Congressional lawmakers this month appeared resigned to allow automatic across the board budget cuts to hit federal agencies on March 1, as no deal on an alternative package of spending cuts or tax increases was in sight.
The automatic cuts, widely known as sequestration, are the product of the Budget Control Act of 2011, which tasked the congressional “Supercommittee” with developing a plan to reduce the federal budget deficit by $1.5 trillion over the next decade. To encourage a deal the law stated that if the Supercommittee failed to agree on a plan to achieve these savings, $1.2 trillion worth of automatic across the board budget cuts would be implemented over nine years, with the first $109 billion of cuts to hit on January 1 of this year.
The Supercommittee did not reach a deal, but late in 2012 Congress did agree to trim $24 billion from the 2013 sequester amount and delay its implementation until March 1. But since that time virtually no progress has been made; Democrats have insisted on tax hikes to fill the gap, and Republicans have countered with demands to find other spending cuts elsewhere. Today, therefore, the sequestration cuts appear unavoidable.
Based on the government’s original estimates, the sequester was expected to trim domestic discretionary spending by 8.2 percent this year, costing EPA roughly $700 million. About $200 million of those cuts would come from the Drinking Water and Clean Water State Revolving Funds, meaning that states would have fewer dollars available to loan out in support of water and wastewater infrastructure enhancements. The federal government is expected to release the final sequestration amounts for each department and agency soon after March 1.
Importantly, the cuts will not happen all at once at midnight on March 1; instead, departments and agencies will have to come up with the required savings between then and the end of the 2013 fiscal year on September 30. EPA has not yet released a detailed plan for carrying out the cuts.