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YOU TAKE THE HIGH ROAD AND I’LL TAKE THE LOW ROAD: As Appropriations Process Begins, Different Spending Approaches Likely to Delay Process Until After November Elections

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“Our economy has just begun to show signs of recovery. To introduce uncertainty about discretionary spending, and about whether representatives in the House will make another effort to shut down the government, will not help. Moreover, the effort to choke off even more discretionary spending will clearly stall economic growth and impede job creation.”

As Congress gets to work determining how much federal money various departments and programs will receive this year, the U.S. House of Representatives and the U.S. Senate have set discretionary spending limits that are approximately $19 billion apart—a development that is likely to delay the appropriations process until after the November elections.1

On one hand, the House adopted a congressional budget resolution that capped discretionary spending in Fiscal Year (FY) 2013 at $1.028 trillion while the Senate chose to stick to the $1.047 trillion amount set by last summer’s Budget Control Act, which raised the debt ceiling. As the appropriations process got underway in mid-April, the different spending priorities became even clearer as the House allocated $8 billion more for defense spending than the Senate, while the Senate chose to provide $8 billion more in funding for labor, health, and education programs than the House.

When House Appropriations Committee Chairman Hal Rogers (R-KY) announced the funding allocations that the twelve appropriations subcommittees would have to work with—known as 302(b)s2 —he said the allocations “demonstrate how seriously this House takes its charge to rein in extraneous and unnecessary spending, encourage economic competitiveness and job growth, help strengthen the nation’s infrastructure, and ensure a strong national security for the protection of all Americans.”

During the House Appropriations Committee’s consideration of Rogers’s allocations, Representative Norm Dicks (D-WA), top Democrat on the committee, expressed his opposition to the lower number adopted by the House.

“The Democratic objection to relitigating $1.047 [trillion] is substantive as well as procedural,” Dicks said. “Our economy has just begun to show signs of recovery. To introduce uncertainty about discretionary spending, and about whether representatives in the House will make another effort to shut down the government, will not help. Moreover, the effort to choke off even more discretionary spending will clearly stall economic growth and impede job creation.”

Unlike the House, where Republicans and Democrats disagreed over what the spending cap should be, both Democrats and Republicans on the Senate Appropriations Committee chose to abide by the $1.047 trillion amount set by the Budget Control Act. In adopting the cap by a 27–2 vote, Senate Minority Leader Mitch McConnell (R-KY) and all but two Republicans on the committee voted with Democrats.

“It is appropriate in my view for the [Senate Appropriations] Committee to proceed on the basis of the discretionary caps enacted into law [by the Budget Control Act],” said Senator Thad Cochran (R-MS), top Republican on the Senate Appropriations Committee. “Not all members of the committee supported the Budget Control Act. Seventy-four Senators did support it, however, including a majority of the members of both parties in the Senate and a majority of members on both sides of the committee. … it is certainly reasonable for us to proceed consistent with the law.”

Under the House plan, the Labor, Health and Human Services, and Education departments would receive a combined $150.002 billion in funding while the Senate plan would fund these departments at $157.722 billion, a difference of $7.72 billion. Meanwhile, the House would fund the U.S. Department of Defense at $519.220 billion versus $511.161 billion in the Senate, a difference of $8.059 billion. The large differences in the subcommittee allocations will make it more difficult for the House and Senate to agree on FY 2013 appropriations bills for these departments.

While the House and Senate were working on their respective plans, the Obama administration urged both chambers to honor the spending levels set by the Budget Control Act (BCA). “Disregarding the BCA agreement and cutting already-tight discretionary program levels even further would be a serious mistake,” Office of Management and Budget Director Jacob J. Lew wrote in a letter to the chairman and ranking member of the House and Senate Appropriations Committees.

While acknowledging the need to reduce discretionary spending, Lew stressed the importance of critical investments in education, innovation, and infrastructure. He called on Congress to “fund policy initiatives needed for [the nation’s] long-term economic health, including health care, financial reforms, and education reforms necessary to “give every child the tools to succeed in the modern global economy.” He said these areas are “crucial to strengthening our families and communities and spurring economic growth and job creation.”

Lew concluded by saying that President Obama would veto any bill that fails to meet these priorities and he offered other conditions that appropriations bills would need to meet to garner the president’s signature.

“If the president is presented with a bill that undermines critical domestic priorities or national security through funding levels or language restrictions, contains earmarks, or fails to make the tough choices to cut where needed while maintaining what we need to spur long-term job creation and win the future, the president will veto the bill.”

 
1 Discretionary spending, as opposed to mandatory spending, is the type of federal spending that Congress decides on each year through the appropriations process.
2 The 302(b)s set the overall funding amount that an appropriations subcommittee can spend within a particular appropriations bill. The individual subcommittees then allocate that overall amount among individual programs within the appropriations bill.

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