CHN: FY2016 Budget Preview

While debate over FY15 funding wrapped up just last month (other than battles over Homeland Security funding that will continue in this month in conjunction with the fight over President Obama’s recent executive action on immigration), Congress is already focusing on FY16 budgets. The new Congress has more members who favor cutting spending on human needs programs and passing tax cuts for the wealthy and corporations. In addition, unless Congress takes action before October when the new fiscal year begins, automatic spending cuts known as sequestration will take effect due to the deficit reduction legislation enacted in 2011, meaning more cuts for many human needs programs. Programs like Medicaid, SNAP/food stamps, and Social Security – which are not subject to the sequester – will also be under attack.
President Obama is required to submit his budget proposal to Congress by the first Monday of February. While that timeline has slipped to March or April in recent years, the White House has said the President’s FY16 budget will be released on time, on February 2. Most likely sometime in March, House Budget Committee Chair Rep. Tom Price (R-GA) is expected to release his version of the federal budget. As mentioned in the related article in this Human Needs Report on the new congressional leadership, Rep. Price has said he wants to eliminate the deficit in 10 years, give states more flexibility, build on past budgets authored by Rep. Paul Ryan (R-WI) – budgets which would drastically cut human needs programs that keep people out of poverty and convert Medicaid into a block grant – and according to CQ possibly also include parts of Rep. Ryan’s plan to fight poverty, which would actually increase poverty by cutting spending on federal safety net programs.

Congressional budget resolutions serve as an outline, providing an overall total funding level for annual appropriations and including policy recommendations, but without the line-item detail of the President’s budget. Because it is not legislation, the Congressional budget resolution does not require the President’s signature. Usually, the only parts of the budget resolution binding on Congress are the appropriations funding levels, and those only become binding if the House and Senate can agree on a joint budget resolution, which is likely this year. The two chambers have an April 15th deadline for agreeing on a joint budget resolution, although that deadline has often been ignored.  No budget resolution has been agreed to by the House and Senate since 2009. Senate Budget Committee Chair Mike Enzi (R-WY) has said he wants to see a budget that can pass both chambers.

There is talk that Republicans in the House and Senate will include a process in the budget resolution known as reconciliation to cut and make changes to mandatory spending programs (those programs not subjected to the annual appropriations process, like Medicaid, Medicare, SNAP/food stamps, and Social Security) and to enact tax cuts. As CQ notes, a reconciliation bill cannot be filibustered and only needs 51 votes to pass in the Senate. However, unlike a budget resolution, it has to be signed into law by the President and therefore is subject to a possible veto. For more information on how reconciliation might affect tax cut legislation, see the related article in this Human Needs Report.

The reconciliation process could also be used to raise the debt limit, the statutory limit on federal borrowing.  Republican opposition to raising the debt limit previously caused the U.S. to be on the brink of defaulting on its debts and was a partial cause of the last government shutdown in 2013. At that time, Republicans used the debt limit as a bargaining tool to get to massive spending cuts in exchange for raising the borrowing limit. In February 2014, Congress passed a bill raising the debt ceiling and allowing the government to borrow as much money as needed through March 15 of this year. The Treasury Department can use tactics known as “extraordinary measures” to ensure that the government won’t default on its loans for a period of time after that, possibly through October, but congressional action will eventually be needed.

CHN will host a webinar on the federal budget on Thursday, Jan. 22, from 1-2:15pm ET. All are invited to participate and learn more about how and when Congress will take up its new round of critical budget decisions, impending threats, and what advocates can do to protect vital programs and services. Click here to register.

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