CHN: Congress Likely to Approve Another Three Weeks of Federal Spending; House Approves Another $6 Billion in Cuts Below FY 2010 Levels; Senate Expected to Follow Suit

March 17, 2011

As Congress edges towards March 18, the date by which current federal funding will expire, there continues to be no agreement for a spending plan that gets all the way to the end of this fiscal year (September 30).  Instead, Congress is expected to approve spending through April 8, continuing the House approach of cutting another $2 billion for each week a stopgap spending measure is in effect (or $6 billion more in cuts).  The House voted for the 3-week Continuing Resolution (HJ Res 48) on March 15.  The 271-158 roll call vote showed increasing impatience with lurching from one temporary spending bill to another.  There were 54 no votes among Republicans, up from only six opposed to the last stopgap bill.  The number of Democrats opposed to the measure increased from 85 to 104.  The Senate is scheduled to vote on the 3-week funding bill on Thursday, March 17; it is expected to pass.

The difficulty of getting to agreement on appropriations through the end of the year was illustrated on March 9 in the Senate, when votes were held on the House-passed plan (H.R. 1) and on an alternative developed by Chairman Inouye (D-HI) of the Senate Appropriations Committee.  The House FY11 plan failed by a vote of 44-56, with no Democrats voting for it and 3 Republicans voting against it (DeMint (SC), Lee (UT), and Paul (KY), because in their view it did not cut enough).  A majority in the Senate viewed the cuts passed by the House as too extreme, because of its harsh reductions in education, health care, housing, nutrition, employment services, and many other programs.  The Inouye plan was also rejected, 42-58, with no Republican support and 11 Democrats and Independents voting against (Bennet (CO), Hagan (NC), Kohl (WI), Levin (MI), Manchin (WV), McCaskill (MO), Nelson (FL), Nelson (NE), Sanders (I-VT), Udall (CO), and Webb (VA)).  Reasons for opposition were mixed – most wanted more cuts; others, fewer.

The Congressional Budget Office (CBO) estimates that H.R. 1 would cut annual appropriations $92 billion below FY 2010 levels, adjusted for inflation.  The Senate Appropriations Committee alternative would cut $40 billion below the inflation-adjusted FY 2010 funding levels.  While the Senate alternative in most instances avoids cuts to low-income programs, H.R. 1 slashes services.  Among its victims:  218,000 fewer children in Head Start (funding cut nearly $1.1 billion below FY 2010, or 15 percent); 11 million patients losing health care at Community Health Centers ($1 billion cut, or nearly half); 20 million people who use services provided by community action agencies to meet home energy assistance, job training, emergency food, Head Start, and other  needs would see those services disrupted if not lost (Community Services Block Grant cut $305 million, almost in half); more than 8 million adults and youth would lose job training/placement help, essentially shutting down Workforce Investment Act programs until July 2012 (a cut of nearly $3 billion); 10,000 people with disabilities whose housing vouchers now allow them to live in accessible housing would be terminated; and 1.2 million poor households in public housing, whose units will deteriorate due to cuts in the Public Housing Capital Fund (cut by more than $1 billion).  (For more information about the cuts, see CHN’s A Better Budget for All:  Saving Our Economy and Helping Those in Need.)

The Inouye plan also makes substantial cuts below last year’s spending, but makes different choices.  It reduces domestic and international accounts $31 billion below FY 10 (as adjusted for inflation), while H.R. 1 cuts these areas by $85 billion.  The Senate plan cut military/homeland security/veterans services by $9 billion, $2 billion more than the House. (For more details, see Center on Budget and Policy Priorities, In Battle Over 2011 Appropriations, Both Sides Calling for Substantial Cuts.)

Other sources of contentiousness that will complicate final agreement are the presence of many policy riders in the House bill.  These provisions would stop important operations of government by prohibiting expenditures for regulatory functions under current law, including those related to climate change, clean water, financial industry consumer protection, and health care reform.  Riders also would stop federal funds from being made available to Planned Parenthood clinics and would prohibit regulations requiring licensed gun dealers to report multiple sales of assault weapons to the same person.  The Senate bill has no policy riders in its bill.

Domestic appropriations are only about 15 percent of the budget; cuts in them can reduce services for millions of people but cannot make a major dent in the budget deficit.  These cuts can also place further strains on our fragile economic recovery.  H.R. 1 would result in a loss of 700,000 jobs, according to Moody’s Analytics economist Mark Zandi; Federal Reserve Chair Ben Bernanke estimated 200,000 jobs lost.  As concerns grow about our economy’s ability to withstand surging oil prices, Congress will have to decide how much it wants to risk in trying to finish its work on a fiscal year nearly half over.

Categories: Budget and Appropriations, Early Childhood Education, Economy