Balanced Budget Accountability Act

Bill Number

S. 45

Origin Chamber

Senate

Congress

119th Congress, Session 1

Policy Area

Congress

Status

Introduced

Latest Action

2025-01-09: Read twice and referred to the Committee on Homeland Security and Governmental Affairs.

Last Updated

2025-05-22T18:18:00Z

AI-Generated Summary

Purpose

The Balanced Budget Accountability Act aims to promote fiscal responsibility by holding Members of Congress accountable for failing to adopt budget resolutions that achieve a balanced federal budget. It penalizes members through salary reductions or escrow if such resolutions are not passed and imposes a supermajority voting requirement for legislation that raises revenue.

Key Provisions

• Definitions and Certification Process:
• A "balanced budget" is defined as a concurrent budget resolution where, starting in fiscal year 2035, total federal spending (outlays) does not exceed total revenues (receipts) and outlays are limited to no more than 18% of the projected U.S. gross domestic product (GDP, a measure of the total value of goods and services produced in the country).
• The Director of the Office of Management and Budget (OMB) must review adopted budget resolutions and certify to congressional leaders whether they meet the balanced budget criteria.

• Salary Penalties for Fiscal Years 2026 and 2027:
• If no balanced budget is certified for fiscal year 2026 by April 16, 2025 (or for 2027 by April 16, 2026), salaries for members of the affected House of Congress are held in an escrow account (a temporary holding fund) starting on that date.
• Funds are released either when a balanced budget is certified or at the end of the 119th Congress (to avoid violating the 27th Amendment, which prohibits mid-term changes to congressional pay).
• Standard tax withholdings apply to escrowed amounts, and the Treasury Department assists with implementation.

• Salary Penalties for Fiscal Year 2028 and Beyond:
• If no balanced budget is certified by April 16 of the prior year, members of the affected House receive only $1 in annual pay for the remainder of that calendar year.

• Supermajority Requirement for Revenue Increases:
• Any bill, resolution, amendment, or conference report that increases federal revenue requires approval by three-fifths (60%) of members in both the House and Senate.
• This is established as a congressional rule, which can be changed by each chamber using its standard rulemaking process.

Significant Changes to Existing Law

• Introduces mandatory certification of budget resolutions by OMB for balance, which is not currently required; existing law allows deficits without such penalties.
• Adds direct financial penalties (escrow or $1 pay) for failing to adopt balanced budgets, altering how congressional compensation is tied to fiscal outcomes—previously, pay is set annually without performance conditions.
• Imposes a new three-fifths voting threshold for revenue-raising measures, changing the simple majority rule under current procedures and potentially making tax increases harder to pass.

Potential Impacts

• On Government Agencies: The OMB gains a formal role in certifying budgets, increasing its oversight of congressional fiscal planning. Payroll administrators in Congress (e.g., Chief Administrative Officer in the House, Secretary in the Senate) must manage escrow accounts, adding administrative burdens.
• On Citizens: Could encourage long-term fiscal discipline, potentially reducing federal debt and deficits, which might stabilize the economy, boost job growth, and preserve opportunities for future generations. However, it risks short-term disruptions if budgets are delayed or politicized.
• On International Relations: Indirect effects through improved U.S. economic confidence, possibly strengthening the dollar and global financial standing; unchecked debt growth could otherwise harm international perceptions of U.S. stability.

Main Stakeholders Affected

• Members of Congress: Directly impacted through potential salary holds or reductions, incentivizing them to prioritize balanced budgets.
• Taxpayers and Future Generations: Benefit from potential debt reduction but may face policy gridlock if revenue increases are blocked.
• Federal Agencies and Economy: Affected by enforced spending limits (18% of GDP cap), which could constrain funding for programs.
• Congressional Leadership and Staff: Responsible for implementing escrow and certification processes.

Notable Legal, Constitutional, or Political Implications

• Constitutional: Explicitly designed to comply with the 27th Amendment by releasing escrowed funds at the end of a Congress, avoiding impermissible mid-term pay changes. Relies on Congress's rulemaking authority under Article I, allowing each chamber to alter the supermajority rule if desired.
• Legal: The escrow mechanism ensures continuity of pay obligations while enforcing accountability; failure to certify could lead to disputes over OMB's determinations, potentially requiring judicial review.
• Political: Creates strong incentives for bipartisan budget agreement but may heighten partisanship around revenue and spending, complicating governance. As an introduced bill (S. 45, 119th Congress), its passage would signal a shift toward stricter fiscal conservatism, though it faces hurdles in a divided Congress.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Sen. Daines, Steve [R-MT]

Recent Actions

• 2025-01-09: Read twice and referred to the Committee on Homeland Security and Governmental Affairs.
• 2025-01-09: Introduced in Senate

Bill Versions

• Balanced Budget Accountability Act — issued 2025-01-09 — PDF (8 pages)