NSAC's Blog

Whither Budget and Appropriations for Current Fiscal Year and Beyond?

January 21, 2011

Very little is clear yet about how House Republican leadership will proceed on government-wide appropriations for the fiscal year that started last October and is currently under a stop-gap continuing resolution.  Coming out of the elections, the new majority declared its support for returning immediately to discretionary funding levels that existing in 2008, the last year of the Bush presidency.  That would entail making about $84 billion worth of cuts from programs that are currently spending based on the continuing resolution.

Reality has now begun to set in.  Given the House Republican leadership’s announced intention to allow defense, homeland security, and veterans affairs to continue to grow, and given the fact that only half a fiscal year will remain by the time a final FY 11 appropriations measure is passed, the new assumption is the House-passed bill will make a down payment on the cuts required to return to FY 08 spending levels at perhaps half or less of the $84 billion clip.

The challenge facing Republican leaders in making good on the down payment is two-fold.  First, within their own rank and file there is much dissension, so much so that language in the resolution about the budget to be debated on the floor next week words providing flexibility in the timeline for meeting the objective of returning to FY 08 levels had to be removed in order to maintain unity.  Second, a final bill must be negotiated with the Democratic-controlled Senate, which will put downward pressure on the size of the cut.  Many on the Senate side are betting on a final reduction for FY 11 of closer $20 billion or less.

Even at reduced “downpayment” levels being contemplated by House leadership, cuts to USDA and EPA programs could easily be in the 10-20 percent range, depending on the final number chosen.  And speaking of choosing numbers, under new House rules adopted earlier in January, House Budget Committee Chair Paul Ryan (R-WI) will get to single handily decide both the size of the cut and the allocation of the cut to specific appropriations subcommittee, duties normally assigned to the full Budget Committee and then full House, and to the Appropriations Committee chair and subcommittee chairs, respectively.

To make it more official then just a rule change, the House will now debate next Tuesday a resolution granting Ryan the same power already granted him in the rule.  That debate will no doubt turn into another partisan slugfest over government fiscal policy on the afternoon preceding the President’s State of the Union address that evening.  The GOP response to the address will be given by Ryan.

The coming budget timeline is fairly clear, but the outcomes are murky at best.  The President delivers his FY 12 budget proposal to Congress the week of February 14.  The current short term continuing resolution for FY 11 runs out March 4, the date by which an omnibus appropriations bill for the remainder of the year would hopefully be completed.  A bill to increase the debt ceiling needs to be passed by the end of March.  The Congressional budget resolution for FY 12 theoretically at least needs to be approved by mid-April.  And the appropriations bills for FY 12 should theoretically be signed into law by October 1.  Whether any of those dates are met beyond the first one remains to be seen however.

Categories: Budget and Appropriations

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