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NSF Congressional Highlight
Budget Round-Up

March 22, 1999

Last week, the House and Senate Committees reported out budget resolutions for FY2000. Both the House and the Senate plans are similar, but differences remain especially regarding the treatment of Medicare. Speaker of the House Hastert and Senate Majority Leader Lott have both said that a final budget agreement between the House and the Senate will be passed by April 15.

Under both plans, discretionary spending would be significantly lower than last year's level, putting tremendous pressure on appropriators to make painful spending cuts. Each resolution assumes the continuation of the discretionary spending caps established by the balanced budget agreement of 1997. Thus, the resolutions would provide $536 billion in budget authority (BA) and $571 billion in outlays for discretionary spending in FY2000, significantly less than 1998 totals.

Compounding this problem is that the House and the Senate proposed significant increases in defense spending. For example, the Senate resolution would require non-defense discretionary spending cuts totaling $46 billion in FY2000, and $10 billion of cuts in FY2001, in order to meet the caps. The Senate resolution assumes that the spending caps will expire in FY2002, and that nondefense discretionary spending will then rise at about half the rate of inflation annually through FY2009. It is unclear whether the caps would expire under the House resolution.

The Senate allows the appropriators to breach the spending caps in FY2000 and FY2001 by designating certain spending as "emergency" spending and passage by a 2/3rds vote. The House committee resolution contains no similar provision.

Both resolutions also assume tax cuts of up to $15 billion in FY2000 and a total of $142 billion over the next five years, and $778 billion over the next ten. Also, both the House and Senate plans stipulate that an estimated $1.8 trillion in Social Security trust fund surpluses over next 10 years cannot be used for any tax cuts or spending programs.

At mark-up, the Senate Budget Committee passed their resolution on a party-line vote with few amendments passing. Significantly, a motion to extend the caps on discretionary spending beyond 2002 failed. The Committee did pass a non-binding resolution in favor of continued 15-percent NIH increases over the next three years. The panel also adopted a non-binding resolution offered Senator Bill Frist (R-TN) supporting continued increases in federal R&D investments.

The House Budget Committee passed its resolution on a party-line vote. At mark-up, an amendment offered by freshman Democrat Rush Holt (D-NJ) to increase NSF and NIH funding was rejected. Rejected on a party-line vote, the Holt amendment proposed to increase Function 250 budget authority (BA) and outlays for NSF to the President's request level and to provide inflation increases in the outyears. The Holt amendment would also doubled the NIH budget in five years. The increases would have been paid for through reductions in the Defense spending increases proposed in the House resolution. The outyear increases would have been paid for by reductions in any future tax cuts.

As a compromise, Committee Chairman Kasich (R-OH) offered to make the Holt amendment a non-binding, Sense of the Congress resolution. This was rejected by Democrats. During debate over the Kasich compromise, there was debate over which party was a bigger supporter of research. Kasich stated that there had been no emphasis on research until the Republicans took control of Congress and dramatically increased NIH funding every year. But Democrats Lynn Rivers (MI) and Ken Bentsen (TX) replied that earlier GOP budgets proposed drastic cuts in NIH and NSF.

For Function 250 - Science, Space and Technology-which includes NSF, NASA, and DoE research programs, the Senate proposes a total of $17.9 billion in BA (down $900 million from the FY'99 total of $18.8 billion) and $18.2 billion in outlays (the same amount as FY'99). The House would provide $18 billion in total BA for Function 250 in FY2000.

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