House Passes FY 2013 Budget Resolution

This afternoon by a margin of 228-191 – with ten Republicans voting against – the House of Representatives passed the Republican budget resolution for fiscal year (FY) 2013, the "Path to Prosperity."   The resolution remains unchanged from the proposal voted out of the Budget Committee last week after the defeat of several amendments offered during the debate of “The Path to Prosperity”.  A summary of the budget can be found here.  The annual budget resolution is supposed to set the overall spending limits appropriators will use when they begin work on the annual spending legislation.  The resolution addresses every aspect of the federal budget including discretionary spending, entitlement programs and taxes. The budget resolution would set the discretionary spending cap at $1.028 trillion.  The cap is the same as last year's House Republican Budget but $19 billion below the $1.047 trillion cap set in the Budget Control Act passed last August.  The resolution calls for using a process known as budget reconciliation to cut more than $200 billion in mandatory spending  over 10 years and eliminating $55 billion in planned defense cuts through sequestration (as outlined in the Budget Control Act).  In terms of taxes, the budget assumes no new tax increases, consolidates the six current tax brackets into two brackets of 10 and 25 percent, repeals the Alternative Minimum Tax, and reduces the corporate tax rate to 25 percent. The budget calls for a reduction in transportation funding investment from $88.6 billion in FY 2012 to $57.1 billion in FY 2013, a reduction of $31.5 billion (36 percent). The budget does not identify the specific categories of transportation cuts. However, the proposal provides for a “reserve fund” that would allow transportation spending to increase if Congress enacts a measure that, “maintains the solvency of the Highway Trust Fund, but only if such measure would not increase the deficit over the period of fiscal years 2013 through 2022.” By allowing for the “reserve fund” to increase transportation funding if revenue is raised, this year’s budget resolution is more flexible than last year’s resolution which limited funding from the Highway Trust Fund to levels that could be supported by the revenue coming into the fund. In addition, the FY 2012 House budget resolution specifically said the federal motor fuels tax would not be increased and transfers from the general fund into the Highway Trust Fund were prohibited. The net result of that language would have required a 30-35 percent cut in future highway and transit funding. The budget’s overall impact on federal construction accounts is yet to be determined.  It can be assumed, however, based on the overall budget number that federal construction accounts will once again see an overall cut in funding.  Ultimately, the appropriators will decide what discretionary programs get funded and at what levels. Throughout the budget and appropriations process, AGC will continue to educate members of Congress on the importance of continued investment in our federal construction programs. For more information, please contact Sean O’Neill at (202) 547-8892 oroneills@agc.org.