News and updates

Formal budget negotiations begin today with Democrats pushing for a multibillion-dollar job creation package aimed at speeding up economic growth. That will be in contrast with Republicans who want to maintain spending cuts under sequestration that will keep government operations running at reduced levels through the rest of FY2014. One thing that leaders in both parties already agree to: no grand bargain. The conference has until December 13th to recommend a plan under an agreement linked to spending and debt limit legislation that was passed October 16th (PL 113-46).

The goal for most of the budget conference committee members is to find a way to replace sequestration and agree on an overall FY2014 spending limit. While the House and Senate budget plans introduced earlier this year are far apart on tax and spending policy, they are somewhat closer on the more immediate issue of FY2014 discretionary spending. The House proposes an overall discretionary cap of $967 billion, $91 billion less than the Senate’s limit of $1.058 trillion. Absent an agreement on FY2014 funding, automatic spending cuts under the sequester would reduce spending by about $20 billion from current levels, to $498 billion for defense and $469 billion for domestic programs.

The House and Senate are both scheduled to recess next week through Veteran’s Day, and then will return to DC to continue negotiations. They will work for two weeks in November, and then take a two-week recess for Thanksgiving (November 25-December 6). That will leave just one week in December to complete work on the budget negotiations before the December 13th deadline. Again, most of the real negotiations will take place behind the scenes so the truncated work schedule should not affect the outcome that much. If a deal is not reached by the December deadline, Congressional leaders may need to consider another continuing resolution to keep government funded beyond January 15th.