Brief Section by Section Summary of Blue Dog Budget Substitute

Title I Recommended levels and amounts

Sets forth recommended levels for revenues, outlays, deficit, debt and allocations to major functional categories for fiscal years 2005 through 2014.  These amounts are shown in the attached chart.

The budget generally follows the Committee recommendations for discretionary spending, with the following changes

Function 350, Agriculture and Rural Development.  Provides an additional $314 billion in budget authority in fiscal year 2005 to bring the funding for the function back to the 2004 enacted levels with corresponding increases from 2005-2009

Function 370 Commerce and Housing Credit Provides an additional $100 million in budget authority in fiscal year 2005 to allow for continuation of Manufacturing Extension Program, Advanced Technology Program and SBA 7a loan program, with corresponding increases in subsequent years

Function 500 Education, Training and Social Services Provides an additional $400 million in budget authority in fiscal year 2005 with corresponding increases in subsequent years to allow for increased funding for No Child Left Behind, IDEA or other education programs.

Function 550 Health. Provides an additional $165 million in budget authority in fiscal year 2005 with corresponding increases in subsequent years to restore funding for community health clinics, rural health care programs and other discretionary health care programs.

Function 570 Medicare Eliminates the Committee recommendation to increase spending for the Medicare administrative budget in 2005 by $247 million above the President’s request, which is intended to reduce funding for advertising regarding the Medicare prescription drug legislation.

Function 700 Veterans Benefits and Services Provides an additional $600 million in budget authority in fiscal year 2005 with corresponding increases in subsequent years to improve veterans health care services and reduce the backlogs in the VA health care system.

Function 750 Administration of Justice Provides $307 million more in budget authority with corresponding increases in subsequent years to restore total funding to the levels requested by the President and avoid reductions in funding for first responders.

Title II --- Reconciliation

Section 201 Reconciliation Directs the Ways and Means Committee to report legislation no later than October 1, 2004 which reduces revenues by $10.36 billion in 2005 and increase revenues by $45.9 billion from 2005-2009 and $51.74 billion from 2005-2014. 

Provides sense of Congress that Ways and Means should comply with those instructions by extending family tax relief expiring after 2004 (full child tax credit, marriage penalty relief, expanded 10% bracket) for one year, providing permanent estate tax relief for family farms and small businesses and suspending reductions in top two marginal tax rates through 2010.

Directs the Ways and Means Committee to report legislation closing corporate tax loopholes, increasing tax compliance and other tax changes to offset additional tax relief for families and small businesses

Section 202 Submission of report on defense savings Requires the House Armed Services Committee to issue recommendations for savings within the defense budget for programs that are low priority or wasteful that could be reallocated to programs increasing combat capability of U.S. military forces by May 15, 2004

Title III—Reserve Funds and Enforcement

Subtitle A—Reserve Funds

Section 301 Reserve fund for military operations in Iraq and Afghanistan. Sets aside a reserve fund of up to $50 billion for supplemental appropriations for military operations in Iraq and Afghanistan shall not exceed $50 billion in new budget authority and the resulting outlays.  Sense of Congress that the President should submit an Iraq/Afghanistan supplemental through the end of the calendar year by June 30, 2004.

Section 302 Reserve fund for health insurance for the uninsured If the Ways and Means or Energy and Commerce Committee report legislation that would provide health insurance or expands access to care for the uninsured, reduces the cost of health insurance, then the Budget Committee may make the necessary adjustment to reflect the legislation, as long as the deficit wouldn’t be increase for FY2005 – FY2009.

Section 303 Adjustment for Surface Transportation. If the House Transportation and Infrastructure Committee reports a transportation bill that gives new budget authority in the highway and transit categories, the Budget Committee may make the appropriate changes to reflect such legislation from FY2005 – FY2009, as long as the change is offset by an increase in revenues to the highway trust fund.

Section 304 Reserve fund for permanent extension of tax cuts. The tax cuts enacted in 2001 may be made permanent if the enactment of such a tax cut would not cause or increase a unified budget deficit in 2011 or any other succeeding year covered in this bill.

Section 305 Reserve Fund for Local Law Enforcement Assistance.  If the Energy and Commerce Committee reports legislation providing for additional spectrum auctions, the Chairman of the Budget Committee may make adjustments to allow for legislation providing for additional local law enforcement assistance by the amount of receipts from the spectrum auctino

Section 306 Deficit Neutral Reserve Fund for Military Survivors Benefit Plans Allows for an increase in survivors’ benefits under the Military Survivors’ Benefit Plan if the legislation is deficit neutral.

Subtitle B—Enforcing fiscal discipline

Section 311 Point of Order against certain legislation reducing the surplus or increasing the deficit after fiscal year 2009 Establishes Calls for budget point of order on legislation that contains a providing which would decrease the surplus or increase the deficit that first takes effect after 2009.

