The failure of the bipartisan congressional “super committee” to produce a plan for solving the nation’s fiscal and budgetary crisis will trigger a $1.2 trillion across-the-board defense and non-defense discretionary spending cuts.

The spending roll back is set to begin in 2013 through a process known as sequestration. Though the exact impact of the process is unknown at this time; its effect will be far reaching.

Ranking member of the House Committee on Appropriations, Rep. Norm Dicks (D-WA), warned that the estimated $39 billion in cuts to nondefense program discretionary appropriations could cost the Federal Aviation Administration (FAA) 525 technicians and more than 600 safety and aircraft certification inspectors. Such drastic cuts could congest the federal approval process for aviation repair stations.

The sequestration process creates a set of discretionary spending caps and triggers mandatory spending cuts spread over a nine-year period. In 2013, cuts will be made from all congressionally approved discretionary and mandatory spending. Beginning in 2014, discretionary caps will be lowered and spending will be cut from all categories not exempted by law (i.e., Social Security, Medicaid, veterans programs, refundable income tax credits, and programs with dedicated revenue streams such as the Airport and Airway Trust Fund).

The automatic cuts are required by the Budget Control Act (BCA) of 2011, the deal reached earlier this year to raise the national debt ceiling. Under the law, House and Senate leadership appointed members to the super committee who were tasked to produce a plan containing at least $1.2 trillion in cuts to the federal budget. The final compromise was to be voted on by both chambers. As an incentive for lawmakers to reach a deal, any failure to make the required cuts would result in the automatic reductions necessary to reach the goal.

While the super committee’s failure has triggered sequestration, it is unclear what, if any, impact the process will have. Many members of Congress have indicated their desire to avoid the cuts envisioned by sequestration by creating new laws to reduce or eliminate the impact of the BCA’s requirements.

ARSA will continue to remind Congress of how crucial an adequately funded FAA is to the aviation maintenance industry. Further reductions to the aviation inspector workforce could undermine the competitiveness of the U.S. aerospace industry. The threat of the cuts highlights the need for rapid congressional action on a long-term FAA funding bill.

Stay tuned for further developments on the sequestration process and the impact it will have on FAA funding.

~~~ posted 11/30/11 ~~~

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