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CONGRESS PASSES BUDGET DEAL: Plan Maintains Tight Spending Restrictions Likely to Provoke Confrontation with President Obama Over Domestic Spending Priorities, Including Education

Earlier this month, the U.S. Congress approved a budget plan for Fiscal Year (FY) 2016 that maintains tight spending limits on defense spending and non-defense programs, including education, and will almost certainly lead to a confrontation later in the year with President Obama on spending priorities.

“This balanced budget will provide Congress and the nation with a fiscal blueprint that challenges lawmakers to examine every dollar we spend. Americans who work hard to provide for their families and pay their taxes understand that it’s time for the federal government to live within its means, just like they do,” said Senate Budget Committee Chairman Mike Enzi (R-WY).

Passing the Senate by a very narrow 51–48 margin, the budget plan locks in tight spending limits that were set by the 2013 budget deal, known as sequestration. No Democrats supported it and Senators Ted Cruz (R-TX) and Rand Paul (R-KY)—both of whom are running for president—also voted against it.

Sticking to the plan would mean no increases in federal education spending in FY 2016. And looking ahead to FY 2017, the budget would cut funding for the U.S. Department of Education by $3.5 billion if the proposed cuts were applied equally across all agencies. That $3.5 billion cut is the equivalent of eliminating all federal support for high schools.

Peter Orszag, former director of the Office of Management and Budget, has said that sticking to the budget plan would “involve slashing investments in port security, medical research, education, environmental protection, and other essential activities.” He adds that the budget brazenly puts non-defense discretionary spending on a path “so unrealistic that no serious person could defend it with a straight face.”

For these reasons, Republicans and Democrats alike have called for a new budget deal that would eliminate sequestration and increase spending caps.

“I would remind my colleagues to the fact that sequestration was never intended to take place,” said Senate Armed Services Chairman John McCain (R-AZ), who ultimately voted for the plan. “It was designed to be so destructive and unacceptable to our national security that it would force members of Congress and the President to make hard choices and cut spending in a meaningful way to avert sequestration. And, while sequestration may be current law, we in Congress have the ability to make new laws that can end the debilitating effects of sequestration—and I believe we must.”

Republican leaders were able to win support for the plan from defense hawks such as McCain by using an accounting maneuver called Overseas Contingency Operations (OCO) to add additional money for defense spending that did not count against the spending limit.

“Instead of working with us to build on the bipartisan budget deal we struck last Congress—Republicans have introduced a budget that would lock in sequestration, hollow out defense and non-defense investments, and use gimmicks and games to paper over the problems,” said U.S. Senator Patty Murray (D-WA), who negotiated the 2013 budget deal with U.S. Representative Paul Ryan (R-WI).

Although nonbinding and not requiring presidential approval, the congressional budget resolution is an important step in the budget process because it sets monetary limits for the spending and tax legislation that Congress will consider for the rest of the year. It also provides guidance to the appropriations committees on how to divide resources among various federal departments and agencies, thus setting the stage for the twelve annual appropriations bills that must be passed by Congress and signed by the president, including the one that funds the U.S. Department of Education.

Earlier this year, President Obama said that he would veto spending bills at sequester levels. “I’ve been very clear,” Obama told the Huffington Post in March. “We are not going to have a situation where, for example, our education spending goes back to its lowest level since the year 2000—since 15 years ago—despite a larger population and more kids to educate. … We can’t do that to our kids, and I’m not going to sign it.”

Such a stance opens the way to at least two possibilities. One is a very long appropriations process that would drag into December or January and involve multiple temporary funding measures called continuing resolutions, which freeze funding at current levels. The other would involve a bipartisan compromise in which Republicans and Democrats agree to a larger budget deal that would raise spending levels to more acceptable levels.

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