Further Action on House Budget Plan for Fiscal Year 2017

As I shared recently, Representative Price (R-GA), Chairman of the House Committee on the Budget, has released a budget plan for Fiscal Year (FY) 2017. Additional materials have been released for this plan, including legislative text, and the House Budget Committee met earlier this week in a full-day marathon mark-up session to consider this proposal.

The Price budget plan would maintain the overall spending caps (for both domestic and defense agencies) that were established in late 2015. However, longer-term the budget would make significant cuts ($6.5 trillion) to both discretionary and mandatory spending programs over the next ten years, and assumes the re-commencement of sequestration. While defense programs would see large funding increases, entitlement programs including Social Security, Medicare, and the Supplemental Nutrition Assistance Program, would undergo major reforms and cuts. This plan also includes a proposal to eliminate the Consumer Financial Protection Bureau and would significantly reduce annual funding levels for the Environmental Protection Agency.

In addition to altering a variety of budgetary enforcement mechanisms to cut various types of spending in both FY 2017 and over the ten-year budgetary window (FY 2017–2026), this budget specifically calls for $49 billion in unspecified cuts in FY 2017 to “other mandatory programs,” which would likely include federal employee benefit programs. Over the entire 10-year budgetary window, these non-specified federal programs are to be cut by approximately  1.5 trillion dollars. While not directly cited with specified cuts, federal employee retirement and health care programs fall under this category of spending.

This budget plan also provides for reconciliation, which is a legislative process that affords expedited consideration for budget legislation, including a lower voting threshold for Senate floor consideration (only 50 votes needed to pass the measure rather than the regular 60 votes required, making it easier to pass). Under this budget, House committees would be required to make substantial cuts (the exact dollar amounts are yet to be determined) to programs within their specific jurisdictions. Of note, this budget’s legislative language provides for future consideration of a proposal that “reforms, improves, and updates” the federal retirement system, which means further cuts to federal employee retirement benefits, most likely by significantly raising required employee contributions.

Late last evening, the House Budget Committee, by a vote of 20-16 (with two Republicans and all 14 Democratic Committee members voting against), approved this budget proposal. However, at this time, House Leadership does not have the needed 218 votes to pass the Price budget on the floor, and announced earlier today that there is no plan to bring it to the floor until at least mid-April following the House’s upcoming two-week recess. Earlier this week, a key House Republican Caucus (voting-bloc) announced its refusal to support it on the floor, including five Republican members who voted for it last night in Committee. House leadership must now work to secure its floor passage and is attempting to craft a separate stand-alone package of additional immediate spending cuts, coupled with new budgetary process changes to make it easier to cut federal spending going forward, all designed to garner the votes needed to ensure passage of the Price budget. The separate package would cut spending by $30 billion in FY 2017 and 2018, and $140 billion over the next ten years. It is not known at this time whether these efforts will succeed in attracting enough support from House Republican legislators.

It is clear that this proposal would devastate agencies’ budgets through its massive cuts to non-defense discretionary spending, and would unquestionably target federal employees by substantially increasing retirement contributions.

I will keep you updated on any developments regarding the status of the House’s budget.