With the latest Continuing Resolution (CR) expiring at midnight tomorrow, and Members eager to adjourn for the year, Congressional leaders and the White House are trying to wrap up the FY12 appropriations process and resolve several other important matters including an extension of the payroll tax cut and unemployment benefits. What was expected to be rather swift passage this week of the FY12 omnibus appropriations bill has now become mired in high-level brinksmanship over competing partisan measures related to the payroll tax cut extension and other non-appropriations related issues.

Earlier this morning House leaders unveiled the omnibus bill of the remaining nine FY12 appropriations bills (H.R. 3671), including the State-Foreign Operations bill.  At the same time, House leaders announced their intention to move the omnibus bill along with two other measures: a disaster relief bill (H.R. 3672) to provide emergency domestic assistance, and a resolution (H. Con. Res. 94) providing offsets to the disaster relief through an across-the-board 1.8% cut to all non-defense discretionary spending.  The filed omnibus is not yet official because Democratic conferees have yet to sign it.  When and how an agreement with the White House and Congressional Democrats will be reached on these measures is very much in question, with passage of another short-term CR into next week a possibility.

The funding level in the omnibus for the FY12 State-Foreign Operations Appropriations bill presents a mixed picture for the International Affairs Budget.  The omnibus measure provides $42.1 billion in base funding for State-Foreign Operations, roughly splitting the difference between the base levels proposed by the House and Senate earlier this year.  This level represents a 5% decrease from FY11 and 14% from FY10.  However, the measure also provides $11.2 billion in the Overseas Contingency Operations (OCO) account for war-related programs in the Frontline States – $2.5 billion above the President’s request.  This additional OCO funding, which includes security-related programs in the Frontline States and other regions that originally had been funded under the base budget, results in a total “base” funding closer to FY11 enacted levels.  While in the short-term this is a favorable outcome given the far deeper cuts proposed by the House, the long-term implications of continued decreases in non-OCO funding levels are very concerning.

2.    Senate Republicans Speak Out on Importance of International Affairs Budget

Speaking this Tuesday at the Foreign Policy Initiative 2011 Forum, Senators Kelly Ayotte (R-NH), Lindsey Graham (R-SC), John McCain (R-AZ) and Marco Rubio (R-FL) championed strong U.S. global engagement and the vital role of the International Affairs Budget.  Senator Rubio stressed the importance of U.S. foreign assistance to all facets of Americans’ daily lives, saying: “In essence, what happens halfway around the world directly impacts virtually every aspect of our life, including how much you pay at the grocery store, how much the toys you buy this Christmas are going to cost, how much food prices are going to be…  And beyond that, the future definition of what the world is going to be like.  I think America’s indispensible to that.”  In an interview with The Washington Post after the forum, Senator Ayotte criticized efforts to cut the International Affairs Budget, noting it provides an excellent return on investment and that “[i]t’s less than one percent of the total budget.”  Senator Graham also took to task those who have called for cutting foreign assistance, saying, “Yes, talk about foreign aid as something that needs to be reformed but, for God’s sakes, don’t give the illusion to Americans that we can be safe by disengaging.”

3.    Senate Defeats Balanced-Budget Amendments

Yesterday the Senate rejected two versions of a balanced-budget amendment to the Constitution after several hours of debate.  Neither of the competing bills received the two-thirds majority (67 votes) required for passage.  S.J. Res. 10, sponsored by Senator Orrin Hatch (R-UT) and rejected 47-53, would require that outlays not exceed revenues unless a two-thirds majority in Congress voted to allow a budget deficit. The bill also caps federal spending at 18% of GDP and would require a two-thirds majority to approve any tax increase.  S.J. Res. 24, sponsored by Senator Mark Udall (D-CO) and rejected 21-79, would also mandate that outlays not exceed revenues, but would require only a three-fifths majority to allow deficit spending.

Under the terms of the August debt ceiling deal, both chambers were required to hold a vote on a balanced-budget amendment before the end of the year.  The House version taken up last month failed by a vote of 261-165.

4.    House Budget Committee Introduces Budget Reform Measures

House Budget Committee Chairman Paul Ryan (R-WI), along with several other Republicans on the committee, recently introduced a package of ten budget reform bills aimed at enforcing tougher spending controls, enhancing oversight, and improving transparency of the federal budgeting process. In a statement, Chairman Ryan said, “Washington stumbles from budget crisis to budget crisis, with little to no oversight of how government spends hardworking taxpayers’ money… These reforms mark an important first step to getting our arms around the problem, but there is no substitute for political will in solving our structural budget problems.” The various proposals include:

• Creating a biennial budgeting cycle;
• Giving the joint budget resolution the force of law by requiring enactment by the President;
• Establishing binding limitations on federal spending and deficits with automatic spending cuts for programs that grow faster than inflation;
• Funding the government though automatic continuing resolutions, with an across-the-board 1% cut for every 90 days past the start of the fiscal year that Congress fails to enact appropriations bills; and
• Capping total government spending at 20% of GDP.

The House is expected to take up the bills early next year, but the previously introduced line-item veto bill (H.R. 3521), sponsored by Chairman Ryan and Ranking Member Chris Van Hollen (D-MD), was approved Thursday by the Budget Committee in a vote of 23-13.  The bill, with twelve bipartisan co-sponsors, grants the president the authority to withhold the obligation of any amount of discretionary budget authority for 45 days, giving Congress time to debate and vote on the proposed cuts in an up-or-down vote.  It is structured to avoid the constitutional obstacles that led to the Supreme Court overturning the previous line-item veto bill enacted in 1996.