Congress returns to complete work on FY2016 budget resolution

Monday, April 13th, 2015

Congress returns this week from its spring recess ready to complete action on the FY2016 Budget Resolution. The House and Senate passed their versions last month and must reconcile the differences.

The annual budget resolution sets revenue and spending targets for the tax writing and appropriations committees so they can begin work on the president’s budget request.  This is an internal congressional procedure and therefore the passed budget resolution is not sent to the president for approval. 

The House and Senate bills set the FY2016 total federal spending level at $3.8 trillion, reach a balanced budget in 10 years, and repeal Obamacare. The House bill would cut $5.5 billion in spending from the current policy level for FY2016-25, while the Senate proposes to reduce spending by $5.1 trillion over the next ten years. The difference is primarily due to the Senate’s smaller cut to nondefense discretionary spending.

The House and Senate bills do not change the requirement to return to sequestration in FY2016, even though most in Congress continue to decry effects of the across-the-board cuts, and keep discretionary spending caps in place.

For defense, both bills keep baseline national defense (DoD plus other defense-related spending such as the Department of Energy’s nuclear program) funding at the sequester level of $523 billion.

However, both bills propose to increase funding for Overseas Contingency Operations (OCO) as a way of increasing defense while staying within the statutory cap levels, because OCO funding is considered emergency spending. The House includes $96 billion for OCO, while the Senate bill set OCO funding at $89 billion. This $7 billion difference must be resolved in conference.

But, the $96 billion OCO in the House bill includes $6 billion OCO funding for the State Department. The $89 billion in the Senate bill (according to reports) does not include any OCO funding for State. So, it appears that there is only a $1 billion difference between the House and Senate bills for DoD, which should make resolution on DoD relatively easy.

There is one complicating factor to the House and Senate scheme to add defense funding while staying within the statutory caps. There is a Senate point of order against the bill that says any proposal to increase OCO spending above the requested level of $50.9 billion needs 60 votes in the Senate. With Republicans having only 54 Senate seats, six Democrats would have to join all Republicans to overrule the point of order to approve the higher defense amount. So, conferees will have to address this point of order issue.

April 15 is the target date for completing the budget resolution so the appropriations committees can begin crafting the 12 appropriations bills. House Budget Committee chair Rep. Tom Price (R-GA) and Senate Budget Committee chair Mike Enzi (R-WY) issued a joint press release last week in which they said they “look forward to the House-Senate beginning its work as early as next week, followed by congressional passage of a joint concurrent budget resolution for our nation.” It is unlikely that House and Senate conferees can compete their work by Wednesday, but there will be strong push by Republican leaders to pass a resolution so House appropriators can mark up some bills before memorial Day.

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