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LEGISLATIVE UPDATE FOR AUGUST 7, 2012:

Appropriations and Legislation Update


BUDGET & APPROPRIATIONS UPDATES
As the Congress recessed and Members returned home for the August break to campaign for the upcoming elections, a joint agreement was reached by the White House and the House and Senate leadership to pass a Continuing Resolution (CR) when they return in September to fund the government until March 30 or for the 6 month period from October 1, 2012 thru March 30, 2013 at the level agreed to in the Budget Control Act (BCA) passed in August, 2011.  The House passed budget resolution had set a level of $1.028 billion for discretionary spending in Fiscal Year 2013.  Instead of the House passed level the Members agreed to use the higher level of $1.047 included in the BCA for the spending level for the first 6 months of FY 2013. 

While considerable progress has been made in marking up the appropriations bills in Committee and 5 have been passed by the House, it is generally agreed that none of the Appropriations bills will pass before the November elections.  This fact makes the CR a necessity to provide for the continuation of the operation of the government.   At the end of this report is a status report of all the FY 2013 appropriations bills.

SEQUESTRATION & THE EXPIRATION OF THE BUSH TAX CUTS
On January 2, 2013 the Bush era tax cuts expire and the $1.2 trillion of spending cuts agreed to as a part of the BCA will go into effect resulting in approximately 7.8% of across the board cuts to all defense and non-defense discretionary spending.  Unless the Congress passes legislation to delay, rescind or replace these measures, it has been estimated that GDP growth could be slowed by 1% in the first 6 months of the new year.  After the elections and during the lame duck session the Congress is expected to address these matters and discuss overall spending, entitlement and revenue reforms to put the Nation on a sustainable economic path.

Initially much of the concern about sequestration was expressed by advocates of defense spending.  More recently the business community has begun to report their plans to delay expansions and investments in view of the possibility of sharply lower government spending.  Also the impact on non-defense discretionary (NDD) spending was highlighted by a July 25 hearing chaired by Senator Harkin.  At the hearing Chairman Harkin released a report titled “Under Threat” outlining the potential impact that sequestration will have on NDD spending programs.  From the report: “So far, we’ve heard a great deal about sequestration’s impact on Pentagon spending. The defense industry has highlighted the potential impacts of and across-the-board cut on defense-related jobs and services. Some Members of Congress are now demanding that we exempt the Pentagon from sequestration, either by finding offsets for the defense cuts only, or by making nondefense programs bear the full brunt of the entire $1.2 trillion in cuts.  But sequestration wouldn’t apply only to defense. It would also have destructive impacts on the whole array of Federal activities that promote and protect the middle class in this country – everything from education to job training, medical research, child care, worker safety, food safety, national parks, border security and safe air travel. These essential government services directly touch every family in America, and they will be subject to deep, arbitrary cuts under sequestration.”Over the past 11 years since the budget was last balanced, defense spending has increased 73%; entitlement spending has increased 30%; and NDD spending has remained flat with no increase over the 11 years.  NDD as a share of GDP is at the same level as it was in the Eisenhower Administration.


Sequestration was included in the Budget Control Act (BCA) passed in August of 2011 as a backup procedure to increase the incentive of the Joint “Super” Committee to reach a compromise on $1.2 trillion in spending cuts from 2012 through 2021.  With the Super Committee unable to find agreement the sequestration- or automatic cuts that apply largely across the board- is scheduled to occur starting January 2013.  

HOUSE 

      Appropriations                 Subcommittee            Full Committee     Floor

      Subcommittee                   Markup                      Markup                Action

Agriculture

 

June 6

June 19

 

Commerce, Justice and Science

April 19

 

April 26

Passed

May 10

Defense

 

May 8

May 17

Passed

July 19

Energy & Water

 

April 18

April 25

Passed

June 6

Financial Services

 

June 6

June 20

 

Homeland Security

 

May 9

May 16

Passed

June 7

Interior & Environment

 

June 19

June 27

 

Labor, Health and Human Services

July 17

 

 

Legislative Branch

 

May 18

May 31

Passed

June 8

Military Construction/ Veterans Affairs

May 8

May 16

Passed

May 31

State & Foreign Operations

May 9

May 17

 

Transportation/Housing and Urban Development

June 7

June 19

 

   SENATE

 

  Appropriations                      Subcommittee            Full Committee          Floor

  Subcommittee                        Markup                      Markup                      Action

Agriculture

 

 

April 26

 

Commerce, Justice and Science

April 17

April 19

 

Defense

 

 July 31

August 2 

 

Energy & Water

 

April 24

April 26

 

Financial Services

 

June 12

June 14

 

Homeland Security

 

May 15

May 22

 

Interior & Environment

 

 

 

 

Labor, Health and Human Services

June 12

June 14

 

Legislative Branch

 

 

 Augsut 2

 

Military Construction/ Veterans Affairs

May 15

May 22

 

State & Foreign Operations

May 22

May 24

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