Changes in Mandatory Program Spending / CHIMPS (

From the Congressional Glossary – Including Legislative and Budget Terms

Changes in Mandatory Program Spending / CHIMPS

CHIMP is an acronym for a “CHange (either a cost or a savings) In a Mandatory Program” that is proposed or enacted in an appropriations bill. Substantive changes to or restrictions on entitlement law or other mandatory spending law specified in appropriations laws that affect current-year or budget-year budget authority and the resulting outlays are treated as changes in discretionary spending for the purposes of scoring those appropriations laws. Once enacted, these changes are reclassified or “rebased” in the subsequent budget as mandatory spending. Under the Statutory Pay-As-You-Go Act of 2010, the outlay effects of CHIMPs that alter mandatory budget authority in an outyear or tax law in any year are classified as PAYGO (mandatory or revenue) impacts except when their net outlay effect is zero over a six-year period beginning with the current year. CHIMPs are separately identified with a specific budget enforcement subcategory classification known as a “discretionary change in a mandatory program”. This classification only applies to policy estimates—not baseline estimates.

OMB Circular A-11 (2013)

Changes in Mandatory Program Spending (CHIMPS) are typically limitations on the discretionary funding used to implement mandatory programs.

Through these limitations, the Appropriations Committee reduces scored mandatory budget authority in the budget year and those reductions are credited towards the appropriations bill for the purposes of determining compliance with their section 302(b) allocation under the budget resolution.

Mandatory—or direct—spending includes spending for entitlement programs and certain other payments to people, businesses, and state and local governments. Mandatory spending is generally governed by statutory criteria; it is not normally set by annual appropriation acts. Outlays for the nation’s three largest entitlement programs (Social Security, Medicare, and Medicaid) and for many smaller programs (unemployment compensation, retirement programs for federal employees, student loans, and deposit insurance, for example) are mandatory spending. Social Security and some other mandatory spending programs are in effect indefinitely, but some (for example, some agriculture programs) expire at the end of a given period. Roughly 60 percent of federal spending in 2012 (other than for the government’s net interest costs) was mandatory. Legislation that changed direct spending would, by itself, affect the budget deficit because no further legislative action would be required for the change in spending to occur.
. . .
Legislation that affects mandatory spending—unlike that for discretionary spending—is subject to House and Senate points of order (parliamentary objections that legislation violates a certain rule) as well as to procedures specified in the Statutory Pay-As-You-Go (PAYGO) Act of 2010.
. . .
Funding for mandatory activities is called budget authority because it allows an agency to make financial commitments that result in federal outlays. In contrast, possible future changes in appropriations for discretionary programs are labeled authorization levels because the amount of any resulting financial commitments will depend on actions by the House or Senate Appropriations Committees.
. . .
A key element in every CBO cost estimate is the benchmark—the amount of spending that CBO estimates will occur under current law—against which the estimated changes in spending are measured. In the case of mandatory spending, the benchmark is current law, as reflected in CBO’s baseline, which is CBO’s projection of government spending for the current year and the next decade. (Most mandatory programs continue automatically throughout the 10-year baseline period.)

Frequently Asked Questions About CBO Cost Estimates, from CBO

“Language that delays $10 billion in mandatory spending for one year is scored as saving $10 billion,” Sessions’s Honest Budget Act explanation of this type of gimmick reads, as quoted by the Steering Committee. “Thus the $10 billion savings can be used to increase spending elsewhere in the bill by $10 billion without affecting the overall cost of the bill. Over a ten year period the same $10 billion can be delayed one year at a time, resulting in total ‘savings’ in the appropriations process of $100 billion ($10 billion X 10 years). However, the actual savings over the ten year period is only $10 billion (the same $10 billion simply got deferred each year). The result is $90 billion in phony savings.”

The Honest Budget Act, Sen. Jeff Sessions (R-AL) (9-page PDFPDF)


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