On October 1st Fiscal Year 2012 begins and none of the 12 bills that fund federal discretionary programs through the annual appropriations process have been signed into law.  To keep the programs operating until funding levels are finalized, Congress is preparing a short-term funding bill, known as a continuing resolution or CR. This stop-gap measure (H.J. Res 79) will extend funding until November 18; it is expected to be enacted by Congress during the week of September 19.  The process for finalizing FY 2012 funding could be much less contentious than last April’s cliff-hanger that ended in passing the FY 2011 omnibus bill with only minutes to spare before a government shut-down would have been triggered.
When the Budget Control Act passed on August 2, it not only averted a federal government default, but also set a total $1.043 trillion cap on funding for appropriations bills in FY 2012.  Although the total is higher than the figure the House approved in its budget resolution, both House and Senate leaders have agreed to accept it.  The total is subdivided into two categories – ‘security’ and ‘non-security’ programs. Security programs include defense, homeland security, veterans’ services, international programs, and certain Department of Energy programs, etc.  Non-security programs include education, training, affordable housing, community development, home energy assistance, child care and other children’s services, community health centers,  environmental protection, meals on wheels and other services for seniors, and many more.  Out of the total cap, $359 billion can be spent on “non-security” programs, down from $362 billion approved in FY 2011.

With deficit reduction taking center stage in Washington and under pressure from newly elected members of Congress intent on shrinking government, the FY 2011 appropriations bill cut $38 billion from FY 2010 levels.   This was the largest annual cut ever.  The $1.043 trillion in FY 2012 represents another $7 billion (non-inflation adjusted) sliced from the FY 2011 total, an inflation-adjusted 1.8 percent cut.  The budget passed by the House in April called for even deeper cuts, capping discretionary spending at $1.019 trillion.  The House had already passed 6 of its bills prior to the August 2nd deal based on this lower level and had considered 4 others in the Appropriations Committee. The new cap gives them more room for the bills they have not yet taken up, in particular the large funding areas of Labor-HHS-Education and Transportation-HUD.  These two bills had been slated for deep cuts.  After leaders agreed to the $1.043 trillion cap the House Appropriations Subcommittee added $8 billion to its Transportation/HUD bill, making it comparable to the $55.3 billion the Senate has allocated to its Subcommittee, and it is also expected to increase its allocation to the Labor-HHS-Education bill to bring it in line with the $157.1 billion Senate recommendation.

The Senate was not able to pass a budget resolution this year and had not set an overall discretionary number prior to the August agreement. Since it returned from August recess the Senate has moved to adopt funding allocations for each of the 12 appropriations bills consistent with the $1.043 trillion cap.  The Senate has passed 7 of its 12 appropriations bills in Committee and is moving to complete others.  Although none will likely be considered on the floor they will provide the basis for negotiations with the House.  See Senate allocations by Subcommittee here.

Both the House and Senate are on recess the week of September 26 so they will have to pass a CR next week that will likely extend until November 18, close to the November 23 date when the Joint Select Committee is scheduled to report its recommendations. One area of contention that will need to be resolved is funding for disaster aid.  The House-released version of the CR (H.J. Res 79) contains $3.65 billion for disaster relief including $1 billion for FY 2011 that would be available immediately.  This includes $226 million for Army Corps of Engineers flood control efforts and $774 million for the Federal Emergency Management Agency (FEMA) Disaster Relief Fund (DRF).  Over $400 million has been spent in recent weeks responding to Hurricane Irene, droughts, wildfires and other disasters leaving only $377 million remaining in the DRF and needs are mounting.   The FY 2011 funding is offset by stripping money provided in FY 2009 for advanced vehicle technology.  The Senate passed $6.9 billion for disaster relief in an unrelated bill moving in the Senate.  The bill includes $5.1 billion for FEMA, the cost of which would not be offset.  Sen. Landrieu (D-LA), Chairwoman of the Homeland Security Appropriations Subcommittee which funds FEMA, has said she will block the CR if the funding for FEMA is insufficient and offset.

The House CR would delay a $5.5 mandatory debt payment owed the U.S. Postal Service and extend the National Flood Insurance Program, set to expire on September 30, to November 18.

Later this year, the House and Senate will likely pass an omnibus appropriations bill bundling all of the bills into one.  While working with the same total spending cap will make an agreement easier, there are differences in the House and Senate bills that could prove difficult to resolve.  The Senate freezes defense spending at its current level of $513 billion and the House increases spending by $17 billion to $530 billion.  Both assume additional spending of $118 billion for the wars in Afghanistan and Iraq.  The Senate would provide $2.699 billion more in Agriculture Appropriations with significantly more for nutrition programs in the bill; $60 million more for The Emergency Food Assistance Program (TEFAP), $10.5 million more for TEFAP administration funding, $38.3 million more for the Commodity Supplemental Food Program, and $581 million more for the Special Supplemental Nutrition Program for Women, Infants and Children (WIC).  According to appropriators, the $6.582 billion for WIC in the Senate bill would fully fund participation in the program.

Subscribe: