Category: Budget

The Budget Conference Committee is quickly approaching its December 13th deadline for coming to an agreement on an overall budget framework that will shape the remainder of FY2014, and possibly FY2015, as well as provide some sequester relief. There are rumors swirling that the two lead negotiators – House Budget Chairman Paul Ryan (R-WI) and Senate Budget Chairwoman Patty Murray (D-WA) – may be close to producing a compromise that could set top-line spending levels for FY2014-2015.

House GOP leaders have already set aside time to move a budget conference deal this week in the event the budget negotiators do produce a compromise. The emerging framework would increase spending a modest amount over the rest of this fiscal year in exchange for an array of deficit reduction steps in other areas. One possible scenario would involve rewriting part of the Budget Control Act enacting the sequester cuts and raising the $967 billion overall discretionary spending level by $34 billion to $1.001 trillion in the fiscal year that began October 1st.

Congress is on break starting today through the Thanksgiving holiday. The House returns to work December 2nd for two weeks and the Senate returns the following week of December 9th. Unfortunately, budget negotiations did not result in top-line numbers for FY2014 spending before lawmakers left town, leaving appropriators very little time to draft an omnibus spending bill before the current continuing resolution (CR) runs out on January 15th. Appropriators and their staff say they need at least 30 days to put together an omnibus bill to keep the government running when the current stopgap spending measure (PL 113-46) expires on January 15th.

House leaders have stated that they will try to advance a new CR at the sequester level of $967 billion for discretionary spending set under the 2011 Budget Control Act (PL 112-25) if budget negotiators can’t produce a deal.

But appropriators are concerned not only about the current year but that the appropriations cycle for FY2015 will face the same challenges that the FY2014 process has faced. The House and Senate Budget Committees traditionally pass concurrent budget resolutions in April each year that provide the framework for appropriators to proceed on the 12 annual spending bills. Work on FY2014 bills fell apart in August after the House and Senate appropriations committees spent months working under different top lines, known as 302(a) allocations, and no compromise was forged to bridge the $91 billion gap between the House and Senate plans. Appropriators believe now is the best chance to create a top line number for FY2015, several months ahead of schedule, which could help restore regular order to the appropriations process.

But now nothing will happen for at least a week or two while everyone enjoys their Thanksgiving break. The game clock, however, keeps ticking toward the January 15th deadline of the existing CR.

Just when all seems lost, it appears that there may yet be hope that Budget negotiators could reach a deal to replace a portion of sequestration. Any potential deal would be small in comparison to the $17.1 trillion national debt, potentially with proposals to replace one year of sequestration cuts — worth $110 billion — or something smaller, with more targeted cuts.

While the outlines of the agreement are certainly far from solid, they could include some mandatory savings, along with revenue, but no new taxes. Potential revenue raisers being discussed include increased Transportation Security Administration fees and money generated from wireless spectrum sales. As an extra bargaining chip, Republicans would consider including an extension of extended unemployment benefits, which expire on December 28th.

This all seems like a small glimmer of hope that the next round of sequestration will be avoided, and maybe topline budget numbers for FY2014 and FY2015 would be agreed to. This would give some certainty – or mock regular order – at least through next years mid-term elections.

Both the House and Senate will be busy this week as they attempt to wrap up a number of issues before they take a two-week break for Thanksgiving. The Senate will try to finish work on the annual Defense Authorization bill that the House completed back in June. This could be one of the few substantial pieces of annual legislation that Congress acts on this year.

But the big news is what’s not happening. With the deadline less than a month away, budget conference committee negotiators say there has been almost no progress in their attempt to address the $91 billion chasm that continues to separate the House and Senate FY 2014 budget plans. The December 13th deadline is fast approaching, with a two-week break in there for Thanksgiving. While Congress set the arbitrary December 13thdeadline, there are no consequences for missing it. In fact, the next deadline that does have consequences is January 15th when the current continuing resolution (CR) runs out. The hope is that negotiators can reach an agreement on an outline that could provide an overall budget number for FY2014 and possibly FY2015 as well as some relief from sequestration before the next round of sequestration take effect in January.