APA Federal Budget Blog: 2011

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Fiscal year 2012 can finally begin.

We weren’t really expecting a government shutdown, but now it’s officially not going to happen. Congress has largely finished work on H.R. 2055, the 2012 spending legislation, with both chambers approving a $915 billion ‘megabus’ bill (nine appropriations bills including the Labor-Health and Human Services and Education bill ((PDF, 2.9MB) that funds NIH). Both chambers passed the initial bill, and the House has approved the conference report: the Senate is expected to approve it on Saturday. Yes, okay, this legislation was due by October 1, and yes, several science funding agencies had to postpone funding decisions and negotiations not knowing what their budgets were. Still, the sense of relief in DC is rare enough that it must be acknowledged when it comes around.

NIH — Slight Increase (Before Across-the-Board Cut). After some technical fund transfers, the NIH program level funding is $30.698 billion, or $299 million over FY 2011. The conferees “strongly urge NIH to maintain extramural research at least at 90% of the NIH budget in FY12.” Other conference instructions include an admonition that NIH should maintain funds that support basic research, and language that eliminates the National Center for Research Resources and creates the National Center to Advance Translational Sciences, a top priority for NIH Director Francis Collins.

In total, program funding for labor, health and education would fall about $1.4 billion to stay within the caps set in the Budget Control Act. The Department of Health and Human Services receives a total of $69.7 billion in the bill, which is nearly $700 million below the last year's level and $3.4 billion below the President's budget request. The Centers for Disease Control and Prevention (CDC) is funded at a program level of $6.124 billion, a decrease of $157 million below last year’s level. The Health Resources and Services Administration (HRSA) receives $6.476 billion, $41 million below last year's level. The Substance Abuse and Mental Health Administration (SAMHSA), with a program level funding of 3.484 billion, is cut $27 million below last year's level. The megabus includes $594.7 million for the Institute of Educational Sciences (IES), including $11 million for awards to public or private organizations or agencies to support activities to improve data coordination, quality and use at the local, State and national levels.

Across-the-Board Cuts. All of the numbers above will be reduced, however. H.R. 2055 includes a 0.189 percent across-the-board cut to all all Labor-HHS Education program accounts except Pell Grants. And – there’s more.

In addition to the megabus spending bill, The House passed two additional bills today that will have an impact on Fiscal Year 2012 funding if they should be approved by the Senate. (Debate begins today, Friday, December 16). These are an emergency disaster aid bill (H.R. 3672) and a resolution that provides a funding offset to the cost of disaster aid (H.Con. Res. 94). H. Con. Res. 94 includes an across- the- board cut of 1.83 percent to all FY 2012 bills except the Department of Defense and Military Construction — Veterans Affairs appropriations acts. Whether to offset the costs of emergency disaster aid has been a contentious issue in this session of Congress, and the Senate is not certain to approve the offsetting cut.

Payroll Tax Holiday Extended? The House and Senate leadership are still negotiating on a two month extension of the payroll tax holiday currently in effect. The disagreements are on the length of the extension and whether and how to offset the cost. Your blogger predicts a short extension will pass since no parties in Congress want to give their constituents the gift of a tax increase. The disposition of this issue will determine how quickly Congress gets to go home for the holidays.

Pat Kobor, Sr. Science Policy Analyst
Science Government Relations Office
American Psychological Association

Last train for 2012 funding, now boarding.

Federal funding for Fiscal Year 2012 is coming down to one last big omnibus bill. Negotiations on the nine remaining appropriations bills were largely finished as of Monday morning, December 5. The thorny issues — riders, abortion amendments — that were not resolved by the subcommittees will go to the House leadership for disposition. Because the bills will need more than Republican votes in order to pass (as many as 100 Republicans may vote no because spending is too high or for other reasons), the bills must be crafted to gain Democratic votes too. Conferees will be appointed on Wednesday or Thursday of this week; a conference meeting will be held and the bill will probably be filed on Monday the 12th. We at the Blog are told that other likely candidates to be added to the bill (if separate negotiations are successful) include a payroll tax cut extension and unemployment insurance extension. The vehicle for moving this Omni will be the Military Construction bill, since it already passed the House and the Senate. Recall that the latest Continuing Resolution requires the Fiscal Year 2012 bills to pass no later than December 18, 2011.

The research funding appropriations for NIH and the Dept. of Defense will be negotiated in the conference committee. NIH’s Fiscal Year 2012 funding will likely land somewhere between the Senate’s $30.5 billion, a cut of $190 million, and the House’s $31.7 billion, a proposed increase of $1 billion, The National Science Foundation appropriation was approved in the minibus bill that passed last month (see November 21 entry, below).

Granted, it’s faint praise: but your Blogger finds it oddly reassuring that despite a really bad year, Congress is functioning well enough to complete the year’s remaining spending bills. Balanced Budget Amendment

As directed by the Budget Control Act debt deal from the summer, both houses of Congress must vote on a Balanced Budget amendment by December 31. H.J. Res. 2, a Balanced Budget Amendment (BBA), failed to gain the 2/3rds majority required for passage in the House on November 18. The final vote tally was 261 Y-165 N.

The required Senate vote on a BBA could come as early as this week. It’s likely that the Senate will vote on two different versions. One is the more extreme version, S.J.Res. 23, introduced by Senate Majority Leader Mitch McConnell (R-KY) and cosponsored by all 47 Senate Republicans. S.J.Res 23 is similar to the House’s H.J.Res.1 version, and contains a severe global spending cap, 2/3rds majority requirement for increasing revenues, and 3/5ths majority requirement for increasing the debt limit. We also expect a vote on a BBA introduced by Sen. Mark Udall (D-CO), which is co-sponsored by Senators Max Baucus (D-MT), Joe Manchin (D-WV), Claire McCaskill (D-MO), Bill Nelson (D-FL), and Ben Nelson (D-NE), that does not contain the spending caps and supermajorities for raising revenues and the debt limit.

Neither of the two BBA versions is likely to garner the 67 votes (2/3) required for constitutional amendments.

Pat Kobor, Sr. Science Policy Analyst
Science Government Relations Office
American Psychological Association

Super Committee fumbles.

The Washington Post is reporting that the Super Committee will acknowledge late today (Monday, November 21) that its members are unable to agree on a recommendation to cut the deficit by $1.2 trillion over ten years. Ouch!  Before we discuss the ramifications to science and the rest of the budget, let’s just take a moment to wince on behalf of those members. Next we can wince on behalf of the rest of the American public whose approval of Congress is already at subbasement levels of 12 percent, according to a CBS - New York Times poll of last month. 

What will happen right away? Probably nothing. Unlike the threats from past crises that went to the wire, the government will not shut down, and the full faith and credit of the U.S. is not at risk, although the stock market may react negatively. Congress’s ability to address long-term problems is a casualty (see ‘wince,’ above).  Super Committee members of each party are blaming those of the other for wanting either to raise taxes on the rich, or not wanting to raise taxes at all.

The Budget Control Act that created the Super Committee calls for $1.2 trillion in automatic spending cuts to kick in at the start of 2013, with half coming from national security budgets. Many lawmakers have called for congressional action to reconfigure the automatic cuts (especially those to defense spending) and given that the cuts will not become law for a year, Congress does have the opportunity to rethink them. The same standoffs between the two parties will certainly affect whether such an effort is successful.

As it is, automatic cuts (half to defense, half to domestic discretionary accounts) would be harsh for science funding agencies. A letter (PDF, 5MB) from House Appropriations Committee Democrats to the Super Committee stated that, should the Committee fail to issue recommendations, the mandatory across-the-board cuts in 2013 would reduce the NIH budget by nearly eight percent, decreasing by 2,500 to 2,700 the number of research grants issued by the agency. Under the same scenario, the NSF budget would be cut by $530 million.

APA and other science organizations will certainly be advocating against such harsh cuts and looking for alternatives. Watch this blog for more updates.

Pat Kobor, Sr. Science Policy Analyst
Science Government Relations Office
American Psychological Association

Appropriators score, Super Committee tries not to fumble.

One Step Forward — Conferees for legislation that combined three of the twelve Fiscal Year 2012 appropriations bills (“Minibus 1”) have reached an agreement.  HR 2112 passed both the House and Senate, and President Obama has signed it.  The bill also includes a ‘clean’ Continuing Resolution providing extra time for Congress to pass the remaining 2012 spending legislation (new deadline: December 16).  It all seems so civilized and normal:  business as usual, the way it used to be!

This agreement was brought to you by a compromise. You may recall that the House approved H.R. 1, the Ryan budget, for FY 2012, which included a lower spending ceiling for the year than both houses later approved in the Budget Control Act. Some House members had insisted that the House stick to the lower spending ceiling, but those voices didn’t prevail.

