Appropriations season officially kicked off last week on Capitol Hill when House Appropriations Committee Chairman Hal Rogers (R-KY) released the fiscal year 2012 spending allocations for each of the 12 subcommittees. The funding levels are based on the Budget Resolution that the House passed along party lines back in April. With the exception of the Defense Appropriations Subcommittee, which received a four percent boost ($17 billion), all other subcommittees received far less than their fiscal year 2010 or 2011 levels.

The chairman also laid out a schedule that paves the way for at least nine of the 12 spending measures to be considered on the House floor before the August recess, with consideration of the remaining bills to follow in September before the end of the fiscal year. 

The subcommittees on Homeland Security and Military Construction were the first to consider and pass their fiscal year 2012 appropriations bills. While both have traditionally been among the least controversial of the appropriations measures, the Department of Homeland Security bill proposes significant reductions to a number of homeland security/first responder grant programs. 

Specifically, the legislation would cut $2.1 billion from the Federal Emergency Management Agency’s (FEMA) state and local grant programs, which the committee has deemed wasteful and backlogged. The proposal would merge several grant programs — including those for port security, transit security, and the Urban Area Security Initiative — into one pot that would total roughly $1 billion. 

Despite a full slate of programs targeted for reductions, funding was increased for border security, the federal Disaster Relief Fund, and the Transportation Security Administration. According to the chairman’s schedule, both the Homeland Security and Military Construction bills could be considered by the full Appropriations Committee as early next week.

In other news, the U.S. government officially reached the federal debt limit on Monday, forcing the Treasury Secretary to take “extraordinary measures” to avoid a default on the U.S.’s $14.3 trillion debt. As a result, Treasury Secretary Timothy Geithner announced that his department would stop issuing State and Local Government Series Securities (SLGS). Geithner also announced that he was reducing the government’s investment in the two government employee pension funds. These measures give lawmakers until August 2nd before the nation defaults on its financial obligations.

At this point, a deal seems far off as both parties continue to debate what should be paired with an increase in the debt limit. The Group of Six – made up of three Democratic senators and three Republican senators – have been working for months to develop a deficit reduction plan that would be palatable to the appetites of lawmakers on both sides of the aisle. The group seems to have reached an impasse, however, as talks broke down, and Senator Tom Coburn (R-OK) removed himself from further negotiations. The group will continue to meet, but it’s unlikely that they can make progress without Coburn’s participation.

All eyes are now on a bipartisan group of six Senate and House lawmakers, led by Vice President Joe Biden, who seem to have found common ground on at least $200 billion in cuts. These discussions have had a narrower focus and the cuts identified thus far have stayed away from politically sensitive entitlement programs like Medicare and Social Security.

To compound the ongoing budget woes, a new report released by the Medicare and Social Security Trustees predicts that both entitlement programs will run out of money sooner than expected. Lawmakers wasted little time in turning these results into the latest battleground over federal spending and the new health care law. Republicans argued that the report underscores the need to enact sweeping entitlement reform, while Democrats maintained that the recently enacted health reform law strengthened Medicare, faulting the slower than expected economic recovery.

The energy debate also dominated headlines in Washington, D.C. as the discussion continued over how to quell soaring gas prices. The House approved three GOP-backed bills last week to expand offshore oil drilling, while Senate Republicans pushed their own measure to boost offshore drilling. Senate Democrats, on the other hand, focused their attention on eliminating tax breaks for the five largest oil companies. Both Senate bills were rejected, and it is unlikely that the upper chamber will consider any of the House-passed measures. Both sides are vowing to keep the issue alive in ongoing budget discussions.

There does appear to be some cooperation among the parties on national energy policy. Senators Jeanne Shaheen (D-NH) and Rob Portman (R-OH) introduced legislation to create a $2.9 billion loan program to promote energy savings in rural America and allow companies to receive loan guarantees for energy efficiency upgrades at commercial, industrial, municipal and school and hospital facilities.

In other developments, Representatives Mike Honda (D-CA), Zoe Lofgren (D-CA) and Adam Schiff (D-CA) took the lead in organizing a letter on the State Criminal Alien Assistance Program (SCAAP) to the leaders of the Commerce-Justice-Science (CJS) Appropriations Subcommittee. The letter – signed by 27 Democratic members of the California delegation – urges the subcommittee to fund SCAAP at its previously authorized level of $950 million.

On a related matter, California Democrats, lead by Representative Lofgren, are circulating a “Dear Colleague” letter to be sent to President Obama urging him to continue to oppose attempts to block grant Medicaid. Attached to the California delegation letter will be correspondence from CSAC arguing that a block grant will shift costs to counties and will particularly affect seniors and persons with disabilities who receive long-term or community-based care. The Congressional Budget Office estimates that a Medicaid block grant would cut federal funding by 35 percent over ten years.

Finally, the House Financial Services committee unanimously approved legislation to reauthorize the National Flood Insurance Program – which expires on September 30th – through fiscal year 2016. The program has come under financial hardship as a number of severe hurricanes have significantly increased insurance claims.

The bill would temporarily suspend mandatory purchase requirements for those in special flood hazard areas, phase in new flood insurance rates for newly mapped areas, and stipulate that private flood insurance would satisfy the mandatory flood insurance purchase requirement for properties in flood hazard areas.

The House passed a similar bill last year; the Senate, however, did not act on the measure before the end of the 111th Congress.