A unified Congress has propelled the fiscal year (FY) 2016 appropriations process to a slow but steady pace. In the spring, Congress approved the first concurrent budget resolution since FY 2010. The budget resolution (discussed in Budget Brief 15-04) abides by the FY 2016 discretionary spending caps included in the Budget Control Act of 2011 (BCA). Since that time, there has been movement on almost all spending bills. Six bills have passed the House, with the remaining six being approved at the committee or subcommittee level. The Senate has been slower to move bills. While most have been approved at the committee level, none has been considered by the chamber as a whole.
Although there has been significant progress on appropriations bills, the outlook for enactment remains unlikely. The president proposed raising the BCA discretionary caps in his FY 2016 budget, and the administration has issued several veto threats on specific bills, indicating it does not support the budget framework approved by Congress.
This Budget Brief describes funding and policy provisions in appropriations bills that are relevant to states. Table 1 provides recommended funding levels for major grant programs based on the latest House and Senate actions. To date, discretionary funding for the programs included on the table would be reduced by -1% in both chambers.
For the first time since FY 2010, Congress has adopted a concurrent budget resolution. While the budget resolution is not law and is not signed by the president, it provides a blueprint that guides the legislative budget process.
Of note, the conference agreement adheres to the defense and non-defense discretionary spending caps included in the Budget Control Act of 2011 (BCA) for fiscal year (FY) 2016. However, it provides additional funding for defense through the uncapped Oversees Contingency Operations (OCO) account. It also includes reconciliation instructions to House and Senate authorizing committees with oversight of health care to report deficit-reducing legislation by July 24 that overhauls the Affordable Care Act (ACA).
This Budget Brief provides an overview of the congressional budget process and highlights major provisions included in the concurrent budget resolution.
Before leaving for a two-week recess on March 27, the Senate approved its budget resolution for fiscal year (FY) 2016 (S. Con. Res. 11). The House approved its resolution (H. Con. Res. 27) on March 25. While similar in many respects, the two bills have several differences that will need to be resolved before a concurrent resolution can be introduced and adopted in both chambers.
A budget resolution is not a law and is not signed by the president. Instead, it is a blueprint that includes top-line discretionary spending levels and broad policy parameters that guide the legislative budget process. If the resolution includes reconciliation directives—as both the House and Senate versions do—these signal that Congress will consider changes to mandatory programs and/or tax policy. This Budget Brief summarizes the key points of the two budget resolutions.
While all other fiscal year (FY) 2015 appropriations were finalized through an omnibus spending bill last December, the Department of Homeland Security (DHS) was funded by a continuing resolution (CR) through February 27, 2015, because of objections to the president’s recent executive order on immigration. The House initially passed the Department of Homeland Security Appropriations Act, 2015 (H.R. 240) in mid-January, with a controversial provision that blocked DHS from carrying out the president’s immigration policy. The Senate passed an amended version that excluded the policy rider. To prevent a DHS shutdown, Congress approved another CR through March 6, 2015. On March 3, the House approved the “clean” bill, sending it to the president for signature. The bill level-funds most state and local programs under the Federal Emergency Management Agency (FEMA) at $1.5 billion.
The president’s proposed budget for fiscal year (FY) 2016 was released on February 2, 2015. Apropos of its Groundhog Day release, the document repeats many recommendations from previous budgets, including new grant set-asides, the expanded use of competitive grants, program expansions, new bonding programs, and a host of tax increases and decreases.
While the budget purports to retain the spending caps established in the Budget Control Act of 2011 (BCA), it exceeds BCA post-sequestration spending levels. In addition, it proposes to eliminate sequestration of mandatory programs. That said, its tax cuts and spending increases are fully offset by tax increases and other savings. Overall, the Committee for a Responsible Federal Budget reports that the budget would provide $930 billion in additional deficit reduction over the next 10 years, compared to current law.
Table 1 at the end of this Budget Brief summarizes proposed funding levels for major state and local grant programs. The table shows that funding would increase 13.1% for the discretionary programs listed, 9.7% for mandatory programs, and 10.7% overall. Much of the discretionary increase is attributable to large proposed increases in transportation funding.
The follows sections focus on policy proposals beyond the changes in funding that are listed in Table 1.
On December 16, 2014, the president signed the Consolidated and Further Continuing Appropriations Act, 2015 (H.R. 83), completing the budget process for fiscal year (FY) 2015 for most federal departments. The omnibus includes all appropriations bills, except the one for the Department of Homeland Security (DHS). That department is covered by a short-term continuing resolution (CR) that expires February 27, 2015. The funding levels in the 11 appropriations bills are in effect for the entire fiscal year and replace the annualized funding levels set in the previous CR. In addition, the omnibus provides emergency funding for responding to the Ebola crisis, and extends Temporary Assistance for Needy Families (TANF) and the Internet tax moratorium through FY 2015.
