Congress and the Administration Delay Final FY 2009 Appropriations Legislation

Although FY 2009 begins tomorrow, most federal departments and agencies will likely have to wait until March to find out what their new budgets will be. In the meantime, under a bill passed by the House and Senate and now awaiting the signature of President Bush, spending will continue at the current rate until March 6, 2009.

Following several months of a budget stand-off between Congress and President Bush, agreement was reached on a continuing resolution to provide five months of flat funding for most departments and agencies, and $600 billion in full year funding for the departments of Defense, Homeland Security, and Veterans Affairs, and for military construction. H.R. 2638 is a 67,000 word bill, in which the following words for most federal departments and agencies are key:

“Such amounts as may be necessary, at a rate for operations as provided in the applicable appropriations Acts for fiscal year 2008 . . . for continuing projects or activities . . . that were conducted in fiscal year 2008. . . .”

This “rate of operation” does not include the additional funding for NASA, the Department of Energy’s Office of Science, National Science Foundation and National Institutes of Health that was provided in the supplemental appropriations bill enacted in June.

This outcome was expected. The Democratic congressional leadership and President Bush disagreed a year ago about the amount of total FY 2008 discretionary spending. Then, as now, the President refused to spend more than his limit, and demonstrated his insistence by vetoing appropriations legislation. Congress could not override this veto, and eventually yielded by passing a consolidated appropriations bill at the President’s number.

This year was a repeat of last year. The House and Senate Appropriations Committees passed draft FY 2009 bills with strong numbers for the DOE Office of Science, the National Science Foundation, and the National Institute of Standards and Technology. An impasse over offshore oil and gas drilling brought the appropriations process to an abrupt end. Although a solution to the drilling impasse was found, the standoff between the President and the Democratic congressional leadership over total discretionary spending continued. Rather than pass appropriations bills that would be vetoed, the leadership decided, in the words of House Appropriations Committee Chairman David Obey (D-WI) to “kick the can down the road” to when a new President will be in the White House.

When it became clear that there would be a continuing funding resolution, attempts were made to convince congressional leaders to increase the funding levels for the National Science Foundation, the DOE Office of Science and the National Institute of Standards and Technology. These efforts included a letter from Members of the House, and other letters from the Coalition for National Science Funding that were signed by AIP and several of its Member Societies. These efforts were unsuccessful, as the continuing resolution increased budgets above “flat funding” for only the upcoming census, home energy and weatherization assistance, a key nutrition program, Pell grant tuition assistance, disaster relief, and a loan to auto makers to modernize their factories.

Under the continuing resolution, no new starts are permitted. Moving forward on new facilities or major instruments will be delayed until Congress passes final appropriations legislation.

The conclusion of this FY 2009 budget cycle is apt to be difficult. Last December, Congress hurried to finish the budget cycle because it did not want to be considering the leftover FY 2008 appropriations at the same time as the Administration’s new FY 2009 budget. Unless Congress returns for a lame duck session, or decides to work on the FY 2009 appropriations when it reconvenes on January 6, 2009, the new President and his new administration, and a new Congress, will be handling two budgets - FY 2009 and the new FY 2010 request - at the same time.