Fiscal Year 2013 Appropriations Taking Shape, Sequestration Looms

Normally, Congress uses a budget resolution to set the overall limit on appropriations funding that lawmakers then divvy up among subcommittees and individual programs later in the year. (Nearly all federal education programs are funded entirely through the annual appropriations process, requiring Congress to pass funding for those programs one year at a time.) In that regard, the budget resolution is a key step in the education funding process. But last year’s debt ceiling agreement – the Budget Control Act – took some of the surprise out of fiscal year 2013’s appropriation levels, as the law already set an appropriations limit for the upcoming fiscal year. Of course, that doesn’t mean that uncertainty around the fiscal year 2013 appropriations process is gone. There’s still plenty. 

Consider that the House recently passed a fiscal year 2013 budget resolution (H.Con.Res. 112) that, among other things, sets an appropriations limit of $1.028 trillion for fiscal year 2013­, which is $19 billion lower than the limit set by the Budget Control Act. The House also indicated that it plans to distribute cuts across non-defense programs only. Those moves have set up a fight with the Senate and the president as the appropriations process proceeds.

The president’s fiscal year 2013 budget proposal sticks with the appropriations limit set by the Budget Control Act, $1.047 trillion. And it looks like the limit in the Budget Control Act will also be the Senate’s figure. Democratic Majority Leader Harry Reid (D-NV) says he won’t bring up any fiscal year 2013 budget resolution for a vote (not because it would be filibustered; budget resolutions cannot be filibustered and require only a simple majority to pass). Therefore, Senator Kent Conrad (D-ND), chairman of the budget committee, filed a “deeming resolution” (authorized under the Budget Control Act) last month that sets the Budget Control Act limit in stone.

At the same time, Senator Conrad has released a proposal which reflects the plan outlined by the National Commission on Fiscal Responsibility and Reform (aka the “Simpson-Bowles” Commission). That plan would limit fiscal year 2013 appropriations to $1.041 trillion, about $6 billion less than the Budget Control Act. But Senator Conrad doesn’t plan to hold a committee vote on it, so it’s probably irrelevant – or maybe it’s relevant for that fact alone.

All in all, the appropriations limit in the Budget Control Act – and possibly the House Republicans’ lower limit – is the only proposal on the table that has momentum in these early days of the fiscal year 2013 appropriations process.

But wait. What about the looming sequestration that was triggered when last year’s bipartisan supercommittee failed to come up with a deficit reduction plan?

Those across-the-board cuts, which will hit fiscal year 2013 appropriations in January 2013, are still set to occur under current law. Congress and the president will have to pass a new law if they want to override the sequestration. If they don’t, sequestration will automatically cut all of the spending limits outlined above by $94 billion.

That makes the pending sequestration the biggest uncertainty in the fiscal year 2013 appropriations process. And the stakes are much higher than the current debate over the appropriations limit.