by Sarah Curry
Director of Fiscal Policy Studies
Last week, the White House Office of Management and Budget (OMB) released a report to both the President and Congress giving an update on sequestration for fiscal 2014. The report includes information on discretionary spending limits for defense and non-defense programs, estimates of the most recent legislation issuing discretionary spending, comparisons with the Congressional Budget Office (CBO) estimates, and a preview of disaster relief spending for 2014.
The OMB report states that the base discretionary spending cap for defense is $498.1 billion and the cap for non-defense spending is $469.4 billion. The House and Senate both have appropriations plans that exceed these caps. Since a budget agreement that changes these spending caps is not present, any excess discretionary spending above the capped amounts triggers an across-the-board cut to align the fiscal 2014 spending with the caps stated above. The cuts would not take place until January, allowing Congress more time to reach a deal, or not. Thus, the sequestration cuts that occurred not long ago could be happening again.
The federal fiscal year begins on October 1, 2013, and while Congress has the power to amend or repeal the spending caps it is unknown whether any changes will be made. Many believe a continuing resolution will be needed around the start of the next fiscal year in order to prevent a government shutdown. Federal Funds Information for States released a brief last week as well describing the current federal budget landscape. This includes estimated fiscal 2014 grant projections under one scenario should Congress fail to reach an agreement and instead choose to enact a full-year continuing resolution.