Wrapping up Fiscal Year 2013 and Budgeting for 2014 in the Same Week

Will either of these bills fix sequestration? Don't hold your breath.

The House and Senate must agree on legislation to fund the final six months of fiscal year 2013 before the current spending legislation expires on March 27. Because the House is scheduled to recess for Easter beginning March 21, the pressure is on for the Senate to complete its bill and send it back to the House. Problem is, senators like to offer amendments, and voting on or tabling all the amendments has been a challenge. The Senate is amending H.R. 933 , the House-passed bill. 

Like the House bill, the Senate amendments preserve existing spending caps, which set non-emergency discretionary spending authority for 2013 at about $984 billion after the spending sequester is taken into account, down from $1.043 trillion in fiscal 2012. So far, senators have rebuffed efforts by members of both parties to make substantial changes to the bill in order to speed its completion. Last week, the Senate rejected an amendment by Sen. Tom Harkin, D-Iowa, that would have boosted funding for education and medical research, but also rejected an amendment to bar funding for the Affordable Care Act. At press time the Senate had amended the bill to include $164 million more for programs in the Departments of Labor, Health and Human Services and Education, $83 million more for Defense, and less for programs in Commerce, Science, Transportation (-$224 million) and Interior (-$779 million). It appears that the sequestration will not be repealed in this legislation, although agencies may be allowed more flexibility to distribute the automatic cuts in less harmful ways.

It's worth remembering as the House begins consideration today of H. Con. Res. 25, the Republican fiscal year 2014 Budget Resolution, that budgets are guidelines and aspirational documents. We pay attention to them for the "big picture," since they don't carry the force of law, and any assumptions about changes to law must be enacted separately. Authored by House Budget Committee Chair Paul Ryan, R-Wis., H. Con. Res. 25 would cut non-defense discretionary spendingby more than $1 trillion over 10 years below the level of the 2011 Budget Control Act caps, which already reduced spending to its lowest level as a share of the Gross Domestic Product since 1962. The resolution would end the Medicare guarantee for future retirees and replace it with a voucher program. It would also save $810 billion by turning Medicaid into a capped block grant. This budget also relies on a repeal of the Affordable Care Act, despite the fact that the ACA was upheld by the Supreme Court and withstood over 30 votes on repeal last Congress. One reason this budget is so draconian is that it was very important to the Republican Caucus that Chairman Ryan offer a budget that balances in ten years.

Several different budget bills will be considered in the House, including a Democratic version that would slowly scale down some spending while maintaining a projected deficit of $610 billion by the end of 10 years. House conservatives also released an alternative budget resolution on March 18 that calls for a balanced budget in four years. The Ryan budget is expected to pass.

The Senate Budget Committee's budget resolution authored by Chair Patty Murray, D-Wash., employs a combination of new revenue and spending cuts to reduce the deficit by $1.8 trillion according to the Congressional Budget Office. S. Con. Res. 8 would direct the Finance Committee to increase revenue by $975 billion over 10 years. It would replace the fiscal year 2013 sequester with a combination of new revenue and spending cuts. It calls for cutting $23 billion from agriculture programs, and includes some economic stimulus in the form of infrastructure improvements and worker training.

It seems unlikely, given the gulf between House and Senate economic aspirations as expressed in the committee budgets, that the two bodies will be able to conference their budgets and come up with a guideline both chambers will abide by. Still, they must agree to overall spending limits in order to approve fiscal year 2014 appropriations bills later in the year. We'll get back to this conundrum after they've dispatched the fiscal year 2013 funding legislation. Stay tuned!