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Approps Briefing Booklet your appropriations 101 handbook — September 08, 2011 —


WHAT’S INSIDE 04

APPROPRIATIONS 101

12

CASE STUDY

14

CASE STUDY

16

CASE STUDY

THE LAST TIME THE PROCESS WORKED

OMNIBUS/MINIBUS: WHAT A BROKEN PROCESS LOOKS LIKE

BUDGETING WITH BAND-AIDS


04 APPROPRIATIONS 101 WHAT ARE APPROPRIATIONS?

+ Each year, the federal government’s fiscal year runs from October 1 through September 30.

+ The next fiscal year – 2012 – will begin on October 1, 2011. + In general, Congress must pass 12 appropriations bills before each fiscal year begins so the federal government can function. Otherwise, many agencies and programs will not have the money to operate.

+ In general, the bills considered during the appropriations process only cover discretionary spending programs (explained in the next section).

+ In 2010, discretionary spending accounted for about 39 percent of all federal spending1.

+ Generally, appropriation bills only apply to one fiscal year. Sometimes Congress will make it clear it intends certain provisions in appropriations bills to extend beyond the fiscal year at hand. (In other words, it may extend beyond fiscal year 2011’s conclusion on September 30, 2011.)


One key point: the U.S. government splits budgeting and appropriating into two distinct processes. David Beers, S&P’s head of sovereign ratings recently noted that there are very few governments in the world that does what the U.S. does: separating the budget decision from the funding decision. It is unusual.2 WHAT IS THE DIFFERENCE BETWEEN MANDATORY AND DISCRETIONARY SPENDING?

+ As mentioned before, discretionary spending is funded through the annual appropriations process.

+ This is stark contrast to mandatory spending programs (Social Security benefits are an example of mandatory spending) whose funding stream is on autopilot.

+ These mandatory spending programs are “controlled by laws other than appropriation acts3.”

+ Further, “spending levels for mandatory programs are generally controlled by eligibility criteria and size of the eligible population4.” In other words, unless Congress takes up legislation to reform these programs, it has very little control over how much money is spent on them.


06

+ In fiscal year 2010, mandatory spending programs made up 55 percent of all federal spending5.

+ In fact, three mandatory programs, Social Security, Medicare, and Medicaid, accounted for 43 percent of all federal spending in 20106. WHAT IS THE DIFFERENCE BETWEEN AUTHORIZATIONS AND APPROPRIATIONS?

+ An authorization bill allows Congress create and modify federal activities or programs. Also, it gives the federal government authorization to spend money on those programs.

+ An appropriations bill actually does the spending – it appropriates how much money each program will actually get for a given year.

One important note: just because something is authorized does not mean the appropriations committee has to fund it.

+ In recent times, this traditional process for authorizing and appropriating has broken down. While appropriations bills are considered “must pass” (because without them, the government cannot remain operational), authorization bills are not.

+ In general, Congress is not supposed to authorize on appropriations


bills since it is against the rules to do so in the House and Senate. Even so, it is becoming more and more likely to see authorization language in appropriations bills.

+According to Senate scholar Martin Gold, “By the late 1970s, it had become common practice for senators to attempt to legislate on appropriations bills. The authorization process had become bogged down with filibusters… while appropriations bills remained ‘must pass’ vehicles7.” WHAT ARE EARMARKS?

+ Earmarks are specific spending projects inserted in appropriations bills by members of Congress.

+ In years past, appropriations bills often included “earmarks,” projects that often went to certain legislative districts or states and the request of only one, or a handful, of lawmakers.

+ This year there is a prohibition against earmarks . 8

HOW DOES THE APPROPRIATIONS PROCESS WORK? How the process should work:

+ April 15: Target date by which Congress adopts a final budget resolution (House and Senate pass their own version and then reconcile the two)9.

+ “Only twice since 1974 has Congress adopted a budget resolution before the April 15 deadline10.”

+ While the budget resolution does not have the force of law, it sets caps on how much Congress can spend for discretionary spending programs11.


08

+ “Emergency spending” is exempt from this cap.

In other words, if

Congress determines something is a compelling and sudden need, it can classify it as emergency spending, which bypasses the spending cap. Emergency spending has “become the tool of choice for Congress and the presidential administration to avoid caps set by annual budget resolutions, resulting in dramatically increased government spending12.”

+ After a budget sets a cap, this top baseline cap set by the budget resolution is divided among the 12 Appropriations Committees who each have their own cap13.

