Each week, there is more news about the impact of sequestration cuts to a wide range of government services, from rental vouchers for low-income families to unemployment benefits for the long-term unemployed to cuts to education and health care.  But this is only the beginning.  If Congress does not act, next year, and every year through FY 2021, there will be more cuts.  The House Appropriations Committee approved funding levels for its dozen subcommittees for FY 2014, showing its willingness to make deep cuts in domestic programs, even though most of those programs have already been cut substantially over the past decade.
Following the lead of the House-passed Budget Resolution, the Appropriations Committee divided up $967 billion in funding on May 21, making the assumption that a second year of cuts will take place.  While the deficit reduction legislation that mandated sequestration does call for this total, the House violates the law by ignoring the required subtotals for defense and non-defense spending.  The House committee approved $512.5 billion for defense, or about $15 billion more than the deficit reduction law allows in FY 2014.  The House committee also cuts $20.6 billion more than the law calls for in all the other programs subject to the sequester cuts.

The funding levels provided to each of the Appropriations subcommittees (called the “302(b) allocations”) make it possible for them to report out bills.  The first approved by the full House Appropriations Committee on May 21 was for Military Construction-Veterans’ Affairs.  This non-controversial bill is one of the few that receives more funding for FY 2014 than it got this year – a 3.4 percent increase, even assuming the lower sequestration total.

The House Appropriations Committee’s priorities are clearly with the military, veterans and homeland security – these are the only areas that get increases over current spending.  In marked contrast, the appropriations bill for the Departments of Labor, Health and Human Services and Education will be cut 18.6 percent below this year’s levels.  The Transportation-Housing and Urban Development spending bill will be cut 9 percent.  Interior-Environment spending will be cut 14 percent, and Energy-Water will be reduced by 11.2 percent.  Financial Services, which includes funding to implement the Dodd-Frank legislation for regulation and consumer protection related to the finance industry, is cut 14.6 percent.  (See the House allocations for each Appropriations subcommittee. See this table for more information on 302(b) subcommittee allocations, compiled by Democratic Staff of the House Committee on Appropriations.)

This year’s sequestration amounts to an approximately 5 percent cuts to domestic programs that are not exempt.  These reductions have resulted in early closings and cancelled summer programs in Head Start, followed by announcements around the country that classes will be shut down and enrollments reduced in the fall.  If a cut well over three times this size were inflicted in FY 2014, many more children would be denied Head Start.  Similarly, if cuts to meals for seniors were more than tripled, programs that are now reducing the number of days they deliver meals or closing dining rooms would have to make drastic additional reductions.  Rental housing voucher cutbacks so far have meant no new vouchers are available in many jurisdictions.  If these cuts were multiplied, housing authorities would be unable to avoid taking away vouchers that now keep people from becoming homeless.    (For more information about this year’s sequestration cuts, click here.)

Appropriations bills do not become law until final versions are negotiated between the House and Senate.  That will be harder than ever for FY 2014.  The House and Senate have not agreed on a total figure for appropriations – a key decision point in budget resolutions.  In contrast to the House budget’s $967 billion total, the Senate’s budget calls for $1.058 trillion, based on the assumption that the additional sequestration cuts will not occur.  (The Senate budget makes up well over $1 trillion in deficit reduction through FY 2021 by a combination of revenue increases and savings in areas mainly including Medicare, farm supports, the Pentagon, and some additional domestic appropriations cuts). The Senate budget resolution specifies that defense spending will total $552 billion in FY 2014, and domestic/international funding will add up to $506 billion.

The Senate Appropriations Committee has not yet divided up these totals into its own 302(b) allocations, but expects to do so during the week of June 17, when it also expects to take up the Military Construction-Veterans Affairs appropriations bill.  But its higher total means that there will be substantial differences between the House and Senate on most appropriations bills.  In the absence of an agreement between the two bodies, the deficit reduction law now in place will require the lower total of the House, but will also require the House to cut about $15 billion from its recommended funding for defense.

Neither House nor Senate appropriators are enthusiastic about this looming result.  Chairman Hal Rogers of the House Appropriations Committee called for “…a budget compromise that will undo the damaging sequestration law and give us a single, common top-line allocation with the Senate” when his committee passed its appropriations allocations on May 21.  Chairwoman Barbara Mikulski of the Senate Appropriations Committee is insisting on passing appropriations bills that are not subject to continuing sequestration cuts.  But, while appropriators are trying to pass separate spending bills according to “regular order,” it is easy to imagine that as the beginning of the new fiscal year approaches (October 1), threats of government shutdown will intensify in the face of seeming inability to bridge the wide differences.

Rearranging the Deck Chairs.  As reports of harmful sequestration cuts accumulate, some Senators are looking for a way out.  Some are seeking increased flexibility for federal agencies to determine how to make the required cuts, to get out from under the across-the-board equal percentage cuts the law calls for.  Senator Richard Shelby (R-AL), the ranking (senior) Republican on the Senate Appropriations Committee, has a proposal to allow agencies to move a limited amount of funding around among accounts.  Senators Susan Collins (R-ME) and Pat Toomey (R-PA) have similar proposals, with agency decisions to alter the automatic cuts subject to review by Congress.  Other bills, such as a plan being developed by Senators Inhofe (R-OK), Toomey and Manchin (D-WV), would require the President to submit an alternative set of cuts, which could be rejected by Congress.  All these plans would substitute different cuts in appropriations for the ones now in place.  Advocates for human needs programs are quite concerned that this might spare some programs, but could easily lead to even more damaging cuts to programs that are less popular or known, but that provide important services to vulnerable people.  Without revenues from fair sources and long-term savings from the Pentagon, key players such as Senate Budget Committee Chair Patty Murray (D-WA) believe that human needs program cuts cannot be successfully replaced.

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