APA has kept a close eye on this bill because it includes funding for the National Science Foundation (NSF). The agreement would give NSF a scant $173 million increase, but that’s certainly better than flat funding, and must be counted as a step forward if not quite a ‘win.’

Super Committee Struggles — By now you may have seen the stopwatch-style counter on the front page of The Washington Post  — counting down the days, hours and minutes til the deadline. The Super Committee deadline to report $1.2 trillion in budget savings, or trigger $1.2 trillion in across-the-board cuts to defense and non-defense accounts, is November 23.  Some observers predict that the Supers will fail to reach agreement by the deadline because this time there’s no looming financial disaster to put teeth in the deadline.

There has been movement in the determination of the House and Senate Republican caucuses to raise no taxes and let no deductions expire. Super Committee member Sen. Pat Toomey (R-PA), who has quite solid conservative credentials, even if he is being roundly denounced by anti-tax activist Grover Norquist, proposed a deal that would include some $300 billion in ‘revenue enhancements.’ Democrats, while applauding the step toward compromise, have not leaped to endorse the Toomey plan because, among other reasons, it would extend the Bush tax cuts on upper income earners. Many Republicans do not support Sen. Toomey’s proposal either, because of the revenue provisions. We call it another step forward, still not a win.

Can they just change their mind? “Oops?” — If the Super Committee does not act by the deadline, the smart money predicts Congress will fail to approve another debt-reduction deal until after the November 2012 elections. That’s when the Budget Control Act (PDF, 222KB) hammer is set to fall: Congress will face the prospect of not only unprecedented cuts to defense accounts and other agency budgets, but also the expiration of all of the Bush-era tax cuts — an outcome that would raise taxes for virtually every American in January, 2013. Of course there is also talk that Congress could choose to pass new legislation that would negate the trigger mechanism requirement of the Budget Control Act (the provision requiring across-the-board cuts).  But given how many Members of Congress praised the Budget Control Act, noting how Congress needed to build in snares and deadlines to avoid its tendency to ‘weasel out’ of tough decisions, that would seem to be an embarrassing outcome, especially for the Republican leadership. 

We at your blog think it’s too early to assume failure. Congress is a ‘last-minute’ decision-maker. There are two days to go! Absolutely anything could happen in two days.

Pat Kobor, Sr. Science Policy Analyst
Science Government Relations Office
American Psychological Association

Senate drives a minibus and the calendar drives Super Committee negotiations.

Eleven of the twelve appropriations bills for Fiscal Year 2012 still await passage by the Senate and passage in final form by both houses (only one bill has passed both chambers).  The current deadline for accomplishing this Herculean feat is November 18, when temporary Fiscal Year 2012 funding runs out. The Senate is gamely pressing forward with the appropriations process.  The first  ‘minibus’ bill that includes the Agriculture, Commerce-Justice-Science and Transportation-Housing bills was being considered on the Senate floor when the Senate recessed the third week in October for a district work period.  The Senate will likely pass it by early November.  Eight bills remain much farther behind in the process.  It is likely that both houses will need to agree on another temporary continuing resolution to provide more time to finish these remaining bills. The Senate is trying the ‘minibus’ approach because they feel it will allow for more input from individual members and greater scrutiny for each bill.  Input and scrutiny: the advantage and disadvantage.  The large number of amendments filed for the Agriculture-Commerce-Transportation minibus is part of the reason the Senate is behind schedule now.  However the remaining bills are configured for debate, the Labor-Health and Human Services-Education bill that includes NIH is sure to be one of the last to be considered, since it includes funding for the Affordable Care Act programs, Planned Parenthood, and other programs that are controversial in this session of Congress.

APA has joined with other science and advocacy organizations in pressing congressional appropriators to maintain the $1.06 billion increase for NIH that was proposed in the House Labor-HHS bill.  Last weekend the APA Science Leadership Conference brought to town 83 psychologists who made over 150 congressional visits in support of that NIH increase (as well as funding for substance abuse research programs in the Departments of Defense and Veterans Affairs). 

With the November 18 deadline looming, should we be worried AGAIN about a possible government shutdown?  Congress will almost certainly work until the last possible moment, but so far it doesn’t look as if either the Republicans or Democrats are eager to play ‘chicken’ with the budget. This time.

But wait – there’s more! Another, larger process of financial negotiation is layered on top of the appropriations work, and the stakes for its work are even higher.  The congressional Super Committee created by the Budget Control Act is required to report a $1.2 trillion package of proposed budget cuts by November 23. The Joint Committee on Deficit Reduction (JCDR, its real name) is having the same difficult time that all of the preceding committees had in developing a package of spending cuts, entitlement changes and tax increases likely to pass both houses of Congress. The sword hanging over the work of the Super Committee is that automatic cuts that will hit defense and nondefense discretionary budget lines will go into effect in 2013 if a deal is not reached this year.

The House and Senate Appropriations Committees sent letters to the JCDR this month urging the members not to reduce discretionary spending any further, arguing that the discretionary category absorbed significant cuts in the final 2011 spending bills, as well as through the caps enacted in the Budget Control Act of 2011. The House Appropriations Committee Democrats’ letter (PDF, 5MB) stated that “failure is not an option.”  The letter noted that if the JCDR does not act in time, mandatory across-the-board cuts that would go into effect in 2013 would reduce the NIH budget by nearly eight percent, and decrease the number of research grants issued by NIH by 2,500-2,700. Under the same scenario, the NSF budget would be cut by $530 million.

In the meantime we will continue to monitor the bean-counting and will report back on any progress.

Pat Kobor, Sr. Science Policy Analyst
Science Government Relations Office
American Psychological Association

The journey toward 2012 funding for NIH and other health programs — NOT the scenic route.

First a bit of catching up:  Congress cleared and the President signed legislation (H.R. 2608) (PDF, 126KB), a Continuing Resolution to keep the government running through November 18, 2011, with the assumption that over a month is PLENTY of time for Congress to complete all the spending legislation for Fiscal Year (FY) 2012. We at the Blog are optimists, so we’ll just let that statement go unchallenged for now.  The new Continuing Resolution sets government spending at the $1.043 trillion level agreed to in the Budget Control Act and requires a 1.503 percent across the board cut from FY 2011 spending for all “continuing projects and activities” that are not otherwise specifically provided for in the Act.

House and Senate Appropriators will continue drafting, and negotiating,  the FY 2012 spending bills, with the goal of passing an omnibus—or several “mini-buses”—before November 18.  In some cases, bills will be conferenced without ever reaching the floor for a vote.  Rep. Denny Rehberg (R-MT), Chair of the House Appropriations Subcommittee on Labor-Health and Human Services-Education, introduced H.R. 3070, a draft of an appropriation bill—never even considered by the Subcommittee—in order to have a baseline from which to negotiate with the Senate.  Chairman Rehberg was not confident he could steer a bill to passage through his Subcommittee.  Labor regulations and provisions related to the Affordable Care Act make the Labor-HHS bill a likely battleground.

Like the President's request, H.R. 3070 provides $31.7 billion for the National Institutes of Health (NIH), $1 billion (3.3 percent) more than the current year's level, and $1.2 billion more than provided in the Senate committee-approved bill. That’s good news, right?  Unfortunately, NIH’s increase comes at the expense of other health agencies. The bill eliminates all Affordable Care Act-related funding—for example, the Prevention and Public Health Fund, and funds for Comparative Effectiveness Research at the Agency for Health Care Research and Quality—as well as funding for Planned Parenthood.

On September 21st, the full Senate Appropriations Committee approved its FY 2012 Labor-HHS-Education spending bill (S 1599) (PDF, 320KB) by a partisan vote of 16 Democrats to 14 Republicans.  The allocation for the NIH was $30.5 billion, $190 million (0.6 percent) below FY 2011. The bill is not expected to reach the Senate floor for a vote, so the negotiating parameters are essentially set.  Senate Labor-HHS Subcommittee Chairman Tom Harkin (D-IA) remarked that it had been a difficult bill to write.  We can assume this month’s march to finish FY 2012 funding bills is “Legislation Without Celebration.”

Pat Kobor, Sr. Science Policy Analyst
Science Government Relations Office
American Psychological Association

Short-term Continuing Resolution passes House, not Senate, and suddenly the end of the fiscal year looms.

Fiscal Year 2012 will begin on October 1, 2011. As of today legislation has passed the House, but not the Senate, to fund the government through November 18, 2011, long enough in theory for the chambers to agree on a year-long Continuing Resolution.

Today the Senate voted 59-36 to table the House-passed short-term Continuing Resolution. Another funding bill must pass in both chambers and be signed by the President before October 1 to avoid a government shutdown. Yes, we have to begin talking about a government shutdown again, because both parties are bringing out the “no compromise” rhetoric that we heard during the last couple of high-stakes governmental finance debates.

