Congress Finalizes Fiscal Year 2018 Spending; SSA Administrative Funding Increased

The House passed HR 1625, the Consolidated Appropriations Act of 2018 on March 22; the Senate passed it early in the morning of March 23; and the
President signed it into law that afternoon, less than 12 hours before  the federal government would have shut down. The government is now fundedthrough the rest of Fiscal Year (FY) 2018, which ends on September 30.

Before the spending bill passed, Congress had passed five Continuing Resolutions (cRs) to keep the government open. There were also two short government shutdowns when funding lapsed. The last CR was passed as part of H.R. 1892, the Bipartisan Budget Act (BBA)of 2018, on February 9. In addition to keeping the government open until Friday March 23, the BBA set overall spending levels for the next two years (FY 2018(10/1/17-9/30/18) and FY 2019 (10/1/18-9/30/19)). Importantly, the BBA waived pay-go rules and lifted the budget caps and sequestration (automatic cuts) required by the Budget Control Act of 2011 . The Budget Control Act (BCA) imposed strict caps on the total amount of appropriations Congress could allocate for both defense and non-defense discretionary programs. Funding for discretionary programs decreased significantly since 2010 as a result ofthe BCA caps and sequestration. The BBA of 2018 lifted those caps and waived sequestration so that spending on non-defense discretionary programs
returns to levels almost equal to spending in 2010.

The BBA gave Congress five weeks (until Friday, March 23) to decide how to spend that additional money and resolve differences between both the
House and Senate bills and the Republicans and Democrats. In typical fashion, Congress was unable to pass the bill until the last minute due to lingering policy disagreements on topics such as immigration, border security and building a wall on the border with Mexico, whether to include legislation tostabilize the health insurance markets, and what
restrictions to include on funding as it relates to abortion. The draft of H.R. 1892 was released at night on Wednesday March 21. The House easily passed the bill on Thursday by a vote of 256-167.The Senate’s vote was 65-32, with three not voting.

Congress effectively gave SSA a $480 million increase in administrative funding over its FY 2017 appropriation. SSA’s Limitation on Administrative Expenses (LAE) for FY 2018 was set at $12.754 billion, an increase of $396 million over the amountit received in FY 2017. Congress also decreased thefunding restricted to program integrity activities
(such as continuing disability reviews, age-18 redeterminations, and Cooperative Disability Investigation Units) by $84 million, from $1.819billion in FY 2017 to $1.735 billion in FY 2018.

The bill directs SSA to spend $100 million of increased LAE on reducing the disability hearing backlog and $280 million of the increase on information technology modernization and improvement. These amounts reflect the increased level of total spending authorized by the BBA of 2018. They are significantly better than the Senate proposal last year to cut $400 million from SSA’s LAE, and the House’s proposal to flat-fund SSA. However, with fixed costs to SSA increasing by more than $350 million from FY 2017 to FY 2018 and many years of underfunding the agency, the additional funding may not be sufficient to meet all of SSA’s objectives.