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.