Section 312Application and effect of changes in allocations and aggregates. Provides that changes in allocations based on reserve funds shall apply while the legislation is under consideration and take effect when the legislation is adopted

Section 313 Discretionary Spending Limits in the House Establishes discretionary spending limits in the House of Representatives for 2005 and 2006 and creates a point of order against any bill or resolution which would increase discretionary spending above those limits.  A separate vote would be required to waive that point of order.

Section 314 Emergency Legislation Establishes a general definition for emergency spending (unanticipated needs related to the loss of life or property, or a threat to national security that is sudden, urgent, unforeseen, which means not predicted or anticipated as an emerging need; and temporary).  Requires the President and appropriations committee to provide justifications for emergency spending based on the established criteria.  Allows for a separate vote to strike the emergency designation in a spending bill, unless it is a provision to make discretionary appropriations in the defense and/or homeland security programs.

Section 315 Pay as you go point of order in the House Reinstates PAYGO rules establishing a point of order against any legislation dealing with mandatory spending or revenues that would increase the deficit. This requirement would apply to all spending or revenue legislation which would increase the deficit. A separate vote would be required to waive that point of order.

Section 316 Disclosure of effect of legislation on the public debt Requires a disclosure of the effect of legislation on the public debt

Section 317 Disclosure of effect of legislation on the public debt Requires a disclosure  of the increased interest costs resulting from legislation.

Section 318 Dynamic scoring of tax legislation. Adds a requirement that the Congressional Budget Office provide an estimate of the macro-economic effect of legislation increasing or reducing the budget deficit.

Section 319 Advance Appropriations.  Limits the use of advance appropriations.

Subtitle C—Increase of Debt Limit

Section 321 Increase in debt limit. Directs the Ways and Means Committee to report separate legislation increasing the debt limit by $150 billion.   Restricts further increases in the debt limit, other than increases necessary to meet obligations of any military operation, to no more than $100 billion at a time until the Chairman of the Budget committee CBO certifies that the budget on path to achieve unified balance by 2012.

Section 322 Review of the budget outlook. The chairman of House Budget Committee may certify that a balanced budget is projected if the director of CBO states an outlook for a balanced budget by 2012 in the Budget and Economic Outlook Update for FY2005-2014.

Title IV—Sense of Congress Provisions

Section 401 Sense of Congress regarding budget enforcement. Legislation should be enacted to reinstate budget enforcement rules for PAYGO, setting discretionary spending limits, requiring separate votes to waive budget points of order, establishing a definition for emergency spending, and establishing rescission authority.

Section 402 Sense of Congress regarding tax reform Ways and Means should draft legislation to reform the IRS Code of 1986 to make in a revenue-neutral manner to improve savings and investment, and consider changes regarding dividends and retirement savings, corporate tax avoidance, and simplification of the tax laws.

Section 403 Sense of Congress regarding spending accountability Authorizing committees should actively engage in oversight; all Federal programs should periodically be reauthorized; committees should submit written justification for earmarks; the FY05 budget resolution should be vigorously enforced; nonwar-related supplemental appropriations should be offset.

Section 404 Sense of Congress regarding previously enacted tax legislation    Congress should review the impact of enacted tax cuts on total revenues, and that legislation should establish revenue targets to equal those established in the FY2004 budget, and provide stipulations if revenues come in under those targets.

Section 405 Sense of Congress regarding trigger mechanism for prescription drug legislation.  A trigger mechanism should be adopted that would reduce the costs of Medicare Rx Drug legislation through negotiation of Rx drug prices by the Secretary of HHS, and that if those negotiations did not sufficiently reduce costs, the President would have to submit alternative legislation.

Section 406 Sense of Congress regarding responsible funding for additional military end strength.  The function levels for defense discretionary spending assumes funding in the Military Personnel accounts for the costs of approximately 10,000 additional military personnel exceeding the normal strength levels.

Section 407 Sense of the House regarding funding for the manufacturing extension program  The function levels for defense discretionary spending assume continuation of the manufacturing extension program

Section 408 Sense of the House regarding the conservation spending category Legislation establishing discretionary caps should have a separate category for conservation spending.

Section 409 Sense of the House regarding the Ouchita-Black Navigation Project  Congress should fully fund Ouchita-Black Navigation Project  for 2005 and beyond

Section 410 Sense of the House regarding tax simplication Calls for a review of recent tax changes to reduce the tax and compliance burdens on middle class families and make the tax code simpler and fairer

Section 409 Sense of the House regarding LIHEAP Congress should fully fund the LIHEAP program at $3.4 billion a year