APA Federal Budget Blog: 2012

Some Republicans are shifting their positions—slightly — on revenue.

The lame-duck Congress returned on Nov. 27 from its brief Thanksgiving recess. Producing legislation to avert the ‘fiscal cliff’ is the top priority, although other legislation, in particular the Defense Authorization Act, is also on the agenda. There is no immediate hurry for Congress to complete appropriations work since the government is funded through March 2013, but word is that the appropriations staff are preparing an omnibus bill to finish some or all of the 2013 spending legislation.

The election results seem to have edged Congress a bit farther away from its impasse on revenue, although we should not be too comforted by the signals we have seen this week. It seems increasingly likely that tax increases in some form will be a part of the final package, although there is certainly no consensus on how to increase government revenue. Many Republicans oppose raising tax rates, but may go along with closing loopholes or limiting deductions in return for legislation that cuts spending on entitlements (one example is a proposal to raise the age of eligibility for Medicare). This week several Republicans—at last count, Sens. Lindsey Graham, R-S.C., Bob Corker, R-Tenn., and Saxby Chambliss, R-Ga., and Rep. Peter King, R-N.Y., — have announced they will abandon their pledge never to raise taxes.

President Obama is building a case against raising any income taxes on middle-income taxpayers. The White House released a report (PDF, 1.2MB) on Nov. 26 that outlines the effect of some of the expiring tax provisions on middle income taxpayers. According to the report, middle class families with two children and incomes between $50,000 and $85,000 would pay an average of $2,200 more if the Bush-era tax cuts expire (those cuts include benefits like the marriage penalty fix and increased child care tax credits). The report details potential damage to the U.S. Gross Domestic Product, citing declines in retail spending, if middle income taxpayers are hit with new taxes. The report does not make a case for continuing the current payroll tax holiday, however. It appears likely that Congress and the President will let the payroll tax holiday expire, and that Social Security taxes and unemployment withholding will go up on Jan. 3 for all income levels.

Fiscal cliff negotiations must also address another critical issue, the federal debt limit, which is set by law at $16.4 trillion. The national debt is now approaching $16.3 trillion. Democrats hope Republicans will agree to an increase as part of a deal and a similar show-down to that of summer 2011, will be avoided.

The pending spending cuts are generating less media discussion than expiring tax provisions at this point. One hopes that may be because there is no real support for allowing the sequester cuts to take effect. The Capitol Hill newspaper Politico has reported that Republicans support postponing the sequester to find a different solution. Keep in mind, however, that some level of spending cuts, if not the full amount of the sequester (e.g. 8.2 percent across the board cuts to non-defense programs) will almost certainly be part of a final resolution. The revenue provisions remain in the spotlight for now.

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

The White House and congressional leaders will meet this week.

We at APA will refrain from raising your blood pressure with headlines like “Countdown to Meltdown! Cliff Divers Gathering!” Yes, the early 2013 deadlines for the fiscal cliff (Jan. 1 for the tax expirations, Jan. 3 for the spending cuts) are closing in. But the uptick in numbers of official news conferences and meetings is heartening. It appears that the White House and Congress intend to resolve the deficit reduction issues that brought us to this unfortunate topographic and metaphorical location, not that any of the players expect easy negotiations. President Obama will meet with congressional leaders on Friday, Nov. 16.

This week we have seen many of the main actors staking out positions that we were already familiar with. As expected, there is more talk about the expiring tax provisions than about the threatened across-the-board spending cuts. This is logical if you consider that spending cuts may well be used to reach deficit reduction targets after a revenue agreement is reached. The two parties’ positions on tax policy and entitlement reform are much the same as we heard during the recent election campaign.

In President Obama’s news conference on Wednesday Nov. 14, for example, he reiterated his belief that he has a mandate to increase taxes for taxpayers making above $250,000. But he also said he would be flexible with specific rates in order to reach an agreement.

In a bid for a new term as House Majority Leader (he was reelected this week), Rep. Eric Cantor (R-Va.) sent a letter to fellow House Republicans on Nov. 7 about the fiscal cliff, long-term reforms and issues of working with the White House. He wrote:

“To state the obvious, there is a significant divide between the President’s approach to these issues and ours. But, the American people expect and they deserve that we act to bridge our differences and deliver results.

“The President cannot demand that every issue be resolved his preferred way. After all the President may have been reelected, but so was our majority. Likewise, we cannot expect that every issue will be resolved the way we prefer...

"... We have spent the past four years fighting President Obama’s attempts to raise taxes and we will continue to do so. On January 1st there will be a $400 billion income tax increase that takes effect automatically. This tax increase will hit every single taxpayer, raising tax rates across-the-board, reinstating a punitive death tax, reimposing the marriage penalty, and even cutting the per child tax credit. Simply raising taxes won’t solve our deficit problems. And many of the President’s proposed tax increases will directly hit those we are counting on most to get our economy going: small businesses.

