Federal Relations

March 15, 2013

Latest CR & Budget Update

This has been a productive week in the world of Congressional Budgets and Appropriations. Congress is wrapping up work on a CR to keep the government funded through the end of the fiscal year on September 30th and both House and Senate Budget Committees unveiled their FY14 budgets this week.

FY13 Spending Package Nearing Passage

The Senate is now considering legislation that the House passed last week to maintain government funding and avoid a shutdown after the current continuing resolution (CR) expires on March 27th. The current CR maintains funding for federal programs primarily at their FY12 levels, which meets the $1.043 trillion level agreed to in the Budget Control Act (BCA) of 2011.

The House-passed bill includes full-year bills for two appropriations measures – Defense and Mil-Con-VA.  The Senate package included these two and added bills for Agriculture, Homeland Security, and Commerce-Justice-Science. Included in these bills is additional management flexibility for implementing the sequester, but not relief from it. The remaining seven appropriations bills are wrapped up into a larger CR.

The Senate process has been somewhat stalled due to a slew of amendments added to the measure, but bill managers are expected to work over the weekend to develop a smaller list and prepare the bill for floor action on Monday. It would then be sent to the House for final approval. While the CR doesn’t expire until the 27th, the deadline is realistically the end of next week before Congress departs for the Easter recess.

FY14 Budget Resolutions
Both House and Senate Budget Committees released their FY14 budget resolutions this week. The two plans are vastly different, although they do abide by the same overall spending caps set in place by the BCA of 2011. While neither measure stands a legitimate chance of passing both chambers as-is, there is hope that each side laying their ideal plans out there will lead to a conference between the two parties and eventually some type of larger tax or deficit reduction deal.

The Ryan (House) Budget
House Budget Committee Chairman Paul Ryan (R-WI), unveiled his budget resolution earlier this week which balances the budget within 10 years and does not raise any tax revenue. His budget contains no direct sequester fix, and cuts spending by an additional $4 trillion dollars by turning Medicare into a voucher-like system, giving states more flexibility to run their health care programs, and reducing the non-defense discretionary spending cap more than $50 billion than the cap set by the BCA to $414 billion. This would take a large amount away from agencies that typically provide research funding and education programs. The Ryan budget also significantly bumps up defense spending – which would effectively mitigate the cuts from the sequester for that sector.

The budget passed the House Budget Committee last week on a party-line vote and is expected to be taken up by the full House sometime before the Easter recess.

The Murray (Senate) Budget
The Senate Democrats’ budget introduced by Budget Committee Chair Senator Patty Murray (D-WA) this week would raise tax revenues by about $975 billion over 10 years and cut the budget by an equal amount over the same time period, reducing the deficit by a total of $1.85 trillion. The cuts would include $275 billion from health care, $240 billion from defense, $142 billion from non-defense discretionary spending, and $76 billion from mandatory programs. Unlike the Ryan plan, this one does not aim to balance the federal budget, and it calls for replacing the sequester with a mix of different spending cuts and tax increases, while adding about $100 billion in new spending on infrastructure and job training. Murray’s budget reflects the FY14 $966 billion spending cap set in place by the sequester law – allocating $497 billion for discretionary defense spending and $469 billion for discretionary domestic spending. It also generally protects areas such as education and innovation – adding $20 billion in research funding.

The Senate Budget Committee also passed the measure on a party-line vote. It is expected to be considered on the Senate floor beginning next week.