February 10, 2011

House-Senate Heading for Budget Showdown

On February 14, President Obama is scheduled to send to Congress his budget proposal for the 2012 fiscal year. With attention focused since the November election on reducing spending levels and cutting the size of the federal budget deficit, reductions in funds are expected to show up throughout the administration’s budget.

As Congress begins deliberations over FY2012 appropriations, legislators still must complete work on a funding bill for the current 2011 fiscal year. A continuing resolution passed in December of last year carries funding for all federal agencies at the 2010 levels until March 4. By that date, Congress will need to decide how to deal with funding for the remainder of the 2011 fiscal year and move on to deal with the 2012 budget. House Republican leaders have pledged to cut nonsecurity discretionary spending to fiscal 2008 levels starting this year.

On February 9, Rep. Harold Rogers (R-KY), chair of the House Appropriations Committee, announced a partial list of 70 spending cuts that he plans to include in the next continuing resolution to fund the federal government for the seven months remaining in the 2011 fiscal year. Included on the list is a cut to the National Endowment for the Arts (NEA) that takes it back to the 2009 level of $155 million. The NEA is operating now under the current continuing resolution at the FY2010 funding level of $167.5 million.

Soon after the 112th Congress convened on January 5, the new Republican majority in the House of Representatives began to set the stage for a budget showdown with the Democratic majority in the Senate. On a strict party-line vote, the House approved a resolution setting new fiscal rules that give the chair of the House Budget Committee the authority to force reductions in the current fiscal year’s spending. Budget chair Rep. Paul Ryan (R-WI) has pledged to cut about $60 billion from current program spending. The cuts Ryan proposes could mean more than 20% reductions since they would come halfway into the fiscal year.

As an indication of the resolve of the new House majority to tackle the spending issues, a number of bills have been introduced aimed at making across-the-board cuts in current appropriations. For example, Rep. Marsha Blackburn (R-TN) has introduced three separate bills (H.R. 93, 94 and 95) proposing 5%, 10% and 15% across-the-board rescissions in nonsecurity discretionary spending for each of the fiscal years 2011 and 2012.

Two resolutions were introduced proposing a balanced budget amendment to the U.S. Constitution (H.Res. 1, 4 and 5). Rep. David Drier (R-CA), who chairs the House Rules Committee, introduced H.R. 114 to provide a biennial budget for the federal government; and Rep. Ed Royce (R-CA) sponsored H.R. 155, a bill to create a national commission to establish a process “for realigning or closing outdated, ineffective, or inefficient Executive agencies.”

While none of these measures may be enacted into law, they point to the fact that funding issues will head the congressional agenda and challenge advocates to be vigilant and engaged on any program receiving discretionary spending. Indeed, the funding for the National Endowment for the Arts is back on the radar screen for those intent on making deep cuts in government spending.

In mid-January, the House Republican Study Committee (RSC), the most fiscally conservative bloc in the House, laid out a plan for $2.5 trillion in spending cuts over the next decade, mainly by holding 2011 funds at 2008 levels and then rolling back all nondefense discretionary spending—this time—to 2006 levels, and eliminating spending entirely on dozens of federal programs. The RSC list includes elimination of funds to the National Endowment for the Arts, the National Endowment for the Humanities, the Corporation for Public Broadcasting (CPB) Subsidy, Save America’s Treasures, Community Development Block Grants, and the programs of the National and Community Services Act. The RSC numbers more than 165 Republicans as members, representing a sizable group in the new Republican majority intent on following through on a pledge to reduce spending.

Enacting the RSC proposal would be next to impossible, given that Senate Democrats have called for more modest spending restraint, and the White House would oppose many of the cuts as well. Still, with the likes of the NEA and CPB on the list, the proposal sets the stage for some serious challenges on the House floor later this year, when the spending bills begin emerging from the Appropriations Committee.