“But as we have discussed over the past two years, more short-term extensions of our current tax structure isn’t what is best for our economy...If the President is serious about getting Americans back to work and avoiding a $400 billion tax hike on January 1st, he will join us in locking in a process for fundamental tax reform in 2013.”

The Coalition for Health Funding, which advocates for adequate budgets for the U.S. Public Health Service agencies, and of which APA is an active member, sent this letter (PDF, 40KB) to congressional leaders yesterday. It reiterates the coalition’s position that non-defense discretionary programs, such as research, education and public health, have already sustained cuts and should be held harmless from additional budget cuts.

We at APA will closely monitor negotiations on this issue, and keep you apprised of any progress or setbacks.

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

And the case was pretty strong to begin with.

Last week the Baltimore Sun published a story detailing the devastating impact of sequestration on Maryland’s research funding. Since federal science agencies are slated for a decrease of $57.5 billion between 2013 and 2017, the article says “business and institutions in the state would receive $2.5 billion less in health-related spending and $2.1 billion less in defense spending.”

Voices have also been raised from the private sector. Last week, executives from the largest U.S. financial institutions called for a bipartisan solution to stop the looming tax increases and spending cuts known as the fiscal cliff, saying the impasse in Washington would likely rock financial markets and damage the American economy. Executives from Goldman Sachs, JPMorgan Chase, Bank of America and other institutions said in a letter to the President and Congress that without a debt deal, interest rates could rise substantially, which could sharply increase borrowing costs.

Meanwhile, APA continues to encourage its members to contact their members of Congress to let them know that constituents really are concerned about the pending spending cuts. You may recall that APA and the Federation of Associations on Behavioral and Brain Sciences recently held a webinar to brief psychologists on making visits to their member of Congress on this topic. The recorded archive of the science advocacy webinar is now available online for those of you who were not able to join us for the live broadcast. It is not too late to schedule a meeting with your representative! 

Want to know how sequestration would hit NIH research in your state? The American Brain Coalition has provided the data for this handy table (PDF, 44KB) that shows state by state the amount of NIH funding for 2010 and 2011 and estimates of the dollars and number of jobs lost by a sequester of 8.2 percent. We encourage you to use this information when you speak to your representative or senator.

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

Leaving us to ponder sequestration, the fiscal cliff and Halloween.

The six-month continuing resolution that assures funding at current levels for most government programs is on President Obama’s desk, and the House and Senate have left the rough-and-tumble of Washington for the rough-and-tumble of their reelection events. 

The American Association for the Advancement of Science just released a good report (PDF, 625KB) that clearly explains sequestration and its impacts on U.S. research and development. Please sit down before viewing the graphics that detail the impacts on science budgets if defense accounts are exempted from the sequester. 

President Obama has announced he will veto any legislation that exempts either defense or nondefense discretionary accounts, and any legislative fix that only "kicks the can down the road," or postpones the fix.

An informal group in the Senate is meeting to find a way to avoid sequestration with a balanced approach to deficit reduction that doesn’t rely solely on cuts to discretionary accounts (like science and tech). The group of senators, christened the Gang of Eight, includes Richard Durbin, D-Ill.; Kent Conrad, D-N.D.; Tom Coburn, R-Okla.; Mike Crapo, R-Idaho; Saxby Chambliss, R-Ga.; Mike Johanns, R-Neb.; Michael Bennet, D-Colo.; and Mark Warner, D-Va. Senators Chris Coons, D-De., and Jeanne Shaheen, D-N.H., have also been in and out of the talks. According to the Congressional Quarterly (CQ), they have introduced their plan to at least 30 other senators interested in a balanced approach. Sequestration is due to take effect on Jan. 2, 2013 unless Congress overrides the provision with a new law. Most of these senators were in the Gang of Six that was trying to find a solution to these issues last summer.

Senator Durbin has floated the idea of a six-month extension on sequestration along with a framework for a more comprehensive solution that would serve as a "down payment" on deficit reduction until they could reach a bigger deal. CQ also reported that the House has not engaged in bipartisan talks and there doesn’t seem to be a plan to before the elections.

The "lame duck" congressional session will begin on Nov. 13, 2012. In that session Congress must not only approve a plan to avoid sequestration, but must decide whether to let the Bush-era tax cuts expire or partially expire, and decide whether to extend the payroll tax holiday. If you’ve heard the term "the fiscal cliff," that’s what it refers to: the cluster of statutory deadlines with major budgetary impacts that collide in early January. If anyone has an idea for a fiscal cliff Halloween costume, send a photo to your blogger, and we will make you famous. It’s bound to be the scariest costume of the season.

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

No amount of planning can mitigate the effect of these cuts.

