Thursday, April 19, 2012

House Passes FY 2013 Budget Rolution

On March 29, the House narrowly adopted a fiscal 2013 budget blueprint put forward by the House Majority (H. Con. Res. 112).  With the Senate not expected to take up a budget resolution, lawmakers will have to find a way to eventually bridge the gap between the House budget's discretionary spending cap of $1.028 trillion for FY 2013 and the Senate's top line limit of $1.047 trillion approved last year. Failure to do so by the Oct. 1 start of the new fiscal year could lead to a temporary stopgap spending bill to keep the government operating through the Nov. 6 general election.

The resolution, written by Paul Ryan (R-WI), Chairman of the House Budget Committee, calls for $3.5 trillion in outlays in FY 2013, while also assuming revenue of $2.9 trillion — for a net deficit of $797 billion, or 5% of gross domestic product (GDP). It caps non-defense discretionary spending for FY 2013 at $1.028 trillion, $19 billion below the level set by the Budget
Control Act, and provides for the cancellation of the automatic spending cuts of defense discretionary spending currently scheduled to occur in January 2013 — thereby preventing the cuts to defense spending.

Instead, it assumes $554 billion would be provided for defense budget — $8 billion more than the cap for defense set by the budget law and $63 billion more than defense would receive if the scheduled automatic defense cuts or "sequestration" were to occur. Non-defense programs, which include domestic appropriations as well as international affairs funding, would essentially be capped at $474 billion — $27 billion below the level set by the budget law and $16 billion more than the programs would receive if the sequestration were to occur.

To replace the savings lost from the cancelled sequestration, the budget includes reconciliation instructions directing six House committees to report legislation that would modify mandatory programs to produce total savings of $18 billion for FY 2013 and $261 billion over 10 years. Those savings would be in addition to the $19 billion in savings in 2013 from the lower discretionary cap. The six committees would be required to approve their reconciliation recommendations by April 27.

Impact on Workforce Programs:

The resolution would consolidate a number of workforce and job-training programs. While the report does not provide specifics on these programs, it cites the House Committee on Education and the Workforce’s proposed Workforce Investment Act (WIA) reauthorization legislation (H.R. 3610) as an example for this reform. H.R. 3610 would consolidate several federal job-training programs into four larger funding streams. These four funding streams—the Workforce Investment Fund, the State Youth Workforce Investment Fund, the Veterans Workforce Investment Fund, and the Targeted Populations Workforce Investment Fund—would operate as block grants to states for various workforce and job training activities. This legislation would also repeal the Wagner-Peyser Act.

Similar to last year, the FY 2013 resolution also proposes tracking the type of training provided, the cost per student, employment after training, and whether or not trainees are working in the field for which they were trained. In addition, the resolution notes these programs should also track beneficiaries’ participation levels in other federal support programs (e.g., SNAP) before and after training to determine if the training led to self-sufficiency.

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