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We Have a Deal, Agency Budget Details in September (We Hope)

August 21, 2019

Washington, DC is enjoying the slower pace of August and – despite earlier threats that the Senate might stay in session – Congress is on summer recess. On August 1, shortly before heading home, Senators voted (67-28), to pass the Bipartisan Budget Act (BBA) of 2019 (H.R. 3877). The measure was approved by the House (284-149) the week prior. Opposition in both chambers came mainly from Republicans concerned about annual deficits.

Signed into law by the president on August 2, the budget deal suspends the debt ceiling through July 31, 2021 and raises the discretionary spending caps in fiscal years 2020 and 2021, providing an extra $324 billion in discretionary funding over the next two fiscal years. The strict spending caps had been imposed by the 2011 deficit reduction law (PL 112-25). This is the fourth, and presumably final, time that Congress has had to raise budget caps.

It is good news that the BBA provides a significant funding increase for domestic programs including research over current levels—however, it is about $15 billion less than the levels that the House used to write its appropriations bills. This means that the House will need to cut this amount from the 12 bills for the final FY 2020 appropriations bills, 10 of which were already passed by the full House.

Reportedly, the Senate has already determined spending levels to subcommittees, referred to as 302(b) allocations. These numbers are not yet public. Senate Appropriations Chair Richard Shelby (R-Ala.) shared his plan to consider the first spending bills, including the Labor-HHS bill, in sub and full committee shortly after the Senate returns on September 9. However, rumors now are that the Senate allotment for the funding bill covering the National Institutes of Health and the Institute of Education Sciences was cut by $5 billion to fund the construction of a wall along the southern border. With the presidential elections warming up, this could become politically untenable. Debates over funding the wall led to the two-month standoff last December that shut down significant federal operations, including the National Science Foundation. The Senate will likely skip floor action, and maybe even committee, to proceed to conference negotiations with the House.  While technically possible for the Labor-HHS bill to be enacted before October 1, with only 15 legislative days to reach bicameral agreement on the appropriations bills, it is more likely that we will see a short-term continuing resolution. September is sure to be interesting.

Despite the four bipartisan budget deals that have been enacted to #RaiseTheCaps, discretionary spending has continued to shrink since 2011. Overall, discretionary spending is down from 8.7 percent of GDP in 2011, to a projected 6.2 percent in 2020. In fact, nondefense discretionary spending (NDD) remains below its historical average as a share of GDP.

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