Appropriations Update: Progress Beginning to Slow

Update: Post-sequester figures have been revised according to the most recent estimates.

Another month has gone by, and while on paper the budget process is moving forward, the roadblocks preventing the passage of appropriations bills for FY 2014 are becoming quite apparent.

Both the Senate and House have been busy, especially in the Committees. Since our last update, the House Appropriations Committee has passed four more appropriations bills and the full chamber has passed two bills, Defense and Energy-Water. The Senate Appropriations Committee has passed seven bills since our last blog, but none have passed the full Senate.

Despite that progress, sequestration remains the main point of contention. As we detailed in our last blog, the Senate has continued to appropriate based on a pre-sequester funding level, while the House has adopted the post-sequester target, though with a pre-sequester level for Defense. But agreeing on additional cuts for non-defense has been difficult. The House Transportation-Housing and Urban Development (THUD) bill, with $44 billion of funding, was pulled from floor consideration last week, while the Senate's $54 billion THUD bill did not survive a filibuster. Not only will the different approaches to sequestration make it difficult to reconcile bills from each chamber, but it may also stall the appropriations process as the committees look to get their bills passed by their respective chambers.

While it is theoretically possible to complete appropriations by the September 30 deadline, a continuing resolution that would keep the government funded at least temporarily is more likely. One sticking point, however, is that Republicans are reportedly pushing for a short, one to two month continuing resolution, even though House Speaker John Boehner has said that he does not want to operate the whole year on a CR. On the other hand, some media accounts indicate that Democrats might prefer a longer-term CR similar to what the government has been operating under since March.

With both parties seeking to alter sequestration in some form, a comprehensive plan may be the only way out of this jam, and there appears to be new momentum surrounding a deal. Republican Congressional leaders have made it clear that they are open to a sequester replacement, and the White House is also expressing some confidence about the possibility of a bigger deal this fall. If lawmakers are able to work together on entitlement and tax reform, the breakdown in appropriations caused by the sequester could be a blessing in disguise and would result in the sequester finally fulfilling its purpose as a deal catalyst.

^{Source: House and Senate Appropriation Committee websites
Note: Italics indicate changes from the last appropriations update.
~ THUD has been adjusted to remove one-time offsetting collections from the Federal Housing Administration (FHA) and Government National Mortgage Association (GNMA) for better comparability}