A primary reason for the bill’s defeat in the Senate was the provision that tempered increased disaster relief spending ($3.65 billion) with a $1.6 billion cut to two green-energy programs. Both chambers agreed on a funding figure for the government more than a month ago, while setting the terms for a debt ceiling increase. But since then, a number of disasters have occurred that made emergency funding for the Federal Emergency Management Agency (FEMA) a necessity. The Republican House leadership added the cut to green-energy programs to entice more House Republicans to vote for the spending bill. The Senate is expected to amend and then pass the package to eliminate the $1.6 billion offsetting part of the disaster relief funding.

Pat Kobor, Sr. Science Policy Analyst
Science Government Relations Office
American Psychological Association

First an earthquake, then a hurricane, now the Supercommittee: summer is OVER.

Welcome back to the grind! Congress is back in town, and given the torrential rains in Washington, DC, since Labor Day, there is nothing to do but work. The Supercommittee, authorized in the Budget Control Act, held its first formal meeting today. The Supercommittee heard opening statements, approved rules for its deliberations, and adjourned in under an hour. Here is a copy of the Supercommittee’s calendar, from Congressional Quarterly:

• Sept. 8: Organizational meeting of joint committee.

• Sept. 13: First hearing of joint committee.

• Oct. 14: Deadline for standing committees to forward their recommendations to joint committee.

• Nov. 23: Deadline for joint committee to vote on legislative proposals, with a 10-year deficit reduction goal of $1.5 trillion.

• Dec. 2: Deadline for joint committee to formally report proposals.

• Dec. 23: Deadline for House and Senate to vote on proposals, without amendment.

• Jan. 15, 2012: Deadline for enactment of at least $1.2 trillion in deficit reduction, or across-the-board spending cuts will be triggered.

• Jan. 15, 2013: If triggered, across-the-board cuts will take effect (True, the ax falls after the 2012 elections, not before: Congress has a year to figure out where to cut if the Supercommittee fails).

Even with the knowledge that $1.2 trillion in cuts are coming, one way or another, members of Congress are still moving through the regular process of approving appropriations bills. Lawmakers have fewer than a dozen working days before Fiscal Year 2012 begins (October 1). Appropriations bills should theoretically be passed by October 1, but for many years it’s been more common for Congress to approve a Continuing Resolution (CR), rolling together any unpassed appropriations bills so they can be approved in one conference committee with one vote.

None of the 12 spending bills for the coming fiscal year has been enacted into law, although versions of H.R. 2055, the Military Construction-VA appropriations bill have passed both chambers. That bill is likely to be the vehicle for the Fiscal Year 2012 CR.

Discussions about a CR have already begun, and House Majority Leader Eric Cantor (R-VA) announced he expects the House to approve a CR the week of September 19 that will fund the government through the late fall. Still, House and Senate appropriators are working on legislation. Appropriations Committees in both chambers hope to at least report all twelve bills, in order to set the parameters for conference committee deliberation.

Pat Kobor, Sr. Science Policy Analyst
Science Government Relations Office
American Psychological Association

Supercommittee members have been appointed — no capes spotted so far.

All the appointments have been made to the Supercommittee that was authorized by the Budget Control Act. Some call the group the Gang of 12.

Co-chairs are Senator Patty Murray (D-WA) and Rep. Jeb Hensarling (R-TX). Other members are: Senators Max Baucus (D-MT), John Kerry (D-MA), Jon Kyl (R-AZ), Pat Toomey (R-PA) and Rob Portman (R-OH), and Reps Dave Camp (R-MI), Fred Upton (R-MI, James Clyburn (D-SC), Xavier Becerra (D-CA), and Chris Van Hollen (D-MD).

The job of the Supercommittee is to identify $1.5 trillion in additional budget cuts (revenues not excluded: and that will surely be a big topic of conversation) by Thanksgiving of this year. If Congress does not pass legislation instituting these cuts by December 23, the law provides for automatic across-the-board cuts in defense and non-defense accounts.

Even though it is much quieter than usual and is otherwise a typical August in Washington, Congress is not quite in recess . Why not? Some members of the Republican Study Committee in the House and Senate wanted to prevent President Obama from making any recess appointments. So while most members of Congress have left town, the RSC members are taking turns gaveling the Senate and House into brief pro forma sessions on Tuesdays and Fridays, and conduct no business. During the latter part of George W. Bush’s presidency, the Senate sometimes used the same practice. It’s just more evidence, if we needed more evidence, that the executive and legislative branches are playing hardball with each other.

CORRECTION: The August 2 entry below said, incorrectly, that the Commerce-Science appropriations bill has passed in the House. It hasn’t yet come before the House for a vote, but was reported out by the Appropriations Committee. That entry has been corrected.

Pat Kobor, Sr. Science Policy Analyst
Science Government Relations
Office American Psychological Association

Debt deal signed and delivered just in time.

The House passed the Budget Control Act, S. 365, by a wide margin, 269-161, on Monday and immediately recessed for the remainder of August. The Senate passed it Tuesday, 74-26, with the bill expected to garner a quick presidential signature.

Yesterday I mentioned that nobody loves this bill, and that’s becoming more evident by the minute. It’s a good thing the votes have been quick, because the longer the deal stands in the spotlight, the worse it looks. Both sides had to swallow some provisions they disliked, but Democrats have been particularly vociferous. Rep. Emanuel Cleaver (D-MO) called it a “sugar-coated Satan sandwich.” Yikes! “Wonkbook” blogger Ezra Klein of The Washington Post calls it “The Terrible, No-Good, Very Bad Deal.” Many Democrats are concerned about the lack of balance, e.g. no revenue provisions, even though the option to include revenues is left open for the Congressional Joint Select Committee on Deficit Reduction (the ‘super-committee’) to consider. But given that the Speaker of the House and the Senate Minority Leader are unlikely to appoint to the committee members of the Republican party who support tax increases (assuming there are still a few of them left) some Democrats feel the prohibition of revenues is there in spirit if not in the text.

For you who want to see it up close, here is a Section by Section Analysis of the Budget Control Act from the House Rules Committee.

What happens next? The Budget Control Act (BCA) is a new budget resolution (a ten-year budget resolution), but without the detail of a normal budget. So the effect of spending cuts on specific agencies, like research funding agencies, won’t be clear for some time. The spending caps allocated to each of the appropriations committees --302(b)s-- will be recalculated, and the appropriations committees will allocate the (reduced) funds as they always do. It isn’t clear yet how the BCA caps will be applied to the Fiscal Year 2012 spending bills that have already passed one house, e.g. the Homeland Security and Energy bills. Will pass that on as soon as I know!

Pat Kobor, Sr. Science Policy Analyst
Science Government Relations Office
American Psychological Association

It walks and talks like a deal, and nobody is happy with it.

Remember that great quote attributed to Benjamin Franklin? After an arduous session of wrangling and compromise to establish the Constitution, asked what sort of government they had devised, Franklin replied, “A Republic, madam, if you can keep it. “ He may not have said it, but it’s clever and fits our situation on Monday, August 1. Congrats, everyone, it’s looking as if ‘Debtmageddon’ may be averted! (Usual caveat: no votes have taken place yet today.)

So what is this deal? First, it would allow the debt ceiling to be raised through early 2013 as the Democrats and President Obama wanted. Modeled after Senate Minority Leader Mitch McConnell’s “Plan B” compromise, it would allow an initial increase in the ceiling of $900 billion, and additional increases afterward initiated by the President, subject to a resolution of disapproval by the Congress. Second, it would cut federal spending by about $1 trillion over 10 years. It does not include the assumption of savings from winding down the wars in Iraq and Afghanistan, which had been a provision in Senator Reid’s bill that House Republicans objected to. The deal establishes a 12-member joint bipartisan committee (some call it a super-committee… sounds cooler), a provision included in both the House and Senate bills. The committee’s mandate is to make recommendations to significantly improve short- and long-term fiscal imbalance, with a goal of cutting the deficit about $1.5 trillion over ten years, to match, dollar for dollar, future increases in the debt ceiling.

The deal includes a fallback if the super-committee is not able to identify additional cuts of at least $1.2 trillion. Across-the-board cuts of both defense and nondefense discretionary spending would be automatically triggered. Programs for the poor, such as Medicaid, would be exempted. But Medicare payments to providers could be included. A vote on a balanced budget amendment is required, but Republicans dropped their demand that the vote ‘clear;’ that is, the amendment is not required to pass by the 2/3 majority in both houses that would be needed to send the amendment to the states for ratification.

