Posts Tagged ‘approps14’

Senate Appropriations Bill Shows Benefits of Replacing Sequestration

July 11, 2013 at 1:57 pm

The Senate Appropriations Committee approved the 2014 appropriations bill today for the Departments of Labor, Education, and Health and Human Services (HHS), one of 12 appropriations bills Congress is supposed to enact before the fiscal year starts October 1.  The bill shows that policymakers can make modest, targeted investments in key areas like early education and medical research without slashing everything else if they cancel the harmful sequestration cuts scheduled for next year.

The bill reflects the committee’s decision to fund defense and non-defense discretionary programs at the levels set in the 2011 Budget Control Act before sequestration.  This approach is consistent with the Senate’s overall budget blueprint, which calls for replacing sequestration with a balanced package of deficit-reduction measures that include other spending cuts and higher revenues.

Under the bill, total funding for discretionary programs at Labor, Education, and HHS would be more than $14 billion above the 2013 level after sequestration.  Areas receiving additional funding include:

  • Medical research: The bill restores the $1.5 billion cut to the National Institutes of Health that sequestration imposed in 2013 and raises funding by $316 million above the 2013 pre-sequestration level.  (This is just a 1 percent increase, less than inflation).
  • Early education: The bill makes a significant down-payment on the President’s initiative to expand early education by funding the discretionary part of the proposal (which also included mandatory funding increases).  Specifically, it provides $9.6 billion for Head Start, $2 billion above the 2013 post-sequestration level and $1.6 billion above the 2013 pre-sequestration level, with the increases largely focused on programs serving infants and toddlers.  The bill also expands resources for child care assistance and for developing public pre-school programs.
  • Drug assistance for people with HIV/AIDS: The bill raises funding for life-saving drugs for HIV/AIDS patients by about $57 million over the post-sequestration level of funding available in 2013.

The Senate Appropriations Committee approach stands in stark contrast to the House Appropriations Committee approach, which cuts the overall amount of funding for Labor, Education, and HHS programs by $40 billion relative to the 2013 level before sequestration and by $33 billion — or 18.6 percent — relative to the 2013 post-sequestration level.

The House Appropriations Committee hasn’t yet drawn up its version of a Labor-Education-HHS funding bill.  Some observers think it may never do so; if that proves to be the case, we will never see how the House’s deep cut in resources for Labor, Education, and HHS would affect specific programs.  That would be unfortunate, as it would allow proponents of the House approach to tout their spending cuts in the abstract without having to take responsibility for what a funding reduction of that magnitude would actually mean for K-12 education, medical research, health care, and other priorities.

A Tale of Two Bills

June 27, 2013 at 4:34 pm

Families that need housing assistance have been hit hard in recent years, as sequestration has deepened cuts to low-income housing and community development programs that the President and Congress made in 2011 and 2012.  Recognizing the harm caused by mindless sequestration cuts, both chambers of Congress approved their own 2014 budget plans earlier this year to replace it.  But, the funding bills that the House and Senate appropriations committees approved today for the Department of Housing and Urban Development (HUD) show that their overall budget plans are miles apart — and families that need assistance have a lot at stake in how this gap is bridged.

Recent cuts have fallen on rental assistance and community development programs (see chart).  In 2013, for example, total funding for HUD’s three major rental assistance programs — the Housing Choice Voucher, Public Housing, and Section 8 Project-Based Rental Assistance programs — is $3.6 billion, or nearly 10 percent, below the 2010 level, adjusted for inflation.  Meanwhile, states and localities have lost $1.2 billion (28 percent) in annual Community Development Block Grant (CDGB) funding and $1.0 billion (51 percent) in annual HOME funds.

Because of these cuts, tens of thousands of low-income families won’t get the housing assistance they need to avoid homelessness and other hardships.  While policymakers have recognized sequestration’s harm, however, the House and Senate proposals couldn’t be more different.

The House budget plan replaces sequestration with even deeper cuts in non-defense discretionary programs — including low-income housing and community development programs — while increasing funding for defense.  In line with this plan, the House HUD funding bill would lock in cuts in housing voucher assistance for more than 100,000 low-income families — nearly all of which include seniors, people with disabilities, or children — and cut funding for public housing, CDBG, and HOME to historically low levels, as we recently explained.

In contrast, the Senate HUD funding bill rolls back sequestration cuts and restores badly needed assistance to low-income families and communities (although funding in some areas would remain well below the 2010 level).  It can protect these critical safety net programs for low-income families because it is part of the Senate’s more balanced, yet fiscally responsible approach to addressing budget challenges.

