The House of Representative passed a year-long FY2011 Continuing Resolution (CR) late last week that sets the FY2011 federal budget at about $1.03 trillion. The CR amount is $100 billion less than the president’s request and $61 billion lower than the enacted FY2010 budget. This low funding level, along with its significant reductions to nondefense programs, sets the House bill on a collision course with the Democrat-controlled Senate and the president, who has threatened to veto a final bill similar to the House bill.

The CR provides specific FY2011 appropriations for Department of Defense accounts (Division A of the bill), for which Secretary Gates had strongly argued. However, the DoD funding level in the bill is much less than that Secretary Gates said he considered absolutely necessary. Although complete details of the bill are not yet available, funding in the bill for DoD accounts (including military construction), totals about $533 billion, $16 billion less than the request. Gates told the House and Senate Armed Services committees last week that DoD needed at least $540 billion for its base budget, $9 billion less than the president’s request. The bill also includes $159 billion for Overseas Contingency Operations (OCO). 

Passage came after four days of debate in which over 500 amendments were offered and 67 approved. Almost all approved amendments were aimed at further cutting nondefense programs. The most significant defense-related approved amendment eliminated $540 million slated to fund the F-35 (Joint Strike Fighter) alternative engine. Secretary Gates has argued consistently against this program and has warned Congress that he would recommend that the president veto a bill that included such finding. Other approved defense-related amendments prohibited the use of funds to close Joint Forces Command (proposed in Secretary Gates’ efficiency initiatives) and using funds for DoD official representation purposes, such as hosting dinners for visiting dignitaries. An amendment to prohibit step increases for federal civilian employees in FY2011 failed.

The Democrat-controlled Senate will consider its alternative year-long CR next week when it returns from the President’s Day recess. It is expected to produce a bill with a higher total funding level and much different program detail for nondefense budgets than the House bill. It is highly unlikely that the Senate can finish its bill and resolve its differences with the House by March 4, the day the current CR expires. Most observers think it will take weeks to complete action on the final bill.

As a result of this budget gridlock, either Congress will have to extend the current CR or the government will be forced to shut down. Possibly remembering the turmoil and political fallout that have occurred when the government shut down (most recently from December 16, 1995 to January 6, 1996), both Republicans and Democrats have said they want to avoid a shutdown. Senate Majority Leader Harry Reid (D-NV) has said the Senate is prepared to move next week on a 30-day CR. House Speaker John Boehner (R-OH) has also said he wants to extend the CR, but at a lower funding level and for a shorter period of time.