What about the R-word: revenues? Well, revenues, or ‘tax expenditures,’ don’t contribute to the initial $1 trillion in cuts. But the super-committee is not prohibited from including revenues in the second round of cuts.

It must be said, nobody loves this deal. But some hate it more than others The Washington Post reports members of the House Progressive Caucus have concerns, and members who have argued vehemently to exclude defense spending from cuts will also have problems with it.

Watch this space for further updates as this deal is brought to the floor of both houses for a vote.

Pat Kobor, Sr. Science Policy Analyst
Science Government Relations Office
American Psychological Association

Counting down toward ‘Debtmageddon:’  We’ve got your good, your bad and your ugly.

BAD: What a rough week the Speaker of the House has had. First, the Congressional Budget Office (CBO) scored his debt limit and deficit reduction bill and determined the budget cuts it contained for the first year were in fact much smaller than advertised, so the bill had to be rewritten. Then on Thursday July 28, he scheduled a vote on the bill (The Budget Control Act of 2011, S. 627), and then had to pull it from the floor because he didn’t have the needed 217 votes to pass it. The vote has been rescheduled for later today, July 29, and it looks more likely that the bill will pass. Why? To attract a few more votes, an additional amendment is being added to make future borrowing authority contingent on Congress’s clearing a balanced budget constitutional amendment. The earlier version only required that vote be scheduled on a balanced budget amendment. This seems an unlikely way to move toward a bipartisan compromise, but we’ll play along.

So far the Senate and the President agree that there should only be one vote on raising the $14.3 trillion debt limit. S. 627 only provides enough headroom to allow government borrowing to continue until around Christmas of 2011, necessitating another scramble like the one we’re experiencing but with the added bonus of holiday cheer. Still, in order for an agreement to become law, SOMETHING has to pass in the House. The Speaker’s bad week is rolling into a bad weekend. Might he have won the battle only to lose the war? If getting to this agreement was hard, wait till he is pushing a compromise version. The Senate is not a potted plant, Mr. Speaker!

UGLY: What’s so bad about a balanced budget amendment to the Constitution? It depends on how it’s written. Two different bills are likely to come to the House floor later today. H. J. Res. 1, sponsored by Rep. Bill Goodlatte (R-VA) has 133 House cosponsors. It would, for the first time, write an arbitrary cap on federal spending into the U.S. Constitution. H.J. Res. 1 would force significant cuts in mandatory and discretionary federal programs, and scientific research programs would likely not be spared. At the same time, by requiring a supermajority vote (3/5) to raise taxes, the amendment would make it nearly impossible for Congress to raise revenues or amend the tax code even in a revenue-neutral way. H.J. Res. 1 would limit annual federal spending to 20 percent of the prior year’s gross domestic product (GDP). Federal spending averaged 22 percent of GDP during Ronald Reagan’s presidency (30 years ago!), a time when the U.S. was not fighting two wars and a bolus of baby boomers was not reaching retirement age. Under H.J. Res. 1, a two-thirds vote of all members in both houses would be necessary to approve spending above the cap in any fiscal year, making it more difficult for the government to respond quickly to economic downturns.

The second balanced budget amendment that will come before the House today, H.J.Res. 2, lacks the spending cap and supermajority provisions. It would require a balanced federal budget each year. It also requires 3/5 of the whole membership of both houses in order to raise the debt limit. 211 Republicans have cosponsored H.J.Res.2, and it is likely some moderate Democrats will support it.

GOOD: Yes, what a great story on the psychology of the debt crisis on “Morning Edition” on National Public Radio today from Shankar Vedantam. Mr. Vedantam has spoken at APA’s Science Leadership Conference and is the winner of an APA Presidential Citation for his insightful reporting, applying psychological research findings to current issues and problems.

All in all, looks like an exciting weekend ahead.

Pat Kobor, Sr. Science Policy Analyst
Science Government Relations Office
American Psychological Association

Two televised speeches later, no closer to a debt limit compromise.

Taking his case to America in prime time, President Obama on July 25 urged Americans to tell their members of Congress their views about the current debt negotiations, and many apparently did so. Telephone circuits at the House of Representatives were overwhelmed for a time today (Tuesday), due to a large volume of calls from people weighing in with their elected representatives. According to CBS News, multiple congressional websites experienced temporary outages on Monday night after the speeches of Mr. Obama and House Speaker John Boehner.

From the President’s speech: "The American people may have voted for divided government, but they didn't vote for a dysfunctional government. So I'm asking you all to make your voice heard. If you want a balanced approach to reducing the deficit, let your Member of Congress know. If you believe we can solve this problem through compromise, send that message."

So one part of the sales pitch appeared to work: people listened to the speeches and many responded. But the bigger exercise in persuasion is to draw congressional votes toward one plan or another, and it is not clear that either plan can gain enough votes to pass.

Speaker Boehner is still working to persuade the House Republican Caucus to vote for his proposal. His plan, in brief, would immediately cut and cap spending by $1.6 trillion over 10 years and raise the debt ceiling by $1 trillion to get through February, 2012. It would create a new congressional commission to reduce spending by an additional $1.8 trillion over 10 years (and cuts would fall heavily on Medicare/Medicaid/Social Security). If the commission’s proposal were adopted, the President could request a second increase to the debt ceiling of $1.6 trillion. The plan would require a vote on a balanced budget amendment by October 1, 2011. No revenue options are included.

The freshmen and fiscal conservatives who are most at odds with the Speaker’s proposal have several concerns. They want a balanced budget amendment guarantee, not just the guarantee of a vote. In addition, some feel the initial round of spending cuts is too low, and others don’t trust that the new commission will effectively slash spending.

Senate Majority Leader Harry Reid (D-NV) is offering a plan that is similar in several respects to that of Speaker Boehner. It would include $1.2 trillion in discretionary spending cuts over 10 years, with [an additional] $1.5 trillion in savings in non-discretionary spending. It includes spending cuts that were agreed upon between the President and House Republicans before those talks broke down. Reid’s plan would also establish a new congressional commission to identify options for future deficit reduction, and it includes no increase in revenue. The primary difference is that this plan provides a one-time debt limit increase large enough to see the government through 2012. And some Republicans, e.g. Senate Minority Leader Mitch McConnell, have attacked the identified non-discretionary savings as “gimmicks.” President Obama is urging Congress to support the Reid plan. Most Democrats will likely hold their nose and vote for it, but a few defections are likely. The President has urged a quick vote, since time must be reserved for a fallback plan (Senator McConnell’s or another) if the two main party proposals fail.

Pat Kobor, Sr. Science Policy Analyst
Science Government Relations Office
American Psychological Association

Pardon that whiplash, but the speaker has left the building.

On Friday morning, a bipartisan deficit deal seemed possible. On Friday afternoon, July 22, Speaker of the House John Boehner (R-OH) held a news conference to confirm that deficit reduction talks between the House Republicans and the President had broken down. The Speaker claimed the President had upped the amount of revenue in a proposed compromise. The President said he’d been “left at the altar again.” So – who’s on first?

As of Monday morning July 25, The Speaker says he will release a two-step plan to reduce the deficit: it would include two packages of spending cuts and two debt limit increases (initially about $1.2 trillion in cuts, with an additional $1.6 trillion coming later). The Speaker also proposes a new working group to discuss longer term issues such as entitlement reform. Will the President go along? After being left at the altar? Will Boehner support the McConnell ‘Plan B’ (see July 13 entry below) that may originate in the Senate? He says the House Republicans will likely not support that plan to allow the President to raise the debt limit. Senate Democrats say they will not support a short-term debt limit increase that is too small to last through 2012. It’s hard to see where the progress is—seems that the only things on the table are items some other party has already said no to.

In his Friday news conference, Speaker Boehner said he would offer the new plan over the weekend of July 23-24 in order to prevent stock markets in Asia from reacting badly to the lack of progress in the negotiations. Those markets are open now, and are likely not feeling bullish on America. Your blogger predicts that when the markets do start to tank, which is bound to happen before August 2, we will start to see real progress in negotiations.

You have likely noticed that despite all this negotiation excitement, the Fiscal Year 2012 appropriations bills have been moving steadily through the House. Committee consideration of the Labor-Health and Human Services-Education bill has been delayed, though (it had been scheduled to begin on Tuesday July 26). The bills that have been passed will have to be reenacted or amended to reflect lower spending limits, if (as we can expect) lower spending limits are agreed to and adopted in legislation as a result of the debt limit/deficit reduction discussions. At some point these talks are bound to yield some sort of agreement, for the primary reason that the debt limit must be raised. So, this brings us back where we started. Again.

Pat Kobor, Sr. Science Policy Analyst
Science Government Relations Office
American Psychological Association

Updates from the deficit negotiation frying pan. Think cool thoughts!

