Outlook on FY 2012 Appropriations Bills

Fiscal Year 2011 ends a month from tomorrow, and it looks highly unlikely that all twelve of the FY 2012 appropriations bills will be enacted in time. While Congress and the Administration will agree to provide continued funding through one or more short term measures, there is reason to believe that bitter disagreements that have prevented the passage of final appropriations legislation for many months in previous years may be avoided.

Sharp differences about the composition of the final FY 2012 appropriations bills are certain, but arguments about how much money should be spent next year for discretionary programs is no longer an open matter. Earlier this year, the House passed a budget plan calling for about a $30 billion reduction in spending. This reduction was opposed by Senate Democrats and the White House, and would have led to many months of disagreement. This disagreement was ended when President Obama signed the Budget Control Act into law on August 2. This bill set discretionary spending caps for fiscal years 2012 through 2021. Discretionary spending is set at $1.043 trillion for FY 2012, down 0.7 percent or $7 billion from this year. Agreement on this number is key to the passage of the FY 2012 appropriations bills.

House Majority Leader Eric Cantor’s (R-VA) words about this FY 2012 figure are of great importance. In an August 17 memorandum to House Republicans, Cantor spoke of the impact that policy uncertainty was having on the economy, stating:

Also of note is a statement by House Appropriations Committee Chairman Hal Rogers (R-KY). On August 19, his committee released the following statement: It is expected that Senate appropriators will pick up the pace when they return to Washington next week. Only one of the twelve bills has passed the Senate: the FY 2012 Military Construction-VA bill. This bill, which also has passed the House, is likely to be the vehicle for one or more short-term measures to provide funding beyond September 30. While there is a possibility that Congress will pass some individual appropriations bills, it appears far more likely that final FY 2012 funding will take the form of a large omnibus funding bill.

Enactment of the Budget Control Act does not signal the end of bitter controversies about the size and role of federal spending. If agreement is not reached on $1.2 trillion in deficit reduction in the next ten years, through additional reductions in discretionary spending and/or changes in entitlement programs and/or revenue increases, automatic cuts will occur. The first set of these cuts, which would occur to defense and non-defense programs and some entitlement programs, would occur in Fiscal Year 2013 on January 2, 2013.

Fiscal Year 2012 appropriations bills have been moving in the House. A summary of the status and content of these bills, as they pertain to programs of interest to the physics community, will be provided in FYI #104.