Budget Briefs
2012
President Releases FY 2013 Budget Request
Budget Brief 12-02February 17, 2012
Summary
On February 13, 2012, the president released his proposed fiscal year (FY) 2013 budget. It shares much in common with earlier budget requests, including proposals to consolidate funding into fewer grant programs (sometimes with less total funding than the replaced programs provided) and replace existing formula grant programs with competitive grants.
More importantly, the budget includes both tax and spending recommendations that would avert the budget sequestration process mandated by the Budget Control Act of 2011 (BCA, P.L. 112-25). Absent congressional approval of some such measures, the BCA calls for an across-the-board sequester of FY 2013 spending beginning in January 2013. Many observers believe that with the president’s signal that he would prefer to avoid a sequester, serious negotiations to do so will likely occur during a lame duck session of Congress, convened after the November 2012 elections.
The FY 2013 budget also calls for policies included in the president’s “American Jobs Act of 2011,” which was unveiled in September 2011. These proposals are described in FFIS Budget Brief 11-14.
Overall, the FY 2013 budget would provide a 2.7% funding increase for the major discretionary programs reported by FFIS on Table 1. This increase is somewhat misleading, as various consolidation proposals—such as the one for homeland security grants—would replace smaller programs not listed on the table with one large program that is listed.
The mandatory programs included on Table 1 are estimated to increase 7% in FY 2013. The increase is driven by child nutrition programs (+8.5%), child care (+17.1%), the Children’s Health Insurance Program (CHIP, +16.1%), and Medicaid vendor payments (+7.5%). Table 1 also estimates the potential impact of the BCA sequester on major programs, should lawmakers fail to adopt policies to replace the sequester provisions of the law.
The details of the various spending proposals are described in the following sections.
FY 2011 Per Capita Federal Spending on Major Grant Programs
Budget Brief 12-01February 2, 2012
Summary
Per
capita federal spending is one measure for states seeking to assess how they
fare in their fiscal relationship with the federal government. This report provides
a per capita analysis of the 200+ federal grant-in-aid programs tracked by FFIS
and included in its grants database. Per capita data are calculated for federal fiscal
years (FYs) 2010 and 2011 using population estimates for July 2010 and July
2011, which were released by the Census Bureau in December 2011.
2011
FY 2012 Appropriations Completed
Budget Brief 11-17December 23, 2011
Summary
On December 17, 2011, the Senate followed the House’s lead and approved the second and final appropriations bill for fiscal year (FY) 2012, a “megabus” that includes funding for nine separate appropriations bills: Defense, Energy-Water, Financial Services, Homeland Security (DHS), Interior-Environment, Labor-Health and Human Services (HHS)-Education (ED), Legislative Branch, Military-Veterans Affairs, and State-Foreign Operations. The bill (H.R. 2055) was accompanied by a fifth continuing resolution (CR, H.J. Res 95) to fund the government through December 23, 2011, pending the president’s signature of the megabus legislation. A companion bill providing $6.4 billion for disaster relief also was approved (H.R. 3672). (A third bill would have offset the cost of that disaster relief through an across-the-board [ATB] cut to all FY 2012 discretionary funding [H.R. 3673]. It was approved by the House but not the Senate.)
With the “minibus” that passed last month (P.L. 112-55), appropriations for FY 2012 are now complete (see Budget Brief 11-16 for a summary of the minibus). Table 1, FFIS’s Jim Martin Table, summarizes FY 2012 funding levels for major programs of importance to states. While a few programs received funding increases, Education is the only department listed on the table to receive a net increase in FY 2012. This brief provides more detail on the relevant provisions of the megabus for state grant programs.
First FY 2012 Appropriations Bill Enacted; Includes CR
Budget Brief 11-16November 18, 2011
Summary
On November 17, 2011, the House and Senate approved the first appropriation bill for fiscal year (FY) 2012, a “minibus” that includes funding for the departments of Agriculture, Commerce-Justice-Science, Transportation-Housing and Urban Development (HUD), and related agencies. The bill (H.R. 2112) includes an extension of the continuing resolution (CR) that funds all programs for which appropriations have not been enacted. The CR continues a 1.5% across-the-board (ATB) cut for such programs, and is in effect through December 16, 2011.
