Just hours before the beginning of the new fiscal year on October 1, the President signed into law the Continuing Appropriations Act, 2011 (PL 111-242) to allow annually appropriated government operations and programs to continue through December 3, 2010.  This stopgap continuing resolution (CR) was necessary since Congress has been unable to pass any of the 12 annual appropriations bills for FY 2011, given the highly charged political atmosphere. The Senate passed the bill on September 29 by a vote of 69-30 and the House followed suit on September 30 with a 228-194 vote.  The CR allows for spending at an annual rate of about $8.2 billion below FY 2010 levels, with less money needed in FY 2011 for the Census Bureau (more was needed in 2010 for the decennial census) and for military base closure activities.  Republican-led opposition resulted in denial of the Administration’s request for approximately $20 billion in additional funding for Pell Grants that help low-income college students pay for school, the Postal Service and implementation of the health care and financial regulation reform bills.
Reaching final agreement on funding for discretionary programs will be difficult.  In growing numbers Members of Congress are feeling pressure to demonstrate that they care about cutting the deficit by targeting the non-military, non-security discretionary (that is, annually appropriated) portion of the budget.  Prior to voting on the CR, the Senate defeated an amendment by Senator John Thune (R-SD) to reduce the discretionary budget except for defense, homeland security and veterans programs by 5 percent.  The remaining programs which would have been subject to the cut comprise less than half of the discretionary budget and include child care, low-income housing, job training and employment services, nutrition, services for the elderly and disabled and education programs – all critical for vulnerable populations.  Eight Democrats joined all Republicans in voting for the Thune amendment which narrowly failed, 48-51.

In his FY 2011 budget, President Obama proposed a freeze on non-military, non-homeland security spending, capping it at $1.128 trillion.  The race to lower spending began when the House reduced the cap to $1.211 trillion.  The Senate has considered two proposals to shrink funding still further, with caps at either $1.114 or $1.108 trillion, but has not enacted legislation including either cap.  Such pressure to drive down spending on discretionary programs will undoubtedly continue to escalate during the lame duck session beginning on November 15 after the mid-term elections.  It is highly possible that FY 2011 discretionary funding will not be finalized until the new Congress is in place early next year.

The CR was used as a vehicle for providing extensions to a handful of expiring programs including the Temporary Assistance for Needy Families (TANF) program. TANF, a joint federal and state block grant program, was last reauthorized in 2005 for 5 years and would have expired on September 30 had it not been extended to December 3 along with the appropriated programs.  TANF’s funding level has remained unchanged since 1996 when it was first authorized and funded at $16.5 billion; thus, its value has eroded by over 30 percent.  With fewer than half of eligible families receiving needed benefits while the economy struggles to recover from the current recession, TANF is not working as a counter-cyclical program. The Senate is reported to be drafting a one-year extension of TANF; it is not yet known whether any changes will be incorporated in that extension.  Advocates are working to make positive changes to this vital program, either within the extension or in a more comprehensive look at TANF expected in the coming year.

The CR also extended the Child Nutrition Act which is due to be reauthorized.  Advocates were deeply disappointed that the TANF Emergency Fund, an effective program in the American Reinvestment and Recovery Act that has provided 250,000 jobs for low-income adults and teenagers, was not extended in the CR.  (See articles in this Human Needs Reporton these programs.)

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