Senate Passes Temporary Spending Bill

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Early last Sunday, the Senate voted to pass a continuing resolution (CR) that funds the government for the first half of Fiscal Year 2013, which begins October 1.  The bill expires March 27, 2013 and will provide $1.047 trillion in discretionary spending, which matches the cap set in the Budget Control Act (BCA) signed in August 2011.  The House passed the CR the previous week.

The funding will be about $8 billion above current levels and the increase — about 0.6 percent — will be spread across the board for all agencies. However, Congress still must deal with the automatic spending cuts it ordered last year when it required the president to sequester $110 billion in FY 2013 if the House and Senate failed to come up with comprehensive budget cuts.  So far, those efforts have failed, and the automatic cuts are scheduled to take effect on January 2.

Last week the Office of Management and Budget(OMB) released a report detailing the across-the-board cuts in the FY 2013 budget under the mandatory

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sequestration law.  “The sequestration would result in a 9.4 percent reduction in non-exempt defense discretionary funding and an 8.2 percent reduction in non-exempt, non-defense discretionary spending,” the OMB reported.

Congress exempted certain programs from the automatic cuts in the Budget Control Act –sequestration.  Among the infrastructure accounts exempted are the federal Highway Trust Fund and the Airport Improvement Program grants-in-aid.  The National Flood Insurance Program funding of $171 million in 2013 also is exempt from sequestration.  “The administration cannot choose which programs to exempt or what percentage cuts to apply,” the OMB said.

If Congress does not take action before January 2nd, among the infrastructure programs to undergo mandatory cuts in 2013 is the Corps of Engineers military construction program, a decrease of $383 million (9.4 percent) from $4.072 billion in the BCA.  The Corps’ Civil Works program will be reduced by $505 million from $5.772 billion.  These cuts included $150 million in construction, $176 million in operation and maintenance, and $86 million in Mississippi River and Tributaries spending.

The State and Tribal Assistance Grants program at the Environmental Protection Agency (EPA) funds wastewater and drinking-water infrastructure through the State Revolving Loan Fund (SRF) programs.  The account will be reduced by $293 million (8.2 percent) overall from $3.5 billion.  The OMB does not identify how much money will be cut from the wastewater SRF and how much from the drinking-water SRF.

The Federal Transit Administration would be cut by $172 million, including $156 million from a total of $1.9 billion for capital investment grants, an 8.2 percent reduction.  Customs and Border Protection would lose $19 million of $237 million (8.2 percent) from its construction program.

The water program at the Bureau of Reclamation would be cut by $89 million (8.2 percent) from $878 million.  A further $302 million from the account’s total of $1 billion would be exempt from sequestration.

The National Park Service budget for construction would be cut $13 million from the $156 million in budget authority.  Another $126 million would be exempt.  The State Department’s embassy construction program of $1.5 billion would be cut by $129 million.

Congress has the authority to act before January 2 to eliminate or redistribute some or all of the sequestration requirements for FY 2013 in an effort to reduce spending by $110 billion.

The full OMB report can be seen here.
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