The budget resolution does not become law, and no money is spent or collected as a result of its adoption. Instead, it is an agreement between the House and Senate meant to assist Congress in developing federal budget policy. It also allows Congress to trigger and employ a powerful legislative process referred to as the budget reconciliation process.

In August 2021, the House and Senate adopted S.Con.Res. 14, a budget resolution for FY2022 (the fiscal year that begins October 1, 2021). This report provides a summary of the provisions of S.Con.Res. 14, including the reconciliation directives.

In February 2021, Congress adopted S.Con.Res. 5, a budget resolution for FY2021. Although FY2021 began on October 1, 2020, the House and Senate had not yet adopted a budget resolution for FY2021. When the 117^th Congress began on January 3, 2021, an opportunity for a budget resolution for FY2021, therefore, remained available. Employing a budget resolution for the fiscal year that had already begun allowed Congress to maximize use of the budget reconciliation process in calendar year 2021. S.Con.Res. 5 triggered the reconciliation process, under which the American Rescue Plan Act (P.L. 117-2) was developed. For more information on that budget resolution, see CRS Report R46675, S.Con.Res. 5: The Budget Resolution for FY2021, by Megan S. Lynch and James V. Saturno.

Legislative History

S.Con.Res. 14 was introduced on August 9, 2021, and referred to the Senate Budget Committee, which was automatically discharged from consideration of the resolution pursuant to Section 300 of the Congressional Budget Act (P.L. 93-344, as amended).¹ The next day, the Senate agreed to a motion to proceed to the consideration of S.Con.Res. 14 by a vote of 50-49. The measure was considered by the Senate on August 10 and into the early morning of August 11. Twenty-nine amendments were agreed to before the Senate ultimately adopted S.Con.Res. 14 by a vote of 50-49 on August 11.

On August 24, the House Rules Committee reported H.Res. 601, which stated that upon adoption of H.Res. 601, the budget resolution S.Con.Res. 14 would automatically be adopted. This meant that S.Con.Res. 14 could be agreed to by the House without requiring a separate vote on its adoption. H.Res. 601 was adopted later that day, on August 24, by a vote of 220-212.

Budgetary Totals

A budget resolution is required to include levels of budget authority, outlays, revenue, deficits, and debt for the upcoming budget year² and at least four additional years.³ Once the budget resolution has been agreed to by both chambers, certain levels contained in it may be enforced through points of order.⁴ Budgetary levels that are enforceable include spending and revenue aggregates as well as committee spending allocations.⁵ Certain budgetary totals included in S.Con.Res. 14 are included below in Table 1.

The levels in the budget resolution represent federal aggregates and do not include programmatic spending details. Assumptions concerning some major programs may be noted in documents accompanying the budget resolution, but these assumptions are not binding on the committees of jurisdiction.⁶

Reconciliation Directives

If Congress intends to use the reconciliation process, reconciliation directives (also referred to as reconciliation instructions) must be included in the budget resolution. These directives instruct individual committees in the House and Senate to develop and report legislation that would change laws within their jurisdictions to accomplish a specific budgetary goal. Such reconciliation legislation is then eligible to be considered under special expedited procedures in both the House and Senate. These procedures are especially important in the Senate, as they include a 20-hour limit on debate time and therefore mean that a reconciliation bill does not require the support of three-fifths of Senators to bring debate to a close.⁷

Title II of S.Con.Res. 14 includes reconciliation directives to 25 House and Senate committees instructing them each to develop and report legislation within their jurisdictions increasing or decreasing the deficit by a specified amount. House and Senate committees and their specified budgetary instruction are listed below in Table 2 and Table 3, respectively. Each committee is directed to submit its legislative recommendations to its chamber's Budget Committee, which is then to package the committee responses into an omnibus budget reconciliation bill and report the measure to its respective chamber without "any substantive revision."⁸

S.Con.Res. 14 directs the specified House and Senate committees to submit their legislative text to the Budget Committees of their respective chambers not later than September 15, 2021.⁹ There is no procedural mechanism for requiring a committee to report reconciliation legislation in response to its directive. Each chamber, however, may employ methods of moving forward with reconciliation legislation and include legislative language that falls within the nonreporting committee's jurisdiction in the event that the committee has not reported by the September 15 deadline.¹⁰

