Clarification: Current Status of Sequester, FY 2013 Appropriations

Special Analysis 13-03
March 8, 2013

Summary 


FFIS has put out so many updates and re-estimates of our grants database that some of our readers may now be more confused than enlightened. We hope this helps to clarify things:

  1. OMB has released the final sequestration percentages: -5.0% for nondefense discretionary programs and -5.1% for nondefense mandatory programs subject to the BCA sequester. These cuts are applied to annualized fiscal year (FY) 2013 funding levels in place on March 1, 2013. Federal agencies charged with implementing this sequester will proceed in different ways and have been advised to work with their state partners to let states know how the cuts will affect specific grant programs. FFIS has estimated these fiscal impacts, and the estimates can be viewed here.
  2. Assuming the current continuing resolution (CR), which expires on March 27, 2013 is extended for the rest of FY 2013 with no changes to any funding levels, a second, much smaller sequester will be triggered. FFIS has described the reasons for the second sequester here.
  3. FFIS has also estimated the fiscal impact of the second sequester, were one to occur, available at the same link as provided in #1.
  4. This week, the House passed a CR to fund programs for the remainder of FY 2013. This CR does not extend all current spending levels; instead it funds most programs at their FY 2012 levels but amends some spending levels and includes a small across-the-board (ATB) cut. This ATB cut would negate the need for a second sequester, although the House action has NO impact on the March 1 sequester. FFIS has not prepared any state-by-state estimates reflecting the House CR because the bill is not law; it now moves to the Senate. FFIS has estimated national totals for major grant programs under the House CR. They can be seen here.
  5. The Senate is taking up the House CR for the remainder of FY 2013 next week. It is expected to amend the House CR. Assuming the Senate passes a CR that varies in any way from what the House passed (and it almost certainly will), the two bills will have to go to conference committee to work out those differences prior to March 27. Only the passage of that second CR will allow a definitive state-by-state estimation of the final spending levels provided for grant programs in FY 2013.