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Budget and Appropriations Update

FY 2011 Budget
On February 19, the House passed H.R. 1, a full year Continuing Resolution (CR) for FY 2011 by a vote of 235-189.  The House version cuts $61 billion from the President’s Request for FY 2011.  Even before passage of H.R. 1, the White House issued a veto threat that stated in part: “The Administration does not support deep cuts that will undermine our ability to out-educate, out-build and out-innovate the rest of the world.”

The Senate will take up the CR when congress returns from the Presidents Day recess on February 28, leaving only 5 days before the current spending measure is set to expire.  It is likely that Congress will pass a short term CR to keep the government funded while the House and Senate negotiate a deal on spending levels for the remaining months of Fiscal Year 2011.  Senate Democrats will introduce a bill temporarily funding the government for 30 days in order to have time to negotiate with the House. The Senate short term CR would extend funding at current levels which are $41 billion below the President’s 2011 Budget Request.  House Republicans are open to the idea of a short term CR provided there are spending cuts included but continue to negotiate for pro-rated cuts to leverage their reduction level of $61 billion.

It should be noted that this debate is entirely focused on domestic discretionary spending which totals only 14% of the Federal Budget.  Even if the Republican cuts are adopted, it would only reduce 1/15 of the FY 2011 deficit.  The nation’s fiscal situation can not be stabilized until a comprehensive plan is adopted that includes cuts to all categories of Federal spending and substantial tax reforms.

President’s FY 2012 Budget Request
The Administration released its Budget Request for FY 2012 on February 14.  The request totals $3.7 trillion and would reduce the deficit by $1.1 trillion over the next decade.  Two thirds of that reduction would come from spending cuts through a five year freeze in discretionary spending as well as savings to mandatory programs like Medicare.  Tax increases are responsible to the other one third in savings.  Below are agency highlights from the Budget Request:

• $7.8 billion for the National Science Foundation (+ 13%)
• $5.4 billion for the Department of Energy’s Office of Science (+ 9.1%)
• $32 billion for the National Institutes of Health (+ 2.4%)
• $4.4 billion for the Food and Drug Administration (+ 33%)
• $5.9 billion for the Centers for Disease Control and Prevention (- 9%)

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