Tuesday, June 18, 2024

Executive News: Budget battles claim focus on Capitol Hill

We have officially entered the best time of year.

Fall will eventually bring us cooler weather, but it’s the fact college football has arrived.

With the start of September, every college fan base has aspirations of a great season and hope this will be their year.

Well, I wish you

Adrian Beverage, OBA President and CEO

all the best of luck because my season has already gone south. Nebraska’s road to a national championship came to a screeching halt the first week of the season. We have a new coach with a track record of taking mediocre teams and building them into contenders. Unfortunately, the Nebraska team of the last 10 years showed up again for the fourth quarter of its season opener and we fell short again.

While it was only the first game, and I still have faith this will be a good year, I’ll have to wait another week to get my hopes up.

Just like the start of football, Congress is coming back this month and there are hopes that it, too, will have a great fall season and end the year doing what’s right for our industry while also tackling the federal budget.

We are all going to be hearing a lot over the next month as to whether the government can get a budget deal done, and we as a country can avoid a shutdown. It seems as if we go through this song and dance every year – frankly, I think the American people would be very skeptical if a federal budget was approved on time.

I think it would be a good time to remind everyone what goes into the federal budget and how it is approved. Just a little background before we get started: The federal government’s fiscal year runs from Oct. 1 of one calendar year through Sept. 30 of the following year. Congress has completed appropriations before the start of the next fiscal year only four times in the past 40 years. The last time Congress completed all appropriations bills on time was in 1996.

There are three spending areas that make up the annual budget:

Mandatory spending — funding for Social Security, Medicare, veterans benefits, and other spending required by law. Mandatory spending usually makes up half of all the funding.

Discretionary spending — federal agency funding. Congress sets funding levels for each agency every year. The agencies usually account for a third of all funding.

Interest on debt — this usually comes out to about 10% of all funding.

There are seven steps that must all take place for the federal budget to be approved; this process starts one year prior before the budget goes into effect.

1. Federal agencies create budget requests and submit them to the White House Office of Management and Budget, better known as OMB.

2. OMB refers to the agencies’ requests as it develops the budget for the president.

3. The president submits the budget proposal to Congress early the next year.

4. Proposed funding is divided among 12 subcommittees, which hold separate hearings. Each is responsible for funding for different government functions. Below are the 12 subcommittees:

Agriculture, Rural Development, Food and Drug Administration — this committee oversees funding for the USDA and other agencies.

Commerce, Justice, Science and related agencies — oversees funding for the Department of Com merce, Department of Justice, NASA and other agencies.

Defense — oversees funding for the military, the intelligence community and other national defense agencies.

Energy and Water Development — oversees the funding for the Department of Energy, U.S. Army Corps of Engineers and other agencies.

Financial Services and General Government — oversees funding for the Treasury, the Executive Office of the President and other government functions.

Homeland Security — oversees funding for Homeland Security.

Interior and Environment — oversees funding for the Department of the Interior, EPA and the U.S. Forest Service.

Labor, Health and Human Services and Education — oversees funding for the Department of Education, Department of Health & Human Services and the Department of Labor.

Legislative Branch — oversees funding for House of Representatives (Senate has their own funding), U.S. Capitol, Library of Congress and other legislative branch agencies.

Military Construction and Veterans Affairs — oversees funding for military construction and the Department of Veterans Affairs.

State, Foreign Operations — oversees funding for U.S. State Department and USAID.

Transportation, Housing and Urban Development — oversees funding for Department of Transportation and HUD.

5. The House and Senate create their own budget resolutions, which must be negotiated and merged. Both chambers must pass a single version of each funding bill.

6. Congress sends the approved funding bill to the president to sign or veto.

As of Sept. 1, only one of the 12 appropriations bills have passed the House and no bills have passed the Senate.

Clearly there is a lot of work to be done before the Sept. 30 deadline. While it seems unlikely they will get the budget approved on time, the most likely scenario is Congress and the president will approve what is called a continuing resolution. Continuing resolutions are temporary spending bills that allow federal government operations to continue when final appropriations have not been approved by Congress and the president. Without final appropriations or a continuing resolution, there could be a lapse in funding that results in a government shutdown.

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In a couple of weeks, we’ll be headed to Washington, D.C., for our annual OBA Washington Visit.

We will have close to 100 Oklahomans making the trek to the nation’s capital. We’ll meet with all our regulators as well as the members of our delegation.

I’ll provide you a full recap of everything that happens as well as an update on the previously discussed federal budget situation.