Spending Bill Eases Sequestration Caps, Sets Up Next Budget Battle

US Capitol BldgLawmakers have agreed on a broad, two-year spending plan that will pump an additional $80 billion in federal funding, loosening the stranglehold that sequestration caps have imposed on the federal budget over the past two years.

The blueprint, the Bipartisan Budget Act of 2015 (HR 1314) would cover spending for Fiscal Years 2016 and 2017. The deal is aimed at undoing automatic spending cuts which are a byproduct of a 2011 budget and debt agreement, and the failure of Washington to unravel the government’s fiscal gridlock.

The next step in the process may be even more difficult. Although HR 1314 sets the broad spending levels, it will be up to the congressional appropriators, and the House-Senate conference committees, to apportion specific agency funding levels. Staff at the 11 appropriations committees has already started working on an omnibus spending bill to keep the government funded past Dec. 11, when a continuing resolution expires. The omnibus bill is necessary because lawmakers were unable to agree on how to move forward of any of the dozen regular spending measures.

The deal lifts the overall caps by $50 billion in FY 2016 (which began on Oct. 1) and by $30 billion in FY 2017. In both years, the increase will be equally divided between defense and non-defense discretionary spending.

Without a budget deal, sequestration would have taken full effect for the first time in FY 2016, cutting non-defense discretionary funding by $37 billion below the already tight funding caps that the 2011 Budget Control Act (BCA) imposed.  The deal would effectively restore $33 billion of this $37 billion in 2016 and $23 billion of the $37 billion slated for 2017.

This increase will be paid for by a mixture of policies, including changes to farm subsidies, selling oil from our strategic petroleum reserve, and extending the across-the-board cuts on mandatory programs (primarily Medicare provider payments) further into the future.

The deal is similar to a pact that Paul Ryan (R-WI) fashioned two years ago with Sen. Patty Murray (D-, D-WA) to ease automatic spending cuts for the 2014-15 budget years. Ryan is now House Speaker.

Advocates have applauded the measure, with caution. Spending on education, children and youth programs would remain well below the funding levels in FY 2010 before the sequestration caps were imposed. So while this budget deal is a helpful first step, it represents only a partial restoration of resources that were lost to several years of federal budget retrenchment and stalemate; it does not represent significant new investment, advocates said.  

More funding is needed to fix the remaining gaps in the safety net, address the damaging effects of low-wage work, help low-skilled youth and adults move up to better jobs, and support a two-generational approach so both parents and children can escape poverty, advocates said. After years of neglect, many key programs struggle to meet the needs of today’s families. For example, the Child Care and Development Block Grant is reaching the smallest number of children in 15 years.

In addition, some key priorities must be addressed through other means, such as the extension of improvements to the Child Tax Credit and Earned Income Tax Credit that are scheduled to expire in 2017.

Outlook

This week’s budget agreement is being billed by some as “Murray-Ryan 2.0” for its combination of relaxed BCA caps and an assortment of offsets. Keeping the lights on for New Year’s will be among new Speaker Ryan’s first challenges on the job, and his strategy may provide some insight into his approach to the speakership

Info: http://tinyurl.com/opc29na

About Frank Klimko

Frank Klimko is a nationally known journalist, grants expert and speech writer/speaker. He has years of experience helping nonprofits devise lists of the right funding opportunities and secure funding from these foundations and corporate entities. Clients have focused on an array of areas including child care, homeless, hunger and K-12 education. Additionally, he is a Freedom of Information Act expert, who has helped numerous clients with securing proprietary information from the federal government. Currently, Frank Klimko writes the Children & Youth Funding Report and Private Grants Alert, which are Washington DC-based publications. CYF is a daily publication covering Congress, the Education Dept. and the various federal regulatory agencies. PGA, another daily publication, covers the world of private philanthropy.
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