Federal Relations

May 31, 2011

Spending and Debt


The FY12 appropriations process is in full gear in the House with many predicting that work on FY12 spending bills may be completed by December, a few months after the October 1st start of the new federal fiscal year.  The White House-led talks seeking an agreement on raising the debt ceiling are expected to yield an agreement by August between House Republicans and Senate Democrats that will also establish how much to cut appropriations for next year.  If that happens, it should smooth the path to completing the job.  Until then, there will be months of debate in the House about the level of spending for specific agencies.  House leaders intend to put nine of the 12 bills on the floor before the scheduled August recess, and to allow lawmakers free rein to offer amendments. 

The House will bring up their first two FY12 appropriations bills to the floor this week, and more spending bills will get marked up in committee.  The Homeland Security and Military Construction-VA spending bills are the first two bills to come to the floor, with debate on Homeland set to begin tomorrow.  With the appropriations process breaking down completely last year and a final FY11 spending package not being completed until just last month, House Republicans are anxious to restore a semblance of “regular order” to the appropriations process.  However, they are doing all of this despite the fact there is not yet any agreement on top-line discretionary spending for the year, which is most likely to be set as part of the White House-led debt reduction negotiations.  Republicans are aiming to get nine of the 12 appropriations bills passed by the House before the start of the August recess.

Today, the House Appropriations Committee will mark up its FY12 Agriculture spending bill.  Democrats say the GOP-proposed cuts to the Agriculture bill’s food aid programs will harm women, children and the elderly but they will have little ability to reverse those cuts at the mark up.  Of the bill’s $125.5 billion in total spending, some 86 percent is mandatory spending for food stamps, child nutrition programs, and farm subsidies.  The measure includes $17.2 billion in discretionary spending, about 13 percent below current levels.

Also this week, the House will mark up the FY12 Defense and Energy-Water spending bills.  The Defense appropriations subcommittee will meet Wednesday morning in a closed session while the Energy-Water subcommittee meets Thursday.  

Debt Limit 

Through a largely symbolic vote that may serve a couple purposes, the House will vote today – and reject – a “clean” increase in the debt limit.   Today’s vote is intended to demonstrate that the House won’t be able to raise the debt limit unless Democrats and the White House agree to major cuts in federal spending.  Republicans have constantly demanded that an increase in the debt limit be coupled with major spending cuts.  Although Democrats initially called for a “clean” debt limit hike without any conditions, they now acknowledge that spending cuts must occur and are now negotiating a debt reduction package with their Republican counterparts.  Negotiators are working against an August 2nd deadline, which is when the Treasury Secretary says the debt limit must be raised.