Last Thursday, January 24, Chairwoman of the Senate Budget Committee, Sen. Patty Murray (D-WA), circulated a memo outlining the “state of play” as her committee begins the process of writing a fiscal 2014 budget resolution. The chairwoman released a statement earlier last week saying that the chamber would act on a budget plan for the next fiscal year, something the Senate has failed to do in recent years, regardless of whether or not the House-backed “No Budget, No Pay” (HR 325) measure becomes law. The memo reviews the work that has already been completed over the last two years to reduce the federal deficit, with an emphasis on how most of the savings achieved so far has been through spending reductions. The memo also explains “three cliffs” or budget deadlines that will require action from Congress. It reviews the potential impacts of sequestration (Cliff #1), now scheduled to take effect on March 1, 2013, as well as the harm that could be caused if these automatic spending cuts are replaced in a manner that is not “balanced.” It describes the potential consequences of a government shutdown if Congress does not approve appropriations by the time the current continuing resolution (CR) expires on March 27 (Cliff #2). And, the memo explains that the debt limit measure passed by the House last week is a step in the right direction, but that this action still continues a “cycle of uncertainty” (Cliff #3) because it does not provide a long-term solution to the issue of the borrowing limit. The memo also lays out a plan for next steps to tackle the federal government’s budget challenges and further reduce the deficit, asserting that additional savings must come from spending cuts that are “responsible” and additional revenue from the wealthiest Americans.

The outlook for sequestration remains uncertain, although a number of reports last week and over the weekend indicated that Congressional leaders think the sequester is likely to start taking effect on March 1 as scheduled under current law, and could remain in effect for at least a few weeks. The Center on Budget and Policy Priorities (CBPP) recently released updated estimates of the percentage cuts in federal funding for programs subject to the sequester on March 1.

Link: Sen. Murray Memo; CBPP Table