The 2011 Funding Level Debate Continues

Update: CBO released an estimate of H.R. 1 on Friday, Feb 25, puting total base discretionary budget authority at $1,026 billion. The table below has been updated. Additionally, Senate Democrats are working on a seven month spending package that reportedly would cut earmarks and use some of the President's proposed terminations and reductions for FY 2012.

As we get closer and closer to the March 4th expiration of the current continuing resolution (CR), lawmakers will either have to decide on funding levels for the remaining 7 months of the fiscal year or pass another short-term extenion--or, of course, risk a government shutdown. As we commented on earlier in the week, the House passed a spending package for the remainder of the year early Saturday morning, cutting funding by roughly $100 billion below the President's request and about $60 billion below the current CR. But given strong disgreements from congressional Democrats and the White House over these spending levels and the brief amount of time that lawmakers have until March 4 arrives, it doesn't look they'll be able to agree on a full spending package in time.

In light of this, Senate Democrats have called for continuing current funding levels in the short-term to give lawmakers more time to negotiate spending levels for the rest of the fiscal year. Recognizing that their spending package passed on Saturday will likely not get through the Senate or White House at this point, House Republicans have begun working on a short two week spending bill that would cut $4 billion off of the current CR--a prorated amount of cuts for two weeks based on the $61 billion spending cut package (based on enacted 2010 levels) passed on Saturday.

FY 2011 Funding Annual Budget Authority (billions) Amount Below CR Level
Amount Below President's Budget
President's 2011 Budget Request $1,128  -$41 $0
CR Funding Level* $1,087 $0 $41

House Passed Bill: H.R. 1

(and Short-Term Extension)

$1,026

$61

(Short-Term Extension: $4 billion)

$102

*Roughly equal to 2011 CR level of $1,091 billion.

As we've said before, the focus on domestic discretionary spending is too narrow. We will need comprehensive entitlement and tax reform too if we are to achieve fiscal sustainability. But discretionary cuts--and, more importantly, caps with enforcement mechanisms--can be a great way to start tackling future deficits, provided that we cut spending responsibly to give agencies, people, and the economy sufficient time to adjust.

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