The White House Office of Management and Budget (OMB) released a report (PDF, 1.2MB) today that outlines where and how cuts will be made if Congress does not act to avoid “sequestration.” A provision in the Budget Control Act, passed last year, required that unless a congressional joint committee proposed a plan, and Congress enacted the plan, for $1.2 trillion in deficit reduction over a ten-year period, the same amount would be sequestered in across-the-board cuts to defense and non-defense discretionary accounts. The first round of cuts — $110 billion — is set to take effect on Jan. 2, 2013. The 400-page report from OMB stated that achieving the deficit reduction targets called for in the Budget Control Act would require an immediate 9.4 percent cut in defense programs and 8.2 percent reduction in domestic initiatives in January.

“The Administration does not support these cuts, but unless Congress acts responsibly, there will be no choice but to implement them,” the report says. “The Administration strongly believes that sequestration is bad policy and that Congress can and should take action to avoid it by passing a comprehensive and balanced deficit reduction package.”

Non-defense science agencies would sustain 8.2 percent cuts and non-exempt defense research would be cut 9.4 percent. For the National Institutes of Health, the amount sequestered would equal over $2.5 billion. For the National Science Foundation, the amount sequestered would be $586 million.

The American Psychological Association and other organizations are encouraging Congress to avoid sequestration by adopting a balanced approach to deficit reduction that does not rely solely on cuts to the small portion of the federal budget that is discretionary, that is, subject to annual appropriations.

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

Meanwhile the OMB will soon report on how the sequester cuts, if they should happen, will be distributed.

A bill to fund the government from October 2012 through March 2013 was introduced this week. This Continuing Resolution (CR) adheres to spending levels in the Budget Control Act, passed last year. Since both houses of Congress had already agreed to those funding levels, there were fewer areas of disagreement to manage — that’s why congressional leaders were able to reach agreement without the drama we have seen surrounding other funding issues. Most funding in the CR is held to 2012 levels, so spending is effectively frozen. Under continuing resolutions, the Office of Management and Budget (OMB) prescribes how agencies apportion their funding for the duration of the legislation. This usually means no new program starts and minimal spending, with agencies even more cautious because of the possibility of sequestration.

The bill will reach a vote in the House of Representatives on Thursday, Sept. 13. The Senate takes it up next, possibly as soon as Sept. 14. The president has agreed to sign it. This CR may be the last bill Congress considers before the election recess.

Meanwhile if you’ve been wondering what federal budgets would look like if the sequester should happen on Jan. 2, you aren’t alone. Congress passed a bill in July, the Sequestration Transparency Act, requiring the administration to report in detail how budgets would be affected if the large cuts cannot be superseded. That report will be issued by the OMB by Sept. 14. There is hope that the sight of these cold hard numbers will inspire Congress to work together on the grand bargain that will avoid the blunt axe of across-the-board cuts.

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

One problem down, but several more remain.

Congress has been in recess for most of August, and will remain out of session until after Labor Day. Before the legislative branch left town, Senate Majority Leader Harry Reid announced that he had negotiated a deal with the House leadership to approve a six-month Continuing Resolution (CR); that is, a bill to keep the government going through March 2013, in the absence of the adoption of fiscal year 2013 spending bills. The agreement was for a “clean” CR at fiscal year 2012 spending levels, with no new policy changes. Good news, right? A smattering of civil discourse and legislative compromise is as welcome as a fresh breeze here in steamy Washington, D.C. It goes without saying that there is some grumbling in the congressional ranks about this agreement but it’s likely to stick. There is a chance that after this legislation is passed and signed in mid-September, Congress will fold and adjourn until after the election.

But wait, you ask: isn’t there some other really important piece of business that this Congress needs to accomplish? Yes there is: enormous automatic spending cuts are set to smite defense and non-defense accounts across the board in January 2013, unless Congress acts to override the Budget Control Act provision and prioritize and direct the cuts, and maybe add some revenue. Without congressional action, $55 billion will be taken off the top of the defense budget, and $54 billion will be taken off the top of almost everything else. Any legislation to stave off those cuts, which are called “sequestration,” will have to wait until the post-election “lame duck” session. The same goes for legislation to extend the expiring Bush-era tax cuts and the temporary payroll tax cut. Congressional Republicans and Democrats do not agree on how or whether to extend various tax cuts, which expire in early January. The prospect of this factional Congress wrestling with such weighty questions after the election seems just as unlikely to result in an amicable agreement as it does before the election.

Many organizations are working hard to make the case against sequestration. A study released this month by the Aerospace Industries Association and Econsult Corporation estimates that budget cuts to Federal Aviation Administration operations as a result of sequestration could cost up to 132,000 aviation jobs and drain $80 billion a year from the nation’s gross domestic product. The American Public Health Association published a good frequently asked questions document (PDF, 143KB) that details some of the costs of large cuts to public health service agencies. To make your voice heard on the importance of federal investments in scientific research, we urge you to participate in a September webinar that APA and the Federation of Associations in Behavioral and Brain Sciences are conducting to prepare our members to to visit members of Congress in their home district offices to advocate against sequestration. (See details in the PSA story, “Calling all scientists: APA and FABBS to organize District Science Lobby Week.”)

