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April Federal Issues Update

Thursday, May 23, 2013  
Posted by: Sarah Cole
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Federal Policy Report ~ Housing Colorado ~ April 2013 Edition

 By Karly Malpiede Andrus

 

Next Critical Dates: This is the next date or two to bear in mind for issues in Washington DC. 

Ø  May – Debt Ceiling will be reached again

Ø  September 30, 2013 – the current Continuing Resolution (CR), extended from fiscal year (FY) 2012 expires

Ø  October 1, 2013 – start of fiscal year (FY) 2014 budget *Assuming Congress proposes Conference bill that gets President’s signature and Congress gets the appropriations bills through the same process.

 

Let’s Talk About Budgets Baby, And What they Mean For You and Me
Congress is about to establish a FY 2014 budget blueprint, with the House and Senate miles apart on the numbers. The House passed its resolution. The Senate passed their resolution and President Obama has weighed in with his proposed budget that is not loved by either the House Republicans or the Senate Democrats.

This means the House Republicans, Senate Democrats and the President have released their respective draft budget resolutions which identify a total amount of tax collections and spending for a year, and allocates the spending by committees.  The Committees would then determine how to allocate spending within the programs of its jurisdiction.  For example, the Senate Appropriations Transportation and Housing Committee is given an overall budget, and then figures out how to divide the funding between transportation and housing programs.

Congress has not passed a budget resolution for quite a few years and the current drafts express why, they reflect the large scale philosophical differences the two parties have on the economy, taxes, and spending.

 

For instance, Rep. Ryan’s budget proposes steep cuts to transportation which is in stark contrast to the proposed jobs and investments package both President Obama and Senator Murray would like to see."Murray is proposing a $100 billion jobs and infrastructure package in her fiscal 2014 budget,” according to Politico, "which includes a $50 billion infusion to fix the most deficient bridges, airports and transit systems and a total of $70 billion for infrastructure as a whole.” Murray’s framework would also provide $10 billion toward improving dams and dredging ports and $10 billion to create an infrastructure bank. The Senate budget summary doesn’t identify a long-term funding source for surface transportation revenues but offers two more financing tools, one of which is the infrastructure bank. On the other hand, Rep. Ryan’s budget has rather steep cuts to transportation programs and an emphasis on local contributions and control of resources. His budget blueprint is similar to his last version only this one "balances” in ten years.

Either way, it is imperative for the nation to discuss appropriate, needed economic investment and long term fiscal solvency. For example, what follows MAP 21 (Moving Ahead Progress for the 21st Century), the 2 year transportation funding bill that expires in 2014. Further, we need to evaluate larger issues that invest in community development like the proposed BUILD Act, which is a Brownfields revamp bill or the proposed bill creating a long term NSP program. Unfortunately, the current environment on the Hill make this next to impossible.  Making larger items critical to the country’s long term solvency , like GSE reform, a distant dream.  You might recall that post 2007 recession the federal government backs approximately 90% of all mortgages issued, regardless of how one falls ideologically on this issue, we can all agree that is simply not sustainable or prudent.

 

A basic review of the ideal Budgetary and appropriations process is helpful. It is important to note that until recently appropriations bills were a way for members to "bring home the bacon”, which used to be a good thing - at least locally.  In the 111th the "Pay-For” rule became dominate in Congress, this essentially means that if a member wants to pass a bill they have to submit it for costing to the Congressional Budget Office (CBO), if the bill has a cost, the member must find a way to "pay for” or offset the cost of the bill.  Consequently, "revenue neutral” has become a key buzz phrase in press conferences.  This means the bill has a mechanism that allows for payment or cuts a current expenditure to replace with the spending in their proposed bill.

 

Having said that, the normal budget process begins with each Chamber passing a resolution, and then they negotiate their differences in Conference Committee to produce a final bill which is sent to the President for his signature. For the first time in a while each Chamber has passed a resolution, but there is little hope for a smooth process given how far apart the various budgets appear. Theoretically, once the President signs the budget bill the Committees can get to work appropriating money under the various bills, which respect the budgetary levels established in the bill the President signed into law.  Again, it appears that both parties and both chambers are quite far apart on many appropriations bills.

 

Important to remember, we are currently under a Continuing Resolution that technically contains FY 2012 programmatic language and levels as the base.  This means that some legislation that has passed since the FY 2012 budget that goes through the traditional process and gets signed into law by the President cannot be enacted as written.  For example, in MAP-21, the transportation bill, a TOD pilot program was written into law, however it was not part of the fiscal year 2012 world.  Unfortunately, they were unable to create a fiscal year 2013 budget, which would have created a place for this pilot program.  Since the Continuing Resolution is essentially continuing fiscal year 2012 programs and levels we cannot fiscally comply with the law.

 

The Center on Budget and Policy Priorities (CBPP) has a great in-depth guide on their website.  Also remember that there are lots of other organizations, including the Library of Congress, that have a wealth of information on this topic.

 

We are in a unique historical period, everything is on the table and the moral component of budgeting has never been more pronounced.  These decisions have consequences, although genuine deliberation and collaboration at this juncture could yield great opportunities. I am cautiously optimistic that is where we will get.

 

Meanwhile, you might want to reach out to your Representatives and Senators about the programs that matter most to you and your organization during the ongoing appropriations and budgetary conversations.


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