By Michael O’Connell
Web Editor
Federal News Radio

Although federal funding is set to run out Nov. 18, a handful of agencies and their employees may be breathing easier this week.

The Senate and the House have proposed a “minibus” that wraps three of the 12 annual appropriations bills into one. It also includes a continuing resolution to keep the rest of the government operating until Dec. 16. The House will vote Thursday on the bill, with the Senate likely to vote Friday.

“At least there’s clarity for agencies on what’s going to happen, and it looks like this bill will pass the House and Senate, even though some conservatives are angry about the level of spending in the House,” said Erik Wasson of The Hill. He spoke Wednesday morning on The Federal Drive with Tom Temin and Amy Morris.

A mixed bag

Agencies affected by the minibus fall under the reduction plan agreed upon last summer, meaning they’ll be funded under 2012 spending levels. Agencies outside of the minibus will still fall under the 2011 spending levels, which are higher.

“It’s a bit mixed,” Wasson said. “Agriculture and Commerce do have a slightly lower budget, but actually Transportation and Housing, the bill came out a little above. They’re overall trying to meet an overall spending limit that’s $7 billion below 2011 levels. But, as appropriators negotiate these out, some bills come in a little bit higher and some are set for deeper reductions.”

Wasson acknowledged that the Fiscal Year 2012 continuing resolution process has been more complicated than usual.

“The path forward for the rest of the bill is not at all clear,” he said. “The Senate tried to move a second one of these minibuses containing Energy and Water, State and Foreign Operations, and Financial Services yesterday, but it’s run into trouble on the floor. It may be that only the Energy bill gets passed.”

The most complicated bills — Labor, HHS, Interior and EPA — appear to be stuck, Wasson said, and will likely have to be attached at the end to the Defense bill, which he describes as more “must pass” legislation.

If the current minibus is passed, USDA, Justice, Commerce, CFTC, Fannie Mae, Freddie Mac, FHA, Transportation and HUD will all be in the clear for Fiscal Year 2012. Both houses of Congress have passed the bill for the Veterans Administration, but it’s being kept in reserve as a vehicle to move another minibus forward, Wasson said.

Supercommittee outlook is grim

Even with this progress, a great deal remains unresolved. The supercommittee still needs to come out with its debt-reduction plan and then Congress needs to vote on that.

“If they are unable to come to a compromise, in 2013, there’ll be across-the-board cuts to discretionary and Defense, with a disproportionate share hitting the Pentagon, half of all of the $1.2 trillion in cuts,” he said. “That’s something that I think agencies are most concerned about and there’s a lot of worry in Congress about those sequesters. So it’s really a 2013 question right now as far as deep cuts coming down the line.”

For the Office of Management and Budget, then, 2013 looms large.

“I know (OMB Director) Jack Lew is doing those agency reviews as we speak,” Wasson said. “It’s got to factor in. I’m sure that the administration will continue along its budgetary track of trying to prioritize the ‘Winning the Future’ ideas of infrastructure, energy and other job-creation measures, while paring back what they see as extraneous spending.”

Evidence of this can be seen in a recent string of OMB announcements concerning cuts in travel budgets and agency swag. “I think they’re trying to trim around the edges,” Wasson said. “But it must be on hold in some ways until the supercommittee decides.”

Remove at your own risk

Although the supercommittee’s deadline is officially Nov. 23, Monday is the real deadline due to committee rules that say the agreement has to be reviewed 48 hours before the final deadline.

Last week, Sen. John McCain (R-Ariz.) attempted to separate the Defense Department from the sequesters. Some saw this as removing the incentive for the supercommittee to act. According to Wasson, President Obama contacted Sen. Patty Murray (D-Wash.) and Rep. Jeb Hensarling (R-Texas) and made it clear that he would veto any attempt to remove the sequesters.

“I think that sort of the market is pushing this in some ways,” Wasson said. “Moody’s and other credit rating agencies have said, ‘While the supercommittee failure, itself, won’t necessarliy result in a another downgrade of U.S. credit, supercommittee failure plus any attempt to remove these triggers would really be a signal that we’re not serious about getting our financial house in order.'”

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