President’s budget would cut Transportation, boost HHS and Treasury

May 5, 2013

Last month, President Obama released his budget proposal for fiscal 2014, marking one of the latest budget proposals ever submitted.

The proposed budget represents middle ground between the House and Senate budget resolutions. The House version focuses on achieving deficit reduction through entitlement reforms, while the Senate’s focuses on an approach that makes use of tax increases and reforms.

Surprisingly, all three budget proposals remove sequestration in 2014 and beyond. But barring a political miracle of bipartisan agreement, sequestration appears here to stay.

All three proposals take similar approaches to discretionary spending, so the president’s budget, which provides a wealth of detail, is a good place to start examining the discretionary spending outlook for 2014.

It is important to note that the president’s budget assumes sequestration is removed even for fiscal 2013, so the 2013 baseline is inflated from the current sequester level. Here are some major agency-level funding boosts and cuts.

The Department of Health and Human Services would see a $6.3 billion, or 8.7 percent, increase for implementation of the Affordable Care Act and other health and social services policies.

The Department of Veterans Affairs would receive a $2.2 billion increase, or 3.7 percent, to cover growing health care costs and veterans’ benefits.

The Energy Department would receive an additional $1.7, or 6.5 percent, to expand energy research and development and other initiatives to reduce U.S. dependence on foreign oil.

The Department of Veterans Affairs would receive a $2.2 billion increase, or 3.7 percent, to cover growing health care costs and veterans’ benefits.

The Energy Department would receive an additional $1.7 billion, or 6.5 percent, to expand energy research and development and other initiatives to reduce U.S. dependence on foreign oil.

The Treasury Department would receive an additional $766 million, or 6.1 percent, to implement Affordable Care Act tax collection.

The Department of Housing and Urban Development would see a $17.3 billion cut, which reflects $16 billion in one-time aid provided last year for Hurricane Sandy recovery.

The Transportation Department would receive a $13.2 billion cut. Given the $16.2 billion the agency received in disaster assistance last year, the total actually reflects a modest budget increase for 2014.

The Department of Homeland Security would see a $12.3 billion cut, but factoring out the $12 billion it received in disaster assistance in 2013, its budget is basically flat.

The aggregate of the budget is roughly what industry expected in terms of discretionary funding, but there remains uncertainty about what to expect in 2014.

If the sequester is lifted before 2014, the spending spree in the fourth quarter of fiscal 2013 will be one for the ages. If sequestration is lifted in 2014 or beyond, companies can expect a quick recovery from a painful 2013 as cuts are reversed.

Neither outcome seems likely, based on the political standoff over tax cuts and entitlement reforms. The worst-case — and seemingly most likely — scenario isn’t all bad. Starting in fiscal 2014, the sequestration funding caps still increase 1 percent to 2 percent per year, delivering a modicum of predictability that contractors will appreciate.

Kevin Plexico is vice president at Herndon-based Deltek, which conducts research on the government contracting market and can be found at www.deltek.com.

SECTION: {section=business, subsection=capitalbusiness}!!!
INITIAL commentConfig: {includereply=true, canvas_permalink_id=washpost.com/8bvh5zpd9k, allow_comments=true, commentmaxlength=2000, includeshare=true, display_comments=true, canvas_permalink_app_instance=m6yzjj840m, display_more=true, moderationrequired=false, includefeaturenotification=true, canvas_allcomments_id=washpost.com/km4ey0dajm, comments_period=14, defaultsort=reverseChronological, includevoteofftopic=false, allow_videos=false, includesorts=true, markerdisplay=post_commenter:Post Commenter|staff:Post Writer|top_commenter:Post Forum|top_local:Washingtologist|top_sports:SuperFan|fact_checker:Fact Checker|post_recommended:Post Recommended|world_watcher:World Watcher|cultuer_connoisseur:Culture Connoisseur|weather_watcher:Capital Weather Watcher|post_contributor:Post Contributor, childrenitemsperpage=3, includeheader=true, includeverifiedcommenters=true, defaulttab=all, includerecommend=true, includereport=true, maxitemstop=3, source=washpost.com, allow_photos=false, maxitems=15, display_ugc_photos=false, includepause=true, canvas_allcomments_app_instance=6634zxcgfd, includepermalink=false}!!!

