FOSSIL ENERGY R&D PROGRAM TO SEE $25M CUT, WHITE HOUSE SAYS

Tamar Hallerman
GHG Monitor
3/8/13

The Department of Energy’s Fossil Energy R&D program will likely see a $25 million budget cut in the coming months, the White House said, as more details emerged this week about the impact of the across-the-board funding cuts know as sequestration that went into effect on March 1. The Office of Management and Budget released a report to Congress late last week detailing the impact of the sequester on individual government programs. The document says that DOE’s Fossil Energy R&D program will see a 5 percent cut in its so-called sequestrable annual budget of $495 million, the equivalent of $25 million through the remainder of the fiscal year. But given the fact that there are only seven months remaining in the fiscal year, the White House pointed out, the cut will have a harsher impact on FE’s coffers. Instead, the cut will be the equivalent of an 8.7 percent cut through the end of September, harsher than the 8.2 percent cut initially estimated by OMB last year. A DOE spokesman said the Department is not commenting further on the spending cuts. 

The OMB document indicates that all non-exempt, non¬-defense discretionary funding—including most energy and environment programs—will see a 5 percent spending reduction as a result of the sequester. Meanwhile, non-exempt defense discretionary programs like the National Nuclear Security Administration are slated to see a 7.8 percent cut. The report said that DOE’s Office of Science budget will be slashed by $245 million, and that Advanced Research Projects Agency-Energy’s accounts will be cut by $14 million. At the Environmental Protection Agency, most programs are also expected to see a 5 percent cut. The Agency’s State and Tribal Assistance Grants, which execute the bulk of EPA’s clean air and water regulations, will see a $210 million cut through the rest of the fiscal year, while its Environmental Programs and Management and the Science and Technology Programs were slated for $135 million and $40 million cuts, respectively.

Administration Shifts Blame to Republicans

In an accompanying letter to Speaker of the House John Boehner (R-Ohio), the White House said it is willing to work with Congress to thwart the cuts. The “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,” OMB Deputy Director for Management Jeffrey Zients said in the letter. However, the White House continued to blame Congressional Republicans throughout the week for failing to compromise on the issue. “Let’s be clear. None of this is necessary. It’s happening because of a choice that Republicans in Congress have made. They’ve allowed these cuts to happen because they refuse to budge on closing a single wasteful loophole to help reduce the deficit,” Obama said during a March 1 press conference that immediately followed an unsuccessful negotiating session with Congressional leaders. Obama called on a “balanced approach” to deficit reduction that includes spending cuts, tax increases for the wealthy and entitlement reform.

But in his weekly column, Boehner said the sequester is “here to stay” until the President and the Senate "decide to join us in focusing on more responsible spending cuts to replace it." Boehner did not budge on his pledge to thwart any additional tax increases. “This is not the outcome that Republicans wanted … But Washington Democrats have yet to get serious about working with us to replace the president’s sequester with cuts that confront our government’s spending binge that’s draining the economy and threatening our children and grandchildren,” he said March 1. The President is scheduled to attend Senate Republicans’ weekly lunch next week to further discuss the sequestration.

Congress and the White House failed to find common ground on offsetting legislation for the sequester last week, allowing for $85.3 billion in across-the-board funding cuts to take effect March 1. The Senate late last week voted down opposing plans aimed at limiting the effects of the sequester, but both failed to muster the adequate support for passage. OMB issued guidance to agency heads last week asking them to plan for the sequester by using “increased scrutiny” for new hires, conferences and travel. The White House said they should also detail which contracts need to be cancelled, delayed, or re-scoped, as well as the number of employees that must be furloughed.