–House Making Steady Progress on Spend Bills; Not So Much For Senate
–House, Senate Differ On FY’13 Discretionary Spending Levels
–Congress Likely To Deal With Most Spending Bills After Nov Election

By John Shaw

WASHINGTON (MNI) – It may be that much of the discussion about the
coming fiscal cliff actually understates the difficulty and complexity
of the coming deliberations on fiscal policy.

This is because most of the references to the fiscal cliff refer to
the convergence of three consequential fiscal policies that are
scheduled to take place near the end of this year: the across-the board
spending cuts for the 2013 fiscal year that are set to begin in January;
the expiration of Bush-era tax cuts at the end of 2012; and the need to
increase the statutory debt ceiling at the end of this year or early
next year.

However, there is a fourth component to the end of the year
confusion that looms on Capitol Hill: the fate of the 12 FY’13 spending
bills that will actually fund the federal government.

The 2013 fiscal year begins on Oct. 1 and it is very likely that
none of the 12 spending bills will be approved in final form by then.
Consequently, stop-gap spending bills will be needed to keep the federal
government funded while work occurs on the bills.

The House has made reasonably good progress on its FY’13 spending
bills so far. It has approved five spending bills:
Commerce-Justice-Science, Energy-Water, Homeland Security, Legislative
Branch and Military Construction.

This week, the House will take up the Transportation-HUD spending
bill and possibly the Agriculture spending bill.

So far, the Senate has not taken up any of its 12 spending bills.

The Senate Appropriations Committee has approved 9 of the 12 bills
but none has been brought to the floor of the Senate.

One of the factors that will complicate final passage of the FY’13
spending bills is that each chamber is working from a different ceiling
for spending.

The Senate has allocated $1.047 trillion for discretionary programs
as allowed for in the 2011 debt ceiling agreement. The House GOP
leadership, employing a different interpretation of the accord, has
allowed $1.028 trillion for discretionary programs.

Last year’s appropriations process was a complicated and bitter
exercise in brinksmanship, with several near-government shutdowns. The
final spending package was not approved until halfway through the fiscal
year.

Adding even more complexity to this year’s spending bill
deliberations is the looming sequestration process. Lawmakers have said
they don’t know how it would affect each of the individual spending
bills.

About $1.2 trillion in across-the-board spending cuts over nine
years are mandated by the sequestration process which was triggered by
the failure of Congress’ Super Committee last fall.

For the 2013 fiscal year, $110 billion in spending cuts are
required by the sequestration process. Of this sum, $55 billion would
come from defense programs and the rest from domestic programs,
primarily from the discretionary portion of the federal budget.

Republicans have passed in the House a plan to replace the $110
billion in across-the-board spending cuts in FY’13 with a package of
more than $300 billion in ten year spending savings.

But the Senate has not yet acted on such a plan. Congressional
Democrats have said the across-the-board spending cuts should be
replaced by a “balanced approach to deficit reduction” with both
spending cuts and revenue increases.

** MNI Washington Bureau: (202) 371-2121 **

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