UGC FROM ARTICLE: {allow_comments=true, allow_photos=false, allow_videos=false, comments_period=14, comments_source=washpost.com, default_sort=, default_tab=, display_comments=true, is_ugc_gallery=false, max_items_to_display=15, max_items_to_display_top=3, moderation_required=false, stream_id=}!!!

FINAL commentConfig: {includereply=true, canvas_permalink_id=washpost.com/8bvh5zpd9k, allow_comments=true, commentmaxlength=2000, includeshare=true, display_comments=true, canvas_permalink_app_instance=m6yzjj840m, display_more=true, moderationrequired=false, includefeaturenotification=true, canvas_allcomments_id=washpost.com/km4ey0dajm, comments_period=14, defaultsort=reverseChronological, includevoteofftopic=false, allow_videos=false, includesorts=true, markerdisplay=post_commenter:Post Commenter|staff:Post Writer|top_commenter:Post Forum|top_local:Washingtologist|top_sports:SuperFan|fact_checker:Fact Checker|post_recommended:Post Recommended|world_watcher:World Watcher|cultuer_connoisseur:Culture Connoisseur|weather_watcher:Capital Weather Watcher|post_contributor:Post Contributor, childrenitemsperpage=3, includeheader=true, includeverifiedcommenters=true, defaulttab=all, includerecommend=true, includereport=true, maxitemstop=3, source=washpost.com, allow_photos=false, maxitems=15, display_ugc_photos=false, includepause=true, canvas_allcomments_app_instance=6634zxcgfd, includepermalink=false}!!
Comments
SECTION: {section=business, subsection=capitalbusiness}!!!
INITIAL commentConfig: {includereply=true, canvas_permalink_id=washpost.com/8bvh5zpd9k, allow_comments=true, commentmaxlength=2000, includeshare=true, display_comments=true, canvas_permalink_app_instance=m6yzjj840m, display_more=true, moderationrequired=false, includefeaturenotification=true, canvas_allcomments_id=washpost.com/km4ey0dajm, comments_period=14, defaultsort=reverseChronological, includevoteofftopic=false, allow_videos=false, includesorts=true, markerdisplay=post_commenter:Post Commenter|staff:Post Writer|top_commenter:Post Forum|top_local:Washingtologist|top_sports:SuperFan|fact_checker:Fact Checker|post_recommended:Post Recommended|world_watcher:World Watcher|cultuer_connoisseur:Culture Connoisseur|weather_watcher:Capital Weather Watcher|post_contributor:Post Contributor, childrenitemsperpage=3, includeheader=true, includeverifiedcommenters=true, defaulttab=all, includerecommend=true, includereport=true, maxitemstop=3, source=washpost.com, allow_photos=false, maxitems=15, display_ugc_photos=false, includepause=true, canvas_allcomments_app_instance=6634zxcgfd, includepermalink=false}!!!

UGC FROM ARTICLE: {allow_comments=true, allow_photos=false, allow_videos=false, comments_period=14, comments_source=washpost.com, default_sort=, default_tab=, display_comments=true, is_ugc_gallery=false, max_items_to_display=15, max_items_to_display_top=3, moderation_required=false, stream_id=}!!!

FINAL commentConfig: {includereply=true, canvas_permalink_id=washpost.com/8bvh5zpd9k, allow_comments=true, commentmaxlength=2000, includeshare=true, display_comments=true, canvas_permalink_app_instance=m6yzjj840m, display_more=true, moderationrequired=false, includefeaturenotification=true, canvas_allcomments_id=washpost.com/km4ey0dajm, comments_period=14, defaultsort=reverseChronological, includevoteofftopic=false, allow_videos=false, includesorts=true, markerdisplay=post_commenter:Post Commenter|staff:Post Writer|top_commenter:Post Forum|top_local:Washingtologist|top_sports:SuperFan|fact_checker:Fact Checker|post_recommended:Post Recommended|world_watcher:World Watcher|cultuer_connoisseur:Culture Connoisseur|weather_watcher:Capital Weather Watcher|post_contributor:Post Contributor, childrenitemsperpage=3, includeheader=true, includeverifiedcommenters=true, defaulttab=all, includerecommend=true, includereport=true, maxitemstop=3, source=washpost.com, allow_photos=false, maxitems=15, display_ugc_photos=false, includepause=true, canvas_allcomments_app_instance=6634zxcgfd, includepermalink=false}!!
Show Comments
Most Read Business