Budget Brief 12-03
March 30, 2012

On March 20, 2012, House Budget Committee Chairman Paul Ryan released his proposed budget resolution for fiscal year (FY) 2013 (H. Con. Res. 112). The House Budget Committee approved the measure on March 21 and the full House adopted it on March 29.

The resolution sets a FY 2013 discretionary budget cap that is lower than the one set by the Budget Control Act (BCA; P.L. 112-25) and cancels the January 2013, BCA-mandated sequester of discretionary spending in order to shield defense spending from cuts. Sequestration is replaced with cuts to nondefense discretionary and mandatory spending (which would be accomplished through budget reconciliation). State grant programs are likely targets, with Medicaid and the Supplemental Nutrition Assistance Program (SNAP) specifically identified for possible conversion to block grants. It also calls for a deficit-neutral overhaul of the tax code, with two personal income tax rates replacing the current structure and the repeal of unspecified tax preferences. It also would reduce the top corporate tax rate.

That said, the following considerations are relevant in evaluating the FY 2013 House budget resolution:

  • It is not legislation. It sets the spending levels the House will allocate among its appropriations subcommittees, where actual funding recommendations for individual departments, agencies, and programs will be made.
  • While it includes long-term projections, it only dictates FY 2013 spending levels.
  • The Senate does not plan to adopt a budget resolution, instead deferring to the spending levels set in the BCA.
  • Because the Senate is adhering to BCA spending levels and the House is reducing those levels, there will be no concurrent budget resolution and almost certainly no full-year appropriations bills enacted prior to the November 2012 election.

The most important aspects of the House budget resolution are: 1) its suspension of the sequester provisions of the BCA for FY 2013, 2) its call for reconciliation, and 3) its budget levels for FY 2013 discretionary spending.