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Federal Update: FY 2014 Budget and the BCA

Federal Update: FY 2014 Budget and the BCA. Special Presentation for Ohio July 30, 2013. Federal Funds Information for States www.ffis.org. Overview. The federal b udget and states The federal budget deficit and the BCA How does the BCA work in FY 2014?

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Federal Update: FY 2014 Budget and the BCA

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  1. Federal Update: FY 2014 Budget and the BCA Special Presentation for Ohio July 30, 2013 Federal Funds Information for States www.ffis.org

  2. Overview • The federal budget and states • The federal budget deficit and the BCA • How does the BCA work in FY 2014? • How does it affect FY 2014 funding? • What’s the long view?

  3. Where the money goes: pieces of the federal budget pie Composition of Federal Outlays in FY 2012($ in Billions, % of Total)

  4. Payments for individuals have come to dominate federal grants

  5. What programs areas are supported by state/local grants? Federal Outlays to State and Local Governments, FY 2012($ in Billions, % of Total)

  6. The federal budget deficit: how did we get here?

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

  8. 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+

  9. 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

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

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

  12. Divergent paths lead to different outcomes for states

  13. House and Senate proceeding despite $90 billion difference

  14. How do major grant programs fare?

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

  16. The BCA becomes less restrictive going forward

  17. What other items is Congress focused on this year? Note: The BCA isn’t on this list.

  18. Will Congress do something? • 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.

  19. Questions? • For more information, visit www.ffis.org • or contact: • Trinity Tomsic (ttomsic@ffis.org) • Melissa Loeb (mloeb@ffis.org)

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