These Cuts Won’t Heal: May 2012 Budget Update

As we approach Memorial Day weekend a number of important developments in this year’s budget negotiations have already occurred.  Several more developments are  expected when Congress comes back into session after the holiday, while others are looming farther in the distance and may not be resolved until after the November elections.  Once again there are several different moving pieces to the budget discussions, including the 2013 budget and appropriations process and the sequestration cuts scheduled to go into effect in January, 2013.

Thus far the majority of the action has been on the House side.  In March, the House passed its budget resolution  which made steep cuts to discretionary spending, called on House committees to replace scheduled defense cuts with cuts to non-defense programs, and converted Medicaid and the Supplemental Nutrition Assistance Program (SNAP) to block grants.  Then earlier this month, following up on instructions from the budget resolution, the House passed reconciliation legislation replacing the defense cuts with cuts to a number of human service programs including repeal of the Social Services Block Grant, a critical funding stream for child welfare systems around the country, and cuts to Medicaid and SNAP.  Finally, the House also passed its version of the 2013 appropriations bill funding the Department of Justice which again cut funding to juvenile justice programs.

Meanwhile in the Senate, while no appropriations bills have been brought to the Floor yet, six have passed through the Senate Appropriations Committee.  Last week the Senate also held votes on several budget resolutions, including the one passed by the House, all of which were rejected.  Senate leaders have maintained that it is not necessary to pass a budget resolution this year since discretionary spending levels for this fiscal year were set by the spending caps in the Budget Control Act.  Lastly, the Senate has thus far refused to take up legislation addressing sequestration.

As we look ahead to the coming months, the next major development is likely to be a markup in the Senate Appropriations Committee of the Labor-HHS-Education appropriations bill, the bill that funds the majority of child welfare and related programs (action is expected in the Senate in early June).  It is not yet known when the House will take up its version, though the House will probably continue to move through its appropriations work when it comes back into session as well.

Though the House and Senate will both be moving appropriations legislation throughout the summer, it is unlikely that many or perhaps any of the appropriations bills will be signed into law before the elections since the two chambers continue to disagree about the level of discretionary spending for the coming fiscal year.  The Senate supports the Budget Control Act spending cap, set at $1.047 trillion for fiscal year 2013, while the House wants to cut even deeper.  This disagreement on the overall discretionary spending level makes it exceedingly difficult to translate funding levels to individual appropriations bills.  Most likely, the appropriations process won’t be finished until after the elections and will be completed in the form of either an omnibus bill or a continuing resolution, with the latter seeming to gain more traction lately.

The fate of the sequestration cuts scheduled to go into effect in January will also likely not be settled until after the elections.  Much is at stake in that battle.  CWLA has detailed the impact that sequestration would have in each state on several important programs serving vulnerable children and families.  As bad as those cuts would be, they could be made even worse if the scheduled defense sequester is replaced with additional cuts to non-defense programs, as the House has advocated.  This week Senate leaders spoke out strongly against such a change, and President Obama has also threatened to repeal the House proposal.  Still, neither side is willing to give in easily and it should make for a very busy end of the year.


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