Federal Update | Good Start on Congressional Appropriations Although Long Road Ahead

The House Appropriations Committee began the annual appropriations process in earnest this week, advancing the first of 12 funding bills for Fiscal Year 2020. In marked contrast to the President’s FY20 budget proposal, it was an encouraging start for University priorities, as appropriators approved substantial increases across student aid programs at the Department of Education and a $2 billion boost for the National Institutes of Health.

However, action in the House is just the first step in a long process, and Senate appropriators have not yet begun their work. In order for the two chambers to make progress on appropriations, the House, Senate and White House will first have to negotiate a broad budget deal that establishes an agreed-upon level of overall spending – likely over two years – that is higher than current law allows. Without such an agreement, statutory caps now in place would cut total defense and non-defense discretionary spending next year by $126 billion from the current year level.

Though such a steep cut has prompted congressional leaders on both sides to agree a deal is needed, there are no indications that talks have begun. Further, the president has thus far dismissed the idea of agreeing to another budget deal, though the common assumption is he will ultimately do so to avoid drastic automatic reductions to defense.

Looking Ahead

How and when elected leaders reach a budget agreement is impossible to predict, though it is likely to come later in the year, perhaps at the same time as Congress is forced to raise or suspend the debt ceiling. Since expiration of the last debt limit suspension on March 1, the Treasury Department has been utilizing extraordinary measures to avoid defaulting on the nation’s debt. Independent analysts and Treasury alike estimate such measures will be exhausted in September or October, just as the current fiscal year is coming to an end or shortly after the new fiscal year has begun.

It could also be that a budget deal is agreed closer to the end of the calendar year, as the $126 billion in cuts are not statutorily triggered until January 2020.

Since FY20 appropriations bills will not be finalized until after a budget agreement is reached, any increases such as those approved this week by the House Appropriations Committee could come – if they come – months after the start of the new fiscal year.

Contact

If you have any questions on this update or Harvard’s engagement in Washington, please feel free to be in touch with Suzanne Day (suzanne_day@harvard.edu) or Jon Groteboer (jon_groteboer@harvard.edu) in the Office of Federal Relations.