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From continuing resolutions to budget blueprints: What you need to know about congressional money wrangling

The federal budget comes back into the Washington political spotlight this week, as Congress tries to move forward on government spending for the rest of this year as well as a budget for the next. 

The clashing fiscal priorities of congressional Democrats and Republicans will be on full display for the next two weeks with deadlines looming as early as the end of March.

Even as members of Congress work on these plans, the spending reductions, also known as the “sequester,” required by the Budget Control Act remain in effect, slicing 6 percent from non-defense, non-entitlement spending and 8 percent from defense spending in the current fiscal year.

Entitlement spending through programs such as Social Security, Medicaid and the Supplemental Nutrition Assistance Program, formerly known as "food stamps," is immune from the sequester’s cuts, although Medicare providers and plans are subject to a two percent cut. At this point there appears to be little likelihood of an agreement that would undo the sequester.

Here are the significant budget actions coming up in the weeks ahead:

This week

Obama goes to Capitol Hill to hold separate meetings with Democratic and Republican members of Congress.

White House spokesman Jay Carney cautioned Monday that these meetings would not be budget negotiations. “I wouldn’t expect that they’re going to trade paper on numbers,” he said. Obama’s goal in the meetings, said Carney, was “making clear what his policy positions are, making clear his sincerity” in seeking lower budget deficits.

This week the Senate takes up its version of a bill – called a continuing resolution, or CR – to keep funding the government through the end of the current fiscal year. Senate Appropriations Committee chairman Sen. Barbara Mikulski, D-Md., will release her CR Monday.

Last week, the House approved its version of the continuing resolution, with a bipartisan coalition of 53 Democrats and 214 Republicans supplying the votes to pass it.

The House bill, worth $982 billion, includes $518 billion in defense funding and another $87.2 billion for overseas military operations such as those in Afghanistan and North Africa.

Ordinarily a CR continues funding for federal departments and agencies at the prior year’s level, but the House CR contains some spending adjustments – known on Capitol Hill as “CR anomalies” – which allow the Defense Department more leeway in its use of funds.

The House CR includes funds important to specific defense-dependent districts – such as funding for the building of two Virginia-class submarines in 2014 and funds for research and development on a submarine that will replace the Reagan-era Ohio-class submarines.

The House CR also includes some spending increases in certain programs such as a provision allowing the Customs and Border Protection agency to maintain its current staffing levels and a 1.7 percent pay increase for military personnel.

If the Senate CR differs from the House-passed CR, the two chambers would need to negotiate a compromise.

In order to avert a government shutdown, both Obama and congressional leaders want to get a CR enacted by March 27, when the current one expires.

Senate Majority Leader Harry Reid said last Thursday that the Senate must finish its work on the CR this week because next week will be devoted to debating and passing a FY2014 budget blueprint. “And we have to do that before the break we take for Easter,” Reid said. Both chambers of Congress take a two-week break for Passover and Easter the weeks of March 25 and April 1.

Also this week, the chairmen of both the House Budget Committee and the Senate Budget Committee are expected to release their budget blueprints for fiscal year 2014. The Senate has not passed a budget resolution since 2009.

While most federal spending is mandatory – for example Social Security benefits – and is on a kind of auto-pilot (the money goes to those who meet the eligibility criteria), the congressional budget resolution is an important device for raising or lowering spending levels on items such as the National Park Service, weather satellites and the National Science Foundation, which funds basic research.

Also under a budget process known as “reconciliation,” tax increases and changes in entitlement programs could be approved with a simple majority vote in the Senate, rather than the usual 60-vote requirement needed to advance legislation. 

But on Monday, Sen. Orrin Hatch, R-Utah, the top Republican on the tax-writing Senate Finance Committee urged Democrats to not use budget reconciliation to enact tax increases. Hatch said there's bipartisan interest in enacting comprehensive tax reform through the normal Finance Committee process, but that "it will poison the well for tax reform, making it all but impossible" if the Democrats choose to use the reconciliation route.

The people to watch are Senate Budget Committee chairman Sen. Patty Murray, D-Wash., and House Budget Committee chairman Rep. Paul Ryan, R-Wis.

A key point of contention in Ryan’s budget plan last year was his call for changes to Medicare beginning in 2023. Ryan’s proposal would have applied market principles to Medicare by encouraging seniors to shop among private-sector insurance providers.

Ryan’s 2012 plan would also have imposed a limit on the growth of per capita Medicare spending for people reaching eligibility after 2023.

Next week

The Senate is scheduled to debate Murray’s FY 2014 budget proposal. Senate rules allow senators to offer dozens of amendments and some of those votes will likely put members who are up for reelection next year in a difficult position of voting for spending cuts or tax increases.

Once each house passes its FY2014 budget plan, the two sides would need to meet and come up with a compromise plan – but even without a formal FY2014 budget resolution, spending could continue if Congress passed a new CR for FY2014.

Beyond next week

The president’s budget plan is required by law to be submitted to Congress no later than the first Monday in February, but Obama hasn’t yet released his plan for FY2014.

Asked Monday when Obama will deliver his budget proposal, Carney said “I don’t have a date certain for you on the president’s budget; it’s being worked on.” Carney said Obama and his aides are watching the budget plans being proposed by Ryan and Murray and that Obama will work with Congress to try to come up with a plan to reduce budget deficits and encourage economic growth.

This summer

According to Bipartisan Policy Center, the government will reach its borrowing limit by August. Obama and Congress will need to devise an agreement that would raise the borrowing limit. It’s too soon to know whether House Speaker John Boehner will seek to use the debt ceiling as another occasion to pressure Obama to make more spending cuts – especially in the entitlement programs.