Washington Update: FY 2012 funding extended into 2013, sequestration looms at the end of the year

In anticipation of the upcoming election season, Congress has passed a continuing resolution (CR) to extend federal spending until March 27, 2013.

Leaders in both chambers have pushed for the passage a CR in order to avoid a government shutdown so close to the November election. Funding for the current federal programs, which was scheduled to expire at the end of September, will remain unchanged until March at which point Congress will revisit budget negotiations. The resolution passed the House with overwhelming support on September 13. The Senate deliberated the measure, and eventually passed the resolution, 62-30. President Obama signed the CR late last week.

Budget stalemate and the Partnership for Sustainable Communities
As part of the compromise legislation to raise the federal debt limit last summer, a “super committee” of members of both the House and the Senate was tasked to identify $1.5 trillion in savings over the next ten years. The committee failed to reach consensus about how best to do this. If Congress fails to pass a comprehensive deficit reduction plan before the beginning of 2013 they risk sequestration, which would result in large cuts in both defense and non-defense discretionary spending. The Office and Management and Budget (OMB) released a report, as required by Congress, outlining cuts that could go into effect as a result of sequestration on January 2, 2013.

Sequestration would mean cuts to nearly all federal agencies. However, the OMB report does not specify cuts to specific programs, so there is still uncertainty over how many programs might be affected. The report does include recommendations that could impact the federal Partnership for Sustainable Communities, including:

  • A potential $41 million cut to the Department of Transportation’s TIGER program. Such a cut could jeopardize DOT’s ability to put out a Notice of Funds Available for another round of grants.
  • A potential $279 million cut to the Department of Housing and Urban Development’s Community Development Fund, as well as an additional $10 million cut to Choice Neighborhoods. The report does not break down the funding far enough to see how this would impact the agecny’s Community Development Block Grants program. Though no appropriations bill funded HUD’s Sustainable Communities Initiative in FY13, these cuts would put the Regional Planning and Community Challenge grants at further risk.

It is difficult to predict the full impact other programs Smart Growth America advocates for, including the Environmental Protection Agency’s Office of Sustainable Communities and Brownfields Program.

The next step of the appropriations process is very unclear, and will be strongly influenced by the results of the November election. While the risk of sequestration cuts coming into effect remains, Congress could take action after the election to even further put off sequestration.