Federal Budget - FY 2013

Updated: December 15, 2013


Obama Calls for Short-Term Deficit Reduction to Further Delay Sequester

With slim chances that Congress will pass a large deficit reduction package to replace the across-the-board spending cuts known as the sequester by March 1, President Obama called on Congress on Tuesday to pass a short-term package of spending cuts and tax reforms instead. Obama warned of the potential grave consequences of the automatic spending cuts set to take effect in three weeks. The president urged Congress to negotiate a smaller package so as to further delay the sequester. The sequester was originally supposed to go into effect in January, but the last-minute deficit reduction on New Year's delayed the cuts until March 1.

AAUW recognizes that these are tough budgetary times, but we call on Congress to come together around a balanced approach to deficit reduction that does not include the harmful spending cuts of sequestration. AAUW is opposed to these harmful spending cuts that attempt to balance the nation’s budget on the backs of vulnerable Americans, including students, women, and working families.

- from AAUW's Washington Update for February 8, 2013.

Back to the Index


Senate Votes to Suspend Debt Ceiling until May

On Thursday, the Senate voted 64-34 to suspend the U.S. debt ceiling until May 19. Under the bill, if neither chamber of Congress passes a budget by April 15, lawmakers’ salaries will be withheld until a budget is passed. The debt ceiling is a cap on the amount of money the Treasury Department can borrow to pay the bills already incurred from running the federal government. Without this bill, it was estimated that the U.S. would hit the debt ceiling sometime in next few weeks. The bill passed the House on January 23, and it now heads to the White House, where President Obama is expected to sign it.

AAUW is guided by the principle that balancing the nation’s budget should not come on the backs of vulnerable Americans, including students, women, and working families. AAUW will continue to work to protect spending for programs that promote education and equity for women and girls.

- from AAUW's Washington Update for February 1, 2013.

Back to the Index


U.S. Could Hit Debt Ceiling by Mid-February

The U.S. government could hit the debt ceiling as early as February 15, according to the Bipartisan Policy Center. The debt ceiling is a cap on the amount of money the Treasury Department can borrow to pay the bills already incurred from running the federal government. Technically the U.S. hit the debt ceiling on New Year's Eve, but the Treasury Department is employing certain temporary measures to avoid a government default. The Bipartisan Policy Center report estimates that the Treasury Department will run out of steps to take sometime between February 15 and March 1. President Obama has asked Congress to raise the debt ceiling without any conditions attached, and Republicans are insisting that spending cuts must accompany any action.

Although AAUW recognizes that these are tough budgetary times, we remain seriously concerned about any spending cuts that would come on the backs of vulnerable Americans, including students, women, and working families. These cuts would hurt ordinary Americans and have a lasting, detrimental impact on America’s economy. For further analysis on the current budget and deficit reduction negotiations, consult AAUW's Budget 101 blog series on AAUW Dialog.

- from AAUW's Washington Update for January 11, 2013.

Back to the Index


Congress Averts Fiscal Cliff, Sets Up Another Showdown in February

On Tuesday, the House of Representatives passed the Senate bill to pull America back from the so-called "fiscal cliff," the combination of tax and spending changes that were set to go into effect this month and could have sent the U.S. economy back into a recession. The deal, which President Obama signed on Wednesday, returned to the Clinton-era tax rates for high-income earners while continuing the current rates for individuals earning less than $400,000 and families earning less than $450,000, and delayed the automatic spending cuts, known as the sequester. In the next two months, Congress will need to find a solution to avoid deep cuts to important investments such as education, funding for civil rights enforcement, women's health programs, and workforce training programs. We'll let you know of key moments in the coming debate when we need to urge Congress to protect these important programs from sequestration.

AAUW commends lawmakers from both parties for coming together to reach a true compromise (look up how your senators and representative voted). Like any compromise, the deal is far from perfect, but it includes several AAUW-supported provisions that will help women and their families, such as returning to the Clinton-era tax rates for high-income earners while continuing the current rates for individuals earning less than $400,000 and families earning less than $450,000; extending the "American Opportunity Tax Credit," a $2,500 tax credit to help college students and their families pay for tuition and related expenses; and ending the payroll tax holiday to protect Social Security’s long-term solvency.

- from AAUW's Washington Update for January 4, 2013.

Back to the Index


Poll Reveals Concern about Fiscal Cliff’s Impact on Career and Technical Education

The Small Business Majority, a business advocacy group, released a poll of small business owners, revealing their concerns about the impact of the January fiscal cliff on career and technical education and the workforce system. Of the 500 small business entrepreneurs polled, 86 percent said they were concerned about cuts to Perkins state grants, which fund vocational education programs at secondary and postsecondary institutions across the country, and 66 percent reported worries about potential cuts to the Workforce Investment Act state grants, which provide employment and training services to “dislocated workers.”