+ Each Appropriations Committee can then begin considering their committee’s individual appropriations bill. (There are 12 bills total.)

+ The House and Senate then consider each individual bill, pass them, and then reconcile the two versions (one from the House and one from the Senate) in a conference committee. That compromise bill then goes back to each chamber for a vote on final passage.

+ Congress is supposed to consider each individual appropriation bill so the President can sign them into law before the start of the new fiscal year (October 1).


HOW THE PROCESS ACTUALLY WORKS

It doesn’t work.

+ For the last two years, Congress failed to pass a final budget resolution. + Since Congress generally doesn’t meet the budget target date of passing a budget, the process gets off to a slow start since a budget is required to set a top line spending number.

+ The last time all appropriations bills moved as individual bills and passed before the start of the new fiscal year was 199514.

+ In every year since 1995, the process hasn’t worked as intended. When this happens, Congress uses the Continuing Resolution, Omnibus, or Minibus processes to enact spending bills (explained below).

+ Since the October 1 funding deadline to pass all 12 appropriations bills is missed on a regular basis, Congress has several options.

+ One option is to use Continuing Resolutions (CR) as stopgap funding measures. CRs generally fund federal agencies at last year’s funding levels, although this is not always the case. While a Continuing Resolution buys more time, Congress can: ---›› Pass the remaining 12 spending bills individually. ---› Pass a minibus spending bill that lumps several spending bills into one bill. ---› Pass an omnibus spending bill that lumps all the remaining spending bills that haven’t been signed into law in one bill. ---› Use a Continuing Resolution to fund the government for the entire year – generally at last year’s funding levels.


10

WHAT IS HAPPENING THIS YEAR (FISCAL YEAR 2012) 15?

+ For Fiscal Year 2012, the House has passed a budget but the Senate has not. + Because Congress must have caps in place to start the appropriations process, this means Congress had to “deem” a budget resolution passed for the purposes of establishing a budget cap. The recently-passed Budget Control Act fulfilled this for the Senate16 and, additionally, the House deemed a budget to have passed several months ago17.

+ Currently, House appropriators are working from the $1.019 trillion discretionary spending cap. The Senate is working with the discretionary spending cap set at $1.043 trillion.

+ As a comparison, for this spending year, the President requested $1.121 trillion in discretionary spending18.

+ So, Congress was allowed to go forward without a budget. Now, how many appropriations bills has it passed? ---› Up to this point, the full-House has passed the Agriculture, Defense, Energy-Water, Homeland Security, Legislative Branch and the Military Construction-VA bills. Six other bills remain. ---› As of this date, the Senate has only passed the Military ConstructionVA Appropriations bill. Eleven other bills remain. ---› No bills have been signed by the President.


1995 FISCAL YEAR APP

DATE BILL IS SIGNED INTO LAW

NUMBER OF BILLS PASSED

Bill

JU

L

22

THE LAST TIME THE PROCESS WORKED :::::::::::::::::::

1

: GOVERNMENT DEPARTMENT

4454 : LEGISLATIVE BRANCH

JUL 22 4454

4426 : FOREIGN OPERATIONS 4453 : MILITARY CONSTRUCTION 4603 : COMMERCE, JUSTICE, STATE 4506 : ENERGY AND WATER DEVELOPMENT 4624 : VA-HUD 4554 : AGRICULTURE

SEP 28 4624

4650 : DEFENSE 4649 : DISTRICT OF COLUMBIA 4602 : INTERIOR 4606 : LABOR, HEALTH/HUMAN SERVICES, EDUCATION 4556 : TRANSPORTATION 4 53 9 : TREASURY-POSTAL SERVICE

SOURCES: CONGR

::::::::::::::


PROPRIATIONS BILLS

2

30

28

P SE

P

26 SE

1 1 7

1

AUG 23 4426

SE

P

G AU

AU

G

23

26

:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

AUG 26 4453

SEP 26

4603

4506

SEP 30 4554

4650

4649

4602

4606

4556

4 53 9

RESS.GOV II CQ.COM

:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::


2009 FISCAL YEAR AP

OMNIBUS/MINIBUS: WHAT A BROKEN PROCESS LOO

SEP 30 // 2008

9 9

2 38 2 38

PRESIDENT SIGNED

Minibus

CR

::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: 9

2 3 8 Minibus :

HOMELAND SECURITY, DEFENSE, MILITARY CONSTRUCTION-VA

:

DISASTER RELIEF

:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

SOURCE: HTTP://THOMAS.LOC.GO


PPROPRIATIONS BILLS

OKS LIKE ::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

MAR 11 // 2009

Omnibus

::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: :