President Obama appears to be cutting to the chase: he is negotiating only with House Republicans at this point, chiefly with Speaker of the House John Boehner. The latest plan floating around ("Grand Bargain 2.0") would raise the debt ceiling by August 2 and include $3 trillion in spending cuts over the next ten years. This proposal would kick at least one can down the road.  It alludes to a future federal tax code overhaul, with no details included, so would postpone any revenue increases until after the 2012 election. The President is clearly serious about striking a deal, because he is giving the Republicans pretty much everything they want. The Washington Post reported today that Senate Democrats are very unhappy with this proposal.

Optimism that a draft proposal from the Senate’s reconstituted "Gang of Six" might be a vehicle for the debt ceiling deal has been dashed.  Senate Budget Chairman Kent Conrad (D-ND) said there is not enough time for the Congressional Budget Office to score the plan and move it through the House and Senate.

The Senate earlier today rejected "Cut, Cap and Balance," (PDF, 176KB) on a party line, 51-46 procedural vote to pull the bill from the Senate floor.

As much as we at your Federal Budget Blog hope for a deal that maintains U.S. credit and bond ratings, and preserves the merest chance that the two parties will be able to work together cooperatively, we are not so optimistic that we are going to like any of these deals. Where there are deep spending cuts, scientific research is unlikely to be spared.  So, that's all we have to say about that, for now.

Pat Kobor, Sr. Science Policy Analyst
Science Government Relations Office
American Psychological Association

"Cut, cap and balance" will come to the House floor this week. And no, that's not a reality show for athletic hairdressers!

During the week of July 18, debt limit and deficit reduction talks between the White House and Congress will resume, and at least one major economic bill will come to the House floor.  The President has offered a menu of options to Republicans in hopes of making a deal before August 2, when the Treasury Secretary says the U.S. will begin to default on some obligations.   The President is still pushing for a big deficit reduction deal of up to $4 trillion, that would include spending cuts, cuts to entitlement programs and tax increases, but has also offered two other potential deals:  a $2 trillion deal that would require smaller compromises from the two sides; and a much smaller short-term deal including enough spending cuts to offset a modest increase in the debt limit.  The smaller deal is offered in the context of Senator Mitch McConnell's "Plan B" proposal (see July 13 entry below), which would require the President to offer binding spending cuts in return for raising the debt limit, but does not specify which programs would be cut. "Plan B" is looking more likely, with new talks on a larger deficit reduction deal to follow. There isn't a text yet that we can link to, and the written proposal will probably only appear when it’s introduced as legislation.

The House Republican leadership has announced that it will bring to the floor a "cut, cap, and balance" bill (see blog entry below from June 30).  The proposal would cut total spending by $111 billion in FY 2012 by (1) reducing non-security discretionary spending by $76 billion (that's where cuts to scientific research would fall); (2) reducing "non-veterans, non-Medicare, non-Social Security" mandatory spending by $35 billion; and (3) keeping defense spending at the president’s requested level. The cap on federal spending would be on a sliding scale, starting at 22.5 percent of GDP in FY 2012 and getting progressively tighter to 19.1 percent in FY 2021. (Federal spending in Fiscal Year 2010 was 24% of GDP so that gives you an idea how draconian these spending limits are.) The balance requires passage of a Balanced Budget Amendment to the Constitution before raising the nation’s debt limit. The proposal does not address revenue. And right on cue, the leadership may also bring to the floor  House Joint Resolution 1, a Balanced Budget Amendment to the Constitution.  Because both of these proposals rely on deep spending cuts to research and services to bring the federal budget into balance, APA will oppose them.  Both measures will likely pass in the House but stall in the Senate.

Pat Kobor, Sr. Science Policy Analyst
Science Government Relations Office
American Psychological Association

Senate Minority Leader Mitch McConnell's "Plan B" to raise the debt limit is astonishing — and may be needed.

The astonishing proposal on July 12 from Senate Minority Leader Mitch McConnell (R-KY) speaks volumes about how far from a deficit reduction agreement the two parties and the Administration are. Senator McConnell proposes that Congress cede the power to increase the debt limit to the President. If this proposal were adopted, the President would ask Congress to raise the debt limit. Congress would either agree or not (presumably not) by passing legislation. If Congress refused the request, the President would veto the legislation and 34 Senators (presumably Democrats) would be required to sustain the veto. The President could then raise the debt limit on his own authority, provided commensurate spending cuts were identified.

Depending on your point of view, this proposal is either incredibly 'adult' or incredibly cynical. In either case, it provides a way for a hopelessly divided Congress to allow the debt limit to be increased without taking responsibility for the decision, and decouples the debt limit controversy from long-term deficit reduction negotiations. If this measure is adopted, Congress can stand aside, criticize the decision to raise the debt limit, and avoid taking the vote that its leadership is now afraid would not muster 50%.

There is a lot of opposition to this proposal (predictably) within the House Republican Caucus. Many in the Caucus remain convinced that they can bring the President and the process to heel and produce a deficit reduction package that would appeal to the most conservative in the Caucus. These tend to be the same Caucus members who think the threats about U.S. default are overblown.

It takes two parties to compromise, of course. The President is adamant that the debt ceiling must be raised, quickly, and supports a comprehensive deal that would include revenue increases as well as spending cuts. But there would be no deal without some kind of revenue provision, and Republicans have been unable to win any sort of compromise in that stance. On the flipside, see the entry below from June 30, the Republican leadership is concerned it can’t muster a majority vote for any deal that includes taxes, regardless of other concessions the Republicans might win.

Democrats and the White House have been more circumspect about the McConnell proposal. Clearly Republicans think the President will pay a political price for raising the debt limit; that's why there is some support for passing the buck. But could he also reap political benefits by being the policymaker who (in his words) eats his peas? Stay tuned. Negotiations for a 'Plan A' deal haven't broken down entirely, but for all the reasons above, the odds of an old-fashioned deal are getting longer.

Saved by Zero?

On July 7, the House Appropriations Subcommittee on Commerce, Justice and Science 'marked up' the Fiscal Year 2012 appropriation for those agencies plus NASA and the National Science Foundation (NSF). The budgets of most agencies were cut, but funding for NSF was held at Fiscal Year 2011 levels ($6.86 billion). Unfortunately, holding the line may be the best deal that NSF, and most research funding agencies, can hope for in this ‘Year of Less is More.’ This year the Subcommittee had six percent less than the Fiscal 2011 total overall to allocate to agencies. The full Appropriations Committee on July 13, only made some slight changes that will be detailed in the next issue of SPIN. The NSF increase still looks like zero, at least for the House version of the legislation.

Pat Kobor, Sr. Science Policy Analyst
Science Government Relations Office
American Psychological Association

APA works in coalitions to encourage Congress and the president not to rely solely on spending cuts to reach deficit reduction targets.

We’ve all been reading about the occasionally optimistic, but usually pessimistic, predictions of whether Congress and the President will be able to design a package of deficit reductions that can pass both Houses of Congress and be signed by the President. Negotiations have taken place in a difficult context: Congress must pass legislation to increase the debt limit prior to August 2, 2011. APA members weighed in along with many others before H.R. 1, the Ryan budget, was brought to the floor.  But recently, in the absence of a concrete proposal, it hasn’t been easy to bring grassroots pressure to bear on the discussions. Conservatives are trying to encourage Republicans to hold the line against any tax increases, including those that would close loopholes that benefit narrow classes of wealthy taxpayers. The previous entry of this budget blog mentions Cut, Cap and Balance, a campaign to demonstrate support for bigger cuts and a Balanced Budget Amendment to the Constitution.

APA and its fellow scientific and health advocacy organizations have also been working hard on this issue in coalitions, to magnify the strength in our numbers and unity of purpose. Below is a letter to the President, with copies to Congressional leaders, from the Coalition for Health Funding, a coalition that supports the agencies of the Public Health Service (NIH, Centers for Disease Control and Prevention, etc.) APA is an active member of this coalition. This letter is an example of the ways APA and other groups are seeking to demonstrate support for a balanced deficit reduction proposal that does not rely solely on spending cuts.

Pat Kobor, Sr. Science Policy Analyst
Science Government Relations Office
American Psychological Association

Letter to the President and Congressional Leaders

Coalition for Health Funding

July 7, 2011

President Barack Obama
The White House
1600 Pennsylvania Avenue, NW
Washington, DC 20500

Dear Mr. President:

As you work to address our nation’s fiscal challenges, the Coalition for Health Funding urges you to take a balanced approach to deficit reduction that does not disproportionately rely on non-security discretionary spending cuts. In the professional judgment of our more than 70 member organizations—together representing 100 million patients, health care providers, public health professionals, and scientists—drastic cuts to non-security discretionary spending will do more harm than good. Such cuts will not only compromise the health and well-being of all Americans, but also America’s position as a global leader in prosperity, discovery, and military capability.

