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Federal Budget Update: FY 2013 Budget and the BCA

Federal Budget Update: FY 2013 Budget and the BCA. NCSL Legislative Summit August 6, 2012. Federal Funds Information for States. Part 1:. Will Congress Enact a FY 2013 Budget?. FY 2013 Appropriations: A $19 Billion Difference. FY 2013 Appropriations: Status.

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Federal Budget Update: FY 2013 Budget and the BCA

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  1. Federal Budget Update: FY 2013 Budget and the BCA NCSL Legislative Summit August 6, 2012 Federal Funds Information for States

  2. Part 1: Will Congress Enact a FY 2013 Budget?

  3. FY 2013 Appropriations: A $19 Billion Difference

  4. FY 2013 Appropriations: Status

  5. FY 2013 Appropriations: At What Cost to States?

  6. Will Congress Pass a FY 2013 Budget? • Continuing Resolution (CR) likely, but for how long? • House and Senate leaders reached broad agreement on six month CR • Details still need to be resolved • Will it pass both houses in September? • What happens after?

  7. Part 2: What if the BCA Sequester is Implemented Next January?

  8. Overview: BCA of 2011 Three components with potential to affect future funding for state grant programs: • Discretionary spending caps w/adjustments (done) • Joint Select Committee on Deficit Reduction (failed) • Sequestration process (January 2, 2013)

  9. Sequester Process: What We Know • $984 billion in cuts required over FYs 2013-2021 • Roughly $109 billion per year, half from defense and half from nondefense • Many mandatory and a few discretionary programs are exempt • ATB cuts in FY 2013, different process for FY 2014+

  10. Sequester: What We Don’t Know What is the ATB percentage cut? • CBO estimates 7.8% for nondefense discretionary and mandatory, 10% for defense • Exact percentage won’t be known until January 2013

  11. Sequester: What We Don’t Know How will individual programs be affected? • Percentage reduction applied to FY 2013 funding (or CR level) • OMB has authority to apply exemptions and special rules • Examples (Medicare, UI, health care reform, trust funds)

  12. Sequester Coverage Status of FFIS-Tracked Programs

  13. Sequester Coverage Status of FFIS-Tracked Funding

  14. Program Areas Most Affected

  15. Sequester: What We Don’t Know How much discretion do agencies have in implementing sequester? • Virtually none. • Some influence over timing (recent ED guidance) Will Congress and the president modify the BCA? • Various proposals, no agreement (explicit legislation required) • Congress did approve legislation requiring OMB to provide sequester details

  16. What We Can Guess About a Sequester

  17. Will Sequester Happen? • Conventional Wisdom: agreeing to postpone the day of reckoning, BUT… • Many other issues at play • May depend on outcome of election • Waiting too long to act could have a major negative impact on economy • How will companies respond to WARN Act and latest guidance?

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