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Theory and Practice: How Appropriations Will Actually Work for FY 20

June 24, 2019

Q: What is “regular order” appropriations and why is it rarely achieved?

A: Under the “good government” version of appropriations — enshrined in law — the House and Senate agree on a budget that contains a ceiling for federal discretionary spending (the 302(a) number) and allocates those monies to conform with spending caps, if any. The appropriations committees then takes the 302(a) number and divides it among the 12 subcommittees (the 302(b) numbers). Appropriators then devote themselves to marking up all of the spending bills, gaining conference agreements on numbers, and sending the bills to the President for signature by September 30 or earlier. This is a straightforward process, dubbed “regular order appropriations.” Congress has always struggled to achieve “regular order” and it last occurred a decade ago. More background is here.

Q. Why is a budget deal needed this year and why is an agreement so hard to reach?

A: The purpose of the Budget Control Act of 2011 (BCA) was to slow the growth in federal spending over the subsequent 10-year period. To achieve this, the BCA sets aggregate spending caps on defense and non-defense funding for each year. From the beginning, the spending levels were too low and Congress found it difficult to comply with the very discipline that it had tried to impose on itself. After the painful sequestration (across-the-board cuts) that occurred in FY 13, it became clear that a budget deal would be needed every one or two years to let funding come up to a more realistic level.

The last deal covered FY 18 and FY 19, but left in place the BCA caps for FY 20. Those caps would create a ceiling for defense spending at a level $70+ billion less than FY 19 and a ceiling for non-defense spending at a level $50+ billion less than FY 19. Virtually all Members of Congress support lifting the caps for FY 20 (and possibly FY 21), although there are significant disagreements about what the new levels should be. The President is also part of the negotiations because lifting the caps will require legislation the President could sign or veto.

Q: What else is complicating negotiations this year?

A: Notably, the debt ceiling for the federal government will be breached some time this Fall, risking a possible default on US government securities. So, a government shutdown could occur because there are no spending bills or CRs in place, but also if the country can no longer pay its bills because of a default. Speaker Pelosi and others are determined that a budget deal includes an increase in the debt ceiling. Also, the 2020 election cycle is already under way, but it is still early. If the budget deal covers only FY 20, it risks a repeat of this fight next summer as Congress considers FY 21 spending and right before the election.

Q: What happened when House and Senate leadership — from both parties — sat down this week to negotiate with Treasury Secretary Mnuchin, acting White House chief of staff Mulvaney, and OMB acting head Vought

A: As the meeting made clear, there are still substantial differences among the three parties with regard to spending levels and also defense vs. non-defense spending. Negotiating will be needed and, hopefully, be resolved before the fiscal year expires in 14 weeks.

Editorial note: The Analysis and Commentary section is written by Steven Grossman, Deputy Executive Director of the Alliance for a Stronger FDA.

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