Outlook on FY 2012 Appropriations Bills

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Publication date: 
30 August 2011
Number: 
103

Fiscal  Year 2011 ends a month from tomorrow, and it looks highly unlikely that all  twelve of the FY 2012 appropriations bills will be enacted in time.  While Congress and the Administration will  agree to provide continued funding through one or more short term measures,  there is reason to believe that bitter disagreements that have prevented the  passage of final appropriations legislation for many months in previous years  may be avoided.

Sharp  differences about the composition of the final FY 2012 appropriations bills are  certain, but arguments about how much money should be spent next year for  discretionary programs is no longer an open matter.  Earlier this year, the House passed a budget  plan calling for about a $30 billion reduction in spending.  This reduction was opposed by Senate  Democrats and the White House, and would have led to many months of  disagreement.   This disagreement was  ended when President Obama signed the Budget Control Act into law on August 2.  This bill set discretionary spending caps for fiscal  years 2012 through 2021.  Discretionary  spending is set at $1.043 trillion for FY 2012, down 0.7 percent or $7 billion  from this year.  Agreement on this number  is key to the passage of the FY 2012 appropriations bills. 

House  Majority Leader Eric Cantor’s (R-VA) words about this FY 2012 figure are of  great importance.  In an August 17  memorandum to House Republicans, Cantor spoke of the impact that policy  uncertainty was having on the economy, stating:

“While  all of us would like to have seen a lower discretionary appropriations ceiling  for the upcoming fiscal year, the debt limit agreement did set a level of  spending that is a real cut from the current year level. I believe it is in our  interest to enact into law full-year appropriations bills at this new lower  level.”

Also  of note is a statement by House Appropriations Committee Chairman Hal Rogers  (R-KY).  On August 19, his committee  released the following statement:

“House  Appropriations Chairman Hal Rogers today stated his intention to complete the  fiscal year 2012 Appropriations process as soon as possible -- avoiding a  potentially harmful drawn-out budget process that could further undermine the  nation’s fiscal stability. In addition, Rogers reiterated his commitment to  maintaining the recently passed debt-ceiling agreement, which holds  discretionary spending to $1.043 trillion for fiscal year 2012.

“The  statement by Chairman Rogers follows:

‘The  Appropriations Committee has repeatedly and successfully made significant  spending cuts this year that have drastically changed the trajectory of federal  spending, trimming billions of dollars and imposing strict spending reductions  so we don’t leave our children with mountains of debt. We will continue to work  in this vein – in a bicameral manner – prioritizing House-passed Appropriations  bills in negotiations and completing our Appropriations work as soon as  possible. It is imperative that the Congress complete these must-pass bills in  a timely manner to avoid the harmful, destabilizing effects caused by a delayed  and drawn out Appropriations process.

‘In  addition, my Committee members and I remain committed to the responsible 2012  spending level agreed to by the House, Senate, and White House under the recent  debt ceiling agreement. The work we do on our Appropriations bills this year  will fulfill this agreement by reducing discretionary spending from current  levels – saving the taxpayers billions – and steering agency budgets across the  federal government to more sustainable and responsible levels.’”

It  is expected that Senate appropriators will pick up the pace when they return to  Washington next week.  Only one of the  twelve bills has passed the Senate: the FY 2012 Military Construction-VA bill.  This bill, which also has passed the House,  is likely to be the vehicle for one or more short-term measures to provide  funding beyond September 30.  While there  is a possibility that Congress will pass some individual appropriations bills,  it appears far more likely that final FY 2012 funding will take the form of a  large omnibus funding bill.  

Enactment  of the Budget Control Act does not signal the end of bitter controversies about  the size and role of federal spending.   If agreement is not reached on $1.2 trillion in deficit reduction in the  next ten years, through additional reductions in discretionary spending and/or  changes in entitlement programs and/or revenue increases, automatic cuts will  occur.  The first set of these cuts,  which would occur to defense and non-defense programs and some entitlement  programs, would occur in Fiscal Year 2013 on January 2, 2013.

Fiscal  Year 2012 appropriations bills have been moving in the House.  A summary of the status and content of these  bills, as they pertain to programs of interest to the physics community, will  be provided in FYI #104.