Federal Relations

September 9, 2016

Hiccup with a CR

Writing a stopgap spending measure, known as a Continuing Resolution (CR), to avoid a government shutdown on October 1st, just got a bit harder than lawmakers anticipated.

Typically, CRs extend current funding levels into the new fiscal year for a short duration. Unfortunately, there’s a hitch this time. If current FY2016 funding is simply extended, it would exceed the FY 2017 discretionary spending caps as set by Sequestration in 2011. How much will it exceed? According to the nonpartisan Congressional Budget Office (CBO), a straight extension will exceed the caps by $10 billion.As scored by CBO for the purposes of a stopgap, FY 2016 base discretionary spending comes in at $1.080 trillion, $10 billion above the $1.070 trillion, FY 2017 limit.

The CBO explained that most of the excess spending comes from the scheduled expiration of some spending cuts in fiscal 2017, as previously passed in prior fiscal years.

So some of the same budget maneuvers that allowed Congress to spend billions more dollars in FY 2016 are now complicating the crafting of a stopgap funding measure to keep the government operating when the fiscal year ends on Sept. 30. The maneuvers that were used in FY 2016 include changes in mandatory programs, or so-called CHIMPs, that inflated nondefense spending in FY 2016. CHIMPs refer to provisions in appropriations bills that reduce or constrain mandatory spending, providing an offset for higher discretionary spending.

In preparing for a stopgap spending measure, the CBO’s score must eliminate any savings that do not automatically continue into the next year, including changes in mandatory programs that appropriators often make to free up extra money for discretionary projects. Changes in mandatory programs, mostly from an expiring cut to the Children’s Health Insurance Fund,  account for $5.6 billion of the lost savings. Further, the CBO score assumes that a CR extends the entirety of the subsequent fiscal year, not a short duration — a prudent move since it is currently unclear how long the CR will last. The date being cited most often now is December 9th. 

It is not yet clear whether the overage problem can be fixed through some simple technical corrections, or whether it could mean trimming any popular programs. 

Meanwhile, the House Republican Caucus remains deeply divided on how to proceed. Despite the Constitution clearly stating that the power of the purse originates in the House, the Senate will go first in trying to pass a short-term CR next week to keep the federal government functioning through the November election.

Stay tuned.