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Hobbs Straus successfully defended a former casino workers’ suit against a Tribe in a Tenth Circuit case finding absence of federal jurisdiction over non-Indian contract and tort disputes arising in Indian country. (2009)

General Memorandum 12-113

General Memorandum 12-113
House Approves FY 2013 Continuing Resolution; Senate to Vote on it Next Week

On September 13, 2012, the House of Representatives approved a Continuing Resolution (CR), H. J. Res. 117 that would fund federal agencies for the first six months of FY 2013 – through March 27, 2013 – at an annualized amount slightly above their FY 2012 levels. The vote was 329-91. Should Congress enact any regular appropriations bills prior to March 27, 2013, they would supersede the CR.

The Senate will vote on the House-passed CR next week. Passage is expected which would clear it for the President's expected signature.

The House and Senate agreed to a FY 2013 spending cap of $1.047 trillion, an amount set by the Budget Control Act of 2011 (PL 112-25) which is $4 billion above the FY 2012 $1.043 trillion cap. Under the agreed-upon FY 2013 level, federal agencies would see a 0.612 percent annualized increase over FY 2012. Key provisions in the House CR are:

Funding under FY 2012 Terms. Funds for the operation of federal agencies would be under the same "authority and conditions" provided in the FY 2012 appropriations acts unless specified otherwise (Sec. 101). With the exception of the Defense Department, CR funds may not be used "to initiate or resume any project or activity for which appropriations, funds, or other authority were not available during fiscal year 2012" (Sec. 104).

Limitations on the Distribution of Funds. Funds would not be distributed for programs that may have high initial rates of operation or for which funds are fully distributed at the beginning of the fiscal year based on the possibility that Congress might eliminate or reduce funding for that particular program (Sec. 109). With regard to distribution of funds during the period covered by the CR Section 110 states: "this joint resolution shall be implemented so that only the most limited funding action of that permitted in the joint resolution shall be taken in order to provide for continuation of projects and activities." However, agencies will be allowed to apportion funds in a manner that would avoid furloughing employees.

Mandatory Funding Programs. Funding for entitlement and mandatory payments and activities under the Food and Nutrition Act would be continued at a rate to maintain current program levels (Sec. 111). The CR would continue the current pay freeze for federal employees and extend the authorization through the period of the CR for the Temporary Assistance for Needy Families program.

Increases. There are some exceptions to the near freeze on funding for federal programs, including war funding; the Wildland Fire Management program; FEMA disaster assistance; Homeland Security cybersecurity efforts; Customs and Border Control staffing; and Veterans Administration disability claims.

Tracking Students Taught by Persons in Alternative Teaching Courses. The CR would require a report from the Secretary of Education by December 31, 2013, regarding the extent to which certain categories of students are taught by teachers who are enrolled in alternative teaching courses. The categories of students are: students with disabilities, English learners, students in rural areas, and student from low-income families.

Farm Bill Not Addressed. The CR does not address disaster assistance for farmers and ranchers nor does it extend provisions of the Farm Bill (a Farm Bill has passed the Senate and been marked up by the House Agriculture Committee). Negotiations are ongoing regarding whether there will be a short-term extension or a longer-term enactment of a new Farm Bill.

Agency Operating Plans. Within 30 days of enactment each department and agency must submit to the House and Senate Appropriations Committees a "spending, expenditure, or operating plan":

(1) at the program, project, or activity level (or, for national intelligence programs funded in the Department of Defense Appropriations Act, at the expenditure center and project level); or

(2) as applicable, at any greater level of detail required for funds covered by such a plan an appropriations Act referred to in section 101, in the joint explanatory statement accompanying such Act, or in committee report language incorporated by reference in such joint explanatory statement. (Sec. 116(a)(1) and(2))

It remains to be seen how federal agencies will handle accounts which of necessity change annually – a case in point is staffing and operations of new IHS facilities.

What's Next. Congress will reconvene after the election – late November or early December – to attempt to agree on a plan that would cut the deficit by $1.2 trillion over a ten-year period and thus avoid an across-the-board sequestration of funds scheduled to take effect in January 2013. Most of the sequestration would be to discretionary funds, as many programs which receive mandatory or entitlement funds would be exempted from the sequestration.

It is unclear whether Congress will attempt to reach agreement on any regular appropriations bills during December, which will be the last month of the 112th Congress. A number of members of Congress – in particular members of the Appropriations Committees – would like to finish work on the regular FY 2013 appropriations bills. An illustration of what will likely not be realized under a six-month or year-long CR are House Appropriations Committee recommendations for an additional $75 million for Contract Support Costs and $54 million for Contract Health Services in the IHS budget above FY 2012 amounts and an additional $12.9 million for tribal school Grant Support Costs in the BIE budget above the FY 2012 amount.

If the result of the November elections is that Republicans gain control of the Senate and/or win the Presidency, Congress will likely wait until the 113th Congress to enact full year FY 2013 funding bills or a year-long CR in order to consider larger overall funding reductions than the current Congress or President would support.

Please let us know if we may provide additional information regarding FY 2013 appropriations. We will continue to report on developments in the appropriations process.

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Inquiries may be directed to:
Karen Funk (kfunk@hobbsstraus.com)
Marie Osceola-Branch (mosceola-branch@hobbsstraus.com)
Moriah O'Brien (mobrien@hobbsstraus.com)

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