Public health is the science and art of preventing disease, promoting physical and behavioral wellness, supporting personal responsibility, and prolonging life in communities where people live, work, and learn. The federal agencies comprising the public health continuum—National Institutes of Health, Food and Drug Administration, Centers for Disease Control and Prevention, Health Resources and Services Administration, Agency for Healthcare Research and Quality, Substance Abuse and Mental Health Services Administration, and Indian Health Service, among other agencies and programs—support all Americans in making healthy choices and protect and improve our lives and welfare.

Our nation’s strength is inextricably linked to our health. Significant reductions to discretionary health funding would limit our ability to, for example:

• Discover cures for illness and disease. Investing in cures will not only improve lives, but help save money. The costs to Medicare and Medicaid and out-of-pocket expenses of treating Alzheimer’s disease over the next 40 years will increase five-fold, from $172 billion annually to $1.08 trillion. The federal government should not divest in the search for an Alzheimer’s cure when the financial burden of this disease is sky-rocketing.

• Address the health workforce shortage. In less than ten years the United States will not have enough health professionals to care for Americans; experts estimate we’ll need 200,000 more physicians and 1 million more nurses. We need greater investment in the next generation of health professionals to meet America’s growing health needs.

• Reduce rates of chronic disease. The treatment of chronic disease is 75 percent of all that we spend on health care. Within Medicare, spending growth is mostly attributable to diabetes, arthritis, heart disease, high blood pressure, and kidney disease that in most cases could have been prevented with public health investment. Chronic conditions also threaten our national security. Department of Defense data indicate that being overweight or obese is the leading medical reason why applicants fail to qualify for military service.

The Coalition recognizes that discretionary spending cuts will be a part of the deficit reduction solution, but should not be the only part of the solution. For the last decade, non-security discretionary spending has remained flat in nominal dollars, representing less than half of all discretionary spending and just one-fifth of all federal spending. Indeed, cuts to non-security discretionary spending alone will not bring the federal budget into balance.

We urge you to seek a balanced approach to deficit reduction. We support the goal of fiscal responsibility, but not at the expense of the health and welfare of our families, our communities, and our nation.

For more, please contact Emily Holubowich (202-484-1100 or eholubowich@dc-crd.com) or visit the Coalition for Health Funding’s Web site, www.publichealthfunding.org.

Sincerely,

Judy Sherman, President	Emily J. Holubowich, Executive Director

Once the words "no new taxes" are used, it's very hard to take them back.

The Republican opposition to including any tax increases in a long- or short-term deficit reduction package has appeared to harden in recent days. The Biden Group negotiations have stalled, since House Majority Leader Eric Cantor (R-VA) decamped to protest that Democrats were pushing revenue increases in exchange for heavy spending cuts. Given that he was the only representative in the Biden Group from the House Republican Caucus, that was a fatal blow to the Group’s efforts. President Obama met on June 27 with members of the Senate leadership team in an attempt to reinvigorate deficit reduction negotiations. Without some compromise on revenues, the path to an agreement is not clear. Democrats insist on a “balanced approach” with revenues and spending cuts. After meeting with Obama, Senate Minority Leader Mitch McConnell (R-KY) fell into step with Cantor and echoed former President George H.W. Bush: “No new taxes.” 

Throughout this long season of deficit negotiation, there has been a subset of Republican congressional voices opposed to any and all tax increases. That House and Senate Republican leaders are now singing this song is not encouraging. In a news conference on June 29, President Obama said that those lawmakers hold an indefensible position and predicted that they would reevaluate it. The president said he would support cutting spending by more than $1 trillion, including cuts in defense, and looking for ways to control entitlement costs. But he said Republicans must agree to allow some taxes to rise for very wealthy Americans, and to eliminate tax breaks for oil companies and corporate jet owners.

Tax provisions that benefit wealthy special interests were thought to be the food of compromise from a political perspective. After all, tax increases, particularly if targeted at the wealthiest Americans, appear to be among the most popular ways to reduce the budget deficit. The most recent Washington Post/ABC News Poll found that 57 percent of Americans believed the best way to reduce the deficit was through both tax hikes and spending cuts. 

To remind us all just how much reinforcement can be found in the failure to compromise (at least for another month) a coalition of 40 conservative groups has launched the Cut, Cap, Balance Pledge.  At this writing, 12 Senators, 22 House members and 59,000+ citizens have signed the pledge, “to urge Members of Congress to oppose any debt limit increase unless all three of the following conditions have been met: (1) Cut - Substantial cuts in spending that will reduce the deficit next year and thereafter; (2) Cap - Enforceable spending caps that will put federal spending on a path to a balanced budget; and (3) Balance - Congressional passage of a Balanced Budget Amendment to the U.S. Constitution -- but only if it includes both a spending limitation and a super-majority for raising taxes, in addition to balancing revenues and expenses.” Notice this pledge does not assume the need to raise revenues except under extraordinary circumstances, hence the requirement for a 3/5 majority vote.

I know what you’re thinking: given the very different world views and policy preferences of the two parties, is it possible they will play chicken all the way to August 2? Lots of observers say yes — this week’s developments make an earlier agreement much less likely.

Pat Kobor, Sr. Science Policy Analyst
Science Government Relations Office
American Psychological Association

Talks led by Vice President Biden explore several deficit reduction options, including deficit caps and spending caps (no, they aren't the same).

Spring ended early in Washington, and it’s likely to be a long, hot summer full of long, hot speeches — and votes — on the deficit.

As you recall, Vice President Biden was asked by President Obama to form a high-level working group to develop a bipartisan proposal to reduce the deficit.  Members of this group include Senators Jon Kyl (R-AZ), Daniel Inouye (D-HI) and Max Baucus (D-MN), and Reps. Eric Cantor (R-VA,) James Clyburn (D-SC) and Chris Van Hollen (D-MD). After a longer-standing bipartisan group (Senate Gang of Six) lost a member and its mojo, the Biden Group took on an enhanced importance and visibility. Biden said this week that his working group hopes to submit its debt reduction agreement to congressional leaders for their consideration before July 4.  

Deadline Approaching – Biden said the group hopes to deliver a final debt deal soon to help reassure Wall Street investors that Congress will not seriously flirt with a default on U.S. financial obligations. The goal, Biden said, is to give lawmakers time to write implementing legislation before Aug. 2 — the deadline for raising the $14.3 trillion debt limit and avoiding a government default, according to the Treasury Department.

Senate Republicans said last week that they are seeking $2.4 trillion in spending cuts over a 10+ year period to accompany an offsetting $2.4 trillion increase in the debt limit. That is the estimated amount of increased borrowing authority needed to carry the U.S. government through the 2012 election.  If Democrats won’t agree to the proposed cuts, it would likely lead to multiple votes on smaller, incremental increases in the debt limit accompanied by spending cuts, reminiscent of the numerous votes on the Fiscal Year 2011 continuing resolutions.

Caps to Center Stage – This week the Biden group has been discussing debt and deficit caps, which would set limits on the deficit or debt and enforce the limits through spending cuts, revenue increases or a combination of the two. The caps help give teeth to the deficit plans, so they are very important features.  Note that there are different types of caps under discussion.

Republican leaders have not been generally supportive of budgetary caps as a tool of deficit reduction, including a debt cap proposed by President Obama earlier this year. The president’s cap would require spending cuts and elimination of tax breaks if the debt does not begin to fall as a share of the economy later this decade.

However, Republican leaders have been more open to spending caps – a specific kind of budgetary cap that relies only on spending cuts, and that would limit government spending to a share of the economy and enforce the limit through automatic spending cuts if necessary. The cap in the Senate Judiciary Committee’s Balanced Budget Amendment is an example (see the end of this story).

APA and other science, health and advocacy groups have raised concerns about deficit reduction plans that rely solely on spending cuts. (See the May 18th blog entry below, for a discussion about that.)

The sticking point over revenues remains the highest barrier to bipartisan agreement on deficit reduction.  A large portion of the Republican caucus in the House refuses to consider any revenue increases, while most Democrats maintain revenues must be part of any agreement.  However, during consideration of an Economic Development and Revitalization Act in the Senate this week, 34 Republicans voted to end the ethanol tax credit which costs the Treasury about $6 billion per year.  Democrats saw the vote as evidence that Republicans are willing to consider ending some special interest tax breaks, and thus increase government revenue, for deficit reduction purposes. (While the ethanol amendment passed 73-27, the bill to which it is attached is unlikely to pass the full Senate… so no actual savings were achieved with the vote.)

