Two-Week Continuing Resolution Shows No Path Forward on Funding

The federal government is currently operating under a two-week continuing resolution, the details of which are not widely known. This marks the current fiscal year's fifth continuing resolution (CR). There is little expectation of compromise on the budget for the remainder of the fiscal year, leaving funding for agencies and government programs in limbo.

As has been true for other budget discussions during fiscal year (FY) 2011, there has been little talk about what Congress actually cut in the recently enacted two-week CR, which trims some $4 billion from the FY 2010 budget. Because of its speedy trip through the House and the Senate, Congress held no hearings on the cuts in the CR, meaning the public has little, if any, idea of what specific programs were cut or why.

Not everyone is happy with the lack of debate. On March 4, CQ quoted Sen. Tom Harkin (D-IA) as saying, "How many people know that CR … cuts out all federal literacy programs in this country? We just wiped them all out."

The cuts in the current CR, which expires on March 18, mostly come from non-security discretionary spending. Of that amount, $2.8 billion is from eliminating some earmarks from the FY 2010 budget, reducing spending from some 50 different accounts. While frequently viewed as waste, the loss of these earmarks will likely be felt across the country. They impact funding for any entity that would receive money in a non-competitive bid, including nonprofits such as Special Olympics, the East Harlem Council for Human Services, and a particular YWCA.

Education Week noted that many national education programs, such as Teach for America, Arts in Education, and the National Writing Project, receive funding through federal earmarks and could face budget crunches with the loss in funding. Even some lawmakers were confused as to what exactly constituted an earmark, with a group of senators writing Senate leadership on March 1 asking if these education programs were considered earmarks.

The remaining $1.2 billion in cuts come from eliminating funding for eight programs President Obama proposed to eliminate or consolidate in his FY 2012 budget. These cuts also target education programs, such as Striving Readers and Even Start, representing some $316 million in federal spending. The bill also cuts $650 million in highway spending. While some of these programs were deemed duplicative, it's unlikely their funding will be transferred to other existing programs, as Obama had been planning.

Interestingly, since the CR only lasts for two weeks, the cuts are not permanent, and these eliminated programs could see their funding restored. The next CR could simply replace the funding for the programs, undoing any damage caused by the current CR. However, with members of both parties considering the $4 billion in cuts as a floor, any agreement, either short-term or long-term, will likely include the cuts featured in this CR.

In the longer term, the current CR might make further compromise more difficult. Its earmark and program cuts represent the "low-hanging" fruit for budget cuts. Congress already agreed to eliminate earmarks for this year's budget, making it easy for both sides to add them to the cuts in the CR. And for Senate Democrats, who are looking for painless cuts, simply signing off on Obama's cuts is easier than trying to come up with alternatives.

Indeed, both sides are already sparring over the next CR, which is required to keep government from shutting down on March 19. On Tuesday, March 8, the Senate is expected to hold two votes to try to gauge the relative strength of support for two alternative long-term CRs. The first vote is on the House's year-long CR (H.R. 1), which cuts $61 billion from FY 2010 levels, and the second is on a year-long CR authored by Senate Democrats. The second bill represents Democrats' attempt at compromise, taking the $4 billion already agreed to in the current CR and adding another $6 billion on top of that.

However, Democrats are also using their bill to draw a line in the sand, saying they will not cut more discretionary spending for FY 2011. At the same time, Republicans in both houses are rejecting the Democrats' compromise bill as not containing enough spending cuts. As a result, both bills are expected to fail their test votes, leaving the two sides back at square one with a week and a half to find a compromise both parties can agree on.

back to Blog