No one could have predicted the circumstances under which Congress and the Administration were able to bring about last week’s long-term budget agreements.
The resignation announcement by House Speaker John Boehner immediately cleared the way for a bill funding the government through December 11th. It also allowed the outgoing Speaker to “clean up the barn” and resolve potentially debilitating issues for incoming Speaker Paul D. Ryan. In a move worthy of the climactic scene in The Godfather, outgoing Speaker Boehner settled political scores by successfully negotiating a two-year adjustment to federal discretionary spending levels and raising the nation’s debt ceiling through March, 2017.
This is good news for aviation. As NATA’s President Tom Hendricks observed earlier in the week, the legislation addresses two threats to our industry – the ramifications of defaulting on our nation’s debts and a potential shutdown of the Federal Aviation Administration. Let’s look at the numbers behind the agreement and talk about what happens next.
The Bipartisan Budget Act of 2015 amends the discretionary spending caps (the 30% of federal spending directly appropriated by Congress on an annual basis) for fiscal years 2016 and 2017 as seen below:
|Discretionary Spending Caps (in billions)|
|Old Cap FY16||Revised FY16||Old Cap FY17||Revised FY17|
One interesting question is whether all parties involved will consider this a two-year spending deal. After all, the agreement includes virtually no increase in spending between FY2016 and FY2017. However, veteran appropriators have observed the 2013 Ryan-Murray deal had a similar tight spending level in year two and all parties involved lived within it.As you see, these levels represent increases of $50 billion and $30 billion respectively over the FY16 and FY17 spending levels established in 2011. Recall that in his February budget request, President Obama proposed a $75 billion discretionary spending increase above the FY2016 caps.
So the chances of a government shutdown have been dramatically reduced but we are not completely out of the woods yet.
Remember, the current continuing resolution (CR) temporarily funds the government by continuing funding levels from the prior year, but it expires on December 11th. The increases in overall discretionary spending provided in the agreement will allow congressional appropriators the budget ceiling needed to complete work on the FY2016 federal budget –including funding for the FAA. However one issue still remains, will policy riders, typically in the form of prohibitions against certain types of spending, derail concluding work on the FY2016 budget?
Reports indicate that work on the spending bills has already begun and will likely result in the dreaded “omnibus” appropriation bill where the twelve separate spending bills will be rolled into one mega spending bill.
By Bill Deere, Senior Vice President for Government and External Affairs