Deadline Approaches for Critical Next Step in Budget Deal

Published: January 08, 2014


The December budget deal received a lot of media attention, but it only marked the first step in the budget process. Current stopgap spending expires January 15, 2014. Without new spending authority in place, the government could partially shut down again. This rapidly approaching January deadline is where the rubber meets the road for agency funding decisions.

A month ago, the Bipartisan Budget Act of 2013, proposed by House Budget Chairman Paul Ryan (R-WI) and Senate Budget Chairwoman Patty Murray (D-WA), laid out top-line spending levels for the next two fiscal years, funding agencies through the fall of 2015. This plan essentially split the difference between the Senate and House budget for overall discretionary budget authority for the current fiscal year. It also reduced scheduled spending cuts by $63 billion over two years, essentially dulling the near-term impact of sequestration.
The top-level caps for discretionary budget authority would enable a rise in spending above current law. For Defense, this increase would be 4.5% in FY 2014 and 1.8% for FY 2015 from current levels. Non-defense discretionary budget authority would rise above current levels by 4.7% in FY 2014 and 1.9% in FY 2015.


A week out from the January 15th deadline, negotiators reported progress in reaching agreement on a $1.1 trillion spending bill to fund the government through September. This bill would mark the crucial next step in the budget process. This step is comprised of the line-by-line agency spending for the rest of fiscal 2014.  On Tuesday, January 7th, Senate Appropriations Committee Chairwoman Barbara Mikulski (D-MD) voiced optimism about reaching an agreement on an omnibus spending measure. Agency budgets close to being settled at the start of the week include the Defense Department, along with Commerce, Justice, Agriculture, Housing and Urban Development, Veterans Affairs and Transportation. 


In an interview with the Associated Press , Mikulski noted that negotiators were, “looking at narrow the differences, looking at … how we can compromise without capitulation on both sides.” Issues that could still present hurdles for the bill include health care and financial sector reform, environmental and labor regulations. With current continuing resolution nearing its expiration and Congressional recess on January 17th, a temporary measure has not been ruled out to extend funding if additional time is needed to address final details. In the meantime, the goal for legislators remains completing all 12 funding bills before the January deadline.


These spending bills are particularly important for government contractors looking for indications of agency priorities and program spending over the next two years. While top-level figures provide a sense of overall government spending, that’s just the start of the budget process. Appropriations committees still have to establish department spending limits from which program-level spending will be determined. And, it’s only once those figures are set that agencies are able to make decisions about specific initiatives and contracts.