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Another Step Toward Fiscal Confrontation

Yesterday, the House Appropriations Committee approved spending allocations totaling $966.9 billion to its 12 sub-committees. The Senate has set its course for a level of $1.058 trillion, thus virtually ensuring a confrontation over Fiscal Year (FY) 2014

discretionary spending


As expected, the committee marked to the cap on spending for FY14 created by the sequester in the Budget Control Act (BCA) of 2011?a total of $966.9 billion. However, the committee would eliminate the current firewall in statute that dictates two distinct caps, one on defense appropriations ($498.1 billion) and another on non-defense appropriations ($468.8 billion), restoring the sequester cuts to defense spending (thus increasing appropriations to $552 billion) and cutting deeper into non-defense monies (thus decreasing those appropriations to $414.9 billion).

While the Senate Appropriations Committee has not yet formally approved its totals for discretionary spending, Senate Chair Barbara Mikulski has instructed her sub-committees to use $1.058 trillion as a goal (this total represents the discretionary caps that would exist if the sequester were repealed). This sets up, as we have noted before, a $91-plus billion difference between the two budgets.

Remember?even if the two bodies were to compromise on some number between the these budget levels, that compromise would likely amount to more than $966.9 billion. In that case, unless specifically overturned by a new law, any compromise would itself be subject to automatic cuts in order to meet the BCA’s sequester mandates, eliminating any breach above the $966.9 billion figure. It may come as a shock to many Members of Congress, as well as their constituents, if and when a second sequester occurs in January 2014.

And, it may well come as a shock to the nation’s economy as well.

2013-05-23 00:00:00

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