Summing Up the Senate's 302(b)s

Finally, somebody has honored the Budget Control Act.  The President’s budget blew off the defense/non-defense caps currently in effect by insisting the caps should remain security/non-security—which surprised us.  Then the House blew off the caps by plussing up defense.  And the Senate Budget Committee also went with security/non-security, following Simpson-Bowles.  Although the Senate was already operating under a filed deeming resolution, as the BCA required.

Table 1. Defense Compared to BCA Caps
In billions	PB	Senate 302(b)	diff.
051: DoD	525.4	520.7	-4.7
053: Atomic Def. Act.*	18.0	17.6	-0.4
054: Other Def. Rel.*	7.2	7.2	0.0
050: National Defense	550.6	545.5	-5.1
BCA Sec. Cap	546.0	546.0	0.0
relative to cap	4.6	-0.5	-5.1
* $5M of Corps of Engineers funding is f054, but still covered in the E&W bill.  Its (falsely) displayed as 053 here in both PB and 302(b), because it is eligible for E&W to cut to meet its allocation.

In line with that deeming resolution, the Senate appropriators have stuck with the defense/non-defense caps in their 302(b) subcommittee allocations.  But it took them a little work to get there.  Let’s walk through it.

First, though the President’s request cut DoD by $5B from last year, his budget function 050, National Defense—what the BCA actually caps—blew right through the BCA cap by almost $5B.  The appropriators solved this by cutting DoD (also known as budget subfunction 051) by another $5B in base budget.  They also cut $0.4B from what will come out of 053, Atomic Energy Related Activities, which the President’s request had increased—despite the tighter caps—by $1B from FY12.  Table 1 lays out all those moves.

Table 2: DoD Funding
in billions	PB	302(b)	Diff
Defense	514.2	510.9	-3.3
Intel Comm Mgmt Accnt		0.5	0.5
MILCON	11.2	10.3	-0.9
base DoD	525.4	520.7	-4.8
OCO	88.5	93.3	4.8
total DoD	613.9	614.0	0.1

But have no fear, DoD will not get less money than the President requested if the Senate appropriators have their way: because they gave DoD more funding in the war budget, just like last year.  Almost $5B more, the same amount they had to cut to meet the caps.  Table 2 shows those moves (remember you have to subtract out the Intelligence Community Management Account, which is funded in the Defense subcommittee bill, but isn’t DoD’s money).  Let’s assume the difference is just rounding. 

Table 3. OCO funding
in billions	PB	302(b)	diff
DoD	88.5	93.3	4.8
State Dept.	8.2	3.4	-4.8
total OCO	96.7	96.7	0.0

But again, don’t worry, Senate Appropriators aren’t planning on spending more on war funding than the President requested. Although DoD is getting $5B more, presumably they’ve cut State’s OCO funding by $5B since the Senate appropriators say they’re going to spend the same amount on war funding that the President requested.  See Table 3 for that math. 

Now maybe you can start to worry, although not much.  The President’s budget requested $48.0B in base f150, International Affairs funding.  Senate Appropriators provided $3.4B more (remember to add Food Aid from the Ag bill to the 302(b) for State and Foreign Ops).  That $3.4B plus-up to the base budget isn’t quite as much as State had cut in its OCO funding.  But lo and behold, the plus-up does keep International Affairs funding dead-even with what it received in FY12 if you count base and war in both years. Still, International Affairs now looks set to get less than the President requested. 

Of course, there are other moves after that because something else in non-security had to make room for the State base increase that partly offset its OCO cut.  But you’ve reached the end of the tour we can take you on as non-security is outside of our expertise. 

So after all those moves, what did we learn from the Senate 302(b)s? 

• Somebody still believes the deal cut last year in the BCA is binding. 
• Exempting OCO from the BCA caps continues to prove a temptation, although raising total war spending still seems out of bounds. 
• Defense may not have to take its nominal cut after all. 
• We’re yet again facing a big gap between the House and the Senate over f150 funding, although that’s been bridged in the past—with a few acrobatic moves.

All things you’ve heard here already.  And you’ve also heard here none of this will be resolved until after the election.