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Congress Passed A Budget, But It Could Still Blow Up In Their Faces

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WASHINGTON -- Congress' current victory lap is premature. As lawmakers head back to their districts, fresh off passing a budget bill to fund the government for the next two years -- the Senate vote this afternoon merely a formality -- the prospects of political paralysis and even another government shutdown haven't completely faded.

The next deadline, in fact, is right around the corner. By Jan. 15, appropriators from the House and Senate will have to figure out how to turn that new budget framework into mutually agreed-upon funding levels for 12 spending bills, one for each of the Appropriations subcommittees.

The task won't be nearly as flashy as the one just completed. But aides on the Hill and observers off it caution that the task could be harder.

"This is where the winners and losers will come from," said one Democratic aide who works on the appropriations process. "How many times have you heard we should be budgeting with a scalpel and not a meat cleaver? This is about to be the reality of the scalpel."

Confronting lawmakers is the delicate task of divvying up the benefits of sequester relief for the next fiscal year, as agreed to by House Budget Committee Chair Paul Ryan (R-Wis.) and Senate Budget Committee Chair Patty Murray (D-Wash.). In general, spending money is an easier task than cutting it. But in this case, lawmakers aren't exactly flush with cash to throw at agencies. If anything, they're like firefighters trying to figure out which houses on a burning block are in the most desperate need of help.

In fiscal year 2013, sequestration cut roughly $85 billion from non-mandatory spending accounts, driving many government entities to exhaust emergency funds, use administrative gimmicks and make painful cuts. Over the year, defense spending was brought down from $552 billion to $518 billion, while non-defense discretionary spending was brought down from $490 billion to $471 billion.

Those figures were set to drop even further during fiscal 2014, as the next round of sequestration cuts kicked in. Defense spending was to fall to $498 billion and non-defense spending to $469 billion. But the just agreed-to budget deal stopped that from happening, putting spending levels at $520 billion and $492 billion, respectively.

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In accounting terms, this meant the budget deal included $44.76 billion in sequestration relief (split evenly between defense and non-defense). In practical terms, the relief was far smaller. Defense spending will be only $2 billion more in 2014 than it was in 2013 ($520 billion compared to $518 billion). Non-defense spending will be $21 billion more ($492 billion compared to $471 billion).

In other words, the pie is not as large as publicly perceived and there are a lot of hungry groups looking for a slice.

"The amount of sequester relief provided was modest, and so I think it will be challenging to add back funds and meet all the needs that are out there," said Joel Friedman, vice president for federal fiscal policy at the Center on Budget and Policy Priorities. "The amount that got added back is just a portion. They sort of met halfway. It doesn't get you all the way back or alleviate the first sequester hit. It will definitely be a challenge, and some programs will continue to be short funded at the end of the process."

Figuring out what money goes where will be the purview of the appropriations committees. Led by Rep. Hal Rogers (R-Ky.) and Sen. Barbara Mikulski (D-Md.), the committees will stitch together an omnibus bill covering all agencies. Each agency will be assigned a certain budget –- a 302(b) allocation -- after which subcommittee members will, in the words of a House Republican aide, have "line-by-line negotiations over each account of the federal government."

At this point, negotiations will get dicey. Hill aides say they expect a flurry of lobbying from outside groups seeking favorable treatment. (For this reason, it is assumed that lawmakers will keep the 302(b) allocations as private as possible.) Defense contractors stand to lose millions on simple line items -- a dozen purchases versus a half-dozen of a certain weapon -- while the futures of some domestic programs hang in the balance.

"Our hopes are that Congress begins to appropriate in a way that shows their understanding of what the drivers of our economy are," said Benjamin Corb, public affairs director for the American Society for Biochemistry and Molecular Biology. "Investments in science research, for example, are not to blame for our current fiscal issues, and in fact may be a solution to strengthen the economy and grow the GDP. Drastic cuts in spending have severely damaged our role as a global leader in science and innovation, and this budget deal allows Congress to begin to take corrective actions before the damage is irreversible."

The nightmare scenario heading into the next few weeks of negotiations is that Republicans and Democrats find the gulf between their respective priorities too wide to bridge. As a result, they fail to meet the Jan. 15 deadline, leaving Congress with a budget skeleton and no actual flesh or muscle.

"We could do another continuing resolution," said the House Republican aide, in reference to a bill that would simply extend current funding levels into next year, "or we could have a government shutdown. One thing members need to understand is that by voting for the budget agreement, they only took the first step."

Already, there are hints that conservative groups may pressure House Republicans to oppose individual appropriations bills even though they may have supported the overall budget.

"It'll be an interesting dynamic, and I think when this comes to a head will be in January," Dan Holler, a spokesman for Heritage Action, told The Huffington Post's Mike McAuliff. "That sort of massive bill rolling through a Republican-controlled House is going to be really painful for a lot of these guys."

Still, few people at this juncture anticipate complete gridlock, in part because there is a relatively painless fallback option. According to several sources, the committees are considering divvying up the increases in each 302(b) allocation proportionally to the size of the agency. In other words, the departments of Labor, Health and Human Services, and Education (whose spending is usually handled in one appropriations bill and whose combined post-sequestration funding stood at $149.6 billion) would receive a larger increase than the Agriculture Department (which stood at $19.5 billion) -- though, percentage wise, it would be the same for both.

Such a pro rata increase would help lawmakers get past the first major step. But others would still remain.

"Then it will be up to the appropriators how they want to apply that 'extra' to each agency, program, project, and activity within the 302(b). I haven’t yet heard how they will approach it," said a top operative lobbying for restoring non-defense funding. "Could be across the board (to make it simple), but I would imagine to the extent possible in three weeks they’d want to cut some programs, prioritize others with increases, fund new initiatives, etc."

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