F CR

CR STOPGAP FUNDING FOR REMAINING BILLS (FUNDING UNTIL MAR 6)

Omnibus : WRAPPED THE REMAINING NINE APPROPRIATIONS INTO ONE BILL

:::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

OV/HOME/APPROP/APP09.HTML


TO PUT IT LIGHTLY, Congress has taken interesting approach to budgeting this year. Rather than allotting

amount for the full fiscal year through appropriation bills, they've fund

the government weeks or months at a time through temporary continu

resolutions (CR). We map out Congress' band-aid budgeting this ye

$ amount cut from baseline

OCT 1-DEC 3

DEC 4-18

DEC 19-21

DEC 22-MAR 4

MAR 5-MAR 18

SOURCE:


$ 3.5 TRILLION in total spending // FY 2010 $ 39.9 BILLION cut in CR

an an

ded

uing

ear.

end of FY 2011

2 BIL

SEP 30 27.9 BIL

7 DAYS

MAR 19-APR 8

CQ.COM

APR 9-15

168 DAYS APR 16-SEP 30


1 Congressional Budget Office: An Analysis of the President’s Budgetary Proposals for Fiscal Year 2012. Table 1-5, Actual 2010. April 2011. http://cbo.gov/ftpdocs/121xx/doc12130/04-15-AnalysisPresidentsBudget.pdf 2 David Beers of S&P. CNN Interview. August 7, 2011. http://edition.cnn.com/2011/BUSINESS/08/06/global.economy/index.html 3 Congressional Research Service. Mandatory Spending Since 1962. June 2011. P.1 http://www.fas.org/sgp/crs/misc/RL33074.pdf 4 Congressional Research Service. Mandatory Spending Since 1962. June 2011. P.1. http://www.fas.org/sgp/crs/misc/RL33074.pdf 5 Congressional Budget Office: An Analysis of the President’s Budgetary Proposals for Fiscal Year 2012. Table 1-5, Actual 2010. April 2011. http://cbo.gov/ftpdocs/121xx/doc12130/04-15-AnalysisPresidentsBudget.pdf 6 Congressional Research Service. Mandatory Spending Since 1962. June 2011. P. Summary. http://www.fas.org/sgp/crs/misc/RL33074.pdf 7 Martin B. Gold. Senate Procedure and Practice. Pp.109. Accessible on Google Books. 8 Politco. Senate Dems Give in on Earmark Ban. February 2, 2011. http://www.politico.com/news/stories/0211/48623.html 9 Congressional Research Service. The Congressional Budget Process: A Brief Overview. March 2011. http://assets.opencrs.com/rpts/RS20095_20110303.pdf 10 Martin B. Gold. Senate Procedure and Practice. Pp. 146. Accessible on Google Books. 11 Congressional Research Service. The Congressional Budget Process: A Brief Overview. March 2011. http://assets.opencrs.com/rpts/RS20095_20110303.pdf 12 Mercatus Center, George Mason University. The Never-ending Emergency. P 2. http://mercatus.org/sites/default/files/publication/Emergency_Spending_de_Rugy_August2011_1.pdf 13 Congressional Research Service. The Congressional Budget Process: A Brief Overview. March 2011. http://assets.opencrs.com/rpts/RS20095_20110303.pdf 14 Congressional Research Service. The Congressional Budget Process: A Brief Overview. March 2011. P. 14 http://assets.opencrs.com/rpts/RS20095_20110303.pdf 15 Unless otherwise noted, information in this section comes from the Congressional Research Service. The Congressional Budget Process: A Brief Overview. March 2011. http://assets.opencrs.com/rpts/RS20095_20110303.pdf 16 Budget Control Act. Pp. 8-9. http://www.gpo.gov/fdsys/pkg/BILLS-112s365enr/pdf/BILLS-112s365enr.pdf 17 The Hill. House GOP Hope’s to ‘Deem’ Passage of Ryan Budget to Move Approp. Bills. May 2011. http://thehill.com/blogs/floor-action/house/164097-house-gop-hopes-to-deem-passage-of-ryan-budget-to-move-apropos-bills 18 Roll Call. Coburn, Van Hollen Wrangle on Budget. April 17, 2011. http://www.rollcall.com/news/coburn-van-hollen-wrangle-budget-205020-1.html?zkMobileView=true


For more information on the facts that affect your pocketbook, visit us at: thepublicnotice.org [published September 08, 2011]


Approps Briefing Booklet