CHN: With FY20 Spending Bills Wrapped Up, FY21 Budget Season Begins

With Fiscal Year 2020 appropriations finally signed into law in December, talks and speculation about Fiscal Year 2021 have begun. One thing that may make the FY21 process smoother than FY20 is that topline spending caps for discretionary (annually appropriated) defense and nondefense spending were already agreed upon as part of the bipartisan budget deal Congress passed last July.

In total, Congress will have $10 billion more in FY21 base discretionary dollars to work with than it did in FY20; $5 billion more for defense and $5 billion more for nondefense programs. This total does not include some funding, like some emergency disaster aid and war funding, that Congress approves outside of the caps.

Advocates are concerned that the $5 billion increase for nondefense programs will be entirely consumed by rising costs in veterans’ health care, leading to flat funding or even cuts in other human needs programs. One solution would be to move some of veterans’ health care services outside the cap, but the Trump Administration opposes this. If Congress cannot find more flexibility in domestic funding, it is likely that many programs will slip back into the pattern of the past decade in which many services eroded. As CHN research shows, 71 percent of human needs programs lost funding from FY10 to FY19 when taking inflation into account; 54 programs were cut by 25 percent or more.

Because the bipartisan budget deal already set spending caps for FY21, Congress does not need to pass a budget resolution – which would historically serve this purpose – this year. In fact, House Budget Committee Chairman John Yarmuth (D-KY) said “it’s more unlikely than likely” that his committee will draft and pass a budget resolution this year, while Senate Budget Committee Chairman Michael Enzi (R-WY) has indicated that he expects his committee to take up such a blueprint. A budget resolution does not go to the President for his signature and does not become law. Failure to pass a FY21 budget does not stop Congress from working on and passing FY21 appropriations bills.

On the other end of Pennsylvania Avenue, the Trump Administration is expected to release its FY21 budget proposal on Monday, Feb. 10. It is expected to be a full budget, complete with details about program funding levels. The budget will be released the week following President Trump’s State of the Union address, which is scheduled for Tuesday, Feb. 4. CHN will host a webinar discussing the Trump budget on Feb. 13 at 2pm ET; stay tuned for details on how to register.