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

When adjusted for inflation and population growth, the House Subcommittee’s bill would bring funding back to levels not seen since 2001.

The House Appropriations Subcommittee on Labor-HHS-Education reported its version of the fiscal year 2013 funding bill on July 18, providing a sharp contrast to S. 3295 (PDF, 384KB), reported by the Senate Appropriations Committee on June 14, 2012. A report from Appropriations Committee Member Rosa DeLauro, D-Conn., states that when adjusted for inflation and population growth, the House Subcommittee’s bill would bring funding back to levels not seen since 2001.

The House bill is based on levels adopted in the fiscal year 2013 House budget (PDF, 305KB), which are below the levels the House and Senate agreed to with the passage of last year’s Budget Control Act. The bill cuts funding for labor, health and education programs $6.8 billion (4.3 percent) below last year’s level. As expected, the bill eliminates all funding for Affordable Care Act (ACA) (PDF, 2.4MB) programs, including Patient Centered Outcomes Research, which would mean a$150 million cut to the Patient-Centered Outcomes Research Institute’s projected $320 million FY 2013 budget. It eliminates funding for the Agency for Healthcare Research and Quality (the Senate bill includes $435 million for AHRQ, a $5 million cut from last year’s funding). The House bill cuts the Substance Abuse and Mental Health Services Administration by 9 percent, funding it at $3.15 billion (in contrast to the Senate’s proposal of $3.472 billion) and eliminates funding for Title X family planning programs.

The Centers for Disease Control and Prevention (CDC) would receive a $66 million ostensible increase. However, the elimination of the ACA-authorized Prevention Fund and other transfers that had supplemented CDC programs results in an 11 percent decrease for the agency—$815 million less than the FY 2012 level and $876 million less than the Senate provides. 

While the bill would maintain funding for the National Institutes of Health (NIH) at the current year’s level, the bill includes language that gives the institutes less flexibility to manage their finances in an increasingly tight budgetary climate. The House subcommittee bill provides $30.6 billion for NIH. The majority of institutes and centers are reduced by 0.02 percent below the FY 2012 comparable level. By contrast, the Senate bill provides a $100 million increase (0.3 percent).

More troubling is the House subcommittee bill’s restrictive report language: “… none of the funds from all Institute, Center, and Office of the Director accounts within the 'Department of Health and Human Services, National Institutes of Health' shall be used for any economic research programs, projects, or activities.” Another provision would set up a new certification system requiring that the head of each agency certify to the secretary that programs, projects or activities are of “significantly high scientific value; and (ii) the impact of the program, project, or activity on public health is measurable; and (B) justification for the certification under subparagraph (A), including an explanation of how the success of the program, project, or activity will be measured with respect to its impact on public health.” APA will provide additional information about the impact of this proposed language when NIH makes it available.

The Senate bill that was reported by the Senate Appropriations Committee on June 14, 2012 would provide $158.8 billion, including offsets and cap adjustments, to the Departments of Labor, HHS, and Education and related agencies. HHS funding would see a slight 1.9 percent increase under the bill, providing discretionary programs $71 billion (program level), up from $69.6 billion in fiscal year 2012.

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

It’s just as bad as you assumed.

U.S. Senator Tom Harkin, D-Iowa, who chairs the Senate Appropriations Subcommittee for Labor, Health and Human Services, and Education, released a report on July 25 that provides the most detailed information to date about how federal programs would be affected if large automatic cuts go into effect as now authorized. “Under Threat: Sequestration’s Impact on Nondefense Jobs and Services” (PDF, 3MB) — prepared by the Senate Labor-HHS subcommittee based on data provided by the departments under its jurisdiction — provides data by state on the impact of sequestration.

In January, 2013, unless Congress acts to supersede the current law, the first installment of a nine-year cycle of cuts will go into effect: $55 billion in cuts will come out of defense accounts and $54 billion from Non-defense discretionary accounts (that is, everything subject to appropriations that doesn’t count as defense).

In his introduction to the report, Harkin explained, “States and local communities would lose $2.7 billion in federal funding for just three critical education programs alone — Title I, special education State Grants, and Head Start — that serve a combined 30.7 million children.”

Regarding the impact of cuts on the National Institutes of Health (NIH), the report said, “Because most NIH research grants are awarded competitively, the State-by-State impact of sequestration cannot be predicted precisely. But all 50 States would be expected to suffer from an across-the-board cut. The total cut to NIH would be $2.4 billion, allocated across the NIH Institutes and Centers. The National Cancer Institute alone would be cut by $396 million. But dollars tell only part of the story. [The Office of Management and Budget] has estimated that if sequestration went into effect, NIH would issue about 700 fewer grants to medical researchers in fiscal year 2013 than it will award this year.”

