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GENERAL MEMORANDUM 13-079

GENERAL MEMORANDUM 13-079
Congress Returns to Consider FY 2014 Continuing Resolution; OMB Proposes to Cap IHS and BIA Contract Support Costs Amounts

The House and Senate return to session today, September 9, 2013, to take up several urgent issues – Fiscal Year (FY) 2014 funding for federal agencies; consideration of authorization of a military strike on Syria; and dealing with the federal debt limit which will be reached in mid-October. It is likely that a resolution on Syria will be considered first followed by a House vote on a short-term funding bill which may come as early as this week. This memo concerns a possible FY 2014 Continuing Resolution (CR).

With the beginning of FY 2014 only three weeks away and none of the FY 2014 appropriations bills enacted into law, it is a near certainty that a short-term CR will be considered by the House and Senate. While there is no text available as of this writing from either house, the information reported from House Majority Leader Cantor's office is that the CR would likely run through mid-December and at the same level as the
FY 2013 post-sequester level ($988 billion). There will be pushback from some House Republicans who want a CR to be funded at the significantly lower level of the House-passed FY 2014 Budget Resolution. There are also calls for cutting or ending funding for implementation of the Affordable Care Act in exchange for some Members agreeing to vote for a short-term CR – such proposals do not appear to include the Indian Health Care Improvement Act.

The House CR as currently being described would not change the Budget Control Act of 2011 (PL 112-25) which would set in motion sequestrations over a ten-year time period if certain budget levels are not reached. However, the Budget Control Act does not require the Administration to implement a FY 2014 sequestration until January 2014, and the hope is that Congress and the Administration will agree to FY 2014 funding levels before mid-December and a broad plan involving spending cuts and revenue which would eliminate the need for future sequestrations. Past attempts to reach such an agreement have failed.

Anomalies. CRs require that funding during the CR period be distributed on a pro-rata basis and spent on activities and under conditions that existed in the prior fiscal year. There are always some exceptions to this which are called "anomalies." The Office of Management and Budget (OMB) has sent to Congress a list of proposed anomalies which includes the Administration's proposal – strongly opposed by tribes – to impose caps not only on aggregate contract support costs spending for the Indian Health Service and Bureau of Indian Affairs but also on every individual Indian Self-Determination Act agreement. The House Appropriations Committee in its FY 2014 Interior appropriations bill opposed this proposal, while the Senate Appropriations Committee draft report stated that they "reluctantly" went along with it. Another disappointment in the OMB list of proposed anomalies is that is it does not include a recommendation for a Carcieri fix to reverse the U.S. Supreme Court's 2009 decision that the Secretary of Interior did not have authority to take land intro trust for tribes recognized after 1934. Last year OMB did propose to include a Carcieri fix in the CR, but Congress did not approve it. Among other things in the anomalies list are extensions of various entitlement programs. The press reports regarding the proposed anomalies describes them as "technical" and "non-controversial", but the contract support costs proposal and the lack of a Carcieri fix are controversial in Indian Country.

The situation with regard to a FY 2014 Continuing Resolution is in flux and we expect daily developments. Please let us know if we may provide additional information.

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

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