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A Look at How the 2014 Budget Battle Impacts Grants

May 1

Written by: Grants Office, LLC
Wednesday, May 1, 2013  RssIcon

“I am disappointed that instead of moving toward compromise and a truly balanced approach to tackling our economic and fiscal challenges, House Republicans decided to double down on the failed policies that the American people rejected just a few months ago.” ~ Senator Patty Murray (D-WA), commenting on the 2014 budget that passed the Republican-controlled House of Representatives on March 21, 2013.

"It never balances... We need to stop shielding government bureaucrats, which is what is hurting people.  When Democrats raise taxes, they're enriching that bureaucracy at the expense of the people."  ~ Senator Jeff Sessions (R-AK) commenting on the 2014 budget that passed the Democratic-controlled Senate on March 23, 2013.

"I think it is fair that we ask in this debate why we have been denied a chance to look at the president's budget."  ~ Congressman Rob Woodall (R-GA) during comments made immediately following passage of the House budget bill.

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May the finger-pointing and intense partisan rhetoric commence!  Shortly after finally passing a continuing resolution to fund the government through the rest of fiscal year 2013 (which ends September 30th), both chambers of Congress went to work on a budget for 2014.   Recent history suggests that having a federal budget in place by the start of the fiscal year is a long shot.  The truth is that the federal government has not passed an actual budget bill, nevermind an on-time one, since April 2009.  Instead, we have seen a long line of continuing resolutions, or temporary stopgap measures that extend funding in an effort to avoid government shutdowns.  While these resolutions keep funds flowing, they wreak havoc on the ability of federal agencies to effectively plan their grant programming and financial obligations for the year.  That uncertainty amongst federal agencies trickles all the way down to public and non-profit organizations that rely on federal grant funds to fund their programs and initiatives. 

In 2013, the unknowns around sequestration exacerbated the overall uncertainty, as agencies held back on the release of their annual grant solicitations or released them with the caveat that applicants were taking a risk that the funds may not be appropriated.  It doesn't take a rocket scientist to understand that the 5% across the board sequestration cut that went into effect on March 1, 2013 stings.  However, in some ways, at the least having it resolved shifts the landscape back to a status quo level of uncertainty that has become the new normal for federal agencies.  As expected, with the continuing FY 2013 continuing budget resolution passed and sequestration in effect, we are beginning to see a flurry of activity around the release of traditional grant programs.

As we move through the second half of FY 2013, we can only hope that the politicians in Washington can push through partisan gridlock and give us a financial blueprint (for FY 2014) for the first time in four years.  The rhetoric you hear from Senators like Patt Murray and Jeff Sessions (see quotes above) indicate that we are in for more of the same when it comes to passing a budget.  Most would say that you can't expect to do the same things and get different results. 

But there may yet be hope for a change - at least in the order in which the budget is developed. In fact, the process that is unfolding for the 2014 budget is one that we have not witnessed for 100 years.  Typically, the President submits a budget proposal to Congress in February.  From there, each chamber of Congress uses that as a starting point and then develops and passes their respective versions of the bill.  This is followed by a conference committee that attempts to resolve differences in Senate and House versions of the budgets.  Of course, the President has to be a part of the compromise process as he/she has the choice to veto or sign the budget legislation. 

This time around, Obama never proposed a budget and allowed both chambers of Congress to pass their own competing appropriations bills.  On April 10, 2013, Obama submitted a budget proposal to Congress that he is positioning as a middle ground compared to liberal approach of the Senate and conservativeness of the House.  One needs to look no further than the aforementioned quote by Congressman Woodall to realize that this approach is not sitting well with Republicans.  It appears to be a savvy move by the Obama administration that may incite enough public pressure across the board to actually get a budget passed.  When a President submits a budget as the first step in the process, it usually gets attacked from both sides of the political aisle.  Those on the left would argue his budget is not liberal enough while those on the right would indicate the opposite.  At the end of the day, when the conference committee fails to reach a compromise, all three institutions share in the blame when it comes to public opinion.   Rather than simply kicking off the budget negotiations, this new strategy seeks to position Obama's budget as a compromise package between the House and Senate.  It includes some significant cuts to entitlement programs like Medicare and Social Security in exchange for additional revenues through caps and reforms in the tax code.  Likewise, harking back to his State of the Union address, Obama's proposal increases spending in the areas of infrastructure deployment, research and education.  If these measures are ultimately included, that would be welcome news to grantseekers.  The calculated risk is that by presenting the President's Budget as a post-facto compromise offer, the sniping from both sides will be somewhat muted in an effort to avoid negative backlash in the public opinion polls. 

This all boils down to two intertwined questions that will be answered over the next several months.  First, will this non-traditional approach buck recent history and result in a budget being passed?  If so, does it result in a budget that includes some of Obama's major priorities, such as targeted spending increases and tax reform?  If the answer is yes to both, the federal appropriations cycle may be forever altered along with the President's influence in the outcome.  Organizations that rely on federal funding or people that make a living on it might have to ask the following question during the next presidential election:  Is this candidate good for grants?  Either way, if we can just get a budget passed, regardless of the details, the transparency and certainty would go a long way in helping federal agencies and granseekers plan their efforts.

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