Where’s the Federal Budget?

By Elizabeth Holland

After a two-hour contentious vote, the Senate agreed yesterday to raise the nation’s borrowing limit, without any conditions, until March 2015. Earlier in the week, House Speaker John Boehner conceded to bring a “clean” debt ceiling increase to the floor for passage with Democratic support after failing to rally his conference behind a modest Republican offset proposal. President Obama will likely sign the bill before the week’s end.

So, crisis averted?

Not quite.

While the debt ceiling compromise ensures our nation will not default on its debt in the immediate future, the real bulk of Congress’s budgetary work—Fiscal Year (FY) 2015 budget and appropriations—is just beginning and is, unsurprisingly, already behind schedule. However, with the impending midterm elections, recent budget deal, and fallout over the last year’s budget crisis still looming large, Congress may attempt to restore normalcy in this year’s budget process. If all goes as planned, here’s what you can expect in the coming months:

The President’s Budget

Traditionally, the president submits his budget to Congress by the first Monday in February, per federal law. As has been in the case in recent years, President Obama’s FY 2015 (Oct. 1- Sept. 30) budget will be unveiled late; the Office of Management and Budget (OMB) said we can expect to see the first part on March 4. The president’s budget is a proposal (not law) that’s submitted as a request to Congress. The president creates his request through a process of coordination between OMB and federal agencies. Based on the policy priorities of the president and his cabinet, OMB gives guidelines to federal agencies instructing them how to prepare their strategic plans and budgets. Agencies in turn then submit budget requests to OMB, which OMB compiles into the president’s budget request. This process can actually begin as early as spring of the prior year, when agencies work on a series of documents and tables that provide information on the agency’s budget needs and explain how resources will be used.

Budget Resolutions

Once the president has submitted his budget request to Congress, the House and Senate budget committees begin working on a budget resolution. Budget resolutions are essentially blueprints or guidelines for spending that the budget committees give to the appropriators.  To create these blueprints, the budget committees typically hold public hearings in March and April at which they receive testimony about the president’s budget proposals from Administration officials, outside experts, trade associations and other interest groups, Members of Congress, and the general public.

Discretionary vs. Mandatory Spending

Budget resolutions set the total federal and spending levels for discretionary spending but do not determine funding for specific programs. That’s the work of the appropriators. Discretionary spending is the part of the federal budget that must be appropriated every single year. This covers anything from programs in transportation to education, administration of justice, general science and technology, the environment, etc. It also includes the budget of many agencies we care a lot about—including the Government Printing Office, National Archives and Records Administration and the Library of Congress,. Oppositely, mandatory spending is exempt from the appropriations process. It covers automatic spending programs like social security and Medicare. There may be some fluctuation in the amount of mandatory spending each year dependant on the number of people eligible for these programs, but in general mandatory spending is about 2/3 of the budget, discretionary spending is about 1/3 of the budget, the majority of which is military spending.

Once the budget committees complete their work, the budget resolutions go to the House and Senate floors, where they can be amended by a majority vote. The budget resolution is a “concurrent” congressional resolution, not an ordinary bill, and therefore does not go to the president for his signature or veto. It also requires only a majority vote to pass, and its consideration is one of the few actions that cannot be filibustered in the Senate.

The budget resolution is supposed to be passed by April 15, but it often takes longer. Occasionally, Congress does not pass a budget resolution. If that happens, the previous year’s resolution, which is a multi-year plan, stays in effect.

Appropriations

A House-Senate conference then resolves any differences, and a conference report is passed by both houses. The budget resolutions then enter the appropriations process. The Bipartisan Budget Act agreed to in December 2013 set spending caps for both FY 2014 and FY 2015, which may make the FY 2015 appropriations process easier than it has been in recent years.  The cap for FY 2015 is $1.014 trillion for discretionary spending, compared to $1.012 trillion for FY2014.

While the budget resolution set goals for spending levels, appropriations bills actually provide this money to agencies. The appropriations committees receive a single allocation for all its programs (referred to as a 302(a) allocation). It must then decide how to divide that lump sum among its 12 subcommittees. The allocations to the subcommittees are referred to as 302(b) allocations and they are really a key decision point in the budget process; 302(b) allocations determine how much spending is allocated to defense vs. health research vs. food safety vs. law enforcement vs. the Government Printing Office (GPO), etc.

As you can imagine, there are a lot of competing priorities in the appropriations subcommittee process. Relevant to our work are the subcommittees on the Legislative Branch, which covers GPO and the Library of Congress; Financial Services, which handles the National Archives; Labor, Health and Human Services, which covers the Institute of Museum and Library Services; and Commerce, Justice and Science, which handles the Legal Services Corporation.

Once they receive their 302(b) allocations, the appropriations subcommittees “mark-up” appropriations bills for the upcoming fiscal year.  Subcommittees are critical to examining agency programs through public hearings, and recommending funding levels that dictate what agencies will have the resources to do.  The subcommittees review agency budget request and receive testimony from agency heads. Subcommittees will often receive written or oral testimony from public interest groups like AALL, as well. The chairman and ranking minority member of the subcommittees use these letters and testimony to determine funding levels for the agencies under their jurisdiction. The subcommittee then votes on these levels, and when the members come to agreement, the bills go back to the full appropriations committees for consideration.

Following full committee action, appropriations bills travel to the House and Senate floor, respectively, for consideration by the full chamber. The Budget Act of 1974 (Pub.L. 93–344, 2 U.S.C. §§ 601–688) sets June 10 as a target date to have completed the House Appropriations Committee’s work on its appropriations bills; however, the committee usually begins to report its bills in May or June, finishing all or most of the bills by July or by the annual recess in August.

Typically, appropriations bills are first considered by the House. When the appropriations bill is on the floor of the House, Representatives debate the bill and offer amendments after hearing opening statements from the chair and the ranking minority member of the subcommittee for which the bill applies. After the bill is passed, it is sent to the Senate, which considers and amends the House-passed bill. In contrast to the House, the Senate doesn’t consider floor amendments in the order of the bill.  Senators may propose amendments to any portion of the bill at any time.

Once the Senate has made its changes, a conference committee must be formed to reconcile the differences between the House and the Senate versions of the bill. These negotiations usually take place between the chair and ranking minority members of the full Appropriations Committees, as well as the members of the subcommittee with jurisdiction over the bill. Upon reaching an agreement, the bill is once again sent to the chambers, both of which generally accept the conference report.

Bill to Law

Just as for any bill, the president may: approve the appropriations bill by signing it so that it becomes a law; veto the bill; or take no action for ten days— if Congress is in session, the bill automatically becomes a law and if Congress has adjourned, the bill has been “pocket-vetoed” and dies.

The Unknowns

Agency budgets will again be subject to sequestration in 2015, though the Bipartisan Budget Act (Pub.L. 113–67) did lessen the load. Congress may act to reduce the budget cuts even further, though the exact implementation and effect of the across the board cuts is hard to project. Still, following the uncertainty of ambiguous and short term budgets over the past several years, agencies including GPO, the Library of Congress, and National Archives and Records Administration may be better able to undertake new projects and continue scheduled activities in this improved budget climate.

Opportunities for Action

As always, the Government Relations Office will call on AALL members to advocate for full FY 2015 funding for those agencies whose work ensures public access to information, so stay tuned for future calls for action this year. Appropriations subcommittees in particular have the ability to influence Congress’s view of agencies work and priorities. Check your members of Congress’s committee assignments using our Legislative Action Center and let us know if they serve on one of the subcommittees mentioned in this post. Then, stay tuned for future budget updates, action alerts, and opportunities to favorably influence the budget process this year!

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