What Does the Budget Deal Mean for the Federal Courts?

October 17, 2013 - Here is a summary of the budget deal Congress approved late yesterday, with special attention to its details and implications for the federal courts. The Senate first approved the bill by an 81-18 vote. The House then approved the bill by a 285-144 vote, sending it to the White House for the President's signature.

There are three main components of the new law: a Continuing Resolution extending short-term government funding at FY 13 levels, with certain exceptions; a temporary debt ceiling lift; and the start-up of a FY 2014 budget conference. The first two fixtures largely kick the can down the road for several months. The start-up of the budget conference is a promising development, though fraught with uncertainty.

Continuing Resolution. The CR extends FY 2014 government funding through Jan. 15, 2014. This is "flat-line funding," for the most part, however, and will likely continue uncertainty for government budget officers about spending, and what final level Congress ultimately will approve once the budget and appropriations numbers are established later this year.

For the federal courts, $51 million in additional funding is authorized for court-related salaries and expenses and federal defender services during the October 1 - January 15, 2014 period. This is good news, but the size of additional funding is small in comparison to the $350 million budget cut that the federal judiciary suffered last year due to sequestration. Specifically, the $51 million is divided among $25 million for court-related salaries and $26 million for defender services. The defender services allocation will pay the private bar attorney fees for indigent representation under the Criminal Justice Act that were suspended in mid-September, when funding ran out two weeks before the end of the fiscal year. Additionally, the legislation gives judiciary officials the ability to reallocate funds among accounts to respond to the most urgent budget needs as they arise.

Retroactive pay for shutdown-furloughed federal employees also is authorized.

Debt Ceiling. The debt limit is extended to Feb. 7, 2014, with the Treasury Department maintaining its ability to use so-called “extraordinary measures” to extend the deadline.

Budget Conference. A House-Senate budget conference will meet to reach a recommended budget resolution by Dec. 13 on FY 2014 spending. This will be the first time in nearly a decade that the House and Senate will sit down in conference, under "regular order," the way things are supposed to work legislatively, to negotiate a budget resolution that sets the top-line federal spending number and appropriations account numbers. The ultimate budget spending number likely will be somewhere between $986B (House GOP number) and $1,058B (Senate Democrat number). Once the federal spending numbers are negotiated and approved through a budget resolution, appropriations bills would be expected to begin to move, either singly or combined. These upcoming budget negotiations will bring Paul Ryan and Patty Murray, the chairs of the House and Senate budget committees, into the national spotlight for the next 6 weeks. The two privately have been trying to lay the groundwork for a deal since the beginning of the year, though House Republicans have been resistant to officially sitting down at the conference table until now.

The budget negotiations will especially focus on the future of the sequester, along with potential changes in mandatory spending programs. Democrats also will insist upon dropping the sequester and seeking new revenue, which will bring into play potential changes in the tax code. Republicans will be drawn to turning off the sequester, at least partially, because of the greater brunt of sequester cuts that defense is scheduled to take in 2014.

Changes in Obamacare coverage also will remain targets for Republicans, including reductions in the government's premium contribution for Members of Congress and Executive Branch political officials. If this is enacted, it could create a slippery slope for the realignment down the road of federal employee health insurance premium contributions by the government While there is a strong argument in defense of the premium contribution and its consistency with private sector employer contributions, House Republicans will continue to spotlight the premium contribution as a "subsidy" and as unfair perk that Washington politicians continue to preserve for themselves.

Overall, the deal buys time for a potentially larger deficit reduction deal and greater certainty in budgeting over the next several years. These negotiations could become even more brutal because of their potential inclusion of changes in mandatory spending -- Social Security, Medicare and Medicaid, all explosive topics. Two positive markers were set in the deal for the federal courts, through bump-up's in short-term funding, as exceptions to the general course of flat-line funding for the rest of the federal government. The provisional funding marks set by the courts' appropriations committees earlier this summer were positive and will provide funding targets that FBA will encourage Congress to embrace.

Bruce Moyer
Counsel for Government Relations to the Federal Bar Association