On March 1, the automatic spending cuts known as sequestration took effect, chopping billions from federal programs. While a few programs like the Highway Trust Fund and the Airport Improvement Program are largely exempt, the majority of government investment accounts will suffer cutbacks of nearly 5 percent.
Overall, roughly $1.2 trillion will be cut from government spending over the next 10 years, with $85 billion this fiscal year alone.
The table below illustrates the impact of sequestration on federal construction program budgets in FY 2013:
|Program||FY 2013 Budget Authority||Budget reduction|
|Highway Trust Fund (core)||$40.2||Exempt|
|Highway Trust Fund (General Fund payment)||$6.2 billion (Sequesterable amount of Highway Trust Fund)||$316 million (no impact this year, but will reduce future year HTF balances)|
|Federal-aid Highways (Contract authority)||$739 million (Sequesterable amount of Highway Trust Fund)||$38 million|
|Highway Emergency Relief from Hurricane Sandy Bill||$2 billion||$101 million|
|Transit Formula Program||$8.5 billion||Exempt|
|Transit Capital Programs||$1.9 billion||$96 million|
|Army Corps of Engineers (Construction)||$2.3 billion||$250 million|
|Airport Improvement Program (Core)||$3.515 billion||Exempt|
|Airport & Airway Trust Fund (grants-in-aid)||$1 million (Sequesterable amount of Airport Improvement Program)||>$50,000|
Though the Congressional Budget Office estimates sequestration will shave 0.6 percentage points from the economy’s annual growth rate, the actual impact is still unknown. Lawmakers are already working to replenish funds to certain agencies that were hit by the spending cuts, particularly the Department of Defense.
The sequester – which was never actually supposed to happen – illustrates just how dysfunctional the political process has become. The federal budget is in desperate need of reform, but across-the-board cuts (as opposed to targeted reductions) do not address our long-term fiscal problems. Visit AEDaction.org to urge your lawmakers to pursue comprehensive budget and tax reforms that propel our country forward.
Article Date: 2013-03-04
Source: Associated Equipment Distributors
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