Automatic federal budget cuts set to take place Jan. 2 could affect Coast Guard bases, beach-replenishment projects, wildlife refuges, fisheries programs, aviation operations and other federal programs in southern New Jersey.
The impending cuts are due to the inability of Congress and the Obama administration to come up with an agreement to reduce the federal deficit. There could be dire consequences in the region if a deal is not reached by the end of the year.
“It’s devastating to the Department of Defense, it’s devastating to the Coast Guard and it’s bad news for about everybody. Not enough members of Congress fully comprehend how bad this is going to be,” said U.S. Rep. Frank LoBiondo, R-2nd.
The Budget Control Act of 2011 requires $1.2 trillion in deficit reduction from fiscal years 2013 through 2021, but failing to reach an agreement brings automatic cuts through a process known as sequestration. Those cuts would total $109 billion the first year.
“Sequestration is a blunt and indiscriminate instrument. It is not the responsible way for our nation to achieve deficit reduction,” a report from the federal Office of Management and Budget states.
The Budget Control Act set up a congressional budget supercommittee to strike a deal by a set deadline. That deadline passed earlier this month without a deal, so the act then mandated sequestration and required the OMB report issued last week.
To put cuts of $1.2 trillion over the next nine years into perspective, the federal government already has a budget deficit of about $16 trillion.
The report issued last week warned of automatic cuts ranging from 8.2 percent for most domestic programs to 10 percent for non-exempt military programs. Half of the $109 billion in cuts is supposed to come from defense programs, and the other half from nondefense discretionary spending.
Some federal programs would face smaller cuts. Medicare, for example, would be limited to cuts of no more than 2 percent. Funding for the Department of Veterans Affairs is exempt, so VA clinics in Vineland, Cape May and Northfield would not be affected.
LoBiondo said he thinks an agreement can still be reached before Jan. 2 but doubts it will happen before the November elections.
“I’m hopeful a consensus can be reached after the election because nothing will be done before that. There are a lot of efforts and behind-the-scenes activity, but not a lot of press releases and press conferences because there’s not a lot to announce,” LoBiondo said.
Coming up with $109 billion in specific cuts or additional revenue could avoid sequestration, but attacking subsidies could lead to similar attacks on programs in southern New Jersey. One of those is beach replenishment done by the Army Corps of Engineers.
The OMB report said the Army Corps has about a $1.8 billion budget for construction projects, including beach work, and this would be cut by 8.2 percent, or about $150 million. The slighly less than $2.2 billion for Army Corps operations and maintenance would be cut by 8.2 percent, or about $176 million. This could affect projects at the shore.
“What it impacts individually remains to be seen. You can’t take that amount of money out without serious concerns about what it could jeopardize,” LoBiondo said.
Richard Pearsall, a spokesman for the Army Corps’ Philadelphia District, said projects already under contract in Ocean City, Brigantine and southern Cape May County would not be affected.
“They’re already in the pipeline and locked in,” Pearsall said.
Projects in the planning stages could be affected, but Pearsall said it remains unclear whether the Army Corps would cut 8.2 percent in funding for all projects or eliminate entire projects to make up the shortfall.
“We’re just waiting for guidance from headquarters. After the election we’ll probably come to grips with it in a more serious way,” Pearsall said.
The Department of Interior also faces cuts that could affect wildlife refuges. Virginia Rettig, who manages the Edwin B. Forsythe National Wildlife Refuge, has no idea how it will play out.
“Until it happens and we have to make a decision, we have no idea what the reality will be. If it does kick in, we’ll manage through it,” Rettig said.
Coast Guard operations are budgeted at more than $3 billion but would be cut by 8.2 percent, or $247 million. Coast Guard acquisitions are budgeted at $1.4 billion and would be cut by 8.2 percent, or $115 million.
Asked how it could affect individual bases, Coast Guard spokesman Lt. Paul D. Rhynard issued the following comment as part of a longer statement: “Under sequestration, the Coast Guard will have funding to sustain programs, projects and activities, but at reduced levels. We will continue to work with the administration and Congress as we go through the 2013 appropriations process.”
The cuts could also affect the Federal Aviation Administration’s plans to develop NextGen technologies into the national airspace system by 2020. NextGen is expected to modernize the nation’s air traffic control system by moving from a ground-based system to one centered on satellite navigation. The William J. Hughes Technical Center in Egg Harbor Township is the nation’s primary NextGen facility.
The aviation industry, however, has been reluctant to take on the costs associated with the upgrades because of a disagreement over the system’s benefits, according to a survey of manufacturers earlier this year.
The program has had problems with consistent congressional funding. Long-term funding to the authority expired in 2007, and the agency had to subsequently rely on 23 short-term financing extensions, which led to a partial shutdown of the FAA last summer. Congress passed reauthorization legislation earlier this summer that funds the authority through 2015.
LoBiondo acknowledged the NextGen Aviation Research and Technology Park “hit some bumps in the road,” but he praised the current leaders and said “we believe this is something that will be able to gain momentum in the future.”
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