On April 14, 2011, the House and Senate approved and the President is expected to sign today the Department of Defense and Full-Year Continuing Appropriations Act, HR 1473. This bill is the 8th Continuing Resolution (CR) enacted for FY 2011, and HR 1473 will be the last as it funds federal agencies through the end of the fiscal year (September 30, 2011).
The House passed the measure by a vote of 260–167, while the Senate passed it by a vote of 81-19. The news from the House vote is that a large number of House Republicans (59) voted against it despite the efforts of House Speaker Boehner to unify the Republican caucus in support of the bill. Some House Republicans opposed the bill because it does not contain certain policy provisions that were included in an earlier bill, the House-passed HR 1. Others voted against the bill because of wanting larger spending cuts.
The bill, introduced on April 12, is a compromise deal negotiated among White House representatives, including President Obama, as well as the Senate Democratic leadership and the House Republican leadership to fund the federal agencies and programs for the rest of FY 2011. Rather than amend a prior continuing resolution, Division B of HR 1473 establishes specific funding levels for non-Defense Departments and agencies. Division A is a full-fledged Department of Defense appropriations bill. The legislation, while making large cuts, does not reduce spending as much as would HR 1, the measure that passed the House in February but which was subsequently defeated in the Senate. HR 1473 does not contain nearly as many policy riders – notably affecting health care reform implementation and the ability of the Environmental Protection Agency to regulate and administer programs – as did HR 1.
HR 1473 contains many reductions, rescissions and program eliminations that result in total funding for all Departments and agencies at $39.9 billion below the FY 2010 enacted level. These reductions have to be squeezed into the last 5 ½ months of the fiscal year, creating a challenge for program administrators.
Major provisions in HR 1473 that apply across-the-board are as follows:
• Sec. 1119 of the bill provides for a 0.2 percent across-the board reduction of all discretionary accounts (except Defense).
• Section 1101(a) that funding, unless otherwise specified, is “under the authority and conditions provided in the applicable appropriations acts for fiscal year 2010…”
• Section 1111 provides that earmarks contained in the FY 2010 appropriations Act/s, committee reports or joint explanatory statement will have no legal effect with respect to the FY 2011 funds provided under this CR. We note that, as previously reported, the House and Senate have agreed to a ban on earmarks for FY 2011 and 2012.
Attached is a chart of the programmatic reductions under HR 1473. We highlight below selected funding levels or increases/decreases for agencies and programs of interest to tribes and tribal organizations. Funding amounts reported below do not include the 0.2 percent reduction.
INDIAN HEALTH SERVICE
The bill includes $4.1 billion for Indian Health Service programs, an increase of $25 million over the FY 2010 level. Within that overall amount, $3.7 billion (a $15 million increase) is recommended for the Health Services account and $404.8 million (a $10 million increase) is recommended for the Health Facilities account. Given these numbers, the FY 2011 increases requested by the President (i.e., $46 million for Contract Support Costs and $84 million for Contract Health Services) will not be realized.
HR 1473 sets the overall Department of Interior and Related Agencies funding at $29.6 billion, an amount that is $2.62 billion less than the FY 2010 level and $2.8 billion less than the President’s FY 2011 budget. The Indian Affairs portion (which includes Bureau of Indian Affairs and Bureau of Indian Education) is decreased by $20.4 million from the FY 2010 enacted level—including the $1 million reduction for Operation of Indian Programs under a prior CR. This amount is, however, $33 million above the President’s FY 2011 budget request.
Contract Support. Funded at $220 million, which is a $54 million increase over the FY 2010 level and $30.47 million above the President’s budget request. There is also continued language that attempts to limit the ability of the BIA and IHS to fund past-year shortfalls in contract support funding from remaining unobligated balances for those fiscal years.
School Operations. Funded at $585,411,000; an amount that is $16,709,000 above the FY 2010 level but $3.9 million below the President’s FY 2011 request. Within School Operations, there is also a $3 million increase for Tribal Grant Support Costs (TGSC), for total funding of $46,373,000, which is the FY 2011 amount proposed by the Administration.
Construction. Funded at $210 million, which is $15 million below the FY 2010 level but is $94.27 million above the President’s FY 2011 request. HR 1473 does not specify the allocation of the Construction amounts among the several Construction accounts. In FY 2010 Education Construction was funded at nearly $113 million, compared to an FY 2011 budget request of $52.8 million.
OFFICE OF THE SPECIAL TRUSTEE
The FY 2011 budget for the Office of the Special Trustee (OST) is $161 million, which is nearly $16 million below the FY 2010 level but is $785,000 above the FY 2011 budget request. Within the total is $31,534,000 for the Office of Historical Accounting, a $16 million decrease from FY 2010 and $2,000 below the Administration’s request.
