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Deeper cuts are threatened in 2014

Jun. 2, 2013 - 06:00AM   |  
By SEAN REILLY   |   Comments
House-planned cuts in fiscal 2014 budgets 'would multiply the damage of sequestration,' Education Secretary Arne Duncan said at a hearing late last month.
House-planned cuts in fiscal 2014 budgets 'would multiply the damage of sequestration,' Education Secretary Arne Duncan said at a hearing late last month. (Thomas Brown / Staff)

As agencies wrestle with the fallout from this year’s sequester-related budget cuts, many face an even steeper round of reductions starting in October under a recently approved blueprint by the House Appropriations Committee.

The blueprint, which spells out the Republican-run committee’s plan for the fiscal 2014 spending bills, calls for increasing defense funding next year by 5 percent and imposing severe cuts on many non-Defense Department agencies, especially the Health and Human Services, Labor, Education and State departments.

The plan would leave overall federal discretionary spending — not counting some disaster relief and overseas war funds — at about $967 billion, or almost 2 percent below this year’s $986 billion level following the sequester cuts that took effect in March.

That level is required under the 2011 Budget Control Act, which mandates sequesters every year through 2021 to reduce future federal deficits. But President Obama and the Democrat-controlled Senate are both pursuing more generous spending plans for next year on the assumption that lawmakers will find a way around the act.

For agency executives, the one certainty is likely to be continued uncertainty.

“We’re not quite sure what to plan for,” Reah Suh, the Interior Department’s assistant secretary for policy, management and budget, said in an interview last month before the House committee approved its blueprint. Whatever the final number in next year’s budget, Suh said, “It’s probably going to look constrained.”

Under the Obama administration’s plan, for example, the allocation for the spending bill that covers Interior, the Environmental Protection Agency and the Forest Service is set at $30 billion, up 6 percent from this year’s post-sequester level of $28.2 billion. Under the House Appropriations Committee’s version, the overall allocation is cut almost 14 percent to $24.3 billion, according to a committee analysis obtained by Federal Times.

For some agencies, the cuts would land even as they pick up big new assignments. Under the health care overhaul, for example, the Internal Revenue Service is charged with implementing about 50 changes to the tax code that “are very complicated in many respects,” the agency’s inspector general, J. Russell George, recently told a Senate Appropriations subcommittee. IRS officials also have to let the public know about the law’s new requirements.

While the agency’s performance thus far has been sufficient, “there’s a lot more that needs to be done,” George said. “So whether it’s enforcement or whether it’s customer service, I don’t know how they’re going to be able to accomplish this huge responsibility.”

Under other spending allocations approved by the House panel, the Labor, Education and Health and Human Services departments — which are funded by the same appropriations bill — would see the deepest cut: a combined 19 percent reduction from this year’s post-sequester benchmark, the analysis shows.

“These cuts would multiply the damage of sequestration,” Education Secretary Arne Duncan said at a separate hearing late last month before the House education committee. “It would represent dumb government dumbing down America.”

The State Department and foreign operations would see a 16 percent cut. And the appropriation for the Transportation and Housing and Urban Development departments would drop 9 percent

The legislative branch, which includes Congress, the Govenment Accountability Office and the Congressional Research Service, would essentially be level-funded. Even so, austerity’s toll is mounting.

GAO, which would normally have about 420 people in its entry-level program, currently has 14, the agency’s head, Comptoller General Gene Dodaro, told lawmakers last month. “I tell everybody I feel like a college football [coach] where the seniors are leaving, but there are no freshmen and sophomores.”

The House committee’s plan sticks to the overall discretionary spending cap spelled out in the Budget Control Act. Most, if not all, of the proposed cuts to domestic agencies are intended to offset further reductions to defense spending that would otherwise occur under the act.

For next year, the Defense Department would receive $512.5 billion, a 5 percent increase from this year’s sequester level, under the House blueprint. Also getting a boost would be the Department of Homeland Security, whose funding would rise 3 percent to $39 billion.

The 2014 budget proposals by President Obama and Senate Democrats each assume a discretionary spending limit of almost $1.06 trillion, or 9 percent higher than the House committee’s version. But DoD officials aren’t writing off the possibility of another sequester. In a memo last week, Deputy Defense Secretary Ashton Carter told the military services and other components to draft plans to cut 10 percent below the White House proposal.

Because the two parties are so far apart, “I expect a very contentious battle,” said Loren Adler, a senior policy analyst at the Bipartisan Policy Center. Instead of an approved 2014 budget at the start of the fiscal year in October, a continuing resolution that could extend 2013 funding levels “is a virtual inevitability,” Adler said.

Marcus Weisgerber contributed to this report.

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