House and Senate pass differing 2014 budgets.

March 25, 2013

Last week, the House and Senate both passed the Fiscal Year (FY) 2013 continuing resolution (CR), legislation to fund the government for the remaining six months of the fiscal year, avoiding a government shutdown. The CR now moves to the President’s desk to be signed into law. The CR funds the government at $1.047 trillion, the amount fixed in law under the 2011 Budget Control Act (BCA), slightly above FY 2012 spending levels. Under the CR, workforce programs will remain relatively level funded from FY 2012. However, the CR does not reflect the sequester—which remains in place for now—which will reduce overall funding in FY 2013 to approximately $984 billion for the year. As a result, funding for federal employment and training programs continue to face significant funding cuts during the remainder of 2013. 

The CR included language requiring the Secretary of Labor to transfer no less than $10 million and as much as $30 million of unobligated Employment and Training Administration (ETA) funds to the Job Corps program. In January, the Department of Labor (DOL) froze Job Corps enrollment following the recent discovery by DOL that Job Corps faced a near $60 million budget shortfall. It is still unclear exactly how much of unobligated ETA funds will go to Job Corps, or from where, specifically, within the ETA budget the unobligated funding might come. 

While finishing up the FY 2013 appropriations process, Congress began working on the FY 2014 budget process (by law, the House and Senate are required to pass budget resolutions by April 15). Budget resolutions set overall spending levels for federal discretionary programs—including most employment and training programs—and will guide the appropriations process later this spring. On March 14, the House passed its FY 2014 budget resolution by a vote of 221-207. The Senate passed its budget resolution 50-49 in the wee hours of the morning on Saturday. 

National Skills Coalition supports the Senate budget resolution, offered by Senate Budget Committee Chair Patty Murray (D-WA) and opposes the House budget resolution, offered by House Budget Committee Chair Paul Ryan (R-WI).    

The Senate budget resolution adopts a balanced approach to deficit reduction, proposing $1.85 trillion in additional deficit reduction over the next decade, equally divided between new revenue and cuts to defense and non-defense discretionary (NDD) programs. The Senate budget resolution would also do away with all nine years of the damaging sequesters. While NSC would prefer to see no further cuts to NDD programs, Senator Murray’s proposal is far superior to sequestration and further cuts to NDD programs proposed in the House budget. 

Importantly, Senator Murray’s budget also includes $10 billion in new investments for job training programs.  

In the House, Rep. Ryan’s budget would, over the next 10 years, reduce federal investments in NDD programs by $1.1 trillion below the existing BCA spending caps. The House budget does not specify from which programs the $1.1 trillion cut to NDD funding would come.  However, based on previous budget resolutions and language included in Rep. Ryan’s “Path to Prosperity” budget blueprint, it seems clear that federal employment and training programs would face additional deep cuts under this budget resolution. NSC is particularly concerned that Rep. Ryan seems to justify these funding cuts by referring to the SKILLS Act (H.R. 803), the Workforce Investment Act (WIA) reauthorization legislation recently passed by the House.

While the House budget would replace the defense sequester, it would keep the NDD sequester cuts in place, and would actually cut NDD programs by an additional $700 billion below post-sequester levels. In addition, the House budget would put postsecondary education out of reach for millions of low-income individuals by slashing funding for the Pell grant program.  

Now that the House and Senate have both passed their respective resolutions, representatives from both chambers will attempt to “conference” the bill, to reconcile the differences between the two measures. However, the differences between the two resolutions are so great that it is extremely unlikely that the conferees will be able to produce a conference report that could be adopted by both chambers.  

What seems more likely is that each chamber’s budget resolution will serve as a starting point for negotiations with President Obama for a “grand bargain” on deficit reduction. Lawmakers will likely seek to have a grand bargain in place in time to avoid another fight on the debt ceiling, which likely means late July or early August (which is when experts expect the nation will be at risk of defaulting on our debt again). NSC strongly supports efforts to reach a balanced deal that fully replaces the sequester and protects NDD programs—including employment and training programs—from any further cuts.   

NSC will continue to provide updates as the federal budget process moves forward.