The directives to the 12 Senate committees total $1.75 trillion in potential deficit increases over the 10-year period, while the directives to the 13 House committees total approximately $1.975 trillion in potential deficit increases over the 10-year period. The House Budget Committee has indicated that the "total of Committee instructions does not equal the total cost of the package because the instructions reflect offsets and overlapping jurisdictions."¹¹

The reconciliation directives included in S.Con.Res. 14 specify the dollar amount by which reconciliation legislation should alter deficit levels. Directives to reduce the deficit (given only to the House Committee on Ways and Means and the Senate Committee on Finance in S.Con.Res. 14) include a dollar amount that in practice is considered a minimum amount of deficit reduction, sometimes referred to as a floor, meaning that the committees may report greater deficit reduction but not less. Conversely, directives to increase deficits are considered a maximum, sometimes referred to as a ceiling, meaning that the committees may report legislation with lower levels of deficit increases but not greater. It should also be noted that compliance with reconciliation instructions is measured on a net basis. This means that a committee's response might include both deficit increases and deficit decreases so long as, taken as a whole, the legislative text is in compliance with the instruction. For example, in this case the House Committee on Ways and Means received an instruction to reduce the deficit by at least $1 billion. The committee could, therefore, include in its response legislation that would increase spending by any amount so long as there were corresponding offsets included that would reduce the deficit by at least $1 billion.

All of the reconciliation directives in S.Con.Res. 14 are framed in terms of increasing or decreasing the deficit and do not include directives related to amending the public debt level. It is, therefore, not anticipated that any resulting reconciliation bill would include an adjustment to the public debt limit.¹²

Reserve Funds

Congress frequently includes "reserve funds" in the annual budget resolution. These provisions are not technically reserves or funds but instead give the chairs of the House or Senate budget committees the authority to adjust the budgetary levels included in the budget resolution in the future if the chamber is considering a specified legislative policy. Generally, the procedural effect of a reserve fund is to allow certain legislative policies to be considered on the floor without triggering a point of order for violating levels in the budget resolution. Often, reserve funds require that the net budgetary impact of the specified future legislation not increase the deficit and are referred to as "deficit neutral" reserve funds.

While reserve funds may have a budget procedure effect, they do not provide funding for any specific policy. Additionally, they do not require Congress to include such a policy in future legislation, nor do they prohibit Congress from taking future action on a policy. They have sometimes been characterized as a way for Senators to receive a nonbinding vote on a certain policy or to signal support (or lack of support) for a certain policy, in the same manner as a "sense of the Senate" provision.¹³

Title III of S.Con.Res. 14 includes more than 30 reserve funds, most of which apply solely in the Senate (see below). Two reserve funds apply in both the House and the Senate. One allows the House and Senate budget committee chairs to adjust budgetary levels in the resolution to accommodate a reconciliation bill developed pursuant to the reconciliation instructions included in the budget resolution. In addition, the provision exempts such a reconciliation bill from other budgetary chamber rules.¹⁴ Another reserve fund allows the House and Senate budget committee chairs to adjust budgetary levels in the resolution to accommodate unspecified legislation that would not increase the deficit over the period of FY2022-FY2031.

Other Senate reserve funds were also included in S.Con.Res. 14. These provisions provide the Senate Budget Committee chair with the authority to adjust the budgetary levels included in the budget resolution in the future if the chamber is considering certain legislative policy. Such legislative policy is described in S.Con.Res. 14 as legislation that would