This Budget Brief describes the funding and policy provisions in the omnibus relevant to states. Table 1 includes FY 2015 funding levels for major grant programs. Compared to FY 2014, states will see a 0.2% increase in these major discretionary programs. Mandatory programs are estimated to increase 9.3%, largely driven by projected growth in Medicaid. A few mandatory programs listed on the table are subject to FY 2015 sequestration of nonexempt mandatory programs.
Overall, the omnibus includes $1.013 trillion in discretionary funding, roughly equal to the FY 2015 discretionary spending cap specified in the Bipartisan Budget Act of 2013 (BBA; P.L. 113-67). The table on the next page compares FY 2015 funding levels provided to each appropriations subcommittee—known as 302(b) allocations—to prior years.
On September 19, 2014, the president signed a Continuing Resolution (CR, H.J. Res. 124) for fiscal year (FY) 2015 that keeps the federal government running until December 11, 2014. Discretionary spending levels in the CR are set at an annualized level of $1.012 trillion. This equals the FY 2014 discretionary spending level specified in the Bipartisan Budget Act of 2013 (BBA; P.L. 113-67), and is -$1.392 billion less than the BBA allows for FY 2015. Within the total, nondefense discretionary spending in the CR exceeds the FY 2015 cap set in the BBA by about $2 billion; lower defense discretionary spending more than offsets that amount, as shown below. To achieve the FY 2014 BBA spending level while providing new funding for targeted programs, the CR applies a -0.0554% across-the-board (ATB) rescission to most discretionary programs.
In addition to providing funding for current programs, the CR includes certain program flexibilities, as well as a few policy provisions. For example, it provides funds for responding to the Ebola crisis, allocates additional funds for the Commodity Assistance Program, and extends Temporary Assistance for Needy Families (TANF), the Export-Import Bank, and the Internet Tax Freedom Act. These provisions and others are described more fully in this brief.
The fiscal year (FY) 2015 appropriations process was off to an encouraging start when both the House and Senate announced a few months ago that they would abide by the FY 2015 discretionary spending caps included in the Bipartisan Budget Act (BBA, P.L. 113-67). Since that time, there has been movement on several FY 2015 spending bills as shown on the table below. Six bills have passed the House, and most have been marked up by the House Appropriations Committee, with the exceptions of Interior-Environment and Labor-Health and Human Services (HHS)-Education. The Senate Appropriations Committee has approved seven bills. However, progress stalled when the full Senate was unable to move its first three bills (Agriculture, Commerce-Justice-Science, and Transportation-Housing and Urban Development [HUD]) as part of a minibus spending package because of disagreement over the amendment process.
This Budget Brief describes the funding and policy provisions included in appropriations bills relevant to states. Table 1 provides recommended funding levels for major grant programs based on the latest House and Senate actions. Legislative text is not available for Senate bills that have been approved only at the subcommittee level.
On March 4, 2014, the president released portions of his fiscal year (FY) 2015 budget proposal, about one month after the statutory deadline; remaining documents were released on March 10. The president’s budget retains the FY 2015 discretionary spending caps included in the Bipartisan Budget Act of 2013 (BBA), but it also includes a separate proposal that would increase FY 2015 spending by $56 billion. Importantly, the president’s budget proposes to eliminate sequestration of mandatory programs that is part of the Budget Control Act of 2011 (BCA). Such sequestration would reduce affected programs by -7.3% in FY 2015.
The budget recycles themes and specific requests from earlier budget submissions, including proposals to consolidate grant programs, replace formula grant programs—or a portion thereof—with competitive grants, and implement new competitive grant programs. It also proposes to increase the minimum wage to $10.10 per hour and index it to inflation.
Overall, the FY 2015 budget would provide a 6.7% funding increase for the major discretionary programs reported by FFIS on Table 1. The mandatory programs are estimated to increase 9.1% in FY 2015. Combined funding for discretionary plus mandatory grant programs would increase 8.4% under the budget.
Significant FY 2015 budget proposals are described in the following sections.
On January 17, 2014, the president signed the fiscal year (FY) 2014 omnibus appropriations spending package (H.R. 3547), completing the budget process for FY 2014. The omnibus includes all 12 appropriations bills and sets overall discretionary spending at $1.012 trillion. The funding levels in the bill are in effect for the entire fiscal year and replace the annualized funding levels set in the previous continuing resolution (CR). Moreover, the Congressional Budget Office (CBO) scored the legislation as exactly matching the defense and nondefense discretionary caps set by the Bipartisan Budget Act (H.J.Res. 59) in December 2013.
This Budget Brief describes the funding and policy provisions in the omnibus relevant to states. Table 1 includes FY 2014 funding levels for major grant programs. Compared to FY 2013, states will see a 4.5% increase in these major discretionary programs. Mandatory programs are estimated to increase 11.5%, largely driven by projected growth in Medicaid. A few mandatory programs listed on the table are subject to FY 2014 sequestration of nonexempt mandatory programs, as explained below.