Budget Point of Order refers to a procedural hurdle in Congress for spending or revenue bills.

The Budget Point of Order Mechanism

Decisions about spending, revenue and budget processes established in a budget resolution are enforced in the House and Senate mainly through a procedural hurdle known as a “point of order.” Points of order may be raised by a House or Senate member against legislation or an amendment if it violates spending and revenue levels as contained in the most recent budget resolution or if it violates other budget laws and rules. A point of order, if raised, removes a bill, amendment, or offending provision from legislative consideration. In the House, points of order can be waived by a simple majority vote. In the Senate, some points of order can be waived with a simple majority, but most require a higher threshold to waive, usually 60 votes. It is important to note, however, that a member of the House or Senate must first raise a point of order to strike an offending provision or prevent the consideration of legislation or an amendment that violates a budget rule. Often times a point of order applies to a bill or an amendment, but no Member will raise it.

Key Points of Order

Mandatory and Discretionary Spending Allocations

This point of order is designed to enforce the 302(a) spending allocations made to each congressional committee as adopted in the budget resolution. It applies to legislation or amendments that would cause a committee to exceed its spending allocation in the current year, the upcoming fiscal year, or the upcoming fiscal year and the sum of all years covered in the budget resolution. In the case of the appropriations committees, the relevant allocation for the point of order is the 302(b) suballocation for the current year and the upcoming fiscal year only. The point of order may be waived by a majority vote in the House and a three-fifths vote in the Senate.

Spending and Revenue Aggregates

This point of order is designed to enforce total spending and revenue levels that Congress adopts in the budget resolution. It is triggered when Congress considers legislation or an amendment that exceeds the aggregate spending levels, or that reduces revenue below the levels adopted in the budget resolution. The test applies to the current year, the year first covered by the budget resolution (the budget year) and the sum of the budget year and all subsequent years covered in budget resolution. This point of order may be waived by a majority vote in the House and three-fifths vote in the Senate.

Advance Appropriations

This point of order is designed to limit which programs can be funded through advance appropriations and the total amount of advances made in the current appropriations cycle. The point of order currently applies to any House bill that exceeds the limit of $28.8 billion, as adopted in its fiscal year 2015 budget resolution. Because the Senate has not to date adopted a joint budget resolution for fiscal year 2015, no limit on advance appropriations is in place in the Senate for the forthcoming fiscal year. Additionally, advances made for non-approved programs trigger the point of order. The point of order applies only to the offending provision and does not prevent consideration of the underlying bill or amendment. It may be waived by a majority vote in the House and a three-fifths vote in the Senate.

It is also noteworthy that for the first time since 2002 Congress set appropriations spending limits in law under the Budget Control Act of 2011. Therefore, lawmakers again have an incentive to use advance appropriations to increase or maintain funding levels for education programs by shifting that funding out of the current year and into an advance appropriation in order to skirt the appropriations spending limits, just as they did in the 1990s.

Unfunded Mandates

This point of order applies to legislation or an amendment that would impose an unfunded mandate on state or local governments. The point of order is triggered if the unfunded mandate is in excess of the limit prescribed in the Unfunded Mandates Reform Act. For fiscal year 2008 and each of the following four years the limit is $67 million. The point of order may be waived by a majority vote in both the House and Senate.

Pay-as-You-Go (“PAYGO”)

Pay-as-you-go, commonly referred to as PAYGO, is a Congressional budget rule enforced by a point of order that is designed to make it more difficult for Congress to enact legislation that would worsen the deficit over the upcoming six- and 11-year periods. In order for legislation to pass the PAYGO deficit test, any increase in mandatory spending or revenue decreases (e.g. tax cuts) must be offset by spending decreases or revenue increases. In the House, PAYGO applies to each bill, so that the bill itself must be deficit neutral. In the Senate, a PAYGO scorecard is used so that a bill that reduces spending or raises revenue can be used to offset a bill considered later that increases spending or reduces revenue, thereby avoiding a PAYGO violation. PAYGO does not apply to appropriations bills. A majority can vote to waive PAYGO in the House and a supermajority of 60 votes are needed in the Senate.

Reconciliation

A number of points of order apply to budget reconciliation legislation. These points of order are intended to ensure that the reconciliation process is used only for certain purposes. If a point or order applies to a reconciliation bill considered in the Senate, the reconciliation bill effectively loses its special filibuster-proof status. This is because points of order that apply to a reconciliation bill in the Senate require a three-fifths vote to waive, while the reconciliation bill requires only a majority vote to pass.

The “Byrd Rule” point of order (313) applies to provisions in a reconciliation bill (or amendments) that do not have as their primary effect reducing or increasing federal revenues and/or spending. The Byrd Rule point of order also applies to any amendment to reconciliation legislation that would increase the deficit in any one year beyond the years covered by the budget resolution. The point of order does not prevent consideration of the underlying bill, only the offending provision. A separate point of order (202(a)) applies to reconciliation legislation or an amendment that would increase the federal budget deficit or reduce a revenue surplus in the upcoming fiscal year, the next six or the next eleven fiscal years. Another point of order (310(d)(2)) applies to any amendment to reconciliation legislation that would prevent the reconciliation bill from meeting spending or revenue instructions adopted in the budget resolution.