Disagreements Over Spending Stall FY 03 Appropriations Process
On May 24, the House of Representatives passed, by a 280 to 138 vote, a fiscal year 2002 supplemental appropriations bill (HR 4774) that provides, according to Republicans, $28.8 billion for defense operations, homeland security, aid to New York City, and other, smaller programs. The Congressional Budget Office (CBO) estimates that legislation’s price tag is actually $30.1 billion. The Senate passed its own, $31.6 billion version of the supplemental spending bill (S 2551) on June 6, by a 71 to 22 margin. The Senate bill contains slightly more money for national security than its House counterpart. President Bush originally requested $27.1 billion in supplemental spending.

Despite bipartisan support for increased spending on defense and national security, action on the supplemental had been hindered by disagreements surrounding overall federal spending limits. In the House, Republicans added language to the bill “deeming” that the budget resolution agreed to by the chamber in March (H Con Res 353) guide spending during this year’s appropriations process. This would allot $749 to be divided among the 13 appropriations bills. House appropriators, including several Republicans, argue that this figure is too low to adequately meet the nation’s needs.

A bipartisan group of Senators, including Budget Committee Ranking Minority Member Pete Domenici (R-NM), agree that the House limit is insufficient. Although the Senate has not approved a budget resolution of its own, these Senators are pushing for a $768 billion spending blueprint. That limit, and budget enforcement mechanisms, were not ultimately including in the Senate supplemental.

In addition to disagreements over spending limits for the upcoming fiscal year, arguments over raising the $5.95 trillion debt ceiling slowed action on the supplemental. House Democrats were angered when their Republican colleagues inserted language in HR 4774 allowing them to increase the debt ceiling during conference negotiations – thereby avoiding a direct vote on the issue on the House floor. Democrats were eager to debate the issue to highlight the fact that President Bush’s $1.35 trillion tax cut, enacted last year, is largely responsible for draining the budget surplus and, in turn, requiring the debt limit increase. Some increase in the debt ceiling is required by June 28 or the government will default on its obligations.

Treasury Secretary Paul O’Neill has called on Congress to raise the debt ceiling by $750 billion. On the whole, Democrats oppose this increase in the absence of legislation that would balance the budget within five years without using Social Security and Medicare surplus funds. During Senate debate on the supplemental, an amendment offered by Russ Feingold (D-WI) and Judd Gregg (R-NH) to set spending caps for five years was shelved. Senate Majority Leader Tom Daschle (D-SD) has indicated that he will bring to the floor a stand-alone measure to raise the federal debt limit by $450 billion in the next few weeks.

In addition to providing additional funds for measures related to defense and national security, both the House and Senate supplemental bills include $5.5 billion for assistance to New York, $750 million of which would be channeled through the Community Development Block Grant (CDBG) – a program that assists low-income Americans in the repair of properties and businesses and in economic revitalization activities. The House bill also contains $300 million for the Workforce Investment Act (WIA), while the Senate provides $400 million for WIA. Both bills contain $75 million for the Women, Infant and Children (WIC) nutrition program to finance rising participation rates and higher program costs.

To the dismay of anti-poverty advocates, both bills would offset some of the new spending by making cuts in federal housing programs. Legislation in the House would rescind $600 million in previously approved spending for Section 8 rental subsidies and rehabilitation of HUD-assisted housing. The Senate bill cuts $300 million in Section 8 funds and $50 million from the HOME down payment assistance initiative. During debate on the supplemental, the Senate also defeated an amendment sponsored by Senator Edward Kennedy (D-MA) to increase funding for schools that operate summer programs by $150 million.

Dissention over spending issues related to the supplemental has delayed action on the 13 fiscal year 2003 appropriations bills. Wary of the limited time in which to debate and pass all 13 bills, some House appropriators have suggested combining the non-defense spending bills into just one or two omnibus measures. Because the two chambers never agreed to a budget resolution, conference negotiations over the appropriations bills will likely be contentious. Further complicating the appropriations process is President Bush’s call to create a new Cabinet-level Department of Homeland Security. Under plans outlined by Bush, the agency would assume authority over programs projected to cost $37.5 billion in FY 03. Appropriators will have to figure out which of their 13 subcommittees will have jurisdiction over the new department.

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