Search Penny Hill Press

Friday, August 5, 2011

Statutory Limits on Total Spending as a Method of Budget Control

Megan Suzanne Lynch
Analyst on Congress and the Legislative Process

Often when there is dissatisfaction with budgetary levels, budget process reforms are proposed to mandate a specific budgetary policy or fiscal objective. This report focuses specifically on one such budget process reform—the concept of creating a statutory limit on total spending.

As discussed in this report, a total spending limit consists of statutory long-term or permanent limits on federal spending coupled with a statutory enforcement mechanism that would make automatic reductions in spending in the event that compliance with the limits is not achieved through legislative action. Such spending limits would comprise any new spending as well as spending that results from previously enacted law. By encompassing all types of spending, and by including a statutory enforcement mechanism, a total spending limit attempts to remedy a perceived limitation of the congressional budget resolution, under which Congress establishes limits on spending in various categories that can be enforced or waived by Congress at its own discretion.

The recent growth in spending, both in dollar terms and relative to the economy, has generated support for total limits on spending. Several groups and organizations have recommended a total spending cap, and on July 19, 2011, the House passed H.R. 2560, the Cut, Cap and Balance Act of 2011, which includes total spending limits for FY2013 through FY2021. In addition, the House-passed budget resolution for FY2012, H.Con.Res. 34, includes a policy statement calling for Congress to enact total spending limits. Other legislative proposals introduced in the 112
th Congress include total spending limits, such as S. 245, H.R. 1605, H.R. 1848, and H.R. 2041.

The potential effectiveness of a statutory limit on total spending is complicated by projection uncertainty, unforeseen events, and especially the complex nature of direct spending. Statutory limits have been subject to criticism for ceding Congress’s “power of the purse,” targeting spending rather than the deficit or debt, attempting to address a budgetary problem through procedure instead of policy changes that would themselves reduce spending, and for other reasons.

This report provides information on the concept of a statutory limit on total spending, including objectives, complications, and criticisms. The report also includes information on the many features of spending limit proposals, which can vary considerably. Lastly, the report provides observations on budgetary controls, similar to statutory spending limits, from an historical perspective.

Date of Report: July 26, 2011
Number of Pages: 21
Order Number: R41938
Price: $29.95

Follow us on TWITTER at or #CRSreports

Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.