As you will recall from a recent blog, a bipartisan budget deal was unveiled last week by House and Senate Budget Committee Chairs Paul Ryan and Patty Murray. The Bipartisan Budget Act of 2013 went on to pass the House by a vote of 332-94 and yesterday cleared a procedural vote of 67-33 in the Senate. The legislation will now proceed to a final Senate vote which is set to occur today, clearing the way for the President’s signature.

The Bipartisan Budget Act of 2013 amends the Budget Control Act and sets increased topline spending levels for fiscal years (FY) 2014 and 2015.  The discretionary spending level for FY2014 is set at $1.012 trillion. This level is less than originally proposed by the Senate in their FY2014 budget total of $1.058 trillion. The compromise level is an increase over the House proposed FY2014 budget which left sequestration in place and called for a topline spending level of $967 billion. The Bipartisan deal includes an increase of $24 billion above the FY2014 cap included in the Budget Control Act. This increase is split between defense and non-defense spending, $2 billion and $22 billion respectively.

The Bipartisan Budget Act of 2013 offsets the two year combined spending increase in FY2014 and FY2015 through a variety of budget savings including aviation security service feeds, customs user fees, and improving the collection of unemployment insurance overpayments. In addition, budget savings of $28 billion are generated by extending sequestration for an additional two years from FY2021 to FY2023.  The Bipartisan Budget Act of 2013 does not repeal sequestration. Instead, it offsets the scheduled discretionary sequester for FY2014 and FY2015 by extending both mandatory and discretionary sequestration for two additional years from FY2021 to FY2023. As you may recall, the overall health center funding level was impacted by sequestration in FY2013 on both the discretionary side and the mandatory Health Center Fund, though funding increases were enough to insulate health centers from any reductions to their grants. Under the Bipartisan Budget Act of 2013, health centers will not face a sequester cut on the discretionary side, but the Health Center Fund will be subject to sequestration. We believe the Health Center Fund will still be subject to a cut capped at 2% (per the Gramm-Rudman-Hollings cap specific to health centers). Homeless and public housing funding in the Health Center Trust Fund are still separated out and subject to a larger cut (but again, since this is from the trust fund those are reductions to the planned increases).

The House and Senate Appropriations Committees will provide their new spending allocations to their respective Labor, Health and Human Services (LHHS) Subcommittees for the redrafting of their FY2014 appropriations bills at the compromise level. The process will move quickly with appropriations action occurring as early as the week of January 6, with only days left before the current Continuing Resolution (CR) expires January 15.

Health center advocates continue to engage in targeted Appropriations Committee outreach to reinforce the FY2014 funding level request for health centers as outlined in the FY2014 Senate LHHS appropriations bill. Please follow Health Centers on the Hill for pertinent updates as the FY2014 funding process continues.