Congress Returns in September to Confront Deficit

Congress returns from its August recess the second week of September to resume work on budget and appropriations for the 2012 fiscal year. While the House Appropriations Committee has cleared 9 of the 12 funding bills, only 6 have passed the House floor. The FY2012 Interior Appropriations Bill, with funding included for the National Endowment for the Arts at $135 million, still must pass votes on outstanding amendments and final passage before the measure moves for consideration in the Senate. So far, the Senate has worked on only one appropriations bill—for military construction and veterans affairs—which has been approved by the Appropriations Committee and passed the Senate floor. No date has been set for the Senate Interior Appropriations Subcommittee to begin drafting its version of the 2012 spending bill.

Because the debt-limit bill Congress passed before it went into recess sets spending ceilings for 2012, the appropriations subcommittees now have a spending total from which to draw their individual allocations, which are expected to be set in early September. In total, the debt-limit deal cuts discretionary spending by about $6 billion below FY2011; much depends on how that loss in funding is spread across the subcommittees.

Still, the subcommittees face difficulty in deciding where to allocate scarce dollars among a myriad of federal programs. Congress is certain to pass a continuing resolution by the end of September, with work still unfinished on the individual appropriations bills. The duration of that stopgap spending measure remains uncertain.

The House Republican leaders face a unique situation as a result of the recently signed debt ceiling bill. There is a difference of several billions of dollars in what the House passed as a fiscal 2012 discretionary spending figure in its budget resolution earlier this year and the number included in the debt ceiling agreement. The debt ceiling bill sets total spending $1.043 trillion while the budget resolution’s number is $1.019 trillion. That vote is expected to take place soon after the recess ends.

Meanwhile, the supercommittee charged with the task of reducing the size of the federal deficit is required by law to hold its first meeting by September 16, and by November 23 to deliver its plan with at least $1.5 trillion in savings. House and Senate committees have until October 14 to submit their own recommendations to the supercommittee if they choose to do so. The House and Senate must vote on the supercommittee’s plan by December 23. The supercommittee is not expected to look to small, individual discretionary programs for the major savings required by the debt ceiling agreement.