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Category: Budget

FY2015 Appropriations Season Underway

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House and Senate appropriators will begin their FY2015 work this week with the goal of moving all 12  annual spending bills through the legislative process before the end of the fiscal year on September 30th.

House and Senate appropriators are holding a trio of hearings this week ahead of next Tuesday’s White House budget release on two traditionally divisive domestic spending measures: Labor-HHS-Education and Financial Services. Two of the biggest budget questions have already been settled, with top-line discretionary spending locked in at $1.014 trillion and defense funding capped at $521.4 billion. The central question remaining is how members choose to divide the $492.5 billion reserved for domestic discretionary programs in the December budget agreement (PL 113-67) among priorities as varied as education, scientific research, health care, and financial regulation.

In other news, House Ways and Means Chairman Camp (R-MI) will unveil his tax overhaul plan on Wednesday that’s expected to lower top individual and corporate income tax rates while imposing a surtax on wealthy individuals and the biggest banks and insurers. Although Camp’s plan is aimed at being revenue neutral, it would redraw large parts of the tax code with far-reaching, high-stakes tax policy changes that will trigger a large battle between political and corporate interests. The details are part of an ambitious plan to rewrite the tax code from top to bottom that the Michigan Republican plans to offer to a Congress that appears uninterested in tackling anything that includes tough political choices.

But it is unclear as to whether Chairman Camp has support from GOP leadership to advance this sort of tax overhaul. Leaders in both chambers have all but dismissed the possibility of a tax overhaul this year since many are reluctant to take up a politically tricky tax overhaul in an election year.

Preview of President’s Budget Request for FY2015

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President Obama will release his FY2015 budget request next Tuesday. He is expected to seek a small increase in spending as called for by the December budget deal but he will avoid any “grand bargain” proposals for steep deficit cuts. Obama’s request will stick to the $1.014 billion discretionary spending caps for FY2015 set by the budget agreement (PL 113-67), which is about $2 billion more than FY2014 and would not require any across-the-board sequester cuts.

The good news for higher education and research is that the White House will also propose a $56 billion “Opportunity, Growth and Security Initiative” aimed at funding research, manufacturing, education, and other priorities. The plan, which the administration said would be paid for by closing tax loopholes and changing spending programs, aims to effectively replace the remaining FY2015 sequestration cuts for nondefense discretionary programs – the programs we care about the most. The initiative would split funding evenly between defense and domestic-focused efforts, and it would create 45 new manufacturing institutes, an efficiency program focused on modernizing the electric grid, and fresh ways to boost access to pre-kindergarten programs.

Obama will release his budget in two parts with the main budget volume, key proposals, summary tables, agency-level information due March 4th, and the historical tables and analytical perspectives volume will come the following week. Shortly after that, we will finalize the UW Federal Agenda for FY2015, which will likely focus on investing in research, access to federal student aid, reauthorization of science and higher education programs, and immigration and tax reforms.

Senate Passes House Bill to Raise Debt Ceiling

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With an impending snow storm as a powerful motivator, the Senate passed the House’s bill to suspend the debt ceiling until March 15, 2015 by a vote of 55-42.

Earlier this week, Senator Ted Cruz of Texas vowed to filibuster the measure since the House Republicans “caved to President Obama” and were unable extract to any spending cuts or other concessions to pass the bill. Such a filibuster could have caused a repeat of last Fall’s government shutdown.

However, much of the Senate’s inclination to stand tough went by the wayside as 5 plus inches of snow have been forecasted for the DC region. Both chambers of Congress have been eager to get out of town this afternoon given the storm hitting the eastern seaboard and the amount of snow that’s expected to fall in the Washington area.

The Senate voted 67-31 to end a debate on the legislation or end any filibuster threatened by Senator Cruz. The vote took nearly an hour, but cleared the way to a vote on final passage with a simple majority threshold. A dozen Republicans voted with Democrats to end the filibuster after the Senate Republican Leadership McConnell and Cornyn led the way. Republicans joining Democrats included, John Barrasso of Wyoming, Susan Collins of Maine, Bob Corker of Tennessee, Jeff Flake of Arizona, Orrin Hatch of Utah, Mike Johanns of Nebraska, Mark Kirk of Illinois, John McCain of Arizona, Lisa Murkowski of Alaska and John Thune of South Dakota.

Both Washington Senators Murray and Cantwell voted to end the debate and voted for the suspension of the debt ceiling.

House Passes Clean Bill to Raise Debt Ceiling

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With a vote of 221-201 , the House voted to suspend the debt limit for one year without requiring any offsets. Earlier this week, the House had floated the idea of adding military COLA pay to the measure, but ultimately that proposal and other additions were squashed.

The measure narrowly passed and only passed with the help of Democrats. Only 28 Republicans voted for it, while 199 voted no.

The Senate is expected to vote to approve the measure later this week before they recess to avoid DC’s impending snow storm.

The Week Ahead: Debt Ceiling and Military COLAs

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Both the House and Senate are in session this week. The Senate is expected to consider legislation to a repeal a cut in the cost-of-living adjustment for younger military retirees, while the House could consider debt ceiling legislation before adjourning Wednesday for a Democratic retreat. Both chamber will recess next week for the President’s Day week.

Treasury Secretary Lew told Congress on Friday that February 27th is the deadline for extending the nation’s debt limit, giving lawmakers less than three weeks to act before the government may default on payments. According to Lew, the 27th is the date when Treasury will exhaust the “extraordinary measures” it uses to stave off the need for new borrowing. While most believe that Congress will extend the nation’s debt limit without threat of government default, there is currently no agreement on how best to do that. House Republicans insist they want a policy concession from the White House to be attached to a debt limit extension, but they have not been able to agree among themselves on a provision. The suspension of the debt limit included in last December’s budget deal (PL 113-46) ended on Friday, leaving the Treasury Department to rely only on extraordinary measures to pay its bills.