CHN: FY03 Omnibus Appropriations Package Sent to President

Compromise Shifts Away from Senate Priorities and Cuts Social Service Programs
The House and Senate on Thursday finally cleared the fiscal year 2003 omnibus appropriations bill that had been caught up in Congressional wrangling since the fiscal year began on October 1, 2002. The eleven non-defense federal agencies covered by the package have been funded at FY 02 levels. Passage of the omnibus will allow new funds to start flowing to these agencies.

The $397.4 billion package exceeds the President’s spending cap of $385.9 billion, but accommodates two White House funding requests – $3.9 billion for additional intelligence activities and $6.1 billion for military operations in Afghanistan. The bill also increases funding for some education programs, boosts Medicare payments to physicians, provides additional drought relief, and augments spending on the space shuttle crash investigation.

To make room for these increases, appropriators included a .65 percent across-the-board spending cut in the bill. However, the Head Start and Women, Infants, and Children Supplemental Food and Nutrition (WIC) programs were spared form the cut, as were Veterans Administration medical payments. Despite previous White House complaints about the practice, the final package also includes $2.2 billion in “advanced appropriations” that count towards this year’s spending levels.

The most significant point of contention among appropriators was the Senate’s $11 billion addition to the original House-approved omnibus bill. The $391 billion bill that originally passed the Senate provided increased funding for Title I education programs, community health centers, Medicare adjustments, HIV/AIDS prevention and treatment, and drought assistance for Western farmers. House appropriators opposed the Senate’s tool of using a deep across-the-board cut to fund increases in education and other priorities, and instead fought to keep the cut under 1 percent and make specific department and program reductions.

The final package includes a reduction in the spending level approved by the Senate for Title I – from an additional $5 billion to $1.4 billion – and a Medicare formula adjustment for physician fees that would cost $54 billion over the next 10 years. Other spending levels in the FY 03 omnibus appropriations bill include:

– $22.1 billion in discretionary spending for the Department of Agriculture, the same amount requested by the Administration, but less than the Senate’s original request and the FY 02 spending level of $24.3. These cuts will have a negative impact on the child nutrition programs up for reauthorization this year, including the Child and Adult Care Food Program (CACFP), the Summer Food Service Program, and the School Lunch and School Breakfast Programs. Among the few Department of Agriculture programs to receive a boost under the FY 03 omnibus is WIC, which will receive an increase of $348 million.

– $130.9 billion in discretionary funding for the Labor, Health, and Human Services and Education Departments, the same amount as the President requested and, overall, $3.3 billion more than FY 02 levels. The Department of Labor, however, will receive a $160 million cut from last year’s levels. The Department of Education is set to receive a $3.1 billion increase – one that Democrats argue is still insufficient to meet current need or the spending levels promised by the 2001 Elementary and Secondary Education Act (PL 107-110).

– $90.4 billion for VA-HUD, compared to the FY 02 spending level of $95.4 billion and Bush’s FY 03 request of $93.4. The Department of Housing and Urban Development (HUD) is set to receive a $1.8 billion spending boost over 2002 levels to $36.3 billion, but public housing advocates say that the agency is shifting money from 2003 accounts to deal with a $250 million shortfall in 2002. Public Housing Agencies will thus likely receive only 70% of the operating funds they received in FY 2002.

The President is expected to sign the omnibus bill, finally ending an appropriations process five months overdue.

Budget and Appropriations