Author: Christy Gullion

Appropriations 

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 1^st 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 2^nd deadline, which is when the Treasury Secretary says the debt limit must be raised.

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.