Table 1, FFIS’s Jim Martin Table, summarizes the funding levels included in the minibus for major programs of importance to states. More than half of the total annual discretionary funding listed in Table 1 is provided by this bill. Every department affected by H.R. 2112 experienced grant funding reductions for the programs included on Table 1: -19% for justice, -2.9% for housing and urban development, and -3.3% for transportation. This brief provides more detail on the relevant provisions of the minibus for state grant programs.
FY 2012 Appropriations Update: Where Things Stand
Budget Brief 11-15October 25, 2011
Summary
Federal government programs are
currently being funded under the second continuing resolution (CR, P.L. 112-36)
of federal fiscal year (FY) 2012. The CR establishes a -1.5% program-level,
across-the-board cut for discretionary funding relative to FY 2011. However,
the current CR expires after November 18, 2011, and congressional leaders hope
to have some of their FY 2012 appropriations work finalized by then. The House
has passed six appropriations bills, while the Senate has passed only one. None
has been signed into law. The Senate is currently considering a “minibus” (H.R.
2112), which includes the FY 2012 Agriculture, Commerce-Justice-Science, and
Transportation-Housing and Urban Development (HUD) appropriations bills. The Senate is scheduled to vote on the minibus on October
31, 2011.
President Releases New Jobs Proposal, Deficit Reduction Proposal
Budget Brief 11-14September 21, 2011
Summary
On September 12, 2011, President Obama submitted to Congress the “American Jobs Act of 2011.” The proposed legislation contains a number of provisions that would provide both tax relief and new spending. These include:
- Grants to retain or hire teachers, law enforcement officials, and first responders
- Grants for school modernization
- Additional funding for a host of existing transportation grant programs
- Various types of assistance targeted to unemployed workers
- Tax relief for businesses and individuals
The legislation also includes initiatives targeted at infrastructure financing, technology, and rebuilding foreclosed-upon properties. The cost of the bill—estimated at $447 billion—would be offset by reducing federal tax expenditures for corporations and raising taxes on high-income individuals, unless the Joint Select Committee on Deficit Reduction (JSC) created by the Budget Control Act of 2011 (BCA, P.L. 112-25) achieves additional deficit reduction to cover the cost of the bill.
On September 19, 2011, the president unveiled his recommendations for deficit reduction, to be transmitted to the JSC. The recommendations identify $4.85 trillion in deficit reduction from federal fiscal year (FY) 2012-2021, including both policies that already have been implemented or are part of his jobs proposal.
This brief describes both proposals with respect to provisions that would have a direct impact on state governments.
Budget Control Act of 2011: The Knowns and Unknowns
Budget Brief 11-13August 5, 2011
Summary
On August 2, 2011, President Obama signed the Budget Control Act of 2011 (BCA, P.L. 112-25), a bill designed to provide for an increase in the federal debt limit while reducing long-term budget deficits. The provisions of the bill are estimated to provide as much as $2.4 trillion in deficit reduction over 10 years [fiscal year (FY) 2012 to FY 2021] and to allow a maximum $2.4 trillion increase in the debt limit in two stages.
Among the BCA’s major components are the following with significant potential impacts on states:
1) Establishes caps on discretionary spending through 2021, which the Congressional Budget Office (CBO) estimates will reduce federal budget deficits by $917 billion between FY 2012 and FY 2021.
2) Creates a Congressional Joint Select Committee on Deficit Reduction to propose at least $1.2 trillion in additional deficit reduction over 10 years.
3) Implements automatic procedures (known as sequestration) to reduce spending by as much as $1.2 trillion over 10 years if the select committee does not achieve such savings.
In addition, the agreement includes other provisions affecting program integrity, student loans and grants, the debt limit, and a federal balanced budget amendment. This brief explains its components and their potential impact on state grant programs.
Special Note from FFIS on Federal Debt Negotiations
Budget Brief 11-12July 27, 2011
Summary
The federal government is expected to reach its debt limit on or about August 2, 2011. To date, there is no agreement to raise the limit, although negotiations are ongoing. Absent an agreement, the federal government will be unable to meet all of its financial obligations. It will then face the need to choose which obligations it will pay and which it will defer until the debt limit is raised. Depending on the choices made, states are likely to feel the impact of reduced or delayed federal payments and reimbursements.