At a “Rally to Restore Balance” outside the Capitol yesterday, at which the report’s conclusions were announced, Senator Harkin urged members of the NDD Coalition (see entry below) to continue the call for a balanced approach to deficit reduction, one that includes revenue provisions as well as entitlement program reforms. “We can’t cut our way to a balanced budget,” he said.

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

Non-defense discretionary: Say that three times, fast.

Okay, it’s a terrible name for a coalition, but descriptive in a jargon-y way. In the federal budget, there are several components: entitlements, discretionary programs and interest on the debt. Within the ‘discretionary’ slice, are defense and all other programs (non-defense) that are subject to annual appropriations. Non-defense discretionary programs include science, education, agriculture, justice and more.

Advocates for various non-defense discretionary programs began meeting together this year to plan ways to educate policymakers about the potential costs of the large automatic cuts (sequester) that are threatened by the Budget Control Act. The sequester was meant to be the stick that would keep Congress working together long enough to agree about ways to cut the budget before the ax would fall automatically in January of 2013. Unless Congress acts to stop or replace the provision, $109 billion will be cut from Fiscal Year 2013 spending on Jan. 2, including $55 billion from defense and $54 billion from domestic programs. Over the next nine years, the automatic cuts would reduce spending by $1.2 trillion.

Cuts to domestic programs would be even larger if the defense programs were exempted from the sequester. The budget passed by the House this past spring (but not by the Senate) would exempt defense programs from the automatic cuts.

The American Psychological Association is one of some 2,800 organizations that signed onto a letter released today by the Non-defense Discretionary Coalition (PDF, 451KB), calling for Congress to address deficit reduction in a balanced way that doesn’t disproportionately affect important programs like scientific research. APA has not called for specific tax or entitlement reforms to reduce the deficit, but is on record rejecting deficit reduction measures that fall exclusively on the discretionary programs in the budget.

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

House and Senate Appropriators are cranking out bills, but most haven’t reached the floor.

Although the House and/or Senate may approve some spending bills this month, experts predict that Congress is unlikely to clear many, or perhaps any, Fiscal Year (FY) 2013 appropriations bills before Election Day. For a bill to be “cleared” it must pass the House and Senate in the same form and be ready for the President’s signature. Before FY 2013 begins on Oct. 1, Congress will need to clear a stopgap funding measure called a continuing resolution (CR).

President Obama has vowed to veto any cleared spending bill that holds to the House-passed level of discretionary spending. The House agreed in its budget to a spending target of $1.028 trillion, or $19 billion below the agreement reached last summer between the House and Senate in the Budget Control Act. So the stage is set for a summer and fall of spending (or spending reduction) drama.

House Republican leaders have said that three spending bills may be considered during July: the Defense, Agriculture and Financial Services appropriations bills, with Defense being the most likely to reach the floor. While six other bills have passed in the House so far, none of the twelve spending bills has yet reached the Senate floor.

APA pays particular attention to the bills funding science agencies:

• The Commerce-Justice-Science bill, which includes the National Science Foundation (NSF), has passed the House and has been approved by the Senate Appropriations Committee. Although neither the House nor the Senate provided the President's request for NSF, $7.373 billion, both the House and the Senate recommended increased funding over the FY 2012 level. The House provided $7.332 billion, close to a $300 million boost over FY 2012. The Senate number was slightly lower at $7.272 billion.
• The Labor-Health and Human Services-Education bill has been approved by the Senate Appropriations Committee but the House Committee has not yet released a draft bill. For FY 2013, the Senate bill would provide $30.7 billion for the National Institutes of Health (NIH), an increase of $100 million over FY 2012 and the President's request. The Senate Committee provided $189.8 million for the Institute for Education Sciences (within the Dept. of Education), the same as in FY 2012, and $12.5 million below the President's request for education research, development, and national dissemination activities.
• The House and Senate Appropriations Committees have approved their respective FY 2013 spending bills for the Department of Homeland Security (DHS). In both bills the Research, Development and Innovation (RD&I) account received substantial increases over FY 2012. The Senate Committee recommended $478 million, the same as the President's request, and the House Committee $405.6 million. The FY 2012 figure was $265.8 million. DHS funds research on Cyber-Security, Radicalization, and Counter-Terrorism, and includes a university-based programs account for Centers of Excellence.

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

Appropriations process proceeding despite questions about sequester.

On June 14, the Senate Appropriations Committee voted to report its Fiscal Year (FY) 2013 spending bill for Labor, Health and Human Services and Education. According to a summary statement released by the committee, the bill would provide $158.8 billion, including offsets and cap adjustments, to the Departments of Labor, HHS, and Education and related agencies. HHS funding would see a slight 1.9 percent increase under the bill, providing discretionary programs $71 billion (program level), up from $69.6 billion in Fiscal Year 2012. NIH is provided $30.723 billion, a $100 million increase.

