Popular energy and environmental programs should prepare for a decade of spending cuts under the debt deal reached late Sunday between the White House and congressional leaders.
Less clear, however, is the effect that the landmark agreement will have on popular tax incentives for the oil, gas, renewable and other energy industries.
Constituencies fighting in the trenches for every dollar insist that their programs are small relative to other big-ticket items in the annual appropriations process. But there’s still plenty of concern that everything from wastewater grants to air pollution monitoring and biofuels research and development will face the scalpel as lawmakers start cutting about $2.7 trillion in spending over the next decade.
“The numbers are just too vague, but obviously we don’t feel we’re in a good place,” said Scott Slesinger, legislative director at the Natural Resources Defense Council.
“These guys are looking at 20 percent real cuts in the next two or three or four years,” said GOP strategist Mike McKenna said. “That’s a big, big hit for an agency to take.”
Under the agreement set for House and Senate votes as early as Monday, Congress will make the dramatic discretionary spending cuts in exchange for raising the debt ceiling by $2.4 trillion.
Those spending cuts will come in waves.
For starters, there’s $917 billion in discretionary reductions over 10 years. Also, a new joint congressional committee will be charged with coming up with $1.5 trillion in additional deficit reduction starting in fiscal year 2013.
Budget experts said they expect the spending cuts to really start kicking in after Congress finishes up its fiscal 2012 spending bills.
“The next appropriations cycle is when they would start to feel the pain,” said James Walsh, a former New York Republican congressman and chairman of the House Appropriations subcommittee that handled the EPA’s budget.
Walsh predicted spending cuts for Energy Department programs dealing with fuel cells, biofuels, synthetic fuels, wind and nuclear power, as well as Army Corps of Engineers’s dredging, sea wall barriers and flood mitigation. The EPA’s regulatory arm probably will “take a whack” while across-the-board cuts in agency salaries would “shrink the overall footprint of the department,” he added.
Another clear target will be EPA grants that go out to wastewater, drinking water and pollution monitoring programs. “With infrastructure, we’re already in a big hole,” Walsh said. “But this isn’t going to help.”