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Few in Washington expected the sequester provision in the budget deal brokered in August 2011 to actually go into effect, but nearly two years later, Congress has not replaced the across-the-board spending cuts, federal agencies are operating under sequestration, and the FY14 appropriations process is quickly headed for gridlock.

The stipulations of the Budget Control Act of 2011 (BCA) would set education budgets back so steeply in FY14 that House appropriators at this time do not even intend to schedule a mark-up of the Labor- Health and Human Services -Education spending bill, the bill that would see the deepest FY14 cuts and funds the Department of Education, the National Institutes of Health, as well as many popular domestic programs. Not only would action on the legislation motivate interest groups supportive of various programs in the bill, but the measure is often used as a vehicle to enact legislative changes on controversial policies (e.g. abortion, funding for the implementation of the Affordable Care Act).

The Senate and the White House have set the overall FY14 discretionary budget target at $1.058 trillion, which is the funding level set by the 2011 Budget Control Act, without the added cuts of the sequester (and assumes repeal of the sequestration policy). The House has set FY14 discretionary funding to $967 billion, which is a $19 billion, or 17-percent, cut from the already deep sequester cuts taken in FY13—resulting in a $91 billion difference between the Senate and the House.

At this time, there have been no apparent discussions on how policymakers will eventually address the federal budget for FY14, which begins on October 1. Legislation to again increase the federal debt ceiling is expected sometime this fall, and that measure may be used, at the very least, to prevent a government shutdown by enacting a continuing resolution.

Without action to block the current budget rules, sequestration policies (furloughs, programmatic cuts) will continue—and deepen. The White House would like to see an overarching budget deal that includes a combination of spending cuts, changes in current tax policy, as well as some changes in entitlement programs. Because the BCA mandates steep and disruptive cuts in military spending, Democrats are hoping Republicans will move toward a deal-and yield on additional tax increases.

On higher education concerns, lawmakers are presently focused on preventing the interest rate on subsidized student loans from automatically rising back to 6.8 percent on July 1, but there is little agreement on how to move forward with a myriad of competing alternative proposals garnering attention. The media's attention is currently focused on a number of scandals involving the IRS, the White House and the Administration—and not on the effects of the sequester.

However, when the proverbial rubber hits the road, and without an overarching budget deal, Congress and the White House will have to make some tough decisions on how they will axe approximately $28 million from the budget that funds the National Institutes of Health, the Department of Education, the Department of Labor, as well as other agencies and popular social programs.

Discretionary Spending Background (Source: CQ Weekly)

  • Appropriations for fiscal 2013, pre-sequester: $156,872,000
  • Fiscal 2013, post-sequester: $149,640,000
  • President's request, fiscal 2014: $165,801,000
  • House allocation, fiscal 2014: $121,797,000


Liz Clark

Vice President, Policy and Research


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