Legal Definitions - OBRA

OBRA stands for Omnibus Budget Reconciliation Act.

An OBRA is a significant piece of legislation passed by the U.S. Congress that combines many different legal changes into a single act. Its primary purpose is to implement the financial goals outlined in a congressional budget resolution. These acts are "omnibus" because they often include a wide range of provisions affecting various areas of law, such as taxation, federal spending, healthcare, education, and social programs, all designed to align with a comprehensive budget plan.

• Example 1: Student Loan Interest Rates

  Imagine Congress is working to reduce the national debt and passes an OBRA. One of the many provisions within this act might change the formula used to calculate interest rates for new federal student loans, slightly increasing them to generate more revenue for the government. Another provision in the same act could adjust eligibility requirements for certain federal grants.

  How this illustrates OBRA: This scenario demonstrates an OBRA because it's a single legislative act that includes multiple, distinct statutory provisions (changes to student loan interest rates and grant eligibility) across different areas, all enacted to align with a broader budget goal (debt reduction) by adjusting federal revenue and spending.

• Example 2: Small Business Tax Credits

  Suppose the economy is recovering from a downturn, and Congress wants to stimulate growth. They might pass an OBRA that, among its numerous sections, introduces a new federal tax credit specifically for small businesses that hire a certain number of new employees or invest in specific job-creating technologies. Simultaneously, the same OBRA might adjust federal funding for job training programs.

  How this illustrates OBRA: This example shows an OBRA as a comprehensive law that includes diverse statutory provisions (new tax credits for businesses and adjustments to job training funds) aimed at achieving a budget-related objective (economic stimulus through tax policy and spending adjustments) as part of a larger, unified budget plan.

• Example 3: Federal Highway Funding

  Consider a situation where Congress decides to reallocate federal spending priorities towards infrastructure improvements. They could pass an OBRA that includes a section modifying the formula by which federal funds are distributed to states for highway maintenance and construction, potentially shifting more resources towards states with older infrastructure. Another part of the same OBRA might adjust federal grants for public transportation projects.

  How this illustrates OBRA: This demonstrates an OBRA's nature as a single legislative package that makes changes to various federal programs (highway funding formulas and public transportation grants) to align with a broader budget resolution's spending priorities and financial goals.