House Adopts Budget Plan, Senate to Vote Week of May 4

On April 30, the House of Representatives adopted a FY 2016 conference budget resolution by a vote of 226-197.  The Senate will vote on the budget agreement (S. Con. Res. 11) as early as May 4.

While the conference report reflects the statutory caps on discretionary spending — $523 billion for defense and $493.5 billion for non-defense in 2016 — it allows additional funding for the Pentagon through a separate allocation of $96 billion for Overseas Contingency Operations.

Congressional Democrats (and President Obama) oppose using higher levels of overseas military funding to circumvent the statutory limits on defense spending. The President’s budget request called for $58 billion for Overseas Contingency Operations in 2016. The House and Senate Budget Committees added $38 billion to that amount, providing increased war funding that can be spent on basic defense needs without the spending being offset elsewhere in the budget.

Neither the House nor Senate budget resolution made changes to the sequestration provision of the Budget Control Act, so the budget conference report assumes sequestration for FY 2016 and beyond. How sequestration will affect spending for specific programs will not become clear until the appropriations bills are written, which is just beginning in the House.

The compromise budget does pave the way for the ‘reconciliation’ process, through which Congress can make expedited changes in mandatory spending programs.  However, the conference report will reserve the reconciliation process only for making changes to the 2010 Affordable Care Act, not to adopt broader cuts in Medicare or Medicaid.

The House resolution assumed non-defense (domestic) cuts of $760 billion over the next ten years, but the conference report calls for $495 billion in reductions. The conference agreement assumes a balanced budget by FY 2024, resulting from $5.3 trillion in spending cuts over ten years, with almost 80 percent of the reductions coming from mandatory spending programs including Medicare and Medicaid. However, the budget savings would not occur unless Congress passed separate legislation to cut spending and make other changes contemplated in the budget.

The budget is an important policy document and provides a blueprint to guide spending for the coming fiscal year, but it does not hold the force of law.  However, it is an important guide to the policies and directions of the congressional majority. Once adopted by both chambers, the concurrent budget resolution will provide limits on taxes and spending that are enforceable by House and Senate rules. The budget does not go to the president for his signature.