Legislative Update for Friday, September 21, 2012

September 21, 2012

OMB RELEASES REPORT ON SEQUESTRATION

Budget Cuts Would Be “Deeply Destructive”

On September 14, the Office of Management and Budget (OMB) released its report on the estimated impact of sequestration on defense and non-defense programs. The report was a requirement of the Sequestration Transparency Act (P.L. 112-155) that directed the Obama administration to provide a detailed plan on how sequestration will be applied. The sequestration process was passed last August as part of the Budget Control Act, which cut spending by about $2.5 trillion in order to extend the nation’s borrowing capacity. Sequestration covers the $1.2 trillion in across-the-board budget cuts that will impact the majority of federal agencies, including the Department of Transportation and FAA. Unless lawmakers agree on a plan to reduce federal spending or postpone action, the legislation would go into effect in January 2013 and the spending cuts would take place over the next nine years. Both the House and the Senate will be in recess starting September 21 and are not expected to return until November 14.

“Sequestration would be deeply destructive to national security, domestic investments and core government functions,” stated the report. “The administration strongly believes that sequestration is bad policy, and that Congress can and should take action to avoid it by passing a comprehensive and balanced deficit reduction package.”

According to the OMB report, sequestration would result in a 9.4 percent cut in non-exempt defense discretionary funding, and an 8.2 percent cut in non-defense, non-exempt discretionary funding. The proposed cuts would slash spending by $109 billion in FY 2013, including slashing the FAA’s budget by $1 billion. In specific, the report indicated that funding for FAA operations would be reduced by 8.2 percent or $377 million and that FAA activities paid for from the Airport and Airway Trust Fund would be cut by $415 million. Funding for the FAA facilities and equipment and research, engineering and development accounts would also be reduced by 8.2 percent or $229 million and $14 million, respectively.

“The Federal Aviation Administration’s ability to oversee and manage the Nation’s airspace and air traffic control would be reduced,” stated the report. In fact, according to a study released in August by the Aerospace Industries Association, budget cuts resulting from sequestration could lead to a drop in airline travel of as much as 10 percent and result in economic losses reaching the $80 billion point by 2035, which is an annual decrease of 37 to 73 million in passenger enplanements and annual reductions of one to two pounds of transported air freight. The anticipated loss to the U.S. economy is estimated to reach $9.2 to $18.4 billion, with $2.7 to $5.4 billion lost in wages and salaries.

In addition, the OMB report reveals that sequestration would produce cuts of 2 percent to Medicare, 7.6 percent to other non-exempt non-defense mandatory programs, and 10 percent to non-exempt, mandatory defense programs. While the Defense Department would be able to transfer funds to preserve war-fighting and military readiness, sequestration would reduce readiness of many non-deployed units, delay investments and equipment repairs, produce cuts to military research and development, and cause reductions in services for military families. The House recently passed legislation (H.R. 6365) recognizing the effects of sequestration on the military and calling upon the president to propose an alternative to sequestration. The bill is not expected to be addressed by the Senate before the recess. In non-defense budget, the report warns that sequestration would threaten domestic safety and “cause severe harm” to programs that benefit the middle-class, seniors and children.

The OMB report does indicate that the cuts were never expected to occur and that the threat of sequestration was “intended to drive both sides to compromise” and pass a balanced deficit reduction package. “As the administration has made clear, no amount of planning can mitigate the effect of these cuts,” the report said. “Sequestration is a blunt and indiscriminate instrument. It is not the responsible way for our nation to achieve deficit reduction.”

CONGRESS PASSES CONTINUING RESOLUTION THROUGH MARCH

 

On September 13, the House passed a continuing resolution (H.J. Res. 117) to fund the government through March 27, 2013. The Senate passed the legislation on September 19 and it will now be sent to the president for his signature. The resolution sets funding according to the $1.047 trillion level set in the debt limit law and funds federal agencies for the first six months of FY 2013 at a rate slightly higher than the current fiscal year. Specific to the FAA, the resolution includes $52 million, a small increase over the FY 2012 level. The resolution also includes $6.4 billion in disaster relief funding and $88.5 billion in “war-related” funding for ongoing overseas military operations. It also includes a provision requiring federal agencies to provide Congress with spending plans in order to “ensure transparency and the proper use of taxpayer dollars.” The continuing resolution is needed because none of the regular appropriations bills for the upcoming fiscal year have been enacted. Without continued funding, many government operations would have to shut down until new spending authority was enacted.

The continuing resolution does not address the federal employee pay raises, which also applies to members of Congress. Although the administration favors granting a 0.5 percent pay raise to federal employees, since Congress has not acted on final appropriations legislation, the president recently recommended paying no raises until Congress passes the final appropriations bills. The administration has made it clear that it supports a pay increase once the measure expires.

Many members of Congress are also expressing frustration at the lack of enacted appropriations bills. “I can’t stress enough how important it is that Congress return to consider regular appropriations bills,” said Rep. Norm Dicks (D-Wash.), the House Appropriations Committee ranking member. “A continuing resolution does not provide the guidance federal programs need to operate effectively.”

Both the House and the Senate will be in recess starting on September 21 and are not expected to return until November 14 unless there is an emergency.

VOTE IN THE 2012 ELECTIONS

Absentee and Early Voting Available in Most States

 

Election Day is a critical day for all Americans, and PASS members are encouraged to take the time to cast their vote in the 2012 elections. However, participating in this year’s elections does not mean you have to be in the voting booth on November 6. If you cannot get to the polls that day, you should make sure you know the steps you need to take in order to ensure your voice is heard. Absentee and early voting is available in most states, but there are specific restrictions that vary by state, and all states have timelines and other rules that must be followed. For more information on voting in your state, visit www.vote411.org today. You can also find information related to elections in your area by visiting your city, county or state website.

 

 

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