As part of the debt ceiling negotiations, various proposals are under consideration that would achieve significant federal deficit and debt reduction over the upcoming years. All of these proposals feature significant reductions in federal spending.
This Budget Brief addresses two questions that FFIS has received repeatedly in the last several days:
- What will it mean for states if the debt limit isn’t raised?
- What will it mean for states if an agreement is reached to raise the debt limit and reduce federal spending over the next several years?
FY 2012 Appropriations Update: House Progress on Agriculture, Energy-Water, Homeland Security
Budget Brief 11-11July 7, 2011
Summary
It was the July
4th recess that wasn’t. The House was absent from the Capitol for
the last week of June, and the Senate was scheduled to take its recess the
first week of July. However, pressure to resolve the longstanding impasse over
raising the nation’s debt limit put the kibosh on the Senate’s plans, so the
chamber returned to Washington after the long weekend, ready to tackle debt and
budget issues.
While any House-Senate agreement on fiscal year (FY) 2012 appropriations is unlikely to occur outside a long-term debt-reduction/budget-balancing framework, the House remains committed to clearing all 12 FY 2012 appropriations bills before the August recess. To that end, the full House has approved three such bills (Agriculture, Homeland Security, and Military-Veterans Affairs), while three others have passed at the committee level: Defense, Energy and Water, and Financial Services. Additional bills are scheduled to be taken up this week.
As for the Senate, it has made far less progress. The Senate Appropriations Committee last week approved its first bill, Military-Veterans Affairs, reporting out a substitute to the House bill (H.R. 2055) that provides $3 million less than the House-passed measure. Unlike the House, the Senate is more disposed toward waiting for a larger budget agreement before tackling individual appropriations bills.
This Budget Brief describes FY 2012 appropriations actions with potential fiscal impacts on states.
Census Bureau’s FY 2012 Budget Request Discontinues Valuable Data Series
Budget Brief 11-10June 6, 2011
Summary
On page 46 of the U.S. Census Bureau’s Budget Estimates, Fiscal Year 2012, there is a description of proposed changes to the programs that are part of the government statistics division of Census. Four program changes are proposed: termination of the Current Industrial Reports Program; a funding reduction to reflect efficiencies developed in the production of e-business statistics; an increase of 10 full-time employees (FTEs) for research, improvements and new data products in the area of pensions; and termination of federal financial statistics. The last two of these affect states.
FY 2010 Per Capita Federal Spending on Major Grant Programs
Budget Brief 11-09May 26, 2011
Summary
Per capita federal spending is one measure for states seeking to assess how they fare in their fiscal relationship with the federal government. This analysis provides the most recent per capita figures, focusing on the 200+ federal grant-in-aid programs tracked by FFIS and included in its Grants Database.
House FY 2012 Homeland Security Appropriations: Impact on State Programs
Budget Brief 11-08May 18, 2011
Summary
On May 13, 2011, the House Appropriations Homeland Security Subcommittee approved a bill to fund the Department of Homeland Security (DHS) for fiscal year (FY) 2012. The approved bill represents a -2.6% change from FY 2011 funding and a -6.8% reduction compared to the president’s FY 2012 proposal.
However, the bill would reduce funding for state and local programs within the Federal Emergency Management Agency (FEMA) by 57%. This Budget Brief explains the proposed changes.
Release of 302(b) Suballocations Signals Start of Appropriations Process in House
Budget Brief 11-07May 13, 2011
Summary
On May 11, 2011, the House Appropriations Committee announced its draft 302(b) suballocations, which assign federal fiscal year (FY) 2012 funding targets to the relevant appropriations subcommittees. This Budget Brief presents the suballocations and identifies those with the largest potential impact on states.
FY 2011 Budget Finally Enacted; More Details to Come
Budget Brief 11-06April 19, 2011
Summary
On April 15,
2011, the president signed the Department
of Defense and Full-Year Continuing Appropriations Act of 2011 (P.L. 112-10),
which funds the federal government for the remainder of federal fiscal year
(FY) 2011. P.L. 112-10 marks the eighth and final Continuing Resolution (CR)
passed by Congress to keep the government running for FY 2011. In the past 35
years, there have been only four other instances in which Congress has enacted
eight or more CRs in a given fiscal year, most recently in FY 2003.