ENVIRONMENTAL PROTECTION AGENCY
The Environmental Protection Agency FY 2011 funding level of $8.83 billion is a decrease of $1.6 billion below FY 2010, and $1.2 billion below the FY 2011 budget request. Within the total are the following:
• $1.525 billion for sewer system improvements through the Clean Water State Revolving Fund program
• $965 million for drinking water system improvements through the Drinking Water State Revolving Fund program
• $1.11 billion in grants to States and tribes to fund environmental regulation and protection activities
DEPARTMENT OF JUSTICE
The Department of Justice (DOJ) is funded at $27.4 billion, which is $300 million below the FY 2010 level and $2.3 billion below the Administration’s FY 2011 request.
State and Local Law Enforcement Activities is funded at $2.8 billion, which is $434 million below the FY 2010 level (excluding earmarks) and $675 million below the FY 2011 budget request. According to the Senate Appropriations Committee summary, “Each grant program under the headings of State and Local Law Enforcement Assistance, Juvenile Justice and Community Oriented Policing Services (COPS) will be reduced approximately 17 percent from 2010 levels.” Specific amounts include:
• $1.12 billion for State and Local Law Enforcement Assistance
• $276 million for Juvenile Justice
• $496 million for COPS (includes hiring and bulletproof vests grants)
• $419 million for domestic violence and sexual assault grants
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
The overall funding level for the Department of Housing and Urban Development (HUD) is $41.2 billion, which is $1.4 billion below the FY 2010 level and $2.9 billion below the President’s FY 2011 budget request.
For the Indian Housing Block Grant program, the bill provides $650 million. This amount is $50 million less than the $700 million appropriated in FY 2010, but $70 million more than the President’s FY 2011 budget request of $580 million.
Community Development Block Grant (CDBG) program $3.3 billion is $650 million below the FY 2010 enacted level, but $1.08 billion below the Administration’s FY 2011 budget request. The bill does include the $65 million set-aside for the Indian CDBG program, the same amount as in FY 2010.
DEPARTMENT OF TRANSPORTATION
The overall funding level for the Department of Transportation (DOT) is $68 billion ($13.8 billion in discretionary budget authority and $54.2 billion in obligation limitations). Notably, the HR 1473 does not transfer any additional funds to the general Highway Trust Fund as was the case in the FY 2010 appropriations law ($650 million added). Additionally, $2.5 billion is rescinded from unobligated balances of highway contract authority as well as $630 million from earmark funding.
The Federal Highway Administration (FHWA) programs are funded at $41.1 billion which is equal to FY 2010 levels and the level which would have been provided by HR 1.
TIGER Grants funding of $528 million is provided for the Transportation Investment Generating Economic Recovery grant program which is $ 72 million less than the FY 2010 level. This is a significant number given that HR1 would have eliminated all funding for this popular grant program and even rescinded unobligated FY 2010 balances.
The Head Start program, funded through the Department of Health and Human Services, is funded at $ 7.575 billion, which should maintain current service levels. HR 1 would have reduced the program by $1.4 billion, estimated to have eliminated 218,000 children and their families from the program.
DEPARTMENT OF EDUCATION
The Department of Education is funded at $68.5 billion, which is $1.3 billion below the FY 2010 level and $2.5 billion below the President’s FY 2011 request. The Title I grants to schools and the Teacher Incentive Fund are level funded, $700 million is provided for the Race to the Top program, and School Improvement Grants is funded at $535.6 million.
Among the programs that are not funded are: Striving Readers, Even Start, Education Technology State Grants, Javits Gifted and Talented Education, Literacy Through School Libraries, and Educational Technology State Grants.
HR 1473 restored funding for the Tribally Controlled Postsecondary Career and Technical Institutions program which had been eliminated in an earlier CR.
Pell Grants. The Pell Grant maximum award will be maintained at its $5,500 level, rather than being reduced by $845 which was the Republican proposal. However, the option for year-round students to receive two Pell Grants per year was dropped.
Another hot button issue during the CR debate was public broadcasting, with the House approving legislation to eliminate Corporation for Public Broadcasting (CPB) funding for National Public Radio (NPR) and prohibiting radio stations from using any source of federal funds to purchase NPR programming. HR 1473 maintains the core, primarily formula-driven funding for the CPB ($445 million in FY 2013 advance funding) but it does not fund some CPB non-core items.
HR 1473 eliminated funding for the Department of Commerce’s Public Telecommunications Facilities Program (PTFP) which has been a source of funding for Indian radio stations. The Federal Communications Commission has approved 37 construction permits for new Native noncommercial FM radio stations. Lack of PTFP funding for construction may lead to the expiration of these permits; the opportunity to reapply for these permits may be years away.
What’s Next. Detailed FY 2011budget information by Departments and agencies is not yet available. Federal agencies are required, within 30 days of enactment, to report to Congress in detail (below the account level) on how their funding will be allocated. Each agency’s plan must be approved by its Department and the Office of Management and Budget. Until the agencies file their operating plans, it is difficult to know the direct impacts on the final FY 2011 amounts for the various programs. In the interim, referring to FY 2010 appropriations will provide some idea of what can be expected.
Please let us know if we may provide additional information regarding FY 2011 appropriations. We will continue to monitor and report on FY 2011 developments.