Quick Hit – March 11, 2019

It’s not about “the wall.”  The wall is a political lever.
President Trump’s proposed budget for FY20 entitled, “A Budget for a Better America” (OpenPaper).

Here’s what matters:

The budget for FY20 has finally been released to Congress. Before going down the rabbit hole of “border wall” funding, let’s look at a few definitions and facts.

  • The Office of Management and Budget released the FY20 “President’s Budget” today, known as PB20 or the PresBud
    • All President’s Budgets are political documents meant to highlight Presidential priorities; they never execute exactly as proposed
    • PB20 signals the real start of the legislative process of delivering appropriations to be allocated within agencies
  • The more worrisome budget to watch for is the Congressional Budget; it is nowhere close to being agreed, and until it is, movement of funding legislation will slow to a grind by summer
  • In 2018, a two-year Congressional Budget agreement was reached, providing a two-year outline of FY18-FY19 spending thresholds, and allowed for “topline” relief from the 2011 Budget Control Act (BCA)
    • Because there was already an agreement in place, the FY19 funding process moved quickly
    • While part of the government funding was held up over the 2018 border wall debate, much of the government (including defense) was actually funded on time for the first time in 8 years
  • For FY20, no relief from the BCA has yet been agreed, so PB20 is the opening argument to the negotiations
    • With PB20 now delivered, President Trump has laid down markers to:
      1. Ignore the BCA spending caps
      2. Cut domestic spending by 5% across the board
      3. Fund DoD to the tune of $750B

Key Definitions:

Useful definitions when reading or listening to breathless media reports:

Allocation: The House and Senate Appropriations Committees, respectively, decide on how to apportion the budgeted amount to each of their corresponding 12 subcommittees. The amount assigned to each of the 12 subcommittees is known as a 302(b) allocation and taken together the 12 assigned amounts are known as 302(b) allocations. 

Appropriation: The provision of funds, through an annual appropriations act or a permanent law, for federal agencies to make payments out of the Treasury for specified purposes.

Authorization: A statutory provision that obligates funding for a program or agency. An authorization may be effective for one year, a fixed number of years, or an indefinite period. An authorization may be for a definite amount of money or for “such sums as may be necessary.”

Budget: Authority provided by law to enter into obligations that will result in outlays of Federal funds.

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