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Budget and Fiscal Year 2014 Update

May 10, 2013

Senator Patty Murray and Rep. Paul Ryan

Senator Patty Murray and Rep. Paul Ryan

For the first time in four years both the U.S. House of Representatives and the Senate have passed individual budget resolutions. Under normal circumstances (which Congress refers to as "regular order") a conference committee would be convened to hash out the differences and agree on a joint budget resolution that each house would pass. Although the two budget committee chairs, Senator Patty Murray (D-WA) and Rep. Paul Ryan (R-WI), have tried to organize a conference committee, it now seems certain that the conference process will not proceed. Without a conference committee agreement, each chamber likely will ask their respective Appropriations Subcommittees to begin marking up their Fiscal Year 2014 (FY14) bills to vastly different numbers. According to Senate appropriations staff, the House budget calls for total discretionary spending of $966 billion; the Senate budget's total discretionary spending level is $1.058 trillion. The difference between the House and the Senate budgets is $92 billion. The primary difference between the two bills is that the Senate total does not assume a FY 2014 sequester (automatic spending cuts). The House number does assume a FY14 sequester but largely exempts defense discretionary spending. The House number would place even tighter constraints on non-defense discretionary (NDD) spending, which includes spending on health, public health, and HIV/AIDS programs.

The appropriations battles are going to be harsh since FY14 will be the second fiscal year that will utilize numbers that were reduced due to the sequester. This year, if the appropriations process is carried out, each subcommittee will get a smaller allocation and would have to make difficult decisions on how to cut spending. From Hill meetings over the last couple of weeks we are hearing that the House will advise each of their subcommittees of their allocation (also known as "302b") within the next week or two and subcommittee mark-ups will begin the week of May 21st with the Military Construction, Veterans Affairs bill and the Agriculture/Food and Drug Administration bill expected to be the first two bills up for consideration. We expect that the Labor, Health and Human Services, Education bill, which includes funding for most domestic HIV/AIDS programs, will be the last bill considered for mark-up, probably in late July in the House. The Senate is expected to begin mark-up of their bills in late June. AIDS United staff continues to participate in Hill visits with numerous coalitions to advocate for the highest possible level for domestic HIV/AIDS programs.

AIDS United believes the only way out of this fiscal morass is to agree on a grand bargain based on a balanced approach that includes revenues, replaces sequestration, and takes into account the NDD spending cuts enacted since FY10. It was hoped that reaching the debt ceiling in May would provide the catalyst for a "grand bargain" discussion. However, since the FY 2013 deficit is now getting smaller faster than anticipated, it looks like the Treasury Department may be able to postpone the hitting of the debt ceiling until October. This delay will create yet another "perfect storm" at the end of FY13, with a possible government shutdown if FY14 appropriations are not complete, and a federal default if the debt ceiling is not increased. AIDS United will work to keep you updated as information becomes available.

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