With sequestration going into effect on March 1, Congress pivoted to work on FY13 funding. On March 6, the House passed a continuing resolution that would provide funding for federal agencies for the remainder of FY13. The bill, H.R. 933, would provide FY12 funding levels for most departments including HUD and USDA. The legislation included two appropriations bills that have already been completed, one for the Department of Defense (DOD) and the other for Military, Construction, Veterans Affairs and Related Agencies (MilCon VA). These bills will be funded at the FY13 levels that the House approved before the CR. Reportedly, House appropriators decided there would be too many anomalies desired for these two bills to simply continue FY12 funding. An “anomaly,” in the context of a CR, is any special provision included to address the particular needs of a program. The CR was seen as a possible opportunity for Congress to replace sequestration, but the House bill includes language that affirms sequestration will be applied to the funds provided by H.R. 933. The Office of Management and Budget (OMB) issued a Statement of Administration Policy (SAP) on H.R. 933 on March 5. In the SAP, OMB expresses concern that providing FY12 funding for 10 of the 12 appropriations bills “will impede their ability to provide services to Americans and efficiently allocate funding to key programs.” The Administration also says that it “will continue to press the Congress to eliminate the automatic and arbitrary cuts to current funding levels imposed by the Joint Committee [on Deficit Reduction’s] sequestration, which will harm middle class and working Americans.” The Senate is expected to take up H.R. 933 the week of March 11 and replace it with a CR that includes the DOD and MilCon VA bills, and three additional appropriations bills for Agriculture, Rural Development, Food and Drug Administration and Related Agencies; Commerce, Justice, Science and Related Agencies; and, Homeland Security. Adding these bills would essentially turn the FY13 funding legislation into an omnibus appropriations bill. House leadership has objected to including this many appropriations bills in the CR. Senate Committee on Appropriations Chair Barbara Mikulski (D-MD) and House Committee on Appropriations Chair Hal Rogers (R-KY) are reportedly in discussions about a compromise appropriations package. While the HUD FY13 appropriations bill is currently not part of the expected omnibus, it would be preferable to HUD being funded at FY12 levels, even with anomalies. The Senate FY13 Transportation, Housing and Urban Development, and Related Agencies (THUD) bill would provide a higher level of funding than would a CR with FY12 funding. The Center on Budget and Policy Priorities (CBPP) reports that a THUD appropriations bill that compromised between the House and Senate proposed FY13 funding levels “would reduce the impact of sequestration considerably- indeed , some [improvements] are of a magnitude that they would more than offset the cuts due under sequestration.” For Rural Housing, however, a CR that continued FY12 funding could be more beneficial for several affordable rental programs that the House or Senate proposed cutting below the FY12 funding level in their FY13 funding bills. The House and Senate Agriculture bills both cut funding for the Section 515 Rental Housing Direct program by more than 50% below FY12 levels. The House bill would also cut funding for the Section 521 Rental Assistance program below the FY12 funding level. Meanwhile, the statutory deadline for the President to submit his FY14 budget request to Congress is now five weeks past. The anticipated date for the President’s budget to be made public has now slipped to the second week of April. Both the House and Senate moved independently of the Administration to meet the April 15 statutory deadline for passing concurrent budget resolutions for FY14. The House Committee on the Budget is expected to mark up its FY14 budget resolution the week of March 11. The resolution is expected to include $4 trillion in additional deficit reduction measures, more than agreed to in the Budget Control Act of 2011. The resolution would replace sequestration but with reductions in discretionary spending that would result in far deeper cuts to HUD and USDA rural housing programs. The Senate Committee on the Budget may also unveil its FY14 budget framework in the next week. The Senate plan may include only $1.5 trillion in deficit reduction, enough to achieve the remainder of the bipartisan deficit reduction goals set by the Joint Select Committee on Deficit Reduction in 2011. At least 50% of the $1.5 trillion could reportedly come from revenues. The spending cuts could result in lesser cuts to HUD and USDA rural housing programs. The House Committee on Appropriations’ subcommittees are also scheduled to begin FY14 work during the week of March 11. The House Appropriations Subcommittee on Transportation, Housing and Urban Development, and Related Agencies is scheduled to hold a hearing, “Management Issues at DOT and HUD,” on March 14 at 10am in room 2358-A of the Rayburn House office building. The Inspectors General from HUD and DOT as well as staff from the Government Accountability Office will testify. View the SAP.