House Budget Bill Would Continue Automatic Spending Cuts
House Republicans introduced a measure that would finance the U.S. government at an annual rate of about $982 billion through Sept. 30, keeping the automatic spending cuts that began March 1.
The stopgap measure unveiled today, known as a continuing resolution, would include new 2013 spending bills for the Pentagon and the Department of Veterans Affairs, which also would be subject to the reductions.
House Appropriations Committee Chairman Hal Rogers, a Kentucky Republican, said the spending plan would avert a federal government shutdown when current funding expires March 27. He said it would give the Defense and Veterans Affairs departments more leeway to decide how to spend their money and implement the mandated cuts.
“It is clear that this nation is facing some very hard choices, and it’s up to Congress to pave the way for our financial future,” he said in a statement. “This bill will fund essential federal programs and services, help maintain our national security, and take a potential shutdown off the table.”
The House is set to vote by March 7 on the measure. It would apply the federal spending cuts to the current level of $1.043 trillion in government funding, resulting in an annual spending rate of about $982 billion.
Under Rogers’s bill, the Defense Department would have a base budget of $518.1 billion and $87.2 billion for war operations. Most of those funds would be reduced under the federal spending cuts. Some accounts such as military personnel and pay are exempt from the automatic cuts.
The measure also would cancel a 0.5 percent pay raise for federal civilian employees scheduled to take effect in April, the first time the federal pay schedule was to be increased since 2010. The provision is expected to save $11 billion over 10 years, Republicans have said.
The House passed almost identical legislation affecting federal pay on Feb. 15 over the objections of President Barack Obama and House Democrats. House Minority Whip Steny Hoyer, a Maryland Democrat, said Republicans were pushing federal employees to “give up their hard-earned pay because Congress cannot reach a balanced solution to deficits.”
New York Representative Nita Lowey, the Appropriations Committee’s top Democrat, said in a statement she was “disappointed” that Rogers’s proposal “would lock most of the federal government into outdated plans and spending levels.”
Lowey said the automatic discretionary spending cuts that are preserved in the legislation “will result in job losses and furloughs, slowed economic growth” and a reduction of government services.
Investors haven’t been deterred much by the budget negotiations. The Standard & Poor’s 500 Index rose 0.5 percent to 1,525.25 at 4 p.m. in New York, after falling as much as 0.3 percent earlier. The Dow Jones Industrial Average gained 37.86 points, or 0.3 percent, to 14,127.52.
Yields on 10-year Treasuries rose three basis points, or 0.03 percentage point, to 1.87 percent at 2:01 p.m. New York time, according to Bloomberg Bond Trader data.
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