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The BCA and the FY 16 Budget “Squeeze”

January 16, 2015

Soon, Alliance members (and actually, all Hill watchers) are going to start hearing a lot more about the Budget Control Act of 2011 and budget spending caps. (BCA is summarized here by the Congressional Research Service.)

I might sum it up as:

Yesterday’s deficit reduction agreements are finally catching up to a Congress no more interested in spending compromises than it was in 2011.

Modifications passed in 2013, the so-called Ryan-Murray budget deal, lessened the pain in FY 2014 and FY 2015, but only at the cost of extending the BCA caps to FY 2024 and tightening the year-over-year constraints on FY 16 spending.

The goal in 2011 was to save nearly a trillion dollars over 10 years against baseline spending by imposing caps on defense and non-defense spending. Every successive year allows a little bit of growth over the prior year — a necessary concession given expected increases in mandatory spending that are certain to be far greater than the amount of growth being allowed. The increases, while extraordinarily modest, are — more or less — evenly spaced over the 10-year period.

The exception is FY 2016, when only a $3 billion increase will be allowed, as shown in the following table:

Spending caps FY 15 FY 16
Defense $521 billion $523 billion
Non-Defense $492 billion $493 billion
Total $1.013 trillion $1.016 trillion

 

For comparison purposes, the total for FY 17 will be nearly $24 billion greater than FY 16.

This coming year really is the one with the tightest fit and by a large margin. Also, because of mandatory spending, the $3 billion increase in the spending cap is really a cut for the bulk of federal programs.

Over the coming weeks, we will come back to this topic. In the meantime, if you hear commentators talking about the FY 16 budget squeeze, you will understand why it is not an exaggeration.

Note: This week’s Analysis and Commentary was written by Steven Grossman, the deputy executive director of the Alliance for a Stronger FDA.

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