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Congress Passes Budget Plans for 2014

Even though President Obama has yet to release his budget plan for fiscal year (FY) 2014, both chambers of Congress have pressed ahead with their planning. Last week, the House and Senate each passed a budget resolution for FY 2014.

Although a budget resolution is not binding, it does provide a target for total spending for the federal government for the upcoming fiscal year. FY 2014 starts on 1 October 2013. Both plans set the same legally required discretionary spending limit of $966 billion for FY 2014. Discretionary programs include defense, education, science, environmental conservation, housing, foreign affairs, and other programs.

Although the House and Senate plans share the same top line budget number for next year, they offer different spending limits for future years and address sequestration and deficit reduction differently.

The House of Representatives continued its efforts to cut federal spending. The lower chamber’s plan would reduce the deficit by $4.6 trillion over a ten-year period. The House budget resolution, authored by Budget Chairman Paul Ryan (R-WI), would essentially wipe out the effect of sequestration on the military and transfer those cuts to domestic programs.

The Ryan plan would also extend the timeframe for the spending caps enacted in 2011. The caps on discretionary spending are currently set to end in 2021. The House resolution would extend them to the years 2022 and 2023. These caps would limit future growth in discretionary spending across the government.

The Senate budget resolution sets a smaller goal for reducing spending over the next decade. The plan created by Senate Budget Chairwoman Patty Murray would cut the deficit by $600 to $700 billion over a decade, while still replacing budget sequestration. This would be achieved through equal parts spending cuts and revenue increases.

The Senate plan would lower discretionary spending, but not as much as the House plan. These cuts would start in FY 2015. The Democratic plan would boost spending for infrastructure, clean energy, climate change research, and environmental protection by $100 billion over ten years.

Congress Passes Budget Plans for 2014
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