Shutdown averted, pay freeze extended as Congress passes 2013 funding bill

Thursday - 3/21/2013, 1:09pm EDT

The House and Senate this week approved a huge stopgap spending bill funding federal agencies through the end of the fiscal year and heading off a potential government shutdown later this month.

The measure keeps in place the steep across-the-board budget cuts, known as sequestration, but provides Cabinet-level agencies some cushion. The measure also extends the federal pay freeze through Dec. 31 and imposes a de facto ban on the U.S. Postal Service's plan to end Saturday delivery.

The final vote in the House was 318-109. On Wednesday, the Senate approved the measure 73-26. The bill now heads to President Barack Obama's desk for his signature.

Sequestration blunted for some agencies

The bill retains $85 billion in sequestration cuts. However, the measure does blunt some of the impact of the cuts by reprioritizing spending for several key agencies.

The bill grants full 2013 appropriations to the Departments of Defense, Homeland Security, Veterans Affairs, Agriculture and Commerce, among others. While it doesn't grant many overall increases, it does shift funding around within agencies to bridge existing shortfalls. Otherwise, the agencies would have continued with the same funding blueprint laid out in previous year's continuing resolutions.

The bill includes an amendment to prevent furloughs for federal meat inspectors, introduced by Sens. Mark Pryor (D-Ark.) and Roy Blunt (R-Mo.). The provision transfers $55 million to the Agriculture Department's Food Safety and Inspection Service from other accounts within the department, including deferred maintenance.

Tuition assistance for military members was also spared from sequestration cuts. Sens. Jim Inhofe (R-Okla.) and Kay Hagan (D-N.C.) introduced an amendment, agreed to by voice vote, to restore funding to the Defense Department's operations and maintenance account (O&M) to continue the progrma.

Earlier this month, the Army, Air Force and other military services had announced they would cut tuition-assistance programs, which pay as much as $4,500 active-duty personnel to attend college — for new applicants.

However, other measures designed to blunt the impact of the cuts were not as successful.

An amendment, introduced by Sen. Tom Coburn (R-Okla.), that would have restored funding for White House tours (ended because of sequestration) failed to garner enough votes.

Federal pay freeze

The final version of the spending bill continues the federal pay freeze — in place since January 2011 — through Dec. 31.

While there was little doubt the House would include an extension of the federal pay freeze in its spending bill, there was surprise when the Senate Appropriations Committee — headed by Maryland Democrat Barbara Mikulski — did the same.

In floor remarks after she introduced the Senate proposal, Mikulski said including the pay-freeze provision was a difficult but necessary choice to secure the bill's passage and, thus, avert a government shutdown.

"Shutting down the government would make a tough situation even worse for federal employees," Mikulski said last week.

Federal workers had been slated to receive a 0.5 percent pay increase on March 27 — when the current spending bill expires — per an executive order signed by President Barack Obama late last year. However, the new spending measure cancels that planned increase.

Postal Service plan up in the air

The final bill also throws cold water on a proposal by the U.S. Postal Service to end Saturday delivery of first-class mail, while retaining package delivery. USPS says the delivery-schedule change is necessary to save about $2 billion annually.

While the bill is technically silent on five-day delivery, previous iterations of the continuing resolutions have banned the agency from eliminating a day of service delivery. Because the appropriations measure is a partial CR, it is understood to maintain the previous ban on five-day delivery.

"Once the delivery schedule language in the Continuing Resolution becomes law (it still needs to be signed into law by the President), we will discuss it with our Board of Governors to determine our next steps," USPS spokesman David Partenheimer told Federal News Radio in an email.

Meanwhile, some lawmakers say USPS still has the legal authority to continue with its new delivery schedule, because it doesn't eliminate Saturday delivery entirely but modifies what it delivers on that day.

Other provisions

The measure also contains a number of provisions related to agency operations.

The bill bars agencies from spending money to send more than 50 employees to a conference held outside the United States. In addition, the bill requires agency heads to submit annual reports to their inspectors general on conference costs that exceed $100,000.

The Veterans Affairs Department will receives a $3.3 billion boost in funding for technology systems; however it comes with string attached. The House and Senate appropriations committees must first approve a new spending plan for the joint VA-DoD integrated electronic health record initiative.

Lawmakers have criticized the departments' handling of the e-health records system.

(The Associated Press contributed to this report)