If history is any guide, Congress will almost certainly pass one or more stopgap spending measures before reaching a final agreement on funding for fiscal year 2017. The question now becomes whether the current Congress and outgoing president will finalize an agreement in the lame-duck session or instead hand off responsibility for the final negotiations to the 115th Congress and the incoming administration.
Members of Congress will return from their lengthy election-year recess on Sept. 6, leaving them with just a few weeks to either quickly conclude work on all 12 appropriations bills or pass a stopgap funding measure to keep the government running past the end of the fiscal year on Sept. 30.
The latter outcome is virtually certain at this point, as none of the appropriations bills have made it to the president’s desk and many members of Congress are loath to pass all 12 in a massive omnibus spending bill before the general election on Nov. 8. In addition, after the politically damaging government shutdown of 2013, members appear to have little interest in forcing another shutdown. Accordingly, negotiations are now focused on determining how long the stopgap measure, known as a continuing resolution (CR), should last.
The length of the CR, or series of CRs, will be the product of high-stakes bargaining between the leadership of both parties. Initial reports suggest that at least two options are being seriously considered: a CR that punts consideration of spending bills just past the election or a CR that extends past Inauguration Day.
The former option would give the current Congress and the departing president another opportunity to craft a final spending agreement. The latter would allow the 115th Congress and the incoming administration to take over the negotiations. Given that control of the House, Senate, and White House could all flip in the election, the negotiation strategy of each party is likely based on whether the party expects to have more or less leverage after the election.
Budget process breaks down, as usual
House and Senate Republicans, the majority party in both chambers, made restoring “regular order” to the appropriations process a high priority on their legislative agenda this year. They had some success on that front, as the appropriations committees of both chambers approved all 12 spending bills. However, procedural hurdles and wrangling over controversial amendments once again torpedoed any hopes of an orderly appropriations process.
To date, the House has passed five of the spending bills whereas the Senate has passed only one, the Energy and Water Development Appropriations bill which funds the Department of Energy. Even approving this one relatively uncontroversial bill proved to be a feat, as an amendment which would have banned future purchases of heavy water from Iran initially derailed the bill, as reported on in FYI #51. The House’s version of the Energy-Water bill was also bogged down by controversial amendments, and ultimately failed on a vote of 112 to 305.
Other bills funding large amounts of R&D—namely the Commerce-Justice-Science, Defense, and Labor-Health & Human Services-Education appropriations bills—did not fare any better. The Senate began floor consideration of the CJS bill, but ultimately set it aside due to debates over gun control amendments. The House did manage to pass the Defense spending bill, but the Senate’s version stalled on the floor. Neither full chamber took up the Labor-HHS-Education bill.
None of this is particularly surprising given that reliance on CRs has become the norm in recent decades. The below chart displays the number and duration of CRs from fiscal year 1998 onward.
CRs create uncertainties
CRs have become an annual government-wide, uncertainty-induced headache, causing various inefficiencies in program budgeting and execution. In general, agencies have to be more conservative when spending funds early in the fiscal year because they do not know how much total money they will ultimately be allowed to spend. For example, agencies may decide to wait until later in the fiscal year to notify some grant applicants of whether they will receive funding. This lengthened notification process in turn creates uncertainty for the researchers, as they are trying to plan their own lab budgets for the year.
Because CRs typically set spending at the level approved in the prior fiscal year, programs that are scheduled for a ramp up or down in spending are particularly affected. Most impacted are “new starts,” activities which have not received money in prior years. New starts typically cannot receive funding until a final spending agreement is reached. Furthermore, what counts as a new start is sometimes unclear. For example, DOE is currently seeking clarification on whether the preliminary construction activities planned for the Long-Baseline Neutrino Facility next fiscal year count as a new start even though the project has recieved funding in previous fiscal years.
In addition, budget line items on which the House and Senate appropriations bills diverge significantly, such as the ITER fusion project which the Senate has zeroed out funding for multiple years in a row, are put in an even denser cloud of uncertainty. For past CRs occurring during years in which the Senate proposed defunding ITER, DOE greatly restricted funding for ITER early in the fiscal year because the Senate could have ultimately prevailed in the final negotiations.
Exceptions are sometimes granted within CRs, although the bar is high. Two examples of activities that Congress granted greater funding flexibility in last year’s CR are the National Oceanic and Atmospheric Administration’s work on the Joint Polar Satellite System and NASA’s closeout of the Space Shuttle Program.
Biennial budget proposal gaining traction
There is widespread and bipartisan agreement that the current budget process is broken, although to date Congress has not summoned the consensus required to make any significant changes. However, this year the Senate Budget Committee, chaired by Sen. Mike Enzi (R-WY), has held a series of hearings to inform a potential overhaul of the budget process.
Just before this summer's recess, Enzi released a framework for budget reform. Among his proposals, Enzi argues that the government should adopt a biennial budgeting process:
The Senate’s current good-faith attempt at regular order has exposed a shortcoming of the current process. There is not enough time in the legislative calendar to thoroughly debate all 12 appropriations bills while completing other legislative business. As a result, Congress has completed appropriations before the start of the fiscal year only 4 times in the past 40 years. …
A biennial cycle would establish two years of government funding, cutting in half the potential for showdowns and shutdowns. It would create stability and predictability for federal agencies, state and local governments, and Americans who rely on federal funding.
Notably, Sen. Tim Kaine (D-VA), a member of the budget committee and now a vice presidential nominee, has voiced support for biennial budgets. Furthermore, Enzi and Kaine are among the 25 cosponsors of the “Biennial Budgeting and Appropriations Act” which would institute a biennial process. Although unlikely to be considered this year, this bill and Enzi’s proposed framework represent growing congressional interest in reforming the budget process.