Senators are proposing hundreds of “deficit-neutral reserve funds.” What gives?

March 22, 2013

Sen. Michael Crapo (R-ID, above) gets a reserve fund, and Barbara Mikulski gets a reserve fund, and you get a reserve fund… (Melina Mara / Washington Post)

Vote-a-rama has officially begun.

The annual ritual (or supposed-to-be-annual, anyway), in which amendments are offered to the Senate budget resolution and the world's greatest deliberative body takes forever to vote on all of them, is underway, with amendments on everything from the Affordable Care Act to drones. Many of them promise to establish "deficit-neutral reserve funds."

For example, Sen. Barbara Mikulski (D-MD) proposed a "deficit-neutral reserve fund to require equal pay policies and practices" and Sen. Michael Crapo (R-ID) proposed to "repeal the tax increases enacted under the Patient Protection and Affordable Care Act that were imposed on low- and middle-income Americans."

Wait, what? How is repealing taxes "deficit-neutral"? Well, it isn't obviously; Crapo is just required by the rules of the Senate to say it is. None of these funds leads to binding changes in policy; they're more like "sense of the Senate" resolutions on the topics at hand. But the "reserve fund" language is important. As this CRS report explains, Section 310(d) of the Budget Act "bars the consideration of any amendment to a reconciliation bill that would increase the deficit." Hence the "deficit-neutral" part.

And what about "reserve fund"? According to CRS, "'Reserve fund' refers to any provision establishing procedures to revise spending or revenue levels, or both, if certain legislation is enacted or some other condition is met." So that specifies that the policies for which reserve funds are established won't take effect unless other legislation gets passed as well. The use of these measures has increased dramatically in recent decades, going from 0 funds as recently as in 1986 to a whopping 37 in the 2009 budget. "These deficit neutral reserve funds are popular because they carve out an area for future policy making without having to specify up front a precise mix of revenues and/or spending cuts to pay for them," Sarah Binder, a rules expert at George Washington University and the Brookings Institution, emails. "By writing the 'reserve fund' into the budget resolution, subsequent bills reported from committee wouldn't be subject to a point of order for violating the committee's spending limits dictated in the budget resolution."

Short version — "deficit-neutral reserve funds" are completely inconsequential amendments offered as a way to discuss budget-irrelevant topics without violating budget reconciliation rules around what you can and can't include in a budget resolution.

Continue reading
Comments
Show Comments
Most Read Business

business

wonkblog

Success! Check your inbox for details.

See all newsletters