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What’s Next in Congress: Fiscal Fizzle or End-of-Year Opportunity?

With Congress set to leave Washington for the August recess, the funding deadline for Fiscal Year (FY) 2016 looms less than a month after members are scheduled to return. A continuing resolution (CR) to fund the government appears to be a likely outcome. While this year, for the first time since 2009, Congress passed a concurrent budget resolution and House and Senate Appropriations Committees cleared all 12 appropriations bills through committee, none of the bills have thus far been enacted. Simply continuing the current year’s funding levels and underlying line items would fail to account for priorities that change over time. Furthermore, these funding levels are inadequate for both defense and non-defense discretionary (NDD) spending, a point we have made before.


The Budget Control Act of 2011 (BCA) set certain cap levels for defense and non-defense discretionary spending through FY 2021. The levels for FY 2015 and FY 2016 are listed in the table above. The “sequester” refers to the new, lower caps that automatically took effect after the failure of the so-called “super committee” set up by the BCA. With the expiration of the deal between Sen. Patty Murray (D-WA) and Rep. Paul Ryan (R-WI) that provided sequester relief for FY 2014 and FY 2015, these sequester caps will once again take effect for FY 2016.

The concurrent budget resolution (S.Con.Res. 11) proposes to abide by the sequester caps for both categories of discretionary spending. The caveat, however, is that it also includes around $88 billion in defense Overseas Contingency Operations (OCO) funding, which is not subject to the defense sequester cap. This amount is $37 billion above what the Department of Defense has requested for overseas engagements.

Incidentally, FY 2015’s base budget spending levels are at or below the scheduled sequester caps for FY 2016?meaning that if policymakers simply pass a clean CR with the same levels of funding as FY 2015, the sequester caps would be met. The president’s budget requests higher levels of spending?closer to the original BCA caps?for both defense and NDD. For the president’s request to be met, Congress would need to pass legislation altering the sequester caps.

In short, both Democrats and Republicans would like to increase funding for defense over sequester levels, but the president and congressional Democrats are also calling for increased NDD spending. Disagreement over these levels, not to mention political fights over extraneous provisions, should not paralyze the entire appropriations process or undermine the bipartisan progress we’ve seen so far this year. Policymakers should return to regular order on the budget and a discretionary spending path that is sustainable for our national security and domestic investment needs.

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