October 24, 2014

A Familiar Story: Budget Process Breakdown

  • The national debt has grown significantly in recent years due to rising annual deficits. A deficit occurs in any year the government spends more...

With less than three weeks remaining in the fiscal year, Congress is heading towards another failure to complete the budget process. None of the twelve FY 2012 appropriations bills have been enacted. The House has passed six bills, and the Senate has passed only one. To avoid a government shutdown, Congress will need to pass a continuing resolution before the end of the month.

The breakdown of the budget process has become an annual ritual, though one difference this year is the Budget Control Act (BCA) that increased the debt limit. The BCA established statutory caps on appropriations, including a $1.043 trillion cap for FY 2012. Contentious debates over spending priorities are still possible, though the cap could provide a path toward agreement on an overall number. The BCA could also affect the process if the deficit reduction committee created by the law uses further cuts to appropriations to reach its $1.5 trillion target.

Congress also must soon address emergency spending for hurricanes and other natural disasters. The President has requested a total of $5.1 billion in emergency funding for disaster response needs, including $500 million for the remainder of FY 2011 and $4.6 billion for FY 2012.

Offsets have traditionally not been required for emergency spending, and the BCA permits the spending caps to be adjusted to accommodate an average level of disaster spending. According to Office of Management and Budget, the maximum adjustment permitted for FY 2012 is $11.3 billion. Earlier this year some House Republicans had suggested that, in the current fiscal environment, some offsets should be included. House Appropriations Committee Chairman Harold Rogers said this week that he intends to include disaster funding in the continuing resolution.