Budget conferees meet

Several proposals floated, but each has determined opponents.

The budget conference committee established as part of the deal to end the government shutdown met on Oct. 30. As each of the 29 members made opening statements, it was clear that there are still strong fault lines that must be bridged before any agreement is reached. By Dec. 13, conferees must agree on the "top line number" between the House-passed $967 billion and the Senate's figure of $1.058 trillion, which will allow the Appropriations Committee time to complete work on the unfinished funding bills by Jan. 15. 

Both chairs of the House and Senate Budget committees suggested that the conference focus not on a sweeping budget fix but on a smaller agreement to replace the Fiscal Year (FY) 2014 sequester cuts set to go into effect on Jan. 15. On that day, in the absence of a deal, the overall spending cap will drop from $986 billion to $967 billion. Senate Budget Committee Chair Patty Murray, D-Wash., is seeking ways to avoid a new round of cuts, and many Republicans also hope to avoid them. Rep. Hal Rogers, R-Ky, chair of the House Appropriations Committee, said in July that he cannot legislate under the sequestration caps. Since the FY 2014 reductions would come almost solely from defense spending, many believe Republicans will be more inclined to offer concessions. Those cuts would set the Pentagon's base budget at about $475 billion, which is roughly $20 billion less than its current funding and $50 billion less than the Department of Defense asked for in its FY 2014 budget request.

You may recall that the House-passed budget assumed sequestration would happen in FY 2014, while the Senate budget assumed sequestration would be repealed. The $100 billion question (the approximate amount needed to close the gap between the Senate and House budgets) is where to find enough savings.  Democrats on the committee suggested raising additional revenue by eliminating some tax expenditures; that is, closing tax loopholes.  Some of the loopholes under discussion are: tax subsidies for yachts or vacation homes; tax-deferment of IRA contributions; and deduction of expenses involved in moving jobs from the U.S. to overseas. Meanwhile some Republican conferees would prefer to generate revenue by making changes to entitlement programs, and others seem satisfied with sequestration as a mechanism for deficit reduction. The conference committee will meet again on Nov. 13, likely to discuss broad proposals.

In news on sequestration's impact, NIH has updated its estimate of how many fewer grants it would be able to fund in FY 2013. The initial estimate posted on June 3, 2013, was 700. On Nov. 4, 2013, NIH posted the updated number. Actual competitive research project grants NIH was unable to fund: 640.  While that isn't a lot to celebrate, we are happy about the additional 60 grants that weren't lost.