Federal Relations

October 28, 2013

Budget Discussions Begin (Again) this Week

Both the House and Senate are in session this week. The Senate is expected to consider energy efficiency and pharmacy compounding legislation, as well as a labor board nominee. The House will consider a resolution disapproving of the debt ceiling increase as well as financial services measures.

But the big show begins on Wednesday as the House and Senate kick off their conference on the FY2014 budget resolutions at 10:00am. Both parties are downplaying their hopes for a broad deal in budget talks that begin on Wednesday, suggesting they would settle for a more narrow accord on FY2014 spending that averts automatic spending cuts due early next year (sequestration). Only $19 billion separates the $986 billion discretionary spending level for FY2013, which has been extended until January 15th, and the $967 billion FY2014 limit set under the sequester rules enacted in the 2011 Budget Control Act. Democrats on the conference committee are unlikely to settle for any top-line discretionary figure lower than $986 billion, while Republicans insist any agreement to raise spending above the post-sequester $967 billion level must offset at least some of the increase with longer-term spending cuts.

It is still to early to predict what might come of this latest round of budget negotiations, but familiar themes related to taxes and entitlements will certainly come back up as they attempt to reach some sort of deal. And a year-long CR is not out of the question as appropriators cannot continue work on FY2014 bills until they have some clarity on top-line budget numbers.