• not raise taxes on people making less than $400,000;
• prohibit the Green New Deal;
• address the crisis of climate change;
• support privately held businesses, farms, and ranches;
• promote U.S. competitiveness and innovation by supporting research and development;
• protect taxpayer privacy while ensuring those evading the tax system pay what they owe;
• prohibit the Council on Environmental Quality and the Environmental Protection Agency from promulgating rules or guidance that bans fracking in the United States;
• facilitate improved internet service for Cuban citizens;
• adjust federal funding for local jurisdictions;
• honor the Capitol Police, the District of Columbia Metropolitan Police, and first responders;
• support or expedite the deployment of carbon capture, utilization, and sequestration technologies;
• prohibit the Department of Agriculture from making fossil-fuel-burning plants ineligible for financing;
• relate to the provisions of the American Rescue Plan;
• relate to means-testing electric vehicle tax credits;
• relate to, prohibit, or limit the issuance of costly Clean Air Act permit requirements on framers and ranchers in the United States or the imposition of new federal requirements on livestock;
• fund the Office of Foreign Assets Control;
• relate to abortion funding;
• ensure robust, secure, and humane supply chains sourced by the United States and its allies for renewable energy materials, technology, and critical minerals;
• prohibit funding to purchase materials, technology, and critical minerals produced, manufactured, or mined with forced labor;
• relate to Great Lakes ice-breaking operational improvements;
• relate to immigration enforcement and addressing the humanitarian crisis at the southern border;
• provide quality education for children;
• relate to hiring 100,000 new police officers;
• prevent electricity blackouts and improve electricity reliability;
• protect migrant and local communities against COVID-19;
• relate to studying and providing for tax equivalency under the payments-in-lieu-of-taxes program;
• prevent tax increases on small businesses;
• provide sufficient resources to detain and deport a higher number of aliens who have been convicted of crimes; or
• maintain the current law tax treatment of like kind exchanges.

Other Provisions

S.Con.Res. 14 includes various other procedural provisions, some of which are commonly included in a budget resolution. S.Con.Res. 14 includes the following:

• A provision stating that the budgetary effects of spending designated as an emergency "shall not count" for the purposes of enforcing budgetary rules in the House and Senate. It also removes the previous ability of a Senator to raise a point of order against an emergency designation.¹⁵
• Provisions related to points of order in the House and Senate prohibiting advance appropriations with certain exceptions.¹⁶
• Provisions granting the chairs of the House or Senate budget committees the authority to adjust the budgetary levels included in the budget resolution for legislation providing appropriations for continuing disability reviews and redeterminations, Internal Revenue Service enforcement;, health care fraud and abuse control, reemployment services and eligibility assessments, wildfire suppression, disaster relief, and veterans' medical care.¹⁷
• A provision relating to committee spending allocations. The Budget Act requires that the budget resolution allocate total spending among committees, typically referred to as 302(a) allocations. The allocations act as a limit on the total spending within a specific committee's jurisdiction and are required to be included in the joint explanatory statement accompanying the conference report on the budget resolution. This provision states that in the event that S.Con.Res. 14 were agreed to without the House and Senate engaging in a conference committee (and therefore issuing a joint explanatory statement) the House and Senate Budget Committee chairs must submit a statement for publication in the Congressional Record establishing committee allocations.¹⁸
• A provision specifying the timing of when any adjustments of budgetary levels made by the House and Senate budget committee chairs (pursuant to authority granted in the resolution) should occur and requiring that the adjustments be published in the Congressional Record as soon as practicable. The provision also specifies that for the purposes of enforcing the budgetary levels in the resolution, budgetary amounts are determined on the basis of estimates made by the House and Senate budget committee chairs.¹⁹
• A provision granting authority to the House and Senate budget committee chairs to make adjustments to the budget resolution to account for changes in concepts and definitions.²⁰
• Provisions granting authority to the House and Senate budget committee chairs to make adjustments to the budget resolution to reflect budgetary changes resulting from the enactment of specified infrastructure legislation.²¹
• A provision stating that the adjustments provided in the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 901(b)) shall not apply to the levels established pursuant to this concurrent resolution.²²
• A provision requiring that the House and Senate appropriations committees receive separate allocations for discretionary administrative expenses of off-budget entities (the Social Security Administration and the U.S. Postal Service).²³
• A provision granting to the House Budget Committee chair the authority to adjust budgetary levels in accordance with the budget resolution.²⁴
• A provision granting authority to the House Budget Committee chair to make adjustments to the budget resolution to account for changes resulting from updates from the Congressional Budget Office (CBO) to its baseline for FY2022-FY2031.²⁵
• A provision stating that during the 117^th Congress, in the Senate, for the purposes of cost estimates for nondiscretionary spending legislation related to any child care or pre-kindergarten legislation, CBO shall assume that funding for programs under the Head Start Act continue at baseline levels.²⁶
• A provision noting that the budget resolution is being adopted as an exercise of Congress's constitutional rulemaking authority and should therefore be considered as if it were a part of the rules of the House and Senate.²⁷