CHN: Congress Passes 6-Month Spending Bill for Fiscal Year 2013; Fiscal Cliff Looms

Article from the September 25, 2012 edition of the CHN Human Needs Report:
On September 22 by a vote of 62-30 the Senate passed HJ Res 117, a stopgap Continuing Resolution (CR), funding annually appropriated programs for the first six months of Fiscal Year (FY) 2013 from October 1, 2012 through March 27, 2013.  The House passed the bill 329-91 a week earlier.  The plan is based on the $1.047 trillion funding cap for annually appropriated programs for FY 2013 established in the 2011 Budget Control Act (BCA) and used by Senate Democrats and the Obama Administration to set FY 2013 funding. This amount is $8 billion above the FY 2012 level and represents an increase for most agencies of 0.6 percent.  The Republican budget passed by the House last March included a lower funding cap of $1.028 trillion for FY 2013.

Neither Democrats nor Republicans wanted controversy or talk of a government shut-down right before elections.  HJ Res 117 contains no controversial policy riders or funding levels that differ significantly from current levels.  It does contain extra funds for modernizing nuclear weapons, for cybersecurity work done by the Department of Homeland Security, for fighting wildfires, and for addressing a backlog of disability claims at the Department of Veterans Affairs.

Hedging their bets on the outcome of the election, both House Republicans and Senate Democrats agreed to the CR.  Republicans hope to be in a stronger position in March when they would work to reduce the over-all funding level for appropriated programs.  Some Democrats believe that their party would have had greater leverage to finalize a more favorable deal with a 3-month CR that expired at the end of December.  They are leery of a 6-month deal that will expire around the time Congress will also need to act on increasing the debt ceiling, a process Tea Party Republicans are already threatening to sabotage again.

Congress has passed a year-long budget by the October 1 beginning of the fiscal year without needing a CR only three times in the last 27 years – 1989, 1995 and 1997.  This year, the House Appropriations Committee passed 11 of the 12 appropriations bills and six passed the full House.  It was unable to complete the Labor-Health and Human Services-Education bill because the cuts being proposed were too severe.  The Senate Appropriations Committee also completed work on 11 bills but none passed the full Senate.  It did not consider the Interior-Environment bill because of pending Republican amendments attacking Environmental Protection Agency regulations.  This year’s CR is unprecedented because it includes funding for all twelve appropriations bill because none of the individual bills have been signed into law.


The CR was used as a vehicle to attach an extension of the Temporary Assistance to Needy Families (TANF) program which was set to expire on September 30.  The $16.5 billion annual block grant program provides funding to states for both cash assistance as well as a variety of other benefits and services to meet the needs of low-income families and children. The program became an election year issue after the Administration’s Department of Health and Human Services (HHS) sent a memo to states allowing them to apply for waivers to experiment with alternative approaches to strengthen employment outcomes.  (See more details in the July 24 Human Needs Report.) (Advocates were concerned that House Republicans would use HJ Res 117 as an opportunity to thwart the HHS waiver.  Instead the House chose to vote on a Resolution of Disapproval (HJ Res 118).  The measure passed 250-164 with 31 Democrats joining 231 Republicans in support of the resolution.  The Senate will not vote on HJ Res 118.

Fiscal Cliff

Passage of the 6-month CR takes regular appropriations off the table during the post-election lame duck session.  Instead, the Congress will grapple with impending across-the-board spending cuts (known as ‘sequestration’) set to take effect on January 1, and the expiration of the Bush-era tax cuts on December 31.  Sequestration was put in place in the Budget Control Act to force action on reducing the federal debt and deficits.  Failure by Congress to avert sequestration and tax increases would result in what has been dubbed by some as the ‘Fiscal Cliff.’  See more details in the July 24 Human Needs Report.  Those are not the only important issues facing deadlines, though.  The farm bill has been allowed to expire, and Congress will want to restore agriculture programs (See article in this Human Needs Report.)  Federal unemployment insurance for the long-term jobless will also expire at the end of December.  People out of work 27 weeks or more make up 40 percent of those unemployed.  Terminating the federal unemployment program serving that group would plunge more people into poverty.

As the end of the year draws near, pressure is mounting for an alternative plan to avoid the cliff.  Republicans and some Democrats are especially concerned about the pending cuts to the Pentagon.  Democrats and the Administration are advocating for a balanced approach that includes new sources of revenue, but thus far, Republicans have refused to agree to tax increases.  The results of the election will most certainly impact the timing and outcome of these critical policy decisions.

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