Comparing Recent Continuing Resolution Proposals

Today, the Congressional Budget Office (CBO) released its score of H. J. Res. 59, the continuing resolution (CR) recently proposed by several House Republicans that would provide funding for the government through December 15th, although the bill was pulled from consideration yesterday. CBO estimates that the bill would provide an annualized $518 billion in base defense funding and $468 billion in base nondefense funding, for a total of $986 billion. The bill would prevent a government shutdown at the end of the month, but the sequester would still have to be addressed in December, as the CR would exceed the sequester cap on defense by $20 billion. If the sequester were not subsequently addressed, 15 days after Congress adjourns (likely in mid-January), defense funding would face $20 billion in across-the-board reductions to bring it in line with the cap.

Also today, House Budget Committee Ranking Member Chris Van Hollen (D-MD) said in a press release that he would be proposing an alternative bill that would fund the government through November 15 and cancel sequestration for Fiscal Year (FY) 2014, setting defense and nondefense levels according to the original caps in the Budget Control Act -- $552 billion for defense and $506 billion for nondefense. While CBO has not yet scored the current legislation, according to Van Hollen's office, the bill would include approximately $180 billion in offsets, $75 billion more over ten years than the 2014 sequester. Savings are split roughly 50-50 between spending cuts and revenue increases, including disallowing Last-In-First-Out accounting for oil companies, repealing the Section 199 deduction for oil and gas companies, implementing the so-called "Buffet Rule," reducing farm subsides, and decreasing base defense caps later in the decade. Van Hollen previously proposed a similar sequester replacement bill without a continuing resolution back in May.

^{Sources: CBO, Van Hollen
Note: Van Hollen's legislation has not yet been scored by CBO, savings are approximate}

Earlier this week, we released a paper, "What We Hope to See from the Government Funding Negotiations," which set clear expectations for dealing with the sequester. Ideally, lawmakers would enact a comprehensive plan that would fully address our debt problem, but at a minimum, lawmakers should offset any appropriations above the sequester caps with savings in other areas.

Though enacting a temporary CR is a wasted opportunity, we can take some comfort that the proposals would not dramatically increase the debt. The House Republican's CR does spend 20 billion above the caps on the defense side -- which must be fixed -- but at least leaves in place the enforcement. Van Hollen's decision to more than fully offset his sequester is encouraging -- though we have some concerns about using out-year cap reductions, which may not be credible.

It is important that we do not worsen our budget outlook as we continue to work toward a larger budget deal.

Note: Blog was updated shortly after original post.