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SAYONARA SEQUESTRATION?

Nov 5

Written by: Grants Office, LLC
Thursday, November 05, 2015  RssIcon

    If the rumors hold true, 2016 could be a banner year for federal spending and funding levels for popular grant programs.  
    Remember the budget sequestration process in 2013 (See May 2013 “A Look at How the 2014 Budget Battle Impacts Grants”)?  Congress and President Obama agreed to institute 5% across-the-board cuts across all government spending, including defense.  
    The sequestration directly reduced funding levels for almost all federal grant programs.  Furthermore, these spending cuts were not limited to a single fiscal year as automatic spending caps were established through 2021.

    The idea was that these sequestration cuts would not be palatable long-term to both Democrats and Republicans alike, and would provide an incentive for compromise down the road.

     Flash forward to November 2015 and there is optimism in Washington as the White House and Congress have tentatively agreed to a two-year budget framework that will authorize spending levels through 2017.  The goal would be to allow the federal government to return to a normal appropriations schedule next year, which is expected to begin in the spring.  
    The compromise budget package would raise government spending levels by $80 billion (above the sequestration cap established in 2013) over the next two fiscal years, evenly divided between defense and domestic programs.    
    The bulk of popular grant programs are funded out of the domestic budget, which is expected to rise $25 billion in 2016 and $15 billion in 2017.  
    If this package of legislation is passed, there is expected to be more money on the table for grant programs.  This will allow federal grantmaking agencies to raise award ceilings for individual applicants, increase the number of grants made, or both.

    There are numerous reasons to delay any release of confetti and celebration, as tempting as it may seem.  
    First and foremost, this is merely a tentative deal that was negotiated behind closed doors in secret amongst top leaders in the House, Senate, and White House.  This package must still garner support from a plurality of House Members and avoid a filibuster in the Senate that has the potential block the legislation.  
    Additionally, the House is undergoing a change in leadership (see Between the Lines Column: “Politics and Programs:  Why the Next Speaker of the House Matters When It Comes to Grants” printed earlier in this issue) that was largely precipitated by a contingent of the Republican Caucus that yearns for a more bottom-up approach to setting the legislative agenda.  
    It is safe to assume that this contingent will not be pleased about the top-down nature of the negotiations that lead to this deal.
    Even if the legislation passes, most likely due to substantial support from Democrats in the House, this is merely a budget framework.  
    In other words, it authorizes spending levels, but will still require the various Appropriation Committees in Congress to develop and pass appropriation bills.  
    Many programs are authorized through legislation, authorization that is irrelevant until appropriations are made.  When appropriations are made, they may exceed or fall short of authorized spending levels.  Thus, even if this deal passes, there may be protracted fights within the actual appropriations process that will follow.  
    Finally, this would be a two-year framework.  Unless subsequent legislation is passed, the sequestration caps will still be in effect for 2018 through 2021.  In that sense, this compromise budget package does not provide the finality that is required to say “Sayonara Sequestration”.  In fact, “See you later” is more accurate.


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