According to congressional appropriators, the FY 2011 budget reduces spending by $38.5 billion. As shown on Table 1, these cuts include at least $8 billion in discretionary funds to states. However, the precise impact of the enacted budget on states is uncertain. Because Congress funded the government through a CR, rather than an appropriations bill, it will not provide explanatory statements or funding tables. In many instances, the legislative text only provides funding at the account level, instead of the program level. For those programs not specifically addressed in the bill, federal agencies will determine the funding level and how to absorb cuts within the account level. The final FY 2011 budget also includes a 0.2% across-the-board cut to all non-defense discretionary appropriations.
This Budget Brief describes funding levels and major provisions included in the final FY 2011 budget of importance to states.
Deconstructing the Numbers in the FY 2011 Budget Agreement
Budget Brief 11-05April 12, 2011
Summary
On April 8, 2011, congressional leaders and representatives of the Obama administration announced an agreement to fund the federal government through the remainder of federal fiscal year (FY) 2011. According to reports, the agreement (H.R. 1473) would impose cuts of $38.5 billion compared to FY 2010 funding levels, and would include a 0.2% across-the-board reduction to non-defense discretionary accounts.
House Budget Resolution Big on Impact, Small on Details
Budget Brief 11-04April 8, 2011
Summary
On April 5, 2011, House Budget Committee Chairman Paul Ryan released his
proposed budget resolution for fiscal year (FY) 2012. The House Budget
Committee approved the measure on April 6. The budget resolution would
set the level of total non-security discretionary spending for next year
at $102 billion less than the president’s request, $58 billion less
than the annualized spending levels for FY 2011 contained in a stopgap
funding measure that expires April 8, and $72 billion below
appropriations in FY 2010. While scarce on details, the resolution
outlines significant changes to Medicare, Medicaid, and other programs.
At the request of the House Budget Committee chairman, the Congressional
Budget Office (CBO) conducted a long-term analysis of key proposals
included in the budget resolution. However, the analysis is not based on
legislation language or the proposed budget resolution, but rather on
the major provisions of the proposal as described by the chairman’s
staff.
President Releases FY 2012 Budget Request, House Proposes Big Cuts for FY 2011
Budget Brief 11-03February 18, 2011
Summary
In
short order, the House of Representatives has released its budget proposal for
the remainder of fiscal year (FY) 2011 and the president has released his
budget proposal for FY 2012. This Budget
Brief summarizes the highlights of both, and Table 1 lists the funding
recommended by each proposal for major grant programs of importance to states.
Instructions for Estimating State Impact of RSC Discretionary Spending Cut Proposal
Budget Brief 11-02February 3, 2011
Summary
On
January 20, 2011, the Republican Study Committee (RSC) released the Spending
Reduction Act of 2010 (H.R. 408), a proposal to cut federal discretionary
spending by $2.5 trillion from fiscal year (FY) 2011 through FY 2021. As a
component of the plan, the RSC would set FY 2011 non-security discretionary
funding at FY 2008 levels on a program-by-program basis, unless a particular
program received less funding in FY 2010 than in FY 2008, in which case the FY
2010 level would apply. Utilizing the FFIS Grants Database (http://www.ffis.org/database), this Budget Brief illustrates how to prepare
a state-specific analysis using RSC’s proposal.
House Approves Budget Process Reform; Focuses on Spending Cuts
Budget Brief 11-01January 12, 2011
Summary
On
January 5, 2011, the House of Representatives adopted a new rules package for
the 112th Congress, which focuses largely on controlling federal
government spending. The package changes the current pay-as-you-go (PAYGO)
spending rules to a “cut-as-you-go” (CUTGO) approach, provides new authorities
for the House Budget Committee chairman, and eliminates highway spending
guarantees. Furthermore, House leaders have recently pledged to reduce the
federal budget by $100 billion, in part by setting federal fiscal year (FY)
2011 spending at FY 2008 levels.