Giving Agencies Leeway to Cut Seen Averting Shutdown: Q&A

The Congress is poised this week to clear a funding measure that will keep the U.S. government running through the rest of the fiscal year. The bill does nothing to cancel $85 billion in across-the-board cuts which took effect March 1.

Instead, lawmakers have crafted a hybrid stopgap measure, also known as a continuing resolution, that seeks to cushion some of the effects of the automatic spending cuts by giving agencies limited flexibility to deal with them.

Here are questions and answers about the continuing resolution and the kind of flexibility some agencies would have:

How much money would the government have for the rest of the year?

Congress would approve more than $1 trillion for non- emergency discretionary spending, an amount agreed upon under a January budget deal. All told, the government faces $85 billion in automatic budget cuts, known as sequestration. The Congressional Budget Office estimates that appropriations through the rest of the fiscal year ending Sept. 30 will drop to an annual rate of $984 billion as a result of the cuts.

Why is Congress taking up this measure now and not altering the cuts for the rest of the year?

Lawmakers must approve new funding because the current stopgap measure expires March 27. Absent a broad deficit- reduction agreement with the White House that no one expects quickly, lawmakers in both parties have agreed not to undo sequestration. Instead, lawmakers decided to cushion some of the effect of the cuts.

What makes the new stopgap measure different?

House Appropriations Chairman Hal Rogers, a Kentucky Republican, decided to include spending bills for the Defense and Veterans Affairs Departments. Those two agencies will receive the money to fund their operations and priorities for fiscal 2013.

The House left all the other agencies operating from their previous budgets. The Senate expanded the list of 2013 appropriations bills and added three more to the House-passed bill: Agriculture-Food and Drug Administration, Homeland Security, and Commerce-Justice-Science. That means that Cabinet- level departments receiving new budgets will include Justice, Commerce, Agriculture and Homeland Security.

How would the stopgap measure give agencies more flexibility to deal with the spending cuts?

The legislation would make it easier for some agencies to cope with the cuts merely by updating their budgets. For example, the bill would increase the Pentagon’s “operation and maintenance” accounts by about $10 billion, which would make it easier to absorb the cuts. The stopgap measure would help agencies set their priorities because the money has been repositioned.

What else provides a buffer for the agencies?

Various programs would receive dispensation for the cuts under the new funding plan. The Senate package includes more than 100 adjustments, called “anomalies,” such as one providing the State Department with an additional $50 million to “respond to the deteriorating situation in Syria, including providing non-lethal aid to the Syrian opposition,” according to a summary provided by the Senate Appropriations Committee.

What happens to the other government agencies?

Other arms of the government would be put on autopilot through Sept. 30, though appropriators included an eight-page list of “anomalies” to adjust funding levels and agency responsibilities to make it easier to operate under the continuing resolution. In the Senate, Democrats dropped plans by Appropriations Committee Chairwoman Barbara Mikulski to give agencies more authority to move money around within their budgets. Republicans had complained that doing so would give President Barack Obama’s administration too much power over the budget.

What is reprogramming and how does it work?

Agencies can ask Congress to reprogram funding to boost spending in specific areas of their budgets. That authority varies by agency. Still, an agency boosting one account by taking money from another subjects that account to the cuts.

Why does Congress need to pass a continuing resolution?

Because both chambers of Congress didn’t pass any of the regular 2013 spending bills, the government was funded through the stopgap measure that continues the status quo of the previous year. That means agencies can’t start new programs and receive funding in accounts that may no longer have priority.

What is the status of the bill?

Once the Senate passes the measure, the Republican-led House will take it up. The House is expected to clear the measure for Obama’s signature before it starts a recess on March 22.

How do the 2014 budget proposals each chamber is debating this week figure into this year’s funding level?

They aren’t related to this year’s funding. The resolutions are each party’s budget priorities for the 2014 fiscal year, which starts Oct. 1. While these budget resolutions are non- binding, the blueprints show the divide between Democrats and Republicans on deficit reduction and serve as the two parties’ messaging tools. Obama will present his 2014 budget request to Congress on April 8, after the two chambers already moved on theirs.

What are some of the differences in the House and Senate budget plans?

House Budget Committee Chairman Paul Ryan, a Wisconsin Republican, unveiled his plan that he said would eliminate the deficit within a decade by cutting $4.6 trillion across a swath of federal expenditures. His Democratic counterpart in the Senate, Patty Murray of Washington, in her plan included $1.85 trillion in net deficit reduction by 2023, including $975 billion from revenue increases and $975 billion from spending reductions. The changes would reduce the deficit by $1.85 trillion.

To contact the reporter on this story: Roxana Tiron in Washington at rtiron@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net

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