The House and Senate begin the congressional review of the president’s FY2013 budget request in stark disagreement on total and agency funding levels. Why should this be a surprise, you might ask?
After all, the budget debate for the last few years has been marked by such disagreement: The Republican-controlled House pushing for large budget decreases to lower deficits against the Democrat-controlled Senate looking to protect domestic programs. The House prevailed for the most part each year (forcing the Senate and the President to agree to much lower funding levels), but these battles did not come without a price—costly delays in agencies’ budget execution caused by lengthy periods of continuing resolutions.
But, last August the threat of an impending U.S. default on its financial obligations finally forced an agreement on a debt reduction plan that offered hope for an end to budgetary stalemate. The president and the Congress agreed to raise the debt ceiling and institute long-term reductions in federal discretionary budgets (funding provided through appropriations acts) to lower deficits. The Budget Control Act of 2011 set a ten-year funding plan that cut $1 trillion from discretionary funding levels for 2012-2021 and set up a mechanism to force a cut of at least another $1.2 trillion. Many hoped that the BCA’s long-term, fixed funding levels would lead to calmer budget cycles in the future. To be sure there would continue to be strong differences in how federal funds were spent, but there should be no argument on how much was spent.
However, with strong differences between the House and Senate over the total federal budget level once again de rigueur, this optimism has faded.
The president requested a FY2013 budget totaling $1.047, the BCA level. Senate Democrat leaders signaled their intention to abide by the agreement and did not prepare a FY2013 Senate budget resolution. In the House however, Budget Committee chair Rep. Paul Ryan (R-WI) prepared a budget resolution that totaled $1.028 trillion, $19 billion less than the BCA level. This reflected a strong sentiment among many House Republicans that the budget agreement did not achieve enough deficit reduction.
House and Senate Appropriators have now taken the next step by setting their FY2013 allocations for the 12 annual appropriations bills (302(b) allocations). Senate Appropriations Committee (SAC) allocated $1.047 trillion, while the House Appropriations Committee (HAC) allocated $1.028 trillion.
The difference between the House and Senate approaches to FY2013 appropriations is highlighted in allocations to security and non-security budgets. For security budgets, the House allocates $8 billion more to DoD while cutting almost $10 billion from State and Foreign Operations. For non-security budgets, the House allocations are over $16 billion lower than the Senate. Almost half of this difference is in the Labor, Education, and Health and Human Services (HHS) budgets, where the new Health Care law funding is a big target. The House also would cut about $2 billion more than the Senate from Transportation and Housing and Urban Development (HUD) budgets and another $2 billion from Financial Services appropriations, where the financial reform legislation is a target.
The White House was quick to respond to the lower House allocations. Acting OMB Director Jeffrey Zients sent a letter to HAC chair Rep. Hal Rogers (R-KY) warning that the president will not sign any FY2013 appropriations bills “until the House of Representatives indicates that it will abide by last summer’s agreement” (The Budget Control Act of 2011).
So, once again the stage is set for what promises to be another budget standoff at the end of the year: A standoff that may not be settled until after the election in a lame duck session of Congress, if then. And, even though leaders on both sides of the aisle have voiced opposition to a government shutdown, the ongoing debate and resulting legislative gridlock could portend a struggle over Continuing Resolutions (CR) deep into the new fiscal year.