The U.S. Senate passed H.R. 325, the “No Budget, No Pay Act of 2013,” on January 31, without amending the bill as passed by the House on January 23. The vote was 64 to 34, with Senator Joe Manchin (D-WV) the only Democrat to vote against it. The bill has been sent to President Barack Obama for his signature.H.R. 325 temporarily suspends the debt limit through May 18 and increases it by the amount of debt incurred during that three-and-a-half month period on May 19, thus giving Congress an additional three months to negotiate a second increase to the debt limit in 2013 (see Memo, 1/25). Under H.R. 325, Congress is required to pass a concurrent budget resolution by April 15. If Congress has not passed such a resolution by this date, the Committees on Appropriations are free to craft appropriations bills. Further, if Congress fails to pass a concurrent resolution by that date, the salaries of Members of Congress would be escrowed until such a resolution was passed. With the decision on increasing the debt limit postponed now until mid-May, sequestration is the next fiscal crisis facing Congress and the Administration. Some Republicans have taken the position that sequestration will take effect on March 1 unless Democrats agree to replace it with other spending cuts. Many Democrats want to replace it with a combination of cuts and revenue increases. Other Republicans are still in agreement with Democrats that the sequester should not take effect and that a replacement should instead be negotiated. Senate Majority Leader Harry Reid (D-NV) announced plans to advance legislation that would postpone the sequester from its scheduled start date of March 1. A group of Senators led by Senator Tom Harkin (D-IA) met in the last week of January to craft alternatives to the sequester. However, the conventional wisdom is that Congress will allow the sequester to take effect on March 1 by not acting to prevent it. Democratic Senators have stated that they believe the Administration has the flexibility to shift funding for several weeks if a solution to the sequester is not agreed to until later in March. Sequestration would cause cuts of around 5% to HUD and USDA in 2013 (see Memo, 1/25). The Senate Committee on Appropriations will hold a hearing on the impact of sequestration on February 14.The Non-Defense Discretionary (NDD) Funding Coalition is circulating a sign-on letter urging Congress to avert the sequester and take an “approach to deficit reduction that does not include further cuts to discretionary programs.” In July, the NDD coalition sent a similar letter to Members, signed by 3,000 organizations. NLIHC urges all national, state, and local organizations that did not sign the letter in July to sign now to demonstrate support for the protection of HUD and USDA Rural Housing programs. Late signers and opt-outs will be accepted in the first part of the week of February 4. The Coalition on Human Needs, NETWORK- A National Catholic Social Justice Lobby, USAction, and the Pentagon Budget Campaign are also circulating a letter calling on Congress to cut Pentagon spending in order to shift funds to support non-defense discretionary spending programs. The organizations write, “If we invest some of the billions we spend on the Pentagon in other sectors of our economy, we would actually generate MORE jobs, strengthening the middle class and protecting essential services that help our families.” To join NLIHC in signing onto this letter, email Ross Wallen at [email protected] also joined a letter to President Barack Obama initiated by the Leadership Conference on Civil and Human Rights (LCCHR) and dated January 28, urging him to protect safety net programs in fiscal policy debate. “As Congress moves toward a debate over the federal debt limit, our organizations urge you to insist on policies that create jobs; oppose benefit cuts for Social Security, Medicare, and Medicaid; protect our nation’s safety net; and ensure adequate revenues to preserve the basic functions of government,” write the 96 organizational signers to the letter. Soon after the deadline for the Administration to implement sequestration, Congress will have to address FY13 appropriations. The continuing resolution currently funding the government at FY12 levels expires on March 27. Congress may attempt to use this deadline to address a solution to the sequester.The Congressional Budget Office (CBO) will release its Budget and Economic Outlook report on February 5 and the House Committee on the Budget is expected to hold a hearing on the report in the coming weeks.Senator Patty Murray (D-WA), chair of the Senate Committee on the Budget, followed the launch of her FY14 “pro-growth” budget work the week of January 21 by unveiling an online forum for the public to share its priorities for the federal budget (see Memo, 1/25). The Chair is seeking stories, priorities and ideas through this section of the Budget Committee website, called MyBudget.The Administration took a step forward with the FY14 budget process when the Office of Management and Budget (OMB) sent the “passback” to agencies. After federal departments submit the first drafts of their budgets to OMB, the department evaluates them and then returns, or passes them back, to agencies for further development before the department budgets are finalized and compiled as the President’s budget request to Congress. The President’s proposed budget usually goes to Congress in the first week of February, but will be delayed this year due to the uncertainty caused by the sequester and the incomplete FY13 appropriations. The President’s budget request to Congress is not expected until March. Anticipating the FY14 budget, the Preservation Working Group (PWG), facilitated by the National Housing Trust, sent a letter on January 28 to Department of Agriculture Secretary Tom Vilsack and Jeffrey Zients of the Office of Management and Budget urging them to “provide Rural Development’s multifamily rental housing programs adequate funding” in FY14. NLIHC joined 72 other local and national organizations in signing the letter. Click here to sign onto the NDD letter. The LCCHR letter is attached.Click here to view Senator Murray’s budget website. The PWG letter is attached.