Fermi National Laboratory

From Lewis-Burke Associates
Update: Austere Budget Resolution Moves Through Congress

The FY 2005 federal budget has now taken center stage in Congress. In early February, the President proposed an austere federal budget for domestic discretionary spending, modest increases for defense spending, additional tax cuts, and a record setting deficit in the $500 billion range. Domestic discretionary spending is the category of the federal budget that provides annual funding for a wide range of important activities such as basic and applied research, education at all levels, highways and mass transit, environmental protection and clean up, housing, veterans medical care, and job training – just to mention a few. Under the President’s proposal, funding for domestic discretionary spending would increase by a grand total of one half of one percent (.5%). Within the domestic spending category, non-defense research (NIH, NSF, NASA, Energy, NOAA, etc.) is proposed to grow by 2.5%.

As constrained as the White House budget is, the spending plans currently being considered by the House and Senate call for even greater reductions in domestic spending programs as legislators attempt to cut the deficit more quickly than the President’s proposals. The Senate Budget Committee plan, sponsored by Chairman Don Nickles (R-OK), would cut domestic spending below the President’s already low level, essentially funding this category of the budget level at the FY 2004 level. The House Budget Committee assumes a similar freeze in its budget plan for domestic programs.

In spite of the plans’ intent to freeze federal domestic spending, Congress will still be inclined – even required – to provide increases in some areas. Conventional wisdom would say the Congress will provide increases for veterans medical care, housing programs, and a few other areas. All this will further squeeze federal support for science and engineering research and education within the relevant federal science agencies.

As soon as the Congress adopts its overall spending plan – called a budget resolution -- for FY 2005, the process will move to the arena of the Appropriations Committees, which will be charged with making the individual agency and program spending allocations within the ceiling provided in the budget resolution. Once the budget process moves to the Appropriations Committees, this is where many observers believe gridlock will set in. At the funding levels within which the Appropriations Committees will be forced to work, many believe that it is unlikely that most of the individual appropriations bills, with the possible exception of defense and homeland security, can garner enough votes to pass the Senate. With an election looming in November and presidential nominating conventions taking up a good part of the summer, the legislative calendar is short. The combination of a truncated calendar and gridlock in the appropriations process could mean a long, hot summer for the budget process as the Congress resorts to passing temporary spending bills for FY 2005 until well past the November elections.

Joel Widder
Lewis-Burke Associates LLC

last modified 3/12/2004   email Fermilab