Legislative Update: Fiscal Cliff Impact on WAP and CSBG

— By the Advocates for the Other America

On January 1st, Congress narrowly averted going over the “fiscal cliff” by reaching a compromise on spending and tax increases. The final agreement temporarily spares programs like CSBG and WAP from automatic sequestration that was scheduled to take place January 1st by delaying the $110 billion in cuts for two months.

Despite this provisional stay, the uncertainties facing CSBG and WAP remain severe due to the following budget related hurdles that must be cleared in the coming weeks:

  1. Sequestration – or 12.8% across the board cuts in defense spending and domestic discretionary spending – is now slated to take effect in early March. Republicans want to replace the $110 billion in cuts with more targeted spending reductions of at least equal size. President Obama has said a package to replace the so-called “sequester” must be balanced between other spending cuts and new tax dollars. It is unclear whether Congress will be able to reach agreement on alternatives to sequestration before the March deadline;
  2. On March 27th the Continuing Resolution (CR), a funding measure keeping the government operating, expires. If Congress does not adopt a new bill, the government will shut down. CSBG and WAP are currently funded under the CR, and it is unclear whether an agreement will be reached on a second CR by March 27th;
  3. The submission of the Fiscal Year (FY) 2014 budget, normally expected for the first week of February, has been delayed until March because of the uncertain fiscal climate, casting further doubt on the funding for CSBG and WAP in the fiscal year beginning October 1st; and
  4. Finally, the debt ceiling has expired, leaving the Treasury with only extraordinary measures to keep the government afloat until Congress reaches an agreement on its extension– which Republicans may attempt to link to reductions in government spending left out of the January 1st agreement.

So stay tuned. Congress is operating on the “total uncertainty “ principle and funding for both CSBG and WAP for the balance of FY 2013 and FY 2014 remains in jeopardy.