On Thursday, March 21, the House passed a continuing resolution (CR) to fund the federal government for the remainder of fiscal 2013 by a vote of 318-109, after the Senate amended and approved the measure on Wednesday. The bill (HR 933) was sent to President Obama; it is expected to be signed into law shortly, preventing the potential government shutdown that would have occurred if Congress did not authorize spending beyond the current continuing resolution, which expires this Wednesday, March 27. The measure leaves the March 1, 2013 sequester in place, but does make some funding adjustments to soften the impact of funding cuts under sequestration for certain programs. The bill also complies with the total discretionary spending cap of $1.043 trillion (before sequester), as defined by the Budget Control Act (BCA). This will mean total discretionary spending for fiscal 2013 once the sequester is applied will be reduced to $984 billion. Since the bill meets the BCA cap requirement, a “second sequester”, also scheduled to take place on March 27 to bring spending levels into compliance with the caps, will not be triggered.

The final measure passed by Congress includes five full-year fiscal 2013 appropriations bills for Defense, Military Construction-Veterans Affairs, Agriculture, Commerce-Justice-Science and Homeland Security. The remainder of government appropriations – Energy and Water, Financial Services, Interior-Environment, Labor-HHS-Education, Legislative, State and Foreign Operations, and Transportation-HUD – are funded by a straightforward CR through September 30, 2013. Most budget accounts for those agencies funded by the CR are funded at their fiscal 2012 spending levels, though some funding adjustments were made to lessen the budgetary impact of the sequester on certain programs.

Sequester Impact Softened for Some Programs, But Not All
Federal Funds Information for States has updated its Jim Martin Table – which lists program funding levels for major discretionary and mandatory grant programs – to reflect the pre-sequester fiscal 2013 amounts provided in the bill as well as the amounts once the sequester is applied. This table illustrates how certain programs would receive funding increases under the CR to partially offset the impact of the sequester. For example, the Women, Infants and Children (WIC) program, received a funding increase so that its net decrease in funding from fiscal 2012, after the five percent reduction under the sequester is applied, is just one percent. The Child Care and Development Block Grant also received a funding increase, so that its fiscal 2013 funding level after the sequester is applied will decline by three percent rather than five percent.

However, most large grant programs to states that are not exempt from the sequester did not receive presequester funding increases, meaning they will see fiscal 2013 funding levels decline by five percent compared to fiscal 2012 levels after applying the sequester. This includes all major education programs listed in the FFIS table, such as Title I Education for the Disadvantaged grants and Special Education grants. For some grant programs, funding levels in the CR were actually lowered from fiscal 2012 so that their total decrease after the sequester would exceed five percent. This is the case for the State Drinking Water and State Clean Water Revolving Funds, as well as for state administration grants for operating unemployment insurance programs.

Other Noteworthy Provisions
The measure increases the obligation limit for federal highway programs for fiscal 2013 to be in line with the surface transportation authorization law (PL 112-141) passed last year. In addition, the bill includes language that the highway funds will be distributed to states based on the formulas in the new authorization law. The bill also includes an extension of Temporary Assistance for Needy Families (TANF) and related programs through September 30, 2013. The measure also eliminated more than $6 billion in funds for performance bonus payments to states that are designed to encourage state enrollment and retention efforts and partially offset costs of increased Medicaid and CHIP enrollment. While the bill addressed some of the funding issues requested by the Administration– referred to as “anomalies”– a number of these requested provisions were left out, including $949 million in additional funds for the Centers for Medicare and Medicaid Services (CMS).

Link(s): HR 933; FFIS Table