March 13, 2015
The House Budget Committee is expected to markup the fiscal year 2016 budget resolution on Wednesday March 18. The Senate Budget Committee is expected to follow suit the next day. Assuming the measures pass out of committee they will be debated and voted on in the full House and Senate the following week.
While the chairmen of the two Committees have kept details of their proposed budget bills very close to the vest, it is widely expected that they will include “budget reconciliation” instructions to various committees of Congress, including the Agriculture Committees. Budget reconciliation is a congressional process used primarily as a means of reducing government spending for mandatory programs (see below).
It is still unclear exactly what the reconciliation instructions to the Senate and House Agriculture Committees will be, but it has become increasingly clear that there will be instructions to the Agriculture Committees.
The rumor in D.C. is that the Committees will be instructed to cut $20 billion, over 10 years, from the 2014 Farm Bill. This amount would be eerily similar to the House’s original 2013 proposal for $20 billion in cuts to the food stamps or Supplemental Nutrition Assistance Program (SNAP).
Whatever the dollar figure is, it doesn’t come with any dictates on what programs to cut. It will be up to the two Agriculture Committees to determine what parts of the farm bill to cut.
As a result, while it seems likely that cutting SNAP might be the main reconciliation messaging target for the leadership team putting together the budget resolution, cuts to commodity programs, crop insurance, and conservation programs would also be on the table should reconciliation instructions be approved by the Budget Committees.
This will effectively re-open the debate on the 2014 Farm Bill, which has happened before. See our blog from Wednesday for more on the history of reconciliation and the farm bill and the 50 percent cost explosion for crop subsidies since the farm bill was signed last year.
We expect there will be amendments offered next week during markups in the Budget Committees to both remove the reconciliation instructions to the Agriculture Committees and also to add or subtract from the specific dollar number included for the farm bill cuts. The latter will probably be in the context of support for specific policy proposals.
NSAC will join other farm, commodity, nutrition, and conservation organizations in opposing the move to cut $20 billion from the 2014 Farm Bill if, in fact, that is what appears when the House and Senate Budget chairs release their draft bills next Tuesday or Wednesday.
Budget Process Basics
Discretionary Spending — The budget, or budget resolution, as it is known, sets a broad framework for the House and Senate Appropriations Committees to use when allocating funding for each part of the Federal Government. Specifically, one of its main purposes is to provide the overall cap on discretionary spending.
After passage of the budget resolution, that spending amount gets subdivided for each subcommittee of the House and Senate Appropriations Committees. Those allocated amounts are then used to develop each of the appropriations bills for the year, including agriculture.
This year’s debate over spending caps will focus on what is to become of sequestration, a process of automatic spending cuts put in place several years ago that is now severely constraining the budget process for both defense and domestic spending. Despite widespread dissatisfaction with sequestration and its meat-ax approach to funding decisions, it is unclear there is a politically viable way out, though we anticipate attempts to be made in the next two weeks.
NSAC strongly supports ending sequestration and will review the details of proposals to alter it to determine whether there are options in this current round that we would support.
Mandatory Spending — Federal spending is split into two types, direct (mandatory) spending, which continues each year without any action by the Appropriations Committees, and discretionary spending, which must be approved every year. Direct spending programs, such as SNAP and commodity and crop insurance subsidies for agriculture and Medicare and Medicaid for health care, make up the vast majority of federal spending.
Budget resolutions often include assumptions about cuts and reforms to mandatory programs, but those only have immediate practical relevance if budget reconciliation directives are included that force changes to be made. Otherwise they are just messaging points.
Timetable — The 1974 Congressional Budget Act requires Congress to pass a budget before considering revenue or spending measures each year, however, in recent years this requirement has often not ben met. Since fiscal year 2010, the Senate failed to pass a budget resolution three times with the House failing once.
The budget resolution is not signed by the President and does not even need to be agreed upon by both the House and Senate. Budget resolutions are only binding on the body that approves them.
The target date for the budget resolution is mid-April each year. With the upcoming early April Easter and Passover recess, however, Congress is attempting to finish at least House and Senate action on the resolution by the end of March.
What is Budget Reconciliation and How Does it Work?
Budget reconciliation is an optional procedure within the budget process that can be used to change current law to bring revenue and spending levels in-line with the policies of the budget resolution. It has also been used as a vehicle to pass policy priorities that do not have enough support to overcome a Senate filibuster. This was the case with its use to pass the Affordable Care Act in 2010 and the tax cut legislation during the Bush administration.
The House and Senate have agreed on reconciliation legislation 23 times since 1980. Of those 23 reconciliation bills, 20 have become law and the President vetoed three.
When the House and Senate Budget Committees consider their annual budget resolution they can include reconciliation language in the resolution. This language amounts to instructions to one or more authorizing committees to cut a certain amount of money from programs with direct spending within their jurisdiction. This is a mechanism for enforcing the budget resolution’s framework on programs not subject to annual appropriations.
The Budget Committee does not tell the committee of jurisdiction what to cut or how to cut it; they only provide a total dollar amount to cut.
The committee receiving the instructions then has a set amount of time to hold hearings and a markup to decide where to cut. The Congressional Budget Act of 1974 sets out a deadline of June 15 for the completion of reconciliation legislation, but that deadline has rarely been met.
Once each Committee has reported back to the Budget Committee, it combines all the legislation into one reconciliation bill without substantive changes. That bill is then voted on and reported to the full House or Senate.
One of the attractions of reconciliation in the Senate is that once a reconciliation bill is reported out of the Senate it is considered by the Senate under expedited procedures. Normally, legislation in the Senate can be filibustered, which effectively means it cannot be voted out of the Senate without 60 votes. Reconciliation legislation is subject to special rules, which limit debate on the legislation allowing it to pass with a simple majority.
Unlike the budget resolution, reconciliation legislation must be signed into law by the President to become binding. If the President vetoes a reconciliation bill then a two-thirds majority in the House and Senate would have to vote override the veto.
We will be watching closely for reconciliation instructions in the upcoming budget resolutions. Stay tuned for updates and for opportunities to protect critical farm bill programs in the coming weeks and months.