The president’s proposed budget for fiscal year (FY) 2017 was released on February 9, 2016. The budget adheres to the defense and non-defense discretionary spending caps for FY 2017 included in the Bipartisan Budget Act of 2015 (BBA). However, it also includes many new mandatory spending proposals, and would eliminate sequestration of mandatory programs. Nevertheless, all of the budget’s tax cuts and spending increases are fully offset by tax increases and other savings over 10 years—the Center for a Responsible Federal Budget estimates that the budget would reduce deficits by $2.9 trillion by FY 2026.
This Budget Brief highlights the major themes of the budget, proposals for new programs, program eliminations, and other provisions of interest to states. Under the proposed budget, funding would increase 1.4% for major discretionary programs, 6.6% for mandatory programs, and 5.1% overall.
On December 18, the president signed the fiscal year (FY) 2016 omnibus appropriations spending package (P.L. 114-113), completing the budget process for FY 2016. The budget includes all 12 appropriations bills. This Budget Brief describes funding and policy provisions that are relevant to states.
The president and congressional leaders have announced a budget agreement, the Bipartisan Budget Act of 2015. The House is expected to consider the legislation today. The following questions and answers highlight the provisions of interest to states.
UPDATE (11/2/2015): The president has signed this legislation.
On October 9, 2015, the House budget committee marked up three reconciliation proposals submitted by the House Ways and Means, Energy and Commerce, and Education and Workforce committees. Taken together, the proposals would reduce federal budget deficits by -$78.9 billion over 10 years, by repealing major provisions of the Affordable Care Act (ACA).
The budget committee combined all of the proposals into a single bill (H.R. 3762), which it approved. It now moves to the House floor for consideration. This Issue Brief provides background on the reconciliation process and analyzes the House bill.
The Senate is expected to vote shortly on a continuing resolution (CR) for fiscal year (FY) 2016 that would keep the federal government operating until December 11, 2015. Discretionary spending levels in the CR are set at an annualized level of $1.017 trillion, which conforms to the FY 2016 post-sequestration discretionary spending level specified in the Budget Control Act of 2011 (BCA). However, within the total, the CR would exceed the FY 2016 BCA cap for non-defense discretionary spending and provide a lower amount for defense discretionary spending, as shown on the graph below. To increase defense spending, the CR would provide $75 billion for the Overseas Contingency Operations (OCO) account, which is not subject to the BCA caps (and not included on the graph).
To achieve the overall FY 2016 BCA spending level, the CR proposes various rescissions. The FY 2016 annualized level for most discretionary programs would be the FY 2015 enacted level reduced by a -0.2108% across-the-board (ATB) rescission. The CR also includes a few program-specific rescissions.
The CR would also extend the authorization for several programs set to expire on October 1, 2015, and would include certain program flexibilities, as well as a few policy provisions.
UPDATE: The president signed this legislation into law on September 30, 2015.
FFIS answers frequently asked questions about federal government shudowns.
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.