CHN: The Congressional Budget and Annual Spending Bills Remain Stalled

A near obsession with the federal deficit has hampered action on House and Senate budgets and the work of annual appropriations. Congressional budgets are not binding by law but they serve the important purpose of setting an overall funding level for discretionary (that is, annually appropriated) programs and revenue targets for the fiscal year. Since the President’s FY 2011 budget was released in February only the Senate has moved towards approving a Budget Resolution. The Senate Budget Committee passed its budget at the end of April. Both the Senate Committee and the President were intent on showing a willingness to clamp down on at least some forms of spending. The President’s budget called for freezing ‘non-security’ discretionary programs for three years, without adjusting for inflation. However, detailed spending recommendations were only supplied for FY 2011, and in that year the President managed to provide above-inflation increases in a good many human needs programs, in large part by moving certain programs from the discretionary to mandatory category. Still, certain education, housing, and job training programs, as well as some services for children and youth were cut, many which sustained cuts during the last Administration. Even further cuts to these programs while the economy is still struggling to recover from the severe recession runs counter to the cautions of many economists against rushing to address the deficit by cutting programs that hit working families and result in lost jobs. Nonetheless, feeling pressure to reduce the deficit, the Senate Committee’s budget cuts even more, an additional $4 billion below the President’s budget. For a more detailed description of funding in the budget passed by the Senate Budget Committee see the Human Needs Report for April 26.
The House has struggled for weeks to come to agreement on an overall discretionary spending number for FY 2011. The conservative Blue Dog Democrats, who fear voting for a budget that has a large deficit, continue to press for cuts well below those in the President’s budget. Cutting the ‘non-security’ discretionary portion of the budget has become the focus of their attempts to signal to constituents in an election year that they care about reducing the deficit. This misplaced emphasis on a relatively small portion of the budget fails to acknowledge the biggest factors that are driving deficits and the debt: wars, the economic downturn, Bush-era tax cuts, and financial rescues. See the Center on Budget and Policy Priorities report, “Where Today’s Large Deficits Come From”. It is unclear whether the House will even attempt to pass a budget this year. If it does not pass a budget, it will be the first time since the 1974 Budget Act that the House will have failed to act.

In order for the appropriations process to move forward, action will be needed to set parameters for the Appropriations Committees so that they can allocate funds to the 12 Subcommittees who then assign funding levels to programs under their jurisdictions. In weighing its options, the Senate is considering moving its Committee-passed budget to the floor for a vote before the July 4 th recess in hopes of encouraging the House to act. While passing a budget requires only 51 votes in the Senate, it is also true that damaging amendments further restricting discretionary spending could pass with a simple majority. Senators Sessions (R-AL) and McCaskill (D-MO) have twice unsuccessfully offered amendments to place stringent multi-year binding limits on discretionary spending well below levels in the Senate Budget Committee budget. Narrowly missing passage when offered on legislation requiring 60 votes, the amendment would very likely pass if offered during a budget resolution where only 51 votes would be required. If the Senate brings the budget to the floor, advocates are concerned about a Session/McCaskill amendment and also potential tax-related amendments. The President’s budget would make the already generous 2009 estate tax rules permanent. Senators Kyl (R-AZ) and Lincoln (D-AR) have repeatedly attempted to pass a more generous estate tax that would exempt even more wealthy estates and lower the tax rate. Their proposal would cost about $130 billion more over 10 years than making the 2009 rules permanent. Ironically, many members who are pressing for more stringent restraints on funding for programs critical to working families support the Kyl/Lincoln estate tax proposal giving beneficiaries of wealthy estates an even larger benefit. For details on the proposal see the Center on Budget and Policy Priorities report.

The Senate and House must both pass a budget and then agree upon a Concurrent Budget Resolution for spending and revenue levels to go into effect. Since the 1974 Budget Act, there have been only four years that Congress was unable to pass a concurrent resolution: 1998, 2002, 2004, and 2006. In the absence of passing a budget resolution, the House and Senate could adopt a ‘deeming resolution’ which essentially is an agreement on overall spending levels. House rules make it somewhat easier to pass a deeming resolution than in the Senate where it will be difficult to find the 60 votes needed.

Given the difficulty of passing any measures in the House or Senate that require spending (see Jobs article elsewhere in this issue), moving forward will be challenging unless members are willing to set aside election-related fears and take responsibility for one of their primary roles – that of funding the federal government. Failure to act in the 12 work weeks remaining before Congress adjourns for elections will push the process into a post-election lame-duck session in which those newly reelected jockey for greater influence in what will likely be a Congress where neither party has a strong majority.

Budget and Appropriations
Policy Analyses and Research