Associated General Contractors of America

Four Things Contractors Should Like about the New US Federal Budget

The two-year budget deal that passed the House this week sets overall levels for discretionary spending for fiscal years 2014 and 2015. It also partially mitigates the impact of the across-the-board sequestration cuts for both years. The Senate is expected to vote on the deal next week before adjourning.

Specifically, the budget sets spending caps for 2014 and 2015 at $1.012 and $1.014 trillion, respectively. It also uses $85 billion in offsets to provide $63 billion in sequester relief and $23 billion in net deficit reduction. 

Although small in scale, the budget provides four promising signs for AGC priorities.

  1. It creates agreed-upon budget numbers for the House and Senate. Such certainty minimizes the threat of a government shutdown in January that could adversely impact contractors working on federal projects. It also increases the chance of Congress passing an all-agency spending bill for fiscal-year 2014, instead of a year-long continuing resolution that would prohibit new federal construction starts.
  2. The budget would also likely lead to a more traditional appropriations process for fiscal 2015. That means Congress can actually analyze federal spending priorities and make difficult decisions to eliminate bad programs and continue good programs. The only time Congress performs a line-by-line analysis of every federal program is during such a traditional appropriations process, which hasn't happened since 2006. The detailed analysis also provides a forum for allowing Congress to have a say over regulations proposed by the Obama administration.
  3. The budget establishes the fact that Congress can work in a bipartisan manner. Every item on the AGC agenda – whether it is tax reform, immigration reform, entitlement reform or a long-term highway authorization – is contingent on bipartisan agreements in both the House and Senate.
  4. The House budget deal recognizes the need for government programs to be paid for and it solidly states that those who benefit from government pensions should pay a little more for their retirement security and those who fly should pay a higher “user fee” for their aviation security .

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