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Appropriations and Policy Update

FY 2011 Appropriations
On December 22nd, President Obama signed the fourth FY 2011 Continuing Resolution (CR).  The new CR will fund the government through March 4th, 2011.  The fourth CR became necessary when both the Omnibus bill that included all 12 appropriation subcommittee bills and a full year CR failed to garner the necessary support in the Senate.  Included in the short term CR are a number of anomalies to provide spending above current rates to allow for normal program operations through March 4, 2011 for certain programs that would otherwise be disrupted.

On January 7th, House Republicans announced their choices to become Appropriation Subcommittee chairmen, as follows;

Agriculture                                Jack Kingston
Commerce-Justice-Science         Frank Wolf
Defense                                    C.W. Bill Young
Energy & Water                         Rodney Frelinghuysen
Financial Services                      Jo Ann Emerson
Homeland Security                     Robert Aderholt
Interior & Environment               Mike Simpson
Labor-HHS                                Denny Rehberg
Legislative Branch                      Ander Crenshaw
Military Construction-VA            John Culberson
State-Foreign Operations             Kay Grainger
Transportation-HUD                   Tom Latham

The Republicans have also made subcommittee assignments for the Republican members as well as staff assignments.  The Democrats are likely to announce their selection of subcommittee ranking members the week of January 17th.

President’s Budget Request
President Obama’s FY 2012 Budget Request will be released in mid-February which is more than a week after its planned released date of February 7th.  The delay in the release is due to the President’s new Budget Director’s nomination being held up for more than six weeks in the Senate.  Jacob Lew was finally confirmed as the new Director of OMB on November 19th.

House Adopts New Spending Rules for 112th Congress
On January 5th, the House by a vote of 240-191 adopted a number of new spending rules for the 112th Congress in an effort to control spending but to also excuse further tax reductions and/or health care reform repeal from the requirement for budget/spending offsets.  The new rules are reflected in H. Res. 5 as follows:

1. Replacing PAYGO with CUTGO.  Previous House rules required new tax cuts or mandatory spending increases to be offset with tax increases and/or mandatory spending cuts. The new rules requires that any new mandatory spending be offset by mandatory spending cuts alone, and exempts tax cuts from needing to be offset under House Rules;
2. Statutory PAYGO Exemptions. The Chairman of the Budget Committee will be given the authority to exclude the costs of several specified policies from estimates used in enforcement of statutory PAYGO;
3. Spending Reduction Accounts. Appropriations bills will now be able to create a 'lockbox' in which discretionary spending cuts can be set aside for deficit reduction, rather than simply freeing up room within budget limits to allow higher spending elsewhere;
4. Long-Term Spending Point of Order. Any legislation which would increase mandatory spending by more than $5 billion in any of the subsequent four decades will be subject to a point of order;
5. Prohibition against Increasing Spending in Reconciliation. Previously, reconciliation instructions were required to reduce the deficit; this provision instead prohibits reconciliation instructions that would result in a net increase in mandatory spending and allows reconciliation to be used for deficit-increasing tax cuts;
6. Elimination of the Gephardt Rule. The Gephardt rule allowed the House to automatically pass a debt ceiling increase upon adoption of a conference report on the budget. Now, in order to increase the debt limit, the House will have to vote for it explicitly;
7. Elimination of Highway Spending Guarantee. The Appropriations Committee will now be allowed to set limits on highway trust fund spending below the levels authorized in the highway bill; and
8. Giving the Budget Chairman Authority to Set Budget Levels. The Chairman of the Budget Committee now has the authority to set budget levels for FY 2011, most significantly the discretionary spending allocation for the Appropriations Committee to govern completion of the FY 2011 appropriations process.

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