Federal Relations

May 12, 2011

Deep Cuts Proposed for FY12

Yesterday, House Appropriations Chairman Harold Rogers (R-KY) released proposed spending allocations for FY12 that target non-defense spending for substantial cuts that are designed to roll back appropriations to FY06 levels (roughly). Like the FY11 spending deal reached last month, all spending bills except Defense face cuts under the proposed allocations. Split up among the Appropriations Committee’s 12 spending bills is the $1.019 trillion in total discretionary spending that was proposed by the House’s FY12 budget resolution adopted last month. Some 52 percent of that total would go to Defense for non-war funding, representing a $17 billion increase (3.3 percent) above current funding. This is the only area that is targeted for an increase in spending. Overall, the discretionary total represents a cut of $30.4 billion from FY11 spending. Compared with President’s FY12 budget request, the total allocation would provide $121 billion less in discretionary spending.

The largest cuts are slated for Labor-HHS-Education (12 percent below current funding), State-Foreign Operations bill (18 percent less), Transportation-HUD (14 percent less), and Agriculture (13 percent less). For two of those bills, those proposed reductions would come on top of major cuts enacted last month for FY11: Agriculture, which was cut by 14.5 percent, and Transportation-HUD, which was cut by 18.5 percent. And in the case of Labor-HHS-Education, the recommended spending levels are close to the FY04 appropriations levels while others are closer to FY06 levels.

The eight purely domestic non-security spending bills (i.e., all bills excluding Defense, Homeland Security, Military Construction-VA, and State-Foreign Operations) would receive a total of $336.7 billion, some $37.1 billion (10 percent) below current levels (FY11 enacted). Compared with FY10 spending under the Democrat’s control, proposed FY12 spending for those eight bills by House GOP appropriators would represent a 19 percent reduction of $77 billion.

Chairman Rogers also released a schedule of committee markups for the 12 bills, and said he expects the House to pass nine of the bills before the August recess period. However, the House will be moving these bills even though they are uncertain as to what the final spending cap for FY12 will be, as that will be determined through the ongoing debt-reduction negotiations. Floor debate on the three toughest bills with the most serious cuts — foreign aid, labor, education, health, and transportation and housing—would all be delayed until after Labor Day. Without earmarks to help garner votes for these bills, passage will be difficult given the lowered spending levels.

Meanwhile in the Senate, Budget Chairman Kent Conrad (D-ND) continues to work on his budget resolution proposal with hopes of holding a May 18 markup on the measure. Conrad appears to have moved to the left with his plan in order to strike a more definitive contrast with the House Republican budget and attract the votes of more Senate Democrats. In the Senate, where 60 votes and GOP cooperation are needed to move legislation on the floor, appropriators may not even begin this year’s appropriations process until there is a bipartisan agreement on a topline number through the budget resolution.

This all makes for a long, hot summer of partisan bickering and intense advocacy efforts.