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FY 2020 US Federal Budget 

Prior to the start of the August in-district work period, both the US House of Representatives and the US Senate approved an agreement that would raise the budgetary caps and set topline spending levels for the next two fiscal years. The agreement would add $324 billion to spending limits over the next two fiscal years, not counting an extra $157 billion mainly for overseas military operations. About $77 billion of that is offset, which is about half of what the White House wanted, and the cuts don’t take effect until fiscal 2027. This clears the way for appropriators to begin work before the current fiscal year ends on September 30.

In addition to preventing a $125 billion or 10% cut in discretionary spending next year. Under the bill total discretionary budgets would rise to $1.37 trillion in fiscal 2020, counting adjustments to the regular caps for war-related spending and the 2020 census. That would be a nearly 4% boost over the current year for appropriators to parcel out as they get to work. Within that topline, the $738 billion defense limit would amount to 3.1% more than the current year, while $632 billion for nondefense accounts would be roughly 4.5% higher than fiscal 2019.

The House Appropriations Committee marked up all 12 of its bills earlier this year, passing 10 of those on the floor, using “deeming resolution.” Deeming allows appropriators to begin work under the assumption that a budget resolution will be achieved. Now that a budgetary agreement is actually in place, House Democrats will need to cut about $15 billion in spending from nondefense accounts and increase defense discretionary spending in their bills by $5 billion. The Senate Appropriations Committee waited to draft its spending bills until after Congress and the White House reached an agreement on total discretionary spending and will begin their work in September.

Understanding the Current Budgetary Landscape

Under current law, the discretionary caps—which have been in place since 2011—are scheduled to sharply drop by 10% or $125 billion on October 1, the start of fiscal year (FY) 2020. The cap on defense spending—which covers the Department of Defense, the National Nuclear Security Administration, and a few other programs in other departments—will drop by 11% or $71 billion. The nondefense cap—covering everything else, including NASA, National Institutes of Health (NIH), the National Science Foundation (NSF), and others—will drop by 9% or $54 billion. Federal programs have been threatened with such drops before, but Congress has repeatedly found ways to avert such cuts

The President’s Proposed Budget

The White House released its budget proposal in February, which would allow the nondefense spending drop to take place as currently required, while slowing spending growth by $1.1 trillion in future years. The defense side would be shielded with an additional $174 billion in war and other emergency funding, which is not subject to the caps. As a result of this, total defense spending would rise by 4.7% or $34 billion above FY 2019 levels to $750 billion total–30% above current law–while nondefense spending would drop by 9.0% or $54 billion.

 

A Primer: Sequestration and Nondefense Discretionary (NDD) Programs

What is sequestration?

The Budget Control Act of 2011 (PL 112-25) established caps on discretionary spending over 10 years, resulting in $1 trillion in cuts spread across discretionary programs. The law also directed a Congressional Joint Select Committee on Deficit Reduction to identify an additional $1.2 trillion in budgetary savings over ten years. The failure of the bi-partisan “super committee” to come to an agreement on a deficit reduction plan triggered “sequestration” to take effect on January 2, 2013.

To sequester means to set apart or to take something away until a debt has been repaid. In the context of funding federal programs, sequester means imminent, across-the-board cuts to most programs, both defense and nondefense—in addition to the $1 trillion in cuts already sustained through the Budget Control Act’s discretionary caps.

There are a few discretionary programs that are exempt from sequestration in the first year, such as Pell grants in the Department of Education. Some mandatory programs, such as Medicaid, are also exempt from the sequester.

What is “NDD?”

When thinking about the federal budget, policymakers differentiate between discretionary programs and “entitlement” programs. Discretionary programs are those that Congress funds annually through the appropriations process. “Entitlement” programs are those that are funded almost automatically to meet the needs of all who qualify for them. Every year Congress must make an active decision on whether to fund discretionary programs and at what level.

Nondefense discretionary or “NDD” programs are all the programs that the government funds for the benefit of all outside of defense programming, including medical and scientific research; education and job training; infrastructure; public safety and law enforcement; public health; weather monitoring and environmental protection; natural and cultural resources; housing and social services; and international relations.

How is the sequester affecting nondefense discretionary programs?

In 2013, the sequester reduced most NDD programs by 5%. These cuts were across the board, with almost no departmental or agency control on how the sequester impacts individual programs. In 2014-2017, sequestration cuts did not occur because the Congress agreed to temporarily raise the limits on spending for both defense and NDD programs and proceeded to passed was within the new limits. No such plan is in place for 2018, and Congress does not seem to be on path to honoring equal cuts between nondefense and defense programs moving forward.

Sequestration will continue to occur in outgoing years unless Congress changes the law or meets ever-decreasing spending limits on the federal budget in its annual appropriations process. 

What can you do? 

Let your Congressmen know that the nondefense discretionary community, including scientific research, has already done its part to reduce the deficit, and that any plan to reduce the deficit should not include more NDD cuts that harm American families.

Recommended message: “I support a balanced approach to deficit reduction that does not include further cuts to nondefense discretionary (NDD) programs. These programs have already contributed to deficit reduction through the bipartisan Budget Control Act (BCA) and prior spending cuts."