The debt ceiling legislation, known as the Budget Control Act of 2011, S. 365 (the Act), was signed into law by the President on August 2nd. This legislation is likely to set the agenda and frame the fiscal debates for the remainder of this Congress and is expected to have significant implications for businesses operating on federal lands and possibly state lands to the extent federal funds to states are diminished.
Here are the primary elements of the bill:
- Mandated cuts. In addition to raising the debt ceiling, the Act mandates $917 billion in reductions in discretionary spending between 2012 and 2021 by reducing and capping annual appropriations. The specific programs affected by these cuts will be determined by the Congress each year.
- “Super Committee” to Recommend Additional Cuts. The bill also created a 12-member Joint Select Committee on Deficit Reduction with the goal of developing a plan to reduce the deficit by an additional $1.5 trillion over the next 10 years through further spending cuts or revenue enhancements. November 23, 2011 is the deadline for developing the plan. The Joint Select Committee must deliver its report to the President, Vice President, Speaker of the House, and Majority and Minority Leaders of the House and Senate by December 2, 2011. The legislative recommendations of the Joint Select Committee must be introduced in the House on its next legislative day and in the Senate on the next day the Senate is in session, and scheduled for an up or down vote without filibuster or amendment by December 23, 2011. If the Committee is unsuccessful or Congress fails to enact legislation implementing the Committee’s plan by January 15, 2012, a “sequestration” process will kick in, leading to $1.2 trillion in “automatic” spending cuts, half from cuts in defense spending and half from cuts in non-defense spending.
- Balanced budget amendment. Van Ness Feldman reports: The Act requires a vote in both the House and Senate by the end of 2011 on a Balanced Budget Amendment. Article V of the United States Constitution requires a two thirds vote of both Houses of Congress to approve a constitutional amendment for submission to the states for ratification. If a Balanced Budget Amendment passes both the House and Senate and is submitted to the states for ratification, the debt ceiling would be increased by $1.5 trillion for a total debt ceiling increase of $2.4 trillion. Approval of a Balanced Budget Amendment does not change the Joint Select Committee’s goal of $1.5 trillion in deficit reduction or eliminate the automatic sequestration of $1.2 trillion in spending.
- Spending reductions v. Revenue enhancements. The Debt Reduction Score by the Congressional Budget Office Assumes the Bush Era Tax Cuts Will Expire. According to the Van Ness Feldman report, the Joint Select Committee could achieve its goal of $1.5 trillion in deficit reduction through spending cuts and/or tax increases. Any proposed increase in taxes, however will require the support of at least 7 members of the Joint Select Committee. The Congressional Budget Office has scored the nation’s projected debt with the assumption that the Bush tax cuts will expire at the end of 2012 but the revenue increases from the expiration of these tax cuts cannot be counted toward the deficit reduction required by this Act.
- Standing Committees in House and Senate Will Report to Select Committee. The standing committees of the House and Senate may make recommendations to the Joint Select Committee until October 14, 2011 regarding the reductions or revenue enhancements that should be included in the Joint Select Committee report to Congress.
The deficit reduction effort that occurred from the mid to late 1990’s was meager compared to this effort. New recreation user fees and NPS concessions reform were approved during that era. At one point in 1996, a 900-page budget reconciliation bill passed the House and Senate that contained a section that put every recreation special use permit out for bid. President Clinton vetoed the bill. Cost recovery for permit applications and administration also emerged during this era, although the rules were not finalized in BLM until 2002.
For outfitters and businesses operating on or near federal lands, the stakes are very high. AOA will be tracking the implementation of this deficit reduction process and developing a strategy to address potential spending reductions and possible changes to the tax code that are likely to impact our members.
To read the complete report go to the Van Ness Feldman website http://www.vnf.com/news-alerts-619.html
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