FY 2015 Cromnibus Paves the Way for the 114th Congress
The 114th Congress convened on January 6. The Republican majority has stated its intent to return to "regular order." Regular order would involve the passage of individual spending bills through a process that has been absent in recent years.
House Budget Committee Chairman Tom Price (R-Ga.) hopes to pass a budget resolution with the Senate that balances the budget within 10 years. This budget resolution would be a blueprint for individual appropriations bills and is expected to be complete in spring of 2015.
The debt limit was last addressed in February 2014 and is suspended until March 15, 2015. However, the government could use tax receipts and intergovernmental payments to avoid default for several months past this date – perhaps as late as August 2015. This would allow the new Republican majority most of the year to dodge a substantial partisan debate. Negotiations regarding the debt limit provide both parties an opportunity to impact budgetary items. While the most recent increase to the debt limit had no conditions attached to it, in the past Democrats have resisted Republican efforts to attach spending cuts to the debt limit.
The 2011 debt-ceiling deal set caps on spending for the next decade. These spending cuts are known as sequestration and were agreed upon in order to reduce the rate of growth of federal spending through 2021. The cuts were divided evenly between defense and nondefense discretionary spending.
In December 2013, the Bipartisan Budget Act of 2013 established an overall government funding cap of $1.014 trillion. The budget agreement authorized an increase in discretionary spending for fiscal year (FY) 2014 and FY 2015, easing the sequestration cuts for those years. The law raised these sequestration caps for FY 2014 and FY 2015 in exchange for requiring the president to sequester the same percentage of mandatory budgetary resources in 2022 and 2023 as will be sequestered in 2021 under current law.
This year's omnibus spending bill sets discretionary spending through September 2015 and raises the overall spending level to more than $1.1 trillion. The overall spending increase is a result of budgetary loopholes exempting items like emergency spending to fund Ebola virus policies from the cap set by the Bipartisan Budget Act.
FY 2016 begins on October 1, 2015 at which point, the full cuts from sequestration will be implemented unless Congress agrees on a way to mitigate them. Funding for discretionary spending will stay relatively flat, though purchasing power is decreased when inflation is taken into account. It is expected that it will become increasingly difficult for Congress to abide by the discretionary spending caps as each year passes.
Some Republicans have discussed the possibility of redistributing the cuts to increase money for military spending or using savings from changes to mandatory programs, such as Medicare or Medicaid, in order to increase the defense budget. Democrats continue to insist upon the even distribution of cuts between defense and non-defense spending. While Republicans will hold the majority in both chambers of Congress, Republicans will still need the support of at least six Democrats or Independents to pass spending bills in the Senate.