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SEQUESTRATION LOOMS: Congress Has Until Friday to Prevent Major Cuts to All Federal Programs

(February 26, 2013) - If Congress cannot reach an agreement by March 1st to avert sequestration, government agencies will be subjected to $85 billion in across-the-board cuts.  These cuts would impact every federal agency.  The mood on Capitol Hill is subdued as little progress has been made between the House and Senate to strike a deal.  While the majority in the Senate favors additional revenue to offset the size of the spending cuts, the majority in the House is holding firm on spending cuts alone.  With five months of the current fiscal already elapsed, the cuts will be implemented over the remaining seven months. 

Looking ahead, Congress has another challenge that is equally daunting: approving a spending measure to prevent a government shutdown by March 27th.  That is when the current continuing resolution (CR) is set to expire.  Congress will have one of two choices to keep the government running beyond March 27th:  approve another continuing resolution or an omnibus measure.  A continuing resolution keeps the government funded at Fiscal Year 2012 levels, providing little flexibility on how the money can be spent. For instance, funds contained in a CR cannot be used for grant programs, including AFG and SAFER.  On the other hand, an omnibus measure contains a number of separate appropriations measures, granting Congress greater leeway on how the money can be spent.  The Senate and House Appropriations Committees are currently working on separate proposals to fund the government through the end of Fiscal Year 2013.  These proposals will most likely include plans to alter the $85 billion in automatic spending cuts.