Appropriations Whirlwind Ready to Begin

On May 17th, the House and Senate agreed on a joint Budget Resolution that capped discretionary spending for fiscal year 2008 (FY08) at $954.1 billion, including an $85.7 billion cap on education, training, employment and social services. More specifically, the budget resolution increased the allowable education funding by nearly $3.6 billion over the FY07 discretionary funding level for education. The resolution also directs the education committees to produce legislation by September 10th that would provide savings of $750 million over the next six years.

As previously reported, President Bush has threatened to veto any spending bills that are too far above his requests for FY08. The Labor-HHS-Education bill, which exceeds Bush’s request by approximately $12 billion, is near the top of the list of bills in danger of a veto. The bill’s fate relies heavily on the resolve of the 147 Republicans who pledged their support to sustain a presidential veto. That resolve, however, is in question since some of the 147 members have already voted for the bills at issue. 145 votes are necessary to sustain the veto.

Before Congress can get to that crossroads, the Senate still needs to pass its Labor-HHS-Education bill, and go to conference with the House. Because the House bill appropriates slightly higher levels of spending, the two bills have some differences that conferees need to work out. While on the House floor, members passed a series of amendments that shifted money from program to program. A point of contention is likely to be the $175 million cut to the Department of Education’s (ED) administrative funds. The salaries and expenses fund was cut nearly in half to provide additional funding for certain members’ favored programs, without increasing the overall cost of the bill. For example, the bill shifts $125 million from administrative funds to help support programs for Historically Black Colleges and Universities.

To save time, House Appropriations Chairman David Obey (D-WI) offered no concrete opposition to what he called “pretend amendments,” though he warned members that these shifts would not likely survive conference with the Senate. Most Senators will likely follow Obey’s rationale: Although many of these programs deserve more funding, it cannot come at the expense of the administrative budgets of executive agencies. Cutting ED’s expense and salary funds will force the agency to downsize programmatic and administrative staff. As Chairman Obey put it, there is no use in increasing the grant money if there is no staff left to administer the grant.

As members return to work next Tuesday (9/4), they will start a whirlwind of action on the various spending bills. To date, the House has finished all twelve appropriations bills, while the Senate has only passed the Homeland Security bill. This leaves less than four weeks for the Senate to pass the eleven remaining spending bills, go to conference with the House on all 12 bills, and deal with possible Presidential vetoes. The odds of accomplishing all that before the October 1st deadline are not good. As such, Congress will likely pass a continuing resolution, extending funding for a specific amount of time, until all bills are signed into law.

Traditionally, the standing rule on continuing resolutions are to fund programs at the previous fiscal year’s level or at the lowest levels agreed to between the House and Senate for the new fiscal year. In other words, for any bill that both chambers have passed, but have yet to go to conference on, the program will be funded at the lower of the two levels. This process is left to the discretion of the Appropriations Committees. For the sake of time, appropriators might simply agree to extend all FY07 levels while Congress continues work on FY08.

However, a continuing resolution is only a temporary fix, giving Congress additional time to finish work on FY08 legislation. If Congress is unable to use that additional time to reach an agreement with the White House, it is likely that majority leaders in both chambers will combine several bills into a large omnibus package. Combining legislation that is responsible for funding multiple government agencies makes vetoing, and sustaining a veto, much more politically difficult.

Considering that both Congress and the President have extremely low approval ratings, political fallout of a government shutdown is likely too steep for both sides. The next two months should be interesting.
Author: SAS, DAD