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Washington Update

Rhetoric and red ink

by Gervaise Dupree

February inaugurates the budget season in Washington with multiple budget processes occurring simultaneously--resulting in daily verbal jiujitsu in the press and in Congress. The president's budget for fiscal year (FY) 1996, beginning 1 October 1995, debuted on 6 February. Congress ended a month of debate on a balanced budget amendment with a failed vote in the Senate, while continuing to work on a budget resolution for FY 96 and rescission legislation (in effect, spending cuts) for FY 95. Federal agencies are preparing their initial FY 97 budget documents for submittal to the Office of Management and Budget.

The president's FY 96 budget

The president's budget met with mixed reviews, with supporters calling it a "strong political document" and critics citing its lack of leadership for continued deficit reduction. A tax cut and modest spending cuts are proposed. The budget contained no new initiatives on health care or welfare. William Safire, columnist for the New York Times dubbed the budget a "print and pray document--You won the election, you go first!"

The budget calls for $1.6 trillion in spending in FY 96, up about 4.8%. The deficit would rise to about $197 billion in 1996, after three years of decline. The administration projects deficits slightly less than $200 billion annually through FY 2000. Of $144 billion in total deficit reduction over five years, President Clinton would get most from extending existing caps on appropriations through 2000. The Republicans have asked for the caps to be extended to 2002.

While overall federal research and development spending would remain essentially flat, civilian R&D is proposed for increase by $1.087 billion, or 3.5%, to $34.902 billion. Defense R&D is cut by $918 million, or 2.4%. Basic research is emphasized over applied research, though significant increases are proposed for favorite administration programs, such as the Technology Reinvestment Project, the Advanced Technology Program and the Manufacturing Extension Partnership. Proposed funding for academic R&D is essentially flat.

Among the federal agencies, the Environmental Protection Agency R&D received the largest percentage increase: 15.8%, or $93 million. Transportation R&D fared second-best, with a 10% increase of $69 million. Other changes: Department of Energy, up 7.4% (+$488 million); Health and Human Services, up 3.8% (+$447 million); NSF, up 3.0% (+$96 million); NASA up 0.7% (+$62 million); Department of Defense down 3.1% (-$1.11 billion).

The president requested a 3% increase for NSF overall, from $3.27 billion to $3.36 billion. However, if the administration's proposed rescission of $131.87 million from the FY 95 budget for the Academic Research Infrastructure account holds, NSF's budget is essentially flat for FY 96 by comparison. Research and Related Activities at NSF would receive $2.45 billion, an increase of 7.6% or $174 million above the FY 95 level. The increases break down as follows: Biological Sciences, $324 million (+7.6%); Computer and Information Science and Engineering, $275.6 million (+6.7%); Engineering, $344.2 million (+7.7%); Geosciences, $451.5 million (+7.6%); Mathematics and Physical Sciences, $698.3 million (+8.3%); Social, Behavioral and Economic Sciences, $122.9 million (+8.0%).

Interagency initiatives received strong support in the administration's budget, with global change research up 7.9% from $329 million to $355.6 million. High performance computing would receive $313.6 million, a 5.6% increase, and biotechnology would increase 6.2% from $166 million to $176.7 million.

Education and Human Resources is the loser, with a 1.2% ($7 million) decrease from FY 95 levels. EHR has received almost a 600% increase over the last decade, and it appears there will not be the same level of support for continued increases either by the administration or the current leadership in Congress.



President's Budget Request

(in billions of dollars)
FY                         1995      1996      1997      1998      1999      2000      
Budget Authority           1,563.8   1,613.8   1,686.4   1,765.2   1,839.1   1,924.0   
Outlays                    1,538.9   1,612.1   1,684.7   1,745.2   1,822.2   1,905.3   
Revenues                   1,346.4   1,415.5   1,471.6   1,548.8   1,624.7   1,710.9   
Deficit                    - 192.5   - 196.7   - 213.1   - 195.4   - 197.4   - 194.4  
Source: President's FY 1996 budget



The Balanced Budget Amendment

Acrimonious Senate debate on a balanced budget amendment (House Joint Resolution 1, House Report 104-3, Senate Report 104-5) ended in defeat, despite the overwhelming approval of the House measure by 300 to 132. This concluded more than 60 years of fighting over a constitutional amendment to force the government to live within its means, except in times of war. However, Senate Majority Leader Robert Dole (R-Kansas) has promised that the amendment will reappear before the 1996 elections.

Severe legislative impacts are expected from the failure to pass the amendment, which was touted as the cornerstone of the Contract with America. Many believe it will now be difficult to get enough Republican votes to pass the spending cuts needed to balance the budget. There will still be a substantial deficit-reduction package, but estimates are it will probably be closer to $600 billion between FYs 96 and 2002 than the $1.2 trillion needed to balance the budget. (Federal Budget Report, 24 February 1995, p. 2).

Congressional budget resolution

The House and Senate budget committees are required to submit a budget resolution by 15 April, providing their projections of total federal spending and revenues in the coming fiscal year. The committees use the president's budget request, information they gather during their hearings, the views and estimates of other committees, and reports from the Congressional Budget Office to draft the resolution. It is a binding agreement between the House and Senate and requires approval by both houses but is not sent to the president for signature and does not become law. It is an internal document to guide Congress' budget work. This year's budget resolution is expected to be delayed into May.

FY 95 rescissions

The House approved $17.1 billion in proposed FY 95 rescissions that will be used to pay for emergency assistance to California and to offset a portion of the tax cuts included in the Contract with America. NSF was protected in these rescissions, except for the academic infrastructure account, but NOAA was hit hard. Next, the rescissions bill has to pass the Senate and if there are major changes, a House-Senate conference will have to successfully negotiate any differences. The bill will then go to the president for signature. If he vetoes the bill, it is doubtful that House and Senate Republicans will be able to get enough Democrats to join them to override the veto. All of these events will take place over the next several weeks and months.

Conclusion

No matter how much things change, they stay the same. In my column on the federal budget in the May-June 1992 issue of the UCAR Newsletter, I quoted an article by Thomas Carper in The Washington Post. He said that what was really needed was leadership, not more process. "During the past 12 years, as our debt has increased fourfold, Congress often disagreed with spending priorities of the president, but the amount of funds appropriated has been almost identical to the amount proposed by the White House. . . . We are living well beyond our means as a nation and it must end or our economy and standard of living will suffer." What he said still rings true. Meanwhile, the rhetoric and the red ink continue to flow.




Federal budget timeline

6 February
President Clinton submitted FY 96 budget to Congress.
15 April
Deadline for adoption of a conference report on the congressional budget resolution for FY 96.
15 May
Appropriations bills may be considered in the House even if a budget resolution has not been agreed to.
10 June
House Appropriations Committee reports all 13 appropriations bills for the coming fiscal year. No deadline in the Senate.
30 June
House completes action on all regular appropriations bills for the coming fiscal year.

Before
1 October
If any of the 13 appropriations bills have not been enacted, House and Senate enact a continuing resolution for the coming fiscal year.
1 October
Fiscal year 1996 begins.


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Edited by Carol Rasmussen, carolr@ucar.edu
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Last revised: Mon Apr 3 17:49:41 MDT 2000