The House and Senate Committees on the Budget moved forward with their FY13 budget work the week of March 19. The House proposal drew fire from the Senate and the White House.
Senator Kent Conrad (D-ND), Chair of the Senate Committee on the Budget, and Senator Daniel Inouye (D-HI), Chair of the Senate Committee on Appropriations, sent a letter to House Speaker John Boehner (R-OH) and Majority Leader Eric Cantor (R-VA) on March 19, expressing concern about reports that the House was considering establishing an FY13 discretionary spending level that would differ from the level established by the Budget Control Act of 2011 (BCA). “Should the House back out of last summer’s agreement and attempt to lower the FY 2013 discretionary level, the House would delay consideration of the appropriations bills. Furthermore, we believe that ignoring the BCA represents a breach of faith that will make it more difficult to negotiate future agreements,” wrote the Senators.
On March 20, Senator Conrad filed a deeming resolution establishing the Senate’s discretionary spending limits for FY13 through FY22 according to the levels enacted in the BCA. For the Senate, this deeming resolution will replace marking up and passing an FY13 budget resolution. Senate Majority Leader Harry Reid has stated that the Senate does not need to pass an FY13 budget resolution, as the BCA provides a statutory spending limit that is even stronger than a budget resolution. House Republicans have argued in favor of passing an FY13 budget resolution despite having passed the BCA and criticizing the Senate for not doing so. In a statement, Senator Conrad said “those who continue to claim we do not have a budget are either not paying attention or are seeking to deliberately mislead the public.”
The House Committee on the Budget released its FY13 budget plan, “The Path To Prosperity- A Blueprint for American Renewal,” on March 20, and voted the next day to advance the plan to the House.
According to House Republicans, the House plan would cut spending by $5 trillion more over the next ten years compared to the President’s budget. The plan would provide tax cuts to higher income households and decrease spending for both mandatory and discretionary programs that serve lower income households. The House plan includes major changes to the Medicare system along with deep cuts to Medicaid.
The Budget Control Act of 2011 established a $1.047 trillion discretionary spending cap for FY13. The House resolution would set discretionary spending at $1.028 trillion, the same level that House Budget Committee Chair Paul Ryan (R-WI) proposed for FY12.
The House plan includes a proposal to replace sequestration of defense and non-defense discretionary funds required under the BCA with mandatory spending cuts for non-defense discretionary spending only. Non-defense discretionary spending would be cut much more deeply than if the sequester scheduled to take effect in January 2013 were to occur. The House budget resolution could result in 22% cuts to non-defense discretionary spending programs. For affordable housing programs, HUD Secretary Shaun Donovan has stated that this could result in one million households losing their housing.
The House budget plan would simplify the tax system by consolidating tax brackets, reducing the corporate tax rate to 25% and eliminating many tax deductions and exclusions, which could include elimination of the mortgage interest deduction.
On March 21, the House Committee on the Budget approved the resolution with amendments by a vote of 19 to 18. Some Republican members of the Committee did not vote in favor of the resolution.
Immediately following the release of the House budget, the White House issued a statement disapproving the plan. “The House budget once again fails the test of balance, fairness, and shared responsibility,” the statement said. In the statement, the White House criticizes the House proposal that would “shower the wealthiest few Americans with an average tax cut of at least $150,000,” paid for at the expense of “the very things we need to grow our economy and the middle class.”
With the House and Senate following different processes to set spending limits for their appropriations committees, each body will begin crafting their 12 spending bills with different overall spending totals.
The House is expected to consider the budget resolution the week of March 26. The passage of a budget resolution, or filing of a deeming resolution, allow the Committees on Appropriations to establish the allocations for the 12 appropriations subcommittees know as the 302(b) allocations.
The House and Senate Committees on Appropriations are expected to begin devising their 302(b) allocations the week of March 26. After a two-week April recess, the House and Senate Appropriations Subcommittees on Transportation, Housing and Urban Development, and Related Agencies (THUD) are expected to return and prepare to mark up their FY13 THUD spending bills.
The letter from Senators Conrad and Inouye is attached to this article.
View Senator Conrad’s statement on the Senate budget: http://1.usa.gov/GSxHvh
View the White House statement on the House budget proposal: http://1.usa.gov/GSxMPM
View the House budget plan: http://budget.house.gov/UploadedFiles/Pathtoprosperity2013.pdf