Looking Ahead: Budget Issues in the Lame Duck Session
October 2, 2012
While the attention of the media and most of Congress is focused on the upcoming elections, many federal grant recipients and other local entities are waiting for resolution of significant budget issues. The out come of the elections, at the Presidential and Congressional levels, will likely impact the agenda for a Lame Duck session. However, regardless of who wins and who will be in control in January, Congress will have to address the looming threat of budget sequestration and other macro budget issues in a Lame Duck session at the end of this year.
At this point in time, most FY 2012 (fiscal year that ended September 30, 2012) funds are already obligated. The one exception to this is the Race To The Top District competition. Applications for this program are due on October 30, 2012, and funds will be awarded in December 2012.
Looking ahead to FY 2013 funding, Congress recently passed a six-month continuing resolution (CR) that will fund the federal government through March 2013. This action was necessary as Congress had not finalized any appropriations bills before leaving for recess. The CR package was funded at the level agreed to for FY 2013 in the Budget Control Act -- $1.047 trillion, which is $4 billion over the FY 2012 enacted amount. Among the provisions of the CR that impact education is a 0.6% increase above the FY 2012 levels of funding for nearly every discretionary program, including U.S. Department of Education programs. However, this increase is only temporary, through March. The final FY 2013 spending levels will be addressed next year by the new Congress, and many insiders are saying that the temporary increase may not hold during the final passage of those bills. The decision on funding CPB's advance appropriation for FY 2015 will also be a subject for the new Congress to address as they finalize the FY 2013 spending bills.
Also on the docket for the Lame Duck session is the looming budget sequestration that is set to take effect on January 2, 2013. Because the super committee failed to strike a deal on deficit reduction, the Budget Control Act passed in August 2011, calls for automatic spending cuts (sequestration) that will reduce the deficit by $1.2 trillion over nine years. There will likely be an effort among Republicans and Democrats in Congress to diminish the impact of sequestration before the end of the year. If that fails, there is a chance that Congress will delay sequestration in order to continue to seek a solution to the cuts. A recent report from the Obama Administration estimates that there will be an 8.2% cut to discretionary programs and a 7,6% cut to mandatory programs. These cuts would be applied across the board for education programs, including important programs such as Ready To Learn, with the exception of Pell Grants. Secretary Duncan has said that if sequestration happens in January, the effects will not be felt from a school perspective until the 2013-2014 school year.
To learn more about the budget outlook for the Lame Duck session and the next Congress and about what the effect will be for federal grants and public media stations, register for the Grant Center webinar on October 17, 2012, at 2:00 p.m. EDT, Outlook and Impact: Budget Sequestration and a Continuing Resolution in the Lame Duck.
