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Budget Deal To Ease Sequester, Boost Discretionary Spending For Two Years

Status Report From: American Institute of Physics
Posted: Friday, October 30, 2015

Congress approved a major bipartisan budget agreement, negotiated with the White House, that increases discretionary spending by $80 billion total in FY 2016 and FY 2017, creating room for boosts to spending at federal science agencies and offices starting this year

Early this morning, the Senate passed and sent the "Bipartisan Budget Act of 2015" to President Obama, concluding a major bipartisan effort between the White House and congressional leaders in both political parties that brings budget stability to the federal government for the next two years. The agreement, which the President has clearly indicated he will sign into law, lifts the federal debt ceiling through March 2017 and dials back for two years the federal budget sequester that has been in place since the passage of the Budget Control Act of 2011.

Notably for the scientific community, the agreement raises annual spending caps on discretionary spending by $80 billion total over the next two years, relief that is split evenly between defense and non-defense accounts. With an additional $50 billion to spend in FY 2016 and $30 billion to spend in FY 2017 above earlier expectations, Congress will have more room to boost the top line budgets of federal departments and agencies, including for the primary sponsors of federally funded science.

Federal R&D spending tends to rise and fall with discretionary spending

The new budget legislation does not guarantee the science agencies will see spending increases in either FY 2016 or FY 2017, but it does provide a 5.2 percent increase in federal discretionary spending in FY 2016. This boost frees up additional funds this year for potentially higher spending levels for the science agencies and offices than those that House and Senate appropriators approved this spring and summer. (Under the agreement, total discretionary spending will increase only marginally in FY 2017, and will actually see a small decrease when accounting for expected inflation, so most of the boost in spending year-over-year under the agreement takes place in FY 2016.)

As Matt Hourihan and David Parkes with the American Association for Advancement of Science have observed, history suggests that an increase in overall discretionary spending will translate into higher spending on federal research and development. According to the analysts, "Discretionary spending and R&D tend to move hand-in-hand: individual agencies may fare better or worse in different years, but the discretionary budget is essentially the center of gravity around which science agencies cluster, fiscally speaking."

Spending levels for science could be closer to President's request this year

The new federal discretionary spending total for FY 2016 of $1.067 trillion is now more in line with the President's FY 2016 budget request than the budget resolution Congress passed earlier this spring. This is important, because it opens the possibility that Congress could approve a final spending bill for FY 2016 that funds the science agencies and offices in line with or close to the President's request.

For instance, as FYI has reported, the President requested the following funding increases for science agencies and offices in FY 2016:

Policy riders a last area of controversy for hammering out this year's spending bill

House and Senate appropriators will now go to work to draft new FY 2016 appropriations legislation that allocates funding within the higher discretionary spending cap. The federal government is currently funded on a short-term stop gap measure that expires on December 11, so the appropriators' deadline is six weeks from now. They will likely begin the work of allocating funds and drafting a spending bill immediately.

With an agreement on overall spending levels for FY 2016 and FY 2017 now finalized, the final major area of controversy left to be resolved in the annual spending bills is on so-called policy riders which have aimed to limit or otherwise change the direction of the Executive Branch on certain flashpoint issues. For example, as FYI reported in May and again in September, one rider to a House appropriations bill would require 70 percent of research funding at the NSF in FY 2016 go to four of its six research directorates, likely singling out the Geosciences and Social, Behavioral, and Economic Directorates for significant funding cuts.

Budget agreement receives largely bipartisan support and praise

The Senate passed H.R. 1314, the "Bipartisan Budget Act of 2015" at 3 a.m., by a vote of 64 to 35, following a Wednesday evening vote in the House that led to passage in that chamber, 266 to 167. While hard line conservatives in both chambers opposed the deal, the final votes in both chambers reflected significant bipartisan support. In the House, one-third of Republicans in the chamber voted with every Democrat to pass the measure. In the Senate, 18 Republicans joined all of the Democrats in the chamber to pass the measure.

The President released a statement today praising Congress' passage of the deal, which the Administration played a leading role in negotiating:

"I applaud the Democrats and Republicans who came together this morning to pass a responsible, long-term budget agreement that reflects our values, grows our economy and creates jobs. The agreement will strengthen the middle class by investing in education, job training, and basic research."

The President continued by calling on Congress to start work on appropriations bills "without getting sidetracked by ideological provisions that have no place in America's budget process."

Newly elected Speaker of the House Paul Ryan (R-WI) supported the agreement, although not without some reservations about the process of closed-door negotiations used to get to the final product. House Majority Leader Kevin McCarthy (R-CA) said in a statement the "deal is not perfect" but had positive words regarding its passage.

Rep. Louise Slaughter (D-NY) summed up the sentiments of many members of Congress: "This is a welcome respite from the sequester's grip. This agreement is the first bipartisan budget bill we've seen in quite a while. It serves as a road map that will lead us through the appropriations process."

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