NLIHC Provides Congressional Overview Lobby Day March 28, 2012
Given that 2012 is an election year and the deep divisions between the two parties, legislative gridlock is expected to continue. The Budget Control Act of 2011 required Congress to form a bipartisan committee to develop a plan to reduce the federal deficit by $1.2 trillion over a ten-year period. Because the Super Committee failed to act significant across the board budget reductions are scheduled for January 2, 2013.
In this the second of four posts we will focus on Sequestration.
The Budget Control Act of 2011 required Congress to form a bipartisan committee to develop a plan to reduce the federal deficit by $1.2 trillion over a ten year period. The act specifies that if a bipartisan Joint Select Committee on Deficit Reduction (the Super Committee) fails to produce a plan, the $1.2 trillion will be sequestered from discretionary spending. Sequestration would make across-the-board cuts to discretionary programs to reach the $1.2 trillion goal. The committee did not reach agreement by the statutory deadline of November 2011, triggering sequestration for FY13.
Sequestration would significantly reduce affordable housing resources available through HUD and the Department of Agriculture. At the same time, many Members of Congress are concerned about the impact that sequestration would have on the Department of Defense. With a year to debate the potential impacts and effects of sequestration, Congress is expected to devise proposals to modify the sequestration requirement, which could further negatively impact funding for affordable housing. If efforts to exempt Department of Defense programs from sequestration were effective, non-defense discretionary spending could be required to bear the entirety of the $1.2 trillion in cuts. The President, however, has stated that he will veto any bills that modify sequestration.