The House and Senate deadlock over Fiscal Year 2012 spending was broken when the Senate relented by dropping its demand for higher funding for disaster relief.  The Senate dropped $1 billion in disaster aid for FY 2011 when Federal Emergency Management Agency (FEMA) officials said it had sufficient funds for FY 2011, averting a standoff with the House that had insisted in offsetting the funding by stripping money designated for advanced vehicle technology.  On September 26, the Senate passed H.R. 2608, the seven-week short-term funding bill known as a continuing resolution or CR, which funds the government through November 18. The House had already left for a one-week recess, so under a ‘unanimous consent’ rule only a few House members needed to be present on September 29 to  continue funding for one week, averting a government shut-down on October 1 when FY 2012 began. The full House voted on October 4 to keep funds flowing through November 18.
House and Senate appropriators hope to avoid passing another short-term appropriations bill and instead come to agreement by November 18 on a final omnibus bill for FY 2012 that includes funding for all discretionary programs.  Both House and Senate leaders have agreed to accept the total $1.043 trillion overall cap on funding passed in the Budget Control Act on August 2. This represents a $7 billion (non-inflation adjusted) cut from the FY 2011 total, an inflation-adjusted 1.8 percent cut. While working with the same total spending cap will make an agreement easier, still there are differences in the House and Senate bills that could prove difficult to resolve – starting with whether to include offsets for FEMA funding, something that has never happened because of its emergency nature. In addition to differences in funding levels for certain programs, policy riders also loom large.

Negotiators will use the 12 bills as they have been developed to negotiate the final package.  The Senate has passed 11 of the 12 bills in the Appropriations Committee – the Interior-Environment bill has not been taken up.  Senate leadership hopes to take a number of the bills to the floor before omnibus negotiations, hoping to get more leverage in the process.  The House has passed 9 of the 12 bills within the Appropriations Committee and 6 of those have passed the full House.

Labor-HHS-Education:  One of the bills the House has not considered in either the Appropriations full or subcommittee is Labor-HHS-Education.  However, Subcommittee Chairman Rehberg (R-MT) took the unprecedented step of posting on the Committee’s website a draft bill representing his proposals for FY 2012. He does not plan to convene the subcommittee to consider the bill.  The largest bill next to Defense, the Labor-HHS-Education bill, will be one of the most difficult to resolve. The House draft bill for FY 2012 is funded at $153.4 billion, $4 billion below its FY 2011 level and below the Senate bill.  The House draft makes particularly deep cuts to job training programs, decreasing aggregate funding by $2.4 billion or 75 percent while the Senate maintains current funding for the programs.  The House draft also cuts nearly 30 education grant programs.  As controversial as the cuts are the new policy riders in the House bill: prohibiting the use of funds to implement almost any part of the Affordable Care Act; overturning protections of the National Labor Relations Act for workers in many companies now covered; and blocking Education Department rules designed to protect students and taxpayers from for-profit colleges with the worst default records.

Defense:  Funding in the two Defense bills are far apart. The Senate freezes defense spending at its current level of $513 billion and the House increases spending by $17 billion to $530 billion.  Both assume additional spending of $118 billion for the wars in Afghanistan and Iraq.

Agriculture/Nutrition:  The Senate would provide $2.699 billion more in Agriculture Appropriations with significantly more for nutrition programs in the bill; $60 million more for The Emergency Food Assistance Program (TEFAP), $10.5 million more for TEFAP administration funding, $38.3 million more for the Commodity Supplemental Food Program, and $581 million more for the Special Supplemental Nutrition Program for Women, Infants and Children (WIC).  According to appropriators, the $6.582 billion for WIC in the Senate bill would fully fund participation in the program.

Housing:  Advocates are deeply concerned about cuts in several programs that serve extremely low-income households in both the House draft and Senate bills providing funding for the Department of Housing and Urban Development (HUD). Funding for contract renewals for tenant-based rental assistance in the House bill is $17.04 billion and in the Senate bill is $17.14 billion.  The Center on Budget and Policy Priorities estimates that a minimum of $17.37 billion would be needed to prevent households from losing vouchers they are now using to enable them to afford their rent.  Under the House bill an estimated 42,000 vouchers would be lost, with the likely outcome that many would be forced out of their homes. Both bills are well below the President’s request of $2.4 billion for the Public Housing Capital Fund which is barely sufficient to meet accumulating maintenance needs of public housing units. This bill is one reflection of the impact of that cuts to domestic discretionary programs in the name of “deficit reduction” are having.

Another challenge to reaching agreement on final funding for FY 2012 will be pressure from the 53 House Republicans who voted on October 4 against the CR, many of whom are unhappy that the total spending is $24 billion more than adopted in the April House-passed budget resolution.

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