|Urgent Federal Policy Matters|
election cycle finally behind us, I thought it would be instructive to offer an
overview of the many policy and political considerations NASAA is monitoring as
we head into a new year. As always, please feel free to call me directly at 202-939-7906
to discuss any of these issues in more detail.
The Fiscal Cliff
discussed in this space, unless Congress acts, a series of major tax and
spending policy changes is scheduled to occur on January 1 and 2, 2013. These
changes include elimination of almost 50 different deductions in the tax code,
including the deduction for charitable giving; increases in tax rates for all
Americans; and across-the-board reductions in all federal spending. The
combination of these changes, particularly the spending cuts that are mandated
as a result of the Budget Control Act of 2011, are considered so severe that
economists and politicians on both sides of the aisle agree that allowing them
to be triggered would be catastrophic to America's fragile economy and almost
certainly would lead to another recession.
Congress returned to work last week, there was a noticeable swell of support for
a bipartisan compromise that avoids the across-the-board cuts known as
sequestration. A bipartisan group of senators has already announced willingness
to compromise on issues seen as the key to negotiating a deal. Many prominent
Republicans, including Senator Lindsay Graham of South Carolina and House
Majority Leader Eric Cantor of Virginia, have expressed a willingness to
violate their pledge not to raise taxes; while Democrats, such as House Budget
Committee Ranking Member Chris Van Hollen of Maryland, have said that
entitlement reform has to be on the agenda.
Though there is no question that signs are pointing toward an agreement,
negotiations of this nature almost always go until the last minute. It is
very possible that we won't know whether or how Congress plans to deal with
sequestration until close to January 1.
It is not
yet clear what role, if any, arts advocates should play in the negotiations. NASAA
continues to monitor this situation closely and is prepared to engage should
funding for the National Endowment for the Arts (NEA) be in jeopardy.
Leadership at the NEA
NEA Chair Rocco Landesman announced his intention to retire at the end of the
calendar year. News of Landesman's decision was not surprising, but nonetheless
leaves the NEA without a figurehead as the government heads into one of the
most difficult budget periods in recent memory. Although the administration has
not yet selected a replacement, we expect them to do so shortly.
Congress Considers Reviving Budget
for Remainder of FY2013
the passage of a continuing resolution earlier this year that funds the
government at current levels until April 1, 2013, shortly before the
Thanksgiving recess, members of the House and Senate Appropriations committees
announced their intention to try to pass a budget bill for the remainder of fiscal
year 2013. Because time is limited, aides have told me that House
Appropriations Chairman Harold Rogers (R-KY) will use the baseline funding
levels set in the Senate bills (which are identical to the president's request
and higher than the figures proposed in the House), but individual program
levels are yet to be determined. For example, the Interior bill, which includes
the NEA, will use the president's proposed number, but the level recommended
for the NEA could be the president's request ($154 million), the House request
($132 million) or the current funding level ($146 million).
House and Senate appropriators reach an agreement on a funding package for
FY2013, they would then ask the leadership in each chamber for the opportunity
to hold a vote. Since House Speaker John Boehner (R-OH) and Senate Majority
Leader Harry Reid (D-NV) negotiated the continuing resolution with the president,
it is quite possible they will deny the appropriators' request, choosing to
wait until the next Congress is sworn in before working on a budget. Further
complicating matters is the fact that this legislation would in no way alter
the upcoming sequestration process. This makes the chances of Congress passing
a budget before the end of the year even more unlikely.
we are preparing for the possibility that Congress does hold a vote on a budget
for the remainder of FY2013, and we are asking key House and Senate members to
include in the budget bill provisions favorable to state arts agencies that
were included in the House bill. These provisions include language informing
the NEA that Congress "values greatly the longstanding collaborative
relationship between the NEA and the States. State Arts Agencies support the
arts for communities at the grassroots level regardless of their geographic
location, providing much of their funding to smaller organizations, community
groups, and schools rather than well-established arts organizations. The
Committee supports the continuation of this effective partnership and urges the
NEA to work constructively with States in developing and implementing arts
education programs and policies."
limited amount of time left before the end of the year, we should know very
soon whether Congress plans to move forward with a budget bill. We will
continue to monitor developments closely and keep you informed of any news.