Funding levels in the Senate bill surpassed the gloomy expectations about next fiscal year’s funding prospects. Remember that there are many acts still to play out in this drama, including floor action and any subsequent funding cuts that may come as a result of the sequester provision in last summer’s Budget Control Act. The House Labor-HHS-Education Appropriations Subcommittee plans to mark up its version of the bill on June 20, 2012, if Chairman Dennis Rehberg (R-MT) can secure enough votes for passage. Last year, the House Labor-HHS-Education Appropriations Subcommittee was unable to report a bill because of lack of agreement within the majority party about funding levels and priorities.

You’re probably wondering – what is happening with the sequester? Worrying, mostly. You may recall that unless Congress acts to stop or replace them, the sequester, or automatic cuts, would trim $109 billion from FY 2013 spending on Jan. 2, including $55 billion from defense and the balance from domestic programs. Over nine years, the automatic cuts would reduce spending by $1.2 trillion. You correctly assume that this subject comes up in virtually every advocacy coalition meeting and phone conversation.

Last week, U.S. Rep. Edward Markey (D-MA) sent a letter to Kathleen Sebelius, the Secretary of Health and Human Services (HHS), asking how the agency plans to distribute a potential 7.8 percent cut (the amount estimated by the Congressional Budget Office, also the lowest current estimate) that will take place if the Budget Control Act’s sequester cannot be avoided. Rep. Markey raises concerns about how research, food and drug safety, and assistance to low-income families will be affected. He cites estimates of cuts to research based on Research!America’s recent analysis: that organization predicts $3.6 billion in cuts to research at HHS, including $2.4 billion in cuts to NIH.

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

Let the 2013 disagreements begin!

On April 24 House appropriators approved Fiscal Year 2013 spending bill allocations that are $27 billion lower than the Senate’s, setting the stage for tough conference negotiations to enact any spending measures this year. House appropriators approved annual 302(b) allocations (that is, the division of available funds among appropriations subcommittees) that followed the $1.028 trillion level set in the House budget resolution.

The House Appropriations panel rejected a Democratic proposal to set spending levels that would instead conform to the $1.047 trillion level called for by the 2011 debt limit law, the Budget Control Act, which is the top line that Senate appropriators approved last week. The House allocated $8 billion more than the Budget Control Act level for defense, exempting defense from a potential sequester of funds, and $19 billion less for domestic discretionary funding, creating a $27 billion difference between the two chambers’ budget assumptions.

The White House Office of Management and Budget sent a letter to appropriators last week assuring Congress that the President will veto any legislation that does not conform to the Budget Control Act numbers.

The House Appropriations Committee approved the Energy-Water spending bill on April 24, the first of the 12 appropriations bills that must be enacted by September 30, 2012, and the Committee is set to approve the Commerce-Justice-Science (CJS) measure as well. (The CJS bill includes the National Science Foundation—more information on that bill soon). The Senate Appropriations Committee is keeping pace, advancing the Energy and Water and Agriculture bills.

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

Full House to vote March 29.

On March 21, the House Budget Committee approved the FY 2013 budget plan drafted by Committee Chair Paul Ryan (R-WI). The Ryan budget proposal (PDF, 1.7MB) (now the House Budget Committee resolution) sets the spending cap for overall discretionary spending at $1.028 trillion, $19 billion below the $1.047 trillion spending cap enacted in the Budget Control Act (BCA). The proposal also replaces the automatic cut required under the Budget Control Act (BCA) with budget reconciliation instructions directing six House committees to identify necessary savings by April 27 (see below for an explanation).

About half of the budget’s $2.5 trillion in 10-year savings would come from health care programs, including health care reform programs. Food stamp assistance would be cut by an estimated $133.5 billion, and an additional $94 billion would come from the Pell Grants program for low-income college students. The plan extends the Bush-era tax cuts — including lower rates for capital gains — but would phase out current tax benefits for the working poor.

The proposal passed in the Committee by 19-18. The 16 Democrats voted no, joined by two Republicans, Reps. Tim Huelskamp (R-KA) and Justin Amash (R-MI) who felt the Committee bill didn’t cut deeply enough.

Meanwhile in the Senate, Budget Committee Chair Kent Conrad (D-ND) and Senate Appropriations Committee Chair Daniel Inouye (D-HI) urged House leaders to abide by the BCA cap. Chairman Conrad filed a “deeming resolution” which formalized the $1.047 trillion spending limit in the Senate. Formally adopting the BCA cap allows the Senate appropriators to determine “302(b)” allocations, or top-line funding levels for spending bills in each of the 12 appropriations subcommittees.

