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The BCA in FY 2014 and Beyond

The BCA in FY 2014 and Beyond. HSFO Annual Conference Columbus, Ohio July 30, 2013. Federal Funds Information for States www.ffis.org. How did w e g et h ere?. The BCA in a nutshell. Discretionary spending caps w/adjustments Joint Select Committee on Deficit Reduction

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The BCA in FY 2014 and Beyond

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  1. The BCA in FY 2014 and Beyond HSFO Annual Conference Columbus, Ohio July 30, 2013 Federal Funds Information for States www.ffis.org

  2. How did we get here?

  3. The BCA in a nutshell • Discretionary spending caps w/adjustments • Joint Select Committee on Deficit Reduction • Sequestration process

  4. The federal budget in a nutshell Composition of Federal Outlays in FY 2012($ in Billions, % of Total)

  5. How sequestration works • $984 billion in cuts through FY 2021 (~$109 billion/year, half from defense, half from nondefense) • FY 2013 sequestration occurred on March 1, 2013 • “Fix” reduced cuts from $109b to $85b • Many mandatory and a few discretionary programs are exempt (special rules for some programs) • ATB cuts in FY 2013, different process for FY 2014+

  6. How sequestration was implemented in FY 2013 • ATB percentage cuts: -5.0% for nondefense discretionary and -5.1% for nondefense mandatory • Applied to FY 2013 funding in place on 3/1/13 • Cuts were required to be applied to each program, project, and activity (interpretation varied by agency) • Final 2013 appropriation levels and existing agency flexibility mitigated or worsened effects of sequester in some instances • Cuts reflected in grant awards issued after March 1, 2013 • Timing varied by program

  7. How does FY 2014 sequestration compare to FY 2013?

  8. Mandatory programs: FY 2014 OMB sequestration estimates

  9. Mandatory programs: FY 2014 OMB sequestration estimates

  10. House and Senate take divergent paths in FY 2014, neither of which conforms to BCA

  11. Divergent paths lead to different outcomes for states

  12. How do major grant programs fare?

  13. What if gridlock persists?

  14. Discretionary spending grows after FY 2014, even with sequestration

  15. The BCA becomes less restrictive going forward

  16. Questions, Comments, Difficulties • The House and Senate are proceeding based on their own budget resolutions, which are vastly different from one another. • How and when will the gaps be bridged? • Will FY 2014 begin with a CR? • “Action-forcing” event: raising the debt ceiling. • After FY 2014, discretionary spending increases under the BCA, even with sequestration. • Continued focus on reforming mandatory programs.

  17. The End: Questions? For more information, visit www.ffis.org or contact: Trinity Tomsic (ttomsic@ffis.org)

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