Update on Federal Spending Developments

Information about recent administration and Congressional federal spending developments

The House of Representatives (Jan. 3 file photo).
U.S. House of Representatives

Yesterday, the House of Representatives voted on a balanced budget amendment (H.J. Res. 2) that would amend the U.S. Constitution to prohibit annual federal outlays (spending) from exceeding revenue, unless Congress were to approve exceptions by a significant threshold (a 3/5 vote in each chamber). The amendment would also require the President to submit a fully balanced budget request to Congress annually. As designed, the measure would dramatically clamp down on funding for federal programs, and as an amendment to the Constitution must also be ratified by 3/4 of the states, following congressional passage. However, the amendment failed to garner the required 2/3 votes (233-184) in the House, so will not advance to the Senate for further consideration.

Following enactment of both the December 2017 tax reform legislation (P.L.115-97) and the more recent Fiscal Year (FY) 2018 omnibus spending package (P.L. 115-141), the Congressional Budget Office (CBO) issued a report detailing the rise in federal debt levels, including that the nation’s deficit is expected to top $1 trillion by 2020, and that the federal deficit will rise $804 billion in FY18 alone, an increase of 21 percent since FY17. CBO also highlighted the impact of the recently enacted tax cuts on federal deficits going forward.

Pay cut - bill cut with scissorsIn response, the President and some in Congress in recent days have called for action to address various federal expenditures—the administration is reportedly crafting a legislative proposal to undo or rescind (so-called “rescissions”) non-defense parts of the FY18 omnibus measure, and some legislators are citing a need to restrict and cut entitlement spending. Examples of entitlement programs are Social Security, Medicare, Medicaid, as well as federal pensions and the retiree part of FEHBP.

While many in Congress are expressing a lack of interest in altering FY18 omnibus funding levels, NTEU will be closely monitoring any attempts to rollback funds for non-defense federal agencies, and to use federal employees and retirees as the scapegoats for elected officials’ spending decisions.

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