Another strategy:  Balanced Budget Amendment – This week the House Judiciary Committee passed H.J. Res. 1 by a party-line vote of 20-12.  As amended, it caps spending at 18 percent of U.S. Gross Domestic Product, requires a 2/3 vote to raise revenues, and a 3/5 vote to raise the debt ceiling. The committee expects to report out the bill next week. The House is in recess the following week, so it appears the earliest the amendment could come to the House floor would be the first two weeks of July.  While this amendment will likely be approved by the House of Representatives this summer, it is unlikely to pass in the Senate and become law.

So where are we now? – The Congressional Budget Office reported last week that the deficit is now $929 billion, about $6 billion less than this same time last year. Revenues are up 10 percent for the year, with individual income taxes registering a 29 percent increase so far, which have contributed to the decline.

And has anything good happened this week? – Yes! Forty-one members of the U.S. Senate sent a letter to the Chairs and Ranking members of the Senate Appropriations Committee and Labor-Health and Human Services and Education Subcommittee, asking that the upcoming bill maintain a strong commitment to the National Institutes of Health. The letter, originated by Senator Bob Casey (D-PA), included 41 signatures, including 7 Republicans.  The signers, in alphabetical order, were: Senators Akaka, Begich, Bingaman, Blumenthal, Boxer, Scott Brown, Burr, Cantwell, Cardin, Casey, Collins, Coons, Crapo, Durbin, Feinstein, Franken, Gillibrand, Hagan, Hoeven, Tim Johnson, Kerry, Klobuchar, Landrieu, Lautenberg, Leahy, Levin, Menendez, Merkley, Mikulski, Reed, Rockefeller, Schumer, Shaheen, Snowe, Stabenow, Tester, Mark Udall, Tom Udall, Whitehouse, Wicker and Wyden.

Pat Kobor, Sr. Science Policy Analyst
Science Government Relations Office
American Psychological Association

The Senate debates four budget proposals, but passes none.

Even though efforts are continuing outside the committee process to develop long- and short-term deficit-dropping proposals, Congressional committees are still working on the primary vehicles that define fiscal policy: the budget and appropriations bills.

On May 25, the Senate considered and rejected four different budget proposals, including the House-passed budget resolution (H. Con. Res. 34, called the “Ryan Budget” after House Budget Committee Chairman Paul Ryan) that passed in the House in April. None of the budget plans garnered even 50 percent of the vote.  While it was widely predicted that each budget proposal would fail, and thus the votes must be considered ‘symbolic,’ still, we in the Science Government Relations Office couldn’t look away:  we had to watch and wonder about it.

• H.Con.Res.34 was rejected 40 – 57, with five Republicans voting “nay”—Senators Brown (MA), Collins (ME), Murkowski (AK), Paul (KY), and Snowe (ME).  No Democrats voted in favor of the measure. 

• President Obama’s budget was rejected 0-97:  again, no Democrats voted for it. 

• The Senate rejected budget proposals by Senators Rand Paul (R-KY) and Patrick Toomey (R-PA). Senator Paul’s proposal (S.Con.Res.20) would bring the budget into balance in five years by sharply reducing the defense budget and eliminating four Cabinet Departments: Commerce, Education, Energy, and Housing and Urban Development.  It was defeated 7 – 90.  Sen. Toomey’s proposal (S.Con.Res.21), which would bring the budget into balance in nine years by capping spending at 18.4 percent of GDP, attracted more support (42-55, with Senators Paul and Murkowski voting “yea”).

While there has been work on a Senate version of the budget, the Senate Budget Committee Chairman, Kent Conrad (D-ND), has opted not to offer a resolution before knowing the results of a working group negotiating a deficit reduction package tied to an increase in the federal debt limit.

“The discussions that can lead to a result between now and August are the talks being led by Vice President Biden,” Sen. Conrad told The Washington Post. “That’s a process that could lead to a result — a measurable result in the short term.”

Pat Kobor, Sr. Science Policy Analyst
Science Government Relations Office
American Psychological Association

302(b) allocations are explained, and Sen. Coburn decamps from the Gang of Six deficit talks.

We in the Science Government Relations Office love to read summary and wrap-up articles like “Confused About ‘Survivor?’ We Watch So You Don’t Have To.” In that spirit, we are happy to shoulder the burden of helping busy scientists make sense of all the deficit cutting players, plans and threats. The important thing to remember, as if you could forget, is: federal spending on science matters. Supporting scientific research is a key function of the federal government, not a function that can fall primarily to states, localities, or the private sector. Decreases in funding translate into less science or fewer scientists or both. If you agree with that statement, then how the federal government works out ‘discretionary spending’ (that is, non-entitlement spending) is a matter of keen interest. Lots of tectonic plates are shifting this year.

There are several pieces of news about the various threads in play this week. First, the framework for the Fiscal Year 2012 appropriations has been adopted. The House Appropriations Subcommittees have each been allocated the amount they will have to work with for the bills now being drafted. These allocations are called “302(b)s.” The 302(b) allocations are based on a discretionary spending cap of $1.019 trillion, a figure that is consistent with the parameters established by the House budget resolution. That amount will force significant reductions in funding below the FY 2011 levels for non-security programs. The Labor-HHS allocation (which must stretch to cover the National Institutes of Health, Centers for Disease Control and Prevention, U.S. Department of Health and Human Services and Department of Education programs, and many others) is $139 billion--$18 billion (13 percent) less than FY 2011 and $41.5 billion (30 percent) less than the President’s request. As expected, the discretionary cap is consistent with Chairman Ryan’s budget: $1.019 trillion.

“Gang of Six” Now Five

There is a long tradition in Congress of informal working groups that try to tackle problems in a bipartisan manner outside the formal committee structure. The “Gang of Six” (three Democrats, three Republicans) in the Senate has been working on a long-term deficit reduction strategy for several months. Many seasoned observers gave good odds that this group would release a plan that had a real chance of gaining majority support. That’s been thrown into question by yesterday’s exit from the Gang of Sen. Tom Coburn (R-OK) a physician with strong conservative credentials, over the issue of entitlement spending cuts.

Members of both parties want to put deficit reduction measures in place before they vote on raising the debt ceiling: Congress is facing an early August deadline to raise the $14.3 trillion cap on federal borrowing. Many Republicans say mandatory (entitlement) programs — including Medicare, Social Security and Medicaid — must be cut in order to balance the budget. Democrats want Republican lawmakers to agree to some tax increases to help reduce the deficit. The Gang’s deal in the works would have forged a compromise: Republicans would have to accept some tax increases, and Democrats would have to accept entitlement changes.

Of course the Gang of Six wasn’t the only game in town – will negotiations being led by Vice President Biden be more successful? Check back with us in the next week for an update on the proposals in the Biden group and more information about the Fiscal Year 2012 budget and appropriations process.

Pat Kobor, Sr. Science Policy Analyst
Science Government Relations Office
American Psychological Association

The House of Representatives passes House Concurrent Resolution 34, the Ryan Budget.

Both the House and Senate are in spring recess this week and next, but before heading out of town the House passed House Concurrent Resolution 34, the Fiscal Year 2012 proposal from House Budget Committee Chairman Paul Ryan (R-WI). The resolution passed 235-193, with four Republicans voting against the bill (Walter Jones, NC; David McKinley, WV; Ron Paul, TX; and Dennis Rehberg, MT) and five Members not voting (John Boehner, R-OH; Dave Reichert, R-WA; Gabrielle Giffords, D-AZ; Gregory Meeks, D-NY; and John Olver, D-MA).

Senate Budget Committee Chairman Kent Conrad (D-ND) weighed in on the House bill, calling Ryan’s plan “most troubling because it lacks balance. A balanced long-term deficit reduction plan would include discretionary spending cuts, including defense; entitlement changes; and tax reform that simplifies the tax code, lowers rates, and raises revenue. That is what the President’s bipartisan Fiscal Commission proposed. Representative Ryan’s plan, on the other hand, fails to include savings in defense and actually reduces revenue. The result is that his plan relies on deep cuts in the safety net for seniors, children, and other vulnerable populations, as well as deep cuts in critical areas like education, which are needed to promote long-term economic growth.”

When Congress returns, watch for what is sure to be a vastly different budget bill to emerge in the Senate, and prepare for wrangling to ensue between the two chambers. House and Senate appropriations committees have begun work on the actual Fiscal Year 2012 funding bills, holding hearings with staff from all of the federal agencies (including those with scientific research portfolios), and following recess they will continue to draft appropriations legislation despite the lack of an agreed-upon budget resolution and a looming fight over the federal debt ceiling.

Heather O’Beirne Kelly, Sr. Legislative & Federal Affairs Officer
Science Government Relations Office
American Psychological Association

Fiscal year 2011 funding is finally settled, and the House Budget Committee chair reveals his budget proposal.

