Despite the public protests of many fiscally conservative Members, the Senate passed House Joint Resolution 59 by a wide 64-36 margin on December 18th. House Joint Resolution 59 is the so-called “budget deal,” the product of weeks of closed-door negotiations between Senator Patty Murray (D, WA) and Representative Paul Ryan (R, WI-01) at the Joint Senate-House Budget Conference Committee. This conference committee itself was part of the previous “deal” that ended the government shutdown in October. Nine Senate Republicans joined 53 Senate Democrats and two Independents in approving the House Joint Resolution 59. The House of Representatives had already voted on December 12th to approve House Joint Resolution 59 in a rare bipartisan 332-94 vote. House Joint Resolution 59 will now be headed to the White House for President Obama’s signature, approval that the President is expected to give by most accounts.
House Joint Resolution 59 contains some relief from the projected sequestration cuts to the defense budget in fiscal years 2014 and 2015. See below table:
Click here to view table.
For those opposed to the looming defense spending cuts imposed by the sequester, the net effect of House Joint Resolution 59 should be viewed favorably. Sequestration cuts in FY14 ($32B) and in FY15 ($45B) will still be painful but not nearly as deep as those established by the original Budget Control Act of 2011. The defense budget topline will be flat in FY14 and FY15 but will start to organically increase again in the out years (FY16-18) even if the full sequestration cuts are in effect. In the fiscal year after this sequestration relief ends (i.e. FY 16), defense spending would increase by about $56B anyway. Beyond the numbers themselves, planners in the Pentagon and in the defense industry will finally have some certainty from Congress as to what to expect and can adjust requirements, programs schedules and contracts accordingly. Overall, House Joint Resolution 59 provides roughly $32 Billion total in additional defense spending in fiscal years 2014 and 2015. Most of that extra funding ($22B) is “front-loaded” into the fiscal year 2014 budget, the point of the sharpest decline in defense spending. The sequestration relief in the fiscal year 2015 budget is more modest with only $9B in extra funding. For the rest of the out years in the FY14-18 Future Years Defense Program, the House Joint Resolution 59 would leave sequestration cuts in place.
Congress must still act to implement the fiscal year 2014 budget. House Joint Resolution 59 simply represents an agreement between the Congress and President about what total federal spending should be. The federal government is still functioning under a continuing resolution that expires on January 15, 2014. The Congress and the President must enact an omnibus appropriations bill within these funding limits by January 15th of next year in order to avert another government shutdown. The omnibus appropriations bill will contain more details about funding for specific defense programs for the remainder of fiscal year 2014.