What Does the Debt Ceiling Solution Mean for Science Funding?

August 17, 2011

by Paula Skedsvold

The Budget Control Act of 2011 (i.e., the debt ceiling agreement) establishes caps on discretionary spending for the next ten years (FY 2012-FY 2021). For FY 2012, the discretionary cap is set at $1.043 trillion, including $359 billion for non-security discretionary spending. This part of the budget funds science at NSF and NIH and is comparable to what was provided in FY 2011. Still, the details for each agency will be sorted out in the coming months.

The Senate will use as its starting point the number agreed to in the debt ceiling deal. The House, on the other hand, is working from the much-lower, top-line number set in the Budget Resolution passed in April. With the new fiscal year beginning on October 1, 2011, there is a wide gap between House and Senate numbers that will have to be resolved. Most expect a Continuing Resolution while the remaining appropriations bills for FY 2012 are considered and agreement is reached on an omnibus bill.

Although the debt ceiling agreement provides a framework for moving forward on FY 2012, there is even more uncertainty about spending cuts in FY 2013 and beyond. The discretionary caps that went into effect with the deal do not include additional cuts that could occur as a result of recommendations of the new bicameral, bipartisan “super-committee” or the sequestration process.

This joint committee is charged with identifying, by November 23 of this year, at least $1.5 trillion in additional deficit reduction measures (through additional spending cuts in discretionary programs, cuts in entitlement programs, tax increases) over the next ten years. If a majority of the super-committee does not agree on a deficit reduction plan or if Congress does not adopt the recommendations, a sequestration will occur that will result in cuts of $1.2 trillion to discretionary spending (spread equally over 9 years beginning in 2013). Fifty percent of the cuts will be to defense and the other 50% will be to non-defense discretionary and mandatory programs (primarily Medicare payments and farm price supports).

According to the Center on Budget and Policy Priorities, these latter cuts will amount to $55 billion per year for 9 years for defense as well as non-defense programs. If Congress adopts only a portion of the super-committee’s recommendations, the sequester will make up the difference dollar for dollar. Given the stakes, many are calling for an open and transparent process by the super-committee.

The Budget Control Act also requires the House and Senate to vote on a Balanced Budget Constitutional Amendment between October 1 and December 31, 2011. If a balanced budget amendment is passed and sent to the states for ratification, no sequester would be needed. However, a balanced budget amendment would also require deep cuts in domestic discretionary spending, thus affecting science funding as well. FABBS will track developments and report on them regularly.

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