Next Step: FY 2016 Budget to Be Hashed Out in Conference
Published: April 01, 2015
The House and Senate both passed versions of a FY 2016 budget last week prior to their two week recess. The next step is to iron out their differences in conference and develop a budget resolution, which is supposed to be passed by April 15th, but rarely meets that deadline.
Both the House and Senate versions of the budget are markedly more conservative than the budget request put forth by the president in February. The president’s budget provides an additional $37B for domestic discretionary investment above Budget Control Act spending levels in FY 2016, and $178B more than current law over 10 years. The House and Senate versions maintain current cuts to domestic programs under the Budget Control Act. The House version proposes cutting non-defense discretionary spending by an additional $759 billion over 10 years, while the Senate version proposes $236B in cuts over the same time period.
Both House and Senate proposals would provide $96B in total war funding in FY 2016, through the Overseas Contingency Operations fund. The Senate budget cuts $5.1T in spending over the next decade, while the House budget cuts $5.5T over the same time period.
The president’s budget request invests $478B over six years to create jobs in surface transportation repairs and includes $146B in FY 2016 for expansion of R&D tax credit to grow manufacturing and create jobs. Neither the House nor Senate proposals contain new funding for job creation.
The president’s budget shows a deficit of $474B in FY 2016, but plans to achieve $1.8T in total deficit reduction over 10 years by increasing both spending and revenues. The Senate budget proposal runs a deficit of $343B next fiscal year and decreases spending $5.1T over 10 years. This proposal balances the budget in 10 years by cutting spending. The House version decreases spending by $5.5T over 10 years, balancing the budget in less than 10 years.
The president’s budget exceeds sequestration caps for defense and non-defense spending in FY 2016 by over $70B. It proposes eliminating sequestration and spending $371B above sequester levels over 10 years. The House proposal adds $90B in war funding to prevent sequestration from affecting the military budget and proposes cutting non-defense discretionary spending by $759B below sequester levels over 10 years. The Senate proposal also adds to war funding in order to prevent sequestration from affecting the military budget and proposes cutting non-defense discretionary spending by $236B below sequester levels over 10 years. The president has indicated that he will not sign a budget bill that does not cancel sequestration cuts.
With the vast differences between the White House budget and those proposed by Congress, it’s likely to be a long budget and appropriations process to get to something that the president will sign.