We can breathe a small sigh of relief: federal agencies now know how much money they have to spend between now and October 1. On April 14 the House passed H.R. 1473 that will keep the government running through late September, while cutting $38.5 billion in federal spending (details in the Tuesday, April 12 posting below). The deal passed the House on a bipartisan 260-to-167 vote, with 179 Republicans and 81 Democrats voting in favor; 59 Republicans and 108 Democrats opposed the measure. Shortly afterward the Senate approved the bill with a bipartisan 81-to-19 vote. Before the final vote, the Senate voted to reject two ‘riders’ that would have defunded the national health-care reform law and Planned Parenthood. As part of the budget deal, the Senate had agreed to hold those two votes. President Obama has signed the measure.

The Congressional Budget Office review of H.R. 1473 showed the bill would actually cut much less than Congress and the President had declared, perhaps as little as $352 million. The Washington Post reported on April 14 that many of the cuts were to ‘budget authority,’ meaning agencies had authorization to spend but may or may not have been actually planning to spend the money. Still, ‘permission to spend’ is ‘permission to spend,’ and cuts in budget authority aren’t considered accounting gimmicks.

For any readers who were betting on a government shutdown, your next opportunity to score will be in the early summer when the President and Congress must negotiate an increase in the debt ceiling. Congress’s failure to raise the debt ceiling would probably result in more of a meltdown than a shutdown, but since it has never happened, we can only speculate about the chaos that would result.

Obama Shakes It Up

In a speech at George Washington University on April 13, President Obama laid out a long-term plan for deficit reduction that he said pulls many suggestions from the December report of the bipartisan Fiscal Commission. His plan would involve $4 trillion in deficit reduction through spending cuts, tax reform and targeted tax increases, enforced by a failsafe ‘trigger.’ This plan isn’t in the form of a legislative proposal, yet, and does not take the place of the President’s proposed FY 2012 budget. It should be considered a good summary of his thinking about tax and fiscal policy and thus a marker for the Democrat-led Senate, and his opening gambit in any legislation to come on entitlement reform or tax reform.

The President lauded scientific research several times in his speech, although he gave no specifics about either potential cuts or new investments: “We have led the world in scientific research and technological breakthroughs that have transformed millions of lives. That’s who we are. This is the America that I know. We don’t have to choose between a future of spiraling debt and one where we forfeit our investment in our people and our country… We will make the tough cuts necessary to achieve these savings, including in programs that I care deeply about, but I will not sacrifice the core investments that we need to grow and create jobs. We will invest in medical research.… We will invest in education… We will do what we need to do to compete, and we will win the future.”

The House Budget Committee’s “Path to Prosperity”

H. Con. Res. 34, the Fiscal Year 2012 proposal from the House Budget Committee’s Chairman Rep. Paul Ryan (R-WI), will come to the floor of the House today. It is expected to pass. The rule makes in order three substitute budgets, all offered by Democrats, none of which is likely to pass.

Called “The Path to Prosperity,” Chairman Ryan’s budget calls for cutting about $6 trillion in spending over ten years, restructuring Medicare and Medicaid, and simplifying the current tax system.

The budget would return non-security discretionary spending to 2008 levels and freeze it there for five years. For the National Institutes of Health, that would mean a maximum funding level of $29.23 billion, approximately a 3.7% cut from the newly enacted FY 11 level ($30.639 billion). What we at APA see as the bigger problem for research funding agencies is not a cut for one year but the proposed five-year freeze. The measure of biomedical inflation, or BRDPI (PDF, 605KB), was 2.8% in 2010, and 2.9% is anticipated for 2011. NIH could expect a significant loss of purchasing power with a five-year freeze, as could all research funding agencies whose costs can be expected to rise.

The National Science Foundation’s Fiscal Year 2008 appropriation was $6.065 billion. For FY 11, NSF is funded at $6.8 billion, a 1.0 percent ($67 million) cut from FY 10.

What will happen to H. Con. Res. 34 when it reaches the Senate? The Senate is not expected to approve the budget as written. The Senate will vote on its version of the budget and then negotiations between the House and Senate will begin. Although congressional rules presuppose that a budget will be approved, in some years the negotiators are too far apart and no budget blueprint is available. You may remember from high school civics that the President does not sign the budget: it’s a blueprint to guide Congress in appropriating funds and managing revenue. The budget sets limits on budget authority for the authorizing committees; guides the division of discretionary dollars among the appropriations subcommittees; and may be the vehicle for guiding language but that language would not carry the force of law.

Congress will be in session the week of April 18, 2011, so it’s a good time to catch up on your budget reading!

Pat Kobor, Sr. Science Policy Analyst
Science Government Relations Office
American Psychological Association

How research funding fares in the final agreement on fiscal year 2011 funding.

Today we saw the first text of the deal struck between Congress and the President to complete funding of the current fiscal year (FY 2011). This funding package was introduced today as H.R. 1473. Remember it isn’t law until it passes in identical form in the House and Senate, and is signed by the President (before April 15 when the last temporary bill runs out). This could get confusing, since the FY 12 budget is also coming before the House this week, and the White House plans to release a document detailing still more proposed cuts.

Overall, the FY 11 deal includes $37.7 billion in cuts from previous spending levels. Of that amount, $1.1 billion, or 0.2 percent, would come from an across-the-board cut spread evenly across all discretionary programs with the exception of those in the Defense Department. Mandatory spending programs will take a hit of $17.8 billion, including more than $2 billion in transportation project funding.

How does research funding fare? Compared to cuts other programs are taking, research is holding its own.

The bill provides $30.7 billion for the National Institutes of Health (NIH), a $260 million or 0.8 percent reduction below the FY10 level, $50 million of which would come from the Buildings and Facilities Account. (This is $1.4 billion more for NIH than the $29.4 billion level in H.R. 1, the original House-passed bill that was rejected by the Senate). This does not include the 0.2 percent across-the-board cut for all non-defense discretionary spending, so it appears that the total reduction for NIH will be about one percent.

Not counting the across-the-board cut, research programs at the National Science Foundation (NSF) would be cut by $43 million from Fiscal Year 2010 levels, and are $444 million less than the President’s FY 2011 request. NSF’s Education and Human Resources Directorate would receive $10 million less than it received in Fiscal Year 2010 and $29 million less than the President requested in his 2011 budget.

The long-term CR, H.R. 1473 (PDF, 798KB), is now available on the House Rules Committee Web site. A summary (PDF, 231KB) is available on the House Appropriations Web site. And a chart (PDF, 347KB) highlighting the cuts made is available on the House Appropriations Committee site as well.

House Appropriations Committee Chairman Harold Rogers (R-KY) said in a release highlighting the bill’s details: “Never before has any Congress made dramatic cuts such as those that are in this final legislation. The near $40 billion reduction in non-defense spending is nearly five times larger than any other cut in history, and is the result of this new Republican majority’s commitment to bring about real change in the way Washington spends the people’s money,” Chairman Rogers said.

APA Science Government Relations staff will update this blog as more information is made available, and as the legislation reaches the floors of the House and Senate for a vote.

Pat Kobor, Sr. Science Policy Analyst
Science Government Relations Office
American Psychological Association

In which your blogger and everyone else in Washington searches for information about what the fiscal year 2011 agreement contains.

Details are starting to emerge about the deal struck between Congress and the President to complete funding of the current fiscal year (FY 2011). These details must be considered tentative, since they must first be set down in legislation, which must in turn pass the House and Senate, and be signed by the President before April 15. This could get confusing, since the FY 12 budget is also coming before the House this week, and the White House plans to release a document detailing still more proposed cuts.

Overall, the FY 11 deal includes $37.7 billion in cuts from previous spending levels. Of that amount, $1.1 billion would come from an across-the-board cut spread evenly across all discretionary programs with the exception of those in the Defense Department. It isn’t yet clear what this will cost research funding agencies.

Mandatory spending programs will take a hit of $17.8 billion, including more than $2 billion in transportation project funding.

From the White House blog of April 9:

“This [FY 11] deal cuts spending by $78.5 billion from the President’s FY 2011 Budget request -- the largest annual spending cut in our history. These are real cuts that will save taxpayers money and have a real impact. Many will be painful, and are to programs that we support, but the fiscal situation is such that we have to act.

The two sides agreed to cut $13 billion from funding for programs at the Departments of Labor, Education, and Health and Human Services as well as over $1 billion in a cut across non-defense agencies, forcing everyone to tighten their belt.“

The White House also reports that this compromise allows robust investments in NSF, even though its planned budget doubling will not occur, and that money to implement the new Health Care Reform law remains intact.

More updates coming soon!

Pat Kobor, Sr. Science Policy Analyst
Science Government Relations Office
American Psychological Association