House FY2017 Appropriations Bills Exceed Budget Caps by $792 Million

The Office of Management and Budget (OMB) has informed the White House and Congress that the 12 appropriations bills reported from the House Appropriations Committee for FY2017 exceed budgets caps by $792 million — $17 million in defense and $775 million in non-defense spending.  If enacted, they therefore would be subject to automatic reductions (sequestration) to bring the total in line with the levels Congress and the President agreed to last fall.  The companion bills reported from the Senate Appropriations Committee, however, are below the caps.

In an effort to curb deficits, the White House and Congress agreed to 10-year limits on federal spending in the 2011 Budget Control Act (BCA).  After a congressional “supercommittee” could not agree on how to implement the reductions, automatic cuts — the sequester — went into effect for FY2013. The consequences were sufficiently dire for both defense and non-defense agencies that agreements were reached to relax the limits for FY2014-2015 (the Ryan-Murray agreement) and FY2016-2017 (the Boehner-McConnell-Obama agreement).  Currently, the top line for defense spending for FY2017 is $609.868 billion and for non-defense (including NASA and NOAA) is $543.597 billion.

In a required “Sequestration Update” to the President and Congress on August 19, OMB reported that the House bills surpass the modified limits for FY2017 by $17 million in defense spending and by $775 million in non-defense spending.  The Senate bills are under the limits, however.  They provide $167 million less for defense and $2.032 billion less for non-defense.

Only one of the 12 bills (Military Construction-Veterans Affairs) has passed both the House and Senate.  Four others have passed the House (Defense, Financial Services, Interior and Environment, and Legislative Branch).  One other has passed the Senate (Transportation-HUD, as part of a package with MilCon-VA, but it was not incorporated into the House-passed bill). 

Congress will have to do something about appropriations before October 1 when FY2017 begins or the government will shut down.  The House and Senate reconvene on September 6, giving them four weeks.  They most likely will pass a Continuing Resolution (CR) to keep the government funded at FY2016 levels for a period of time, although Rep. Chris Van Hollen, the top Democrat on the House Budget Committee, said earlier this week that he could not rule out a shutdown because of Republican opposition to last fall’s Boehner-McConnell-Obama agreement.  His hope, however, is that a CR will be enacted to cover through the November elections, with final agreement on FY2017 funding levels before the end of 2016 and the 114th Congress.

How the House and Senate resolve their differences to avoid breaching the budget caps and what effect that will have on civil or national security space programs is unknowable at this point. The caps are not broken down by agencies, only into defense and non-defense categories.  It is up to Congress to decide how to allocate the funds, which involves a lot of give-and-take. 

At this point, FAA’s space office, NOAA’s satellite programs, and NASA have fared well in the House and Senate appropriations committees.  The committees have been especially generous to NASA when compared to the President’s request for FY2017, although the amounts are similar to what Congress appropriated for FY2016.

The House Appropriations Commerce-Justice-Science (CJS) bill provides $19.508 billion for NASA and the Senate committee approved $19.306 billion.  Congress appropriated $19.285 billion for FY2016, but for FY2017 the President requested $18.262 billion in appropriated funds — a $1 billion cut. (As explained in SpacePolicyOnline.com’s fact sheet on NASA’s FY2017 budget request, NASA displays its request as $19.025 billion because it includes $763 million in non-appropriated funding from mandatory accounts and a tax on oil companies.  NASA has never received money from the mandatory part of the federal budget, which pays for programs like Social Security and Medicare, and how the White House imagined that it would this year is a mystery. The tax on oil companies was part of a White House “clean transportation” initiative that never materialized.  The inclusion of the $763 million is widely viewed as an attempt to obscure the fact that the President’s request was a significant cut for NASA.)

Congress’s ability to provide so much more than the request is largely because the budget caps were relaxed and NASA has powerful champions on the House and Senate Appropriations committees. 

As a new President takes office and a new Congress convenes next year, decisions will need to be made on whether to change or eliminate the sequester rules.  They are set in law and will go back into full effect with the FY2018 budget, the first that will be submitted by the incoming President.