Changes in Mandatory Program Spending / CHIMPS (CongressionalGlossary.com)

From the Congressional Glossary – Including Legislative and Budget Terms

Changes in Mandatory Program Spending / CHIMPS

 


Sessions Unveils Amendments To Combat Billions In Spending Through Waste, Gimmicks

 

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 rather than in authorizing legislation. The term applies only to provisions in appropriations acts that change mandatory budget authority, outlays, offsetting collections, or offsetting receipts relative to the baseline. For the purposes of scoring those appropriations acts, such changes are scored as discretionary. After enactment, these changes are no longer considered discretionary, and they again become part of the mandatory baseline in the subsequent Budget. In the MAX budget database, proposed CHIMPs are separately identified with a specific budget enforcement subcategory classification known as a “discretionary change in a mandatory program” until they are enacted in full-year appropriations bills (see section 81.2). This classification only applies to policy estimates—not baseline estimates.
Under the Statutory Pay-As-You-Go Act of 2010, the outlay effects of CHIMPs that alter mandatory budget authority in an outyear are classified as PAYGO (mandatory) impacts except when their net outlay effect is zero over a six-year period beginning with the current year. All changes in revenues in any year are classified as PAYGO, and are not scored as discretionary, even if they are included in an appropriations bill.

OMB Circular A-11, Section 20 – Terms and Concepts (2018) (45-page PDFPDF)

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

 


Discretionary and mandatory outlays of the US Federal Government

 

“Language that delays $10 billion in mandatory spending for one year is scored as saving $10 billion,” Sessions’ 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)

The last decade brought a dramatic rise in the use of changes in mandatory programs, or CHIMPs, in annual appropriations bills. Through timing shifts or rescissions of mandatory funding that was not otherwise going to be spent, changes in mandatory programs have been used to create phony savings on paper that offset increases in discretionary spending. Although these illusory savings have been featured in the appropriations process for decades, the use of this gimmick spiked in 2011. This coincided with an increased push to keep the discretionary topline stable (fiscal year 2011’s appropriation cycle culminated in a defense funding bill and year-long continuing resolution with anomalies) and the enactment of the Budget Control Act, which capped discretionary spending through fiscal year 2021.

“Changes in Mandatory Programs: An Overspending Tool,” Senate Budget Bulletin, by Senate Budget Committee Republican Staff, June 28, 2018

 

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