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Budget and Appropriations Update

FY 2012 Appropriations

The Congress on April 14, six months into Fiscal Year (FY) 2011, finally passed an appropriations bill for the balance of the year.  This legislation (P.L. 112-10) was signed by the President on April 15.

This final legislation was preceded by 7 Continuing Resolutions (CR) that were necessary to continue the operation of the government until final agreement was reached.  The final bill passed the House (260-167) and Senate (81-19).  The bill totals $1.048 trillion in spending. The bill also contains nearly $40 billion in cuts of which $12 billion were part of three previous CR’s signed into law and nearly $28 billion in additional cuts.  A summary of the reductions made in the bill compared to FY 2010 actual spending levels is below.

  • Agriculture; $20 billion (-$3 billion from FY 2010)
  • Commerce, Justice and Science; $53.4 billion (-$10.9 billion)
  • Defense; $513 billion (+$5 billion)
  • Energy & Water; $31.8 billion (-$3.6 billion)
  • Finical Services; $22 billion (-$2.4 billion)
  • Homeland Security;  $41.8 billion (-$784 million)
  • Interior; $29.6 billion (-$2.62 billion)
  • Military Construction/VA; $73.3 billion (-$2.7 billion)
  • State & Foreign Ops; $48.3 billion (-$504 million)
  • Transportation/HUD;  $55.5 billion (-$12.3 billion)
  • Labor, HHS and Education; $157.7 billion (-$5.5 billion)

FY 2012 Budget

The House voted on and passed a Budget Resolution for FY 2012 by a vote of 235-193 on April 15.  While Budget Resolutions do not have the force of law they offer a frame work for the appropriation bills to follow.  The House passed spending blueprint calls for $3.529 trillion in total spending and cuts nearly $200 billion relative to the President’s request released in February.  House Budget Chairman Ryan’s plan also calls for $6 trillion in cuts over the next decade compared to the President’s baseline projections.  The $771 billion in cuts would come from restructuring Medicare into a voucher program and converting Medicaid into a block grant to the states.  The Senate has already declared the House resolution “dead on arrival”. 

To help avoid an extended debate over FY 2012 spending and the necessary extension of the Debt Ceiling, the President has asked congressional leaders to appoint a bipartisan working group, chaired by VP Biden to come up with a plan and make recommendations for debt reduction with proposals to be made by the end of June.  Democrats have named their workgroup members:  Appropriations Chairman Inouye (D-HI); Finance Chairman Baucus (D-MT); Budget Ranking Member Van Hollen (D-MD); and Assistant Democratic Leader Clyburn (D-SC).  Republicans have named House Majority Leader Eric Cantor (R-VA) and Senate Minority Whip John Kyle (R-AZ). 

Other Related Matters

  • By May, the Senate’s Gang of Six is expected to release its recommendations. 
  • Budget Chairman Conrad will begin development of the Senate’s budget resolution around the same time. 
  • Treasury Secretary Geithner notified Congress that the debt limit will be reached May 16, but that the Treasury could take different accounting measures to stall default until July 8. 

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