AAUW supports a balanced approach to preventing the fiscal cliff. If the automatic spending cuts known as sequestration occur, programs supporting educational opportunities, women’s health, and civil rights would suffer massive funding cuts. In terms of the tax changes that make up the fiscal cliff, AAUW strongly supports ending the Bush-era tax rates and returning to the Clinton-era rates for high-income earners, while continuing the current rates for the middle class. AAUW strongly prefers the reinstatement of the Clinton-era rates instead of extending the payroll tax cut “holiday.” AAUW looks forward to working with Congress and the administration to resolve the fiscal cliff in a balanced way that promotes and protects education, civil rights, and women’s rights.

- from AAUW's Washington Update for November 30, 2012.

Back to the Index


Fiscal Cliff Negotiations Begin during Lame Duck Session

Congress returned this week for its lame duck session, and negotiations to find a solution for the fiscal cliff—a series of tax and budget changes that are slated to take effect at the beginning of January 2013— started right away. President Obama met this week with labor, business, and civil rights groups, including AAUW, and was scheduled to meet with congressional leaders today. Obama held a press conference this week where he said that he aims to decrease the deficit while protecting the middle class. He repeated his position on letting the Bush tax cuts for the wealthy expire.

AAUW supports a balanced approach to prevent the fiscal cliff. If the automatic spending cuts known as sequestration occur, programs supporting educational opportunities, women’s health, and civil rights would suffer massive funding cuts. In terms of the tax changes that make up the fiscal cliff, AAUW opposes an extension or expansion of the Social Security payroll tax holiday. Reducing the payroll tax rate breaches Social Security’s guaranteed funding stream and forces it to rely on general funding transfers, setting a dangerous economic and political precedent and threatening Social Security’s long-term solvency. AAUW looks forward to working with Congress and the administration to resolve the fiscal cliff in a balanced way that promotes and protects education, civil rights, and women’s rights.

- from AAUW's Washington Update for November 16, 2012.

Back to the Index


Party Leaders Call for Negotiations to Avoid ‘Fiscal Cliff’

Avoiding the “fiscal cliff”—a series of tax and budget changes that are slated to take effect at the beginning of January 2013—will likely be the first item on the agenda during the lame duck session when the 112th Congress returns later this month. In a press conference this morning, House Speaker John Boehner (R-OH) said reducing taxes and closing tax loopholes, not raising taxes, should be part of the solution to the fiscal cliff. This afternoon, President Obama said a balanced solution was needed; he agreed with Rep. Boehner that increasing revenue needs to be part of the solution, and he maintained his position that the wealthy should pay more in taxes. Obama also called for extending tax cuts for the middle class.

AAUW supports a balanced approach to prevent the fiscal cliff. If the automatic spending cuts known as sequestration occur, programs supporting educational opportunities, women’s health, and civil rights would suffer massive funding cuts. AAUW advocates for budget sequestration applying equally to both defense and discretionary spending, as our mission is to promote and protect education, civil rights, and women’s rights.

- from AAUW's Washington Update for November 9, 2012.

Back to the Index


Congress to Pass Spending Bill before Leaving

After a five-week August recess, Congress is back in session. Before leaving again next week, the main item on the agenda will be a spending bill to continue funding the government through March 2013. The bill is expected to pass with bipartisan support. However, this spending resolution does not take into account the automatic spending cuts, or sequestration, still set to take place in January 2013.

AAUW believes Congress should enact a sensible plan, including increased revenues, to reduce the federal deficit before the federal budget sequestration begins in January 2013. However, if this compromise is not reached in time, AAUW strongly believes that sequestration must be applied equally to both defense and non-defense discretionary spending, and that cuts to non-defense discretionary spending should exclude programs that promote job creation and economic security, expand educational opportunities, defend civil rights, and protect women’s health.

- from AAUW's Washington Update for September 14, 2012.

Back to the Index


CBO Warns of Recession if Congress Doesn’t Act to Prevent “Fiscal Cliff”

The Congressional Budget Office (CBO) warned this week that the country could face a deep recession if Congress does not take action to prevent what’s being called “the fiscal cliff.” In the 2013 calendar year, the Bush-era tax rates will expire and automatic spending cuts will be implemented unless Congress acts to prevent these changes; the fact that all of these significant changes in revenue and spending are set to happen at the same time has led analysts to dub this event as the “fiscal cliff.” The CBO predicted that if nothing is done and the changes are allowed to go into effect, the deficit would decrease, but the economy would suffer and unemployment would rise. An infographic from the CBO explaining the consequences can be seen here.

AAUW believes Congress should enact a sensible plan, including increased revenues, to reduce the federal deficit before the federal budget sequestration begins in January 2013. However, if this compromise is not reached in time, AAUW strongly believes that sequestration must be applied equally to both defense and non-defense discretionary spending, and that cuts to non-defense discretionary spending should exclude programs that promote job creation and economic security, expand educational opportunities, defend civil rights, and protect women’s health.

- from AAUW's Washington Update for August 24, 2012.

Back to the Index


Branch Homepage - Public Policy Issues to Watch