On March 27, House Democrats released an alternative budget proposal (PDF, 404KB) that would set overall spending for Fiscal Year 2013 at the BCA level. In that resolution, Budget Committee Minority Representative Chris Van Hollen (D-MD) proposes to make permanent the Bush-era tax cuts for the middle class but to generate $1 trillion in new revenue by ending tax cuts for millionaires, closing tax loopholes and establishing “the Buffett Rule,” designed to ensure millionaires do not pay lower tax rates than the middle class.

Watch for additional budget alternatives to be offered in the House for a vote, including one from the Republican Study Committee that would enact deeper spending cuts than the Budget Committee resolution. The Budget Committee budget will almost certainly be the only version with enough votes to pass the House. Remember though: even if a proposal is included in the House budget, that doesn’t mean it’s a ‘law.’ The budget is a blueprint that does not carry the force of law itself, but it lays out overall priorities and makes assumptions about how to achieve them. An exception is the Budget Control Act which was passed as a law.

The House Budget Plan for Fiscal Year 2013 uses the mechanism of budget reconciliation to enact the cuts that must be made this year under the BCA. The House resolution instructs authorizing committees to find savings in the programs under their jurisdictions. Each marks up its own bill, which is then combined with other committees’ bills and “reconciled” in a single resolution. This bill’s target is to reduce deficits by $261 billion over the coming decade, and by $18 billion next year.

It goes without saying that 2012 is an election year, and that budgets are political documents. Both parties’ budgets may be characterized as ‘aspirational.’ But their importance for setting the terms of the debate this year between chambers and parties cannot be overestimated.

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

Pros and cons will sound familiar.

The budget deficit never really left center stage, but the spotlight is about to shine on it again. House Budget Committee Chairman Ryan (R-WI) will release his Committee’s budget draft on Tuesday, March 20. The budget is expected to include a spending cap of $1.028 trillion, which is $19 billion below the cap that was agreed to by both houses of Congress last August in the Budget Control Act. As was the case last year, more conservative elements in the House majority will press hard for lower spending and faster deficit reduction than is palatable to the Senate majority.

Last year Ryan used the budget to define Republican priorities, including significant changes to Medicare. That budget was adopted by the House on a party-line vote but failed in the Senate. The Senate can be expected to reject the House Budget this year also, and negotiations between the two chambers will break along similar lines as those last year, e.g., how much to cut spending, whether to increase revenues by eliminating some special tax breaks, and how or whether to reform entitlement programs. Unlike last year, however, this year’s debate begins in the shadow of a large spending cut. The Budget Control Act required that the deficit be reduced an additional $1.2 trillion dollars or automatic cuts (a sequester) would take place in January 2013. Because Congress was unable to agree on how to reach that goal, the sequester looms in the future unless new legislation is passed to avoid it.

Advance word about the Ryan budget is raising concerns in public health and science advocacy organizations. According to the National Journal, Ryan plans to use the budget to exempt defense from the spending cuts required under the sequester. Defense spending was to account for $600 billion of all mandated cuts over 10 years. Ryan doesn't expect nondefense discretionary programs to pick up the slack. Instead, he wants entitlements to absorb the cost of a defense exemption. “House Republicans are continuing their efforts to reprioritize the savings called for under the Budget Control Act, because our troops and military families shouldn’t pay the price for Washington’s failure to take action,” said Ryan. Advocates of non-defense programs worry that exempting defense accounts will make the eventual cuts fall harder on health, science and education programs, and entitlement programs.

Over 900 health, education, workforce, and social service organizations, including APA, co-signed a letter (PDF, 150KB) to House and Senate Appropriations Committees urging them to protect funding for critical domestic programs and services.

Remember that the sequester language was written to provide incentives for both parties to come to the table for an agreement. The theory was, Republicans would be motivated to work with Democrats to find ways to avoid cuts to defense, and Democrats would be motivated to avoid cuts to domestic discretionary spending. Thus the language exempting defense from spending cuts can be expected to draw a lot of fire from Democrats.

The APA Science Government Relations Office will be working hard to help maintain current investments in health, science, and education programs. There are many ways you can keep up with these important issues. Subscribe to APA’s Science Policy Insider News, to the APAScience twitter feed, to this blog, and to APA’s Psychological Science Agenda.

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

Bottom line: NIH even, NSF up, CDC and DoD results mixed.

The Administration’s Fiscal Year (FY) 2013 budget arrived on Capitol Hill on February 13, 2012, adhering to the caps adopted in the 2011 Budget Control Act. Federal department heads held briefings to explain the proposed numbers to legions of interested parties such as your bloggers. So, direct to you from the mouths of Cabinet officers and other important people, here is a quick summary of the 2013 budget:

• National Institutes of Health (NIH) - level-funded at $30.86 billion.
• National Science Foundation (NSF) — up 4.8% to $7.4 billion, which is $340 million above the 2012 enacted level.
• Department of Defense (DoD) — basic research account slightly up, applied research accounts cut.
• Department of Veterans Affairs (VA) — research slightly increased from $581 million in FY 2012 to $583 million in FY 2013.
• Centers for Disease Control and Prevention (CDC) — $6.56 billion, $660 million below last year’s budget authority.
• National Aeronautics and Space Administration (NASA) — $17.7-billion, down 0.5 percent.