The Senate bill would, for example:

  • Restore funding for most of the up to 140,000 Housing Choice vouchers that will be lost under sequestration.  (The President’s budget request for voucher renewals, which provides $400 million more for voucher renewals than the Senate bill, would restore all of the voucher assistance cut by sequestration.)
  • Roll back the deep cuts in homeless assistance, restoring Emergency Solutions Grant funding, for example, to help local communities prevent homelessness and provide housing assistance to homeless individuals and families.
  • Provide more adequate funding to operate and repair public housing, while also reversing the sequestration cuts in CDBG, HOME, and other HUD programs.

Senate Appropriations Plan Wisely Says No to Sequestration

June 26, 2013 at 12:54 pm

Our new report on the Senate Appropriations Committee’s spending plan, along with our recent report on the House Appropriations Committee plan, help explain why the two chambers are on such different spending paths.

The Senate Appropriations Committee voted last week to fund defense and non-defense discretionary programs next year at the levels set in the Budget Control Act (BCA) without the additional “sequestration” cuts scheduled for 2014.  That’s starkly different from the House Appropriations Committee plan, which sets an overall funding level that’s consistent with sequestration and then shifts money from non-defense programs to defense, resulting in deep cuts in non-defense discretionary programs.

The Senate plan is consistent with the Senate-passed budget resolution, which proposes to replace sequestration in each year through 2021 with a balanced deficit-reduction package that includes both other spending reductions and additional revenues.

The House and Senate approaches reflect very different priorities — and the Senate approach is far preferable.  Here’s why.

Since policymakers began efforts to shrink deficits in 2010, they have cut non-defense discretionary programs substantially — first as part of the 2011 appropriations process, then through the BCA, and then again through sequestration (see graph).  The House plan would add a new round of steep non-defense cuts.

In contrast, the Senate approach would roll back sequestration, which the International Monetary Fund recently said is hurting the economic recovery.  This is consistent with Federal Reserve chair Ben Bernanke’s recent statement that current fiscal policies are a drag on growth.

The Senate plan would still leave non-defense funding in 2014 roughly 12 percent below the 2010 level, adjusted for inflation.  That’s because the BCA caps, even without sequestration, sharply constrain funding for non-defense discretionary programs.  By 2017 the caps will cut spending on non-defense discretionary programs to its lowest level as a share of the economy on record, with data available back to 1962.

The House plan shows that if overall discretionary funding stays at the post-sequestration levels, any action to protect one program area — such as defense — will require more severe cuts in other areas. The fundamental problem, as we’ve said, is that the overall funding level for discretionary programs under sequestration is too low.

House Appropriations Plan Leaves Too Little Funding to Go Around

June 5, 2013 at 1:14 pm

The House Appropriations Committee-approved plan to divide up 2014 discretionary funding among the 12 appropriations subcommittees would lead to deep cuts in a broad range of non-defense areas and shift tens of billions of dollars from domestic programs to defense and other security programs, our new analysis explains.

Total discretionary funding under the plan would equal the amount that the Budget Control Act (BCA) allows if sequestration continues next year as scheduled.  But the plan gives defense programs much more funding than the BCA allows under sequestration, raising them close to the BCA cap before sequestration.  And it gives non-defense programs much less funding than the BCA allows under sequestration.

But, if policymakers took the opposite approach, raising non-defense programs close to the pre-sequestration level, they would have to cut defense programs by about 10 percent below their current level.

The plan makes clear that if overall discretionary funding remains at the post-sequestration level in 2014, policymakers can protect funding in one major area only by making deeper cuts in other areas.  The fundamental problem is that the overall funding level for discretionary programs under sequestration is too low.

The Administration threatened earlier this week to veto the first appropriations bill based on the plan (H.R. 2216, which funds military construction, veterans’ programs, and related programs), stating, “adhering to the overall spending limits in the House Budget’s topline discretionary level for fiscal year (FY) 2014, would hurt our economy and require draconian cuts to middle-class priorities.”

This graph shows how deeply the plan would cut non-defense areas in order to accommodate its funding increases for defense and other security programs.  Overall funding for the Departments of Education, Health and Human Services, and Labor would be 18.6 percent below this year’s level after sequestration, while the bills funding the Interior Department, the Environmental Protection Agency, and the State Department would be 14 percent below the current level.  The declines are even bigger once inflation is taken into account.

A far better approach would be to replace sequestration with a balanced package of spending cuts and revenue increases and fund discretionary programs at the BCA levels without sequestration, as the President’s budget and the Senate-passed budget resolution do.