Saturday, August 30, 2014

Sequester Order Cuts EPA Less Than Anticipated But Key Programs Hit

Posted: March 3, 2013

The White House's March 1 sequester order cuts EPA's fiscal year 2013 budget by $472 million, almost $250 million less than what officials had projected, but key programs still took big hits -- including agency regulatory programs and grant programs to help states implement federal rules, grants that states have long warned are underfunded.

According to the Office of Management & Budget's (OMB) March 1 order, the agency's total reduction comes in at around 5 percent, which is lower than the 8.2 percent across-the-board cuts of $716 million that budget officials projected in a report to Congress last September.

The cuts are less than anticipated, OMB says, because Congress delayed the effective date, moving it from Jan. 1 to March 1 as part of a year-end deal to extend most Bush-era tax cuts. "Because these cuts must be achieved over only seven months instead of 12, the effective percentage reductions" are reduced from what was projected, the order says.

Under the order, EPA's state and tribal assistance grant (STAG) account, which was slated to receive $3.6 billion in FY13, is being trimmed by $210 million, a level below the $293 million that OMB had projected. But the result is still a loss for states who say recent funding for the account falls far short of the help they need to implement EPA rules.

The next largest cut for EPA targets the environmental and programs management (EPM) account, which funds many of the agency's air, waste, water, toxics, climate and other regulatory programs. OMB had previously projected the $2.7 billion account would face a $220 million cut, but the final sequestration order cuts $135 million.

Other affected accounts include the Superfund account, which must slash $74 million from its $1.5 billion total, though that is less than the $119 million that had been projected.

EPA's science and technology fund is being cut by $40 million, down from the $65 million that had been anticipated. And the leaking underground storage tanks trust fund must cut $6 million from its $110 million budget, less than the $9 million that had been anticipated.

The Office of Inspector General (IG) must cut $2 million from its $42 million budget, which is less than the $3 million OMB had expected last September.

The sequester -- the legally mandated across-the-board cuts of $1.2 trillion over 10 years -- stems from 2011 negotiations between Congress and President Obama to raise the debt ceiling. The mechanism, which has now cut $85 billion from FY13 spending, was intended to put in place draconian budget cuts that would force both sides to reach a more flexible budget deal to reduce the deficit.

But no deal has been reached and the administration is now cutting the first $85 billion of the required total. The largest share of the cuts -- $43 billion -- falls on defense spending, with the remainder falling on non-defense discretionary spending.

While the effect of the cuts are not immediately apparent, top EPA officials, House Democrats, environmentalists, agency unions and EPA's IG Arthur Elkins Jr. have warned of broad adverse impacts from the sequester, ranging from diminished work to staff furloughs.

For example, EPA union officials have criticized agency plans to require employees to take unpaid leave. The unions want EPA to secure cost savings from reduced contracts in lieu of staff furloughs.

And in an Feb. 4 interview with Inside EPA, Elkins warned that any reduction to the IG's budget would hurt his efforts for the IG to ensure "transparency" of agency operations by providing independent oversight of EPA's programs and how it spends its budget. Elkins warned that budget cuts might force the IG to focus on mandatory work and drop discretionary work, such as requests from Congress to investigate agency programs or actions.

Acting EPA Administrator Bob Perciasepe in a recent letter to the Senate Appropriations Committee said enforcement efforts would be weakened as a result of the sequester because the agency would have to cancel 1,000 inspections of regulated facilities' Clean Air Act and Clean Water Act compliance. He also warned that EPA would also have to end 100 projects aimed at preserving or cleaning up water supplies and protected waterbodies.

Those concerns were echoed by House Democrats in a recent report, which warned that in addition to budget cuts undermining the agency's ability to meet its mission of protecting the environment, EPA staff under sequestration would be unable to craft the permits necessary to bring newly-constructed facilities into operation.

After the sequester took effect, Sierra Club Executive Director Michael Brune said "gridlock and obstruction by Congressional Republicans will result in new threats to our air, our water, our food, and our families."

'Blunt Instrument'

In a letter to House Speaker John Boehner (R-OH) accompanying the sequester order, OMB Deputy Director for Management Jeffrey Zients echoed long-standing warnings from the president and other Democrats that the sequester will likely have adverse impacts of the cuts on the economy.

He says that "sequestration is a blunt and indiscriminate instrument. It was never intended to be implemented and does not represent a responsible way for our Nation to achieve deficit reduction."

Zients said President Obama wants to find a way to replace the sequester. "On multiple occasions, the President has proposed comprehensive and balanced deficit reduction plans to avoid sequestration. The President and Congress, working together, have already reduced the deficit by $2.5 trillion. The President has been clear that he is willing to make tough choices to reach an agreement on further deficit reduction. The Administration continues to stand ready to work with the Congress to enact balanced deficit reduction legislation that replaces sequestration and puts the Nation on a sound long-term fiscal path," Zients wrote. -- Anthony Lacey (This e-mail address is being protected from spambots. You need JavaScript enabled to view it )

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