While there is widespread relief that the NIH budget was not cut, flat-funding is hardly considered good news. There is some ‘new’ funding in the budget, including $80 million designated for Alzheimer’s research tapped from the Prevention and Public Health Fund (created by the Affordable Care Act). The Office of Behavioral and Social Sciences Research is level-funded at $27 million.

In a tough budget year, NSF’s solid increase reflects the President’s commitment to doubling the three major federal (non-NIH) basic science agencies — NSF, the Department of Energy’s Office of Science, and the National Institute of Standards and Technology. Every scientific field across NSF would see an increase for core disciplinary research in this budget, including the behavioral and social sciences.

Within DoD, the basic research account (known as the 6.1 level) would see a $2 million increase over FY 2012 for a total of $2.1 billion, whereas the applied research accounts (6.2 and 6.3 levels) would see cuts of $260 million and $45 million respectively. The Medical and Prosthetic Research account within the VA would get a very slight (0.3%) increase from $581 million in FY 2012 to $583 million in FY13.

The President’s budget includes about $6.56 billion for CDC, with a total budget authority of only $4.99 billion, a decrease in budget authority by more than $660 million below FY 2012 — this means a 22 percent reduction in the agency’s budget authority from FY 2010. The rest of CDC funds would come from the Prevention and Public Health Fund ($903 million) and transfers from HHS ($667.5 million). The Prevention and Public Health Fund, which has seen recent attacks on the Hill by legislators who call it a “slush fund,” sees a $4 billion cut over the next 10 years in the President’s Budget.

Within the Department of Education, the President’s budget proposed $620 million for the research, development, dissemination and evaluation activities of the Institute of Education Sciences, which would restore funding for research and development to the FY 2010 levels. The National Institute on Disability and Rehabilitation Research would receive $106 million under the president’s plan, including $69.6 million for continuation of grants made in previous years and $26.2 million for new awards in FY 2013.

What’s next? The House and Senate Budget Committees will hold hearings on the President’s budget this week with Office of Management and Budget Acting Director Jeffrey Zients. The House plans to release a budget in March, and bring it to the floor before the end of that month. Typically, appropriators don’t officially release bills until Congress adopts a joint budget resolution, or when a deal is not reached — as will almost certainly be the case this year—until after May 15.

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

CBO releases its baselines, and the president’s budget is on deck.

Two events traditionally mark the beginning of ”Budget Season” in Washington. One is the release of the President’s budget, which will happen this year on February 13. The other sentinel event is the release of the Congressional Budget Office’s Budget and Economic Outlook (PDF, 1.87MB).  Each January, CBO prepares baseline budget projections for the coming decade, providing a baseline against which potential policy changes (and changes already scheduled by law) may be measured.

Some highlights of the CBO report:

• There will be a $1.1 trillion budget deficit in Fiscal Year 2012 if current laws remain unchanged. “This is nearly 2 percentage points below the 2011 deficit, but still higher than any deficit between 1947 and 2008. Over the next few years, projected deficits in CBO’s baseline decline markedly, dropping to under $200 billion and averaging 1.5 percent of GDP over the 2013–2022 period.”
• Much of the projected decline in the deficit occurs because under current law revenues are projected to increase by almost $800 billion, or more than 30 percent, between 2012 and 2014, largely because the Bush tax cuts are scheduled to expire.
• Projected spending averages 21.9 percent of GDP over the next ten years, less than the 23.2 percent CBO estimates for 2012, but high by historical standards.

“Budget Season” also inspires new speculation about how Congress will manage to negotiate 12 appropriations bills during this contentious election year, with the additional fiscal pressure of the sequester required by the Budget Control Act, the automatic spending cuts that will take effect next January.

Those cuts were required when the special joint committee created by August’s debt limit law (PL 112-25), also known as the Super Committee, did not produce $1.2 trillion in savings over a decade. The cuts are expected to reduce appropriations for the fiscal year that begins Oct. 1 by roughly 9 percent across the board unless Congress passes new legislation to reduce the deficit by that amount by other means.

APA and other health and science organizations are discussing advocacy strategies to encourage Congress to avoid making such heavy cuts to research agencies’ budgets. 

Did you catch the references to the importance of science in the State of the Union address? In his Jan. 24 speech, President Obama said, “innovation is what America has always been about… Innovation also demands basic research. Today, the discoveries taking place in our federally financed labs and universities could lead to new treatments that kill cancer cells but leave healthy ones untouched...Don’t gut these investments in our budget. Don’t let other countries win the race for the future.  Support the same kind of research and innovation that led to the computer chip and the Internet; to new American jobs and new American industries.”

The full transcript of the address can be found on the White House website.

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