Still Sequestered, but No Government Shutdown

With several days to spare before its March 27 deadline, Congress passed H.R. 933, a new Continuing Resolution (CR) to keep the government funded through September 30. President Obama signed the bill into law on March 26. The legislation included Fiscal Year (FY) 2013 appropriations language for the Departments of Defense (DoD) and Veterans Affairs, thus providing needed funding in the DoD accounts that were most at risk during the first half of the year. The language shifted approximately $10.5 billion into DoD’s operations and maintenance accounts, hit hardest in the previous CR and by sequestration. H.R. 933 also gives DoD additional flexibility to move money between accounts.

While this new legislation will ease some of DoD’s funding challenges, it keeps the biggest challenge—sequestration—in place. DoD still must find savings of $46 billion to meet the sequestration requirements, which translates to 9% cuts to every program except military pay. Thanks to the additional funding provided by H.R. 933, DoD announced it would delay sending furlough notices to civilian employees for two weeks and use that time to review whether the same level of furloughs would be needed during the rest of the fiscal year.

Other provisions in H.R. 933, include:

  • $518 billion to DoD for its non-war accounts, equal to last year
  • $173.5 billion for operations and maintenance (Military family programs are mostly funded through operations and maintenance budgets)
  • $32.7 billion for military health care
  • $10.6 billion for military construction projects (a reduction from last year based on construction projections)
  • $1.65 billion for military family housing
  • $927 million for construction or renovation of military medical facilities
  • $270 million for grants to school districts to construct, renovate, repair, or expand civilian schools on military installations with capacity or facility condition deficiencies
  • $61 billion for the Department of Veterans Affairs (VA) (VA funds are exempt from sequestration)
  • $53 billion for the Veterans Health Administration as well as $54.5 billion in advance funding for FY 2014. (Advanced VA funding is a past legislative victory)
  • $55 million for the Department of Agriculture to ensure meat inspectors won’t be furloughed
  • $250 million for the Women, Infants, and Children (WIC) nutrition program, restoring two-thirds of the program’s sequestration cuts

The legislation also prohibits DoD from:

  • Cutting more than the percentage set under sequestration from Tuition Assistance (TA) programs, thus requiring that the Army, Marine Corps, Air Force, and Coast Guard restore TA. The language of the amendment introduced by Senators James Inhofe (R-SC) and Kay Hagen (D-NC) did not provide additional funding to the program. That means DoD will have to find savings in other programs to cover the costs of restoring TA.
  • Spending any money to identify installations for a potential round of base closures
  • Establishing an enrollment fee for TRICARE for Life

What’s Next?

After House approved the bill, DoD announced it would delay sending furlough notices to civilian employees for two weeks while it re-evaluates the fiscal situation in light of the changes contained in the legislation. Furloughs would then start in early May. The re-evaluation may prompt a change on the total number of planned furlough days needed for FY 2013 to achieve the mandated sequestration cuts. It is possible civilians will be furloughed for fewer than the 22 days originally announced by DoD.

DoD is encouraged more funds have been provided in the operations and maintenance accounts. Most of these funds will be used for training and other readiness support. At a meeting on March 21 with association leaders, DoD officials stated their top three priorities in implementing the sequestration cuts remain:

  1. Protecting readiness for current deployments
  2. Providing training and maintenance support for troops to deploy next
  3. Minimizing damage from the furloughs, which officials believe will create longer-term harm to the Department

As the funding situation for the rest of this fiscal year is now resolved—however unsatisfactorily—attention turns to FY 2014. The Administration has not yet released its FY 2014 budget, due in February. Officials anticipate it will be sent to Congress the week of April 8. Not waiting for the Administration, the House and Senate passed their own budget resolutions the week of March 18.  Differences between the various versions must be resolved as Congress begins working on the FY 2014 appropriations bills. A complicating factor in the timing on that work could be the next debt ceiling debate. It is now anticipated that we’ll reach the debt ceiling in July.

The National Military Family Association applauds Congress and the Administration for agreeing on the plan to keep the government funded for the rest of the fiscal year, thus avoiding a government shutdown. We appreciate the Defense appropriations provisions that direct more funding to operations accounts and give DoD more flexibility to move money around. We are concerned, however, that most of the sequestration cuts remain in effect.

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