Federal sequester limits coastal restoration payouts

The ongoing federal budget stalemate that led to the so-called “sequester” also could affect more than $1 billion in anticipated coastal restoration funds for Louisiana and other Gulf Coast states.

The sequester, which began in March its across-the-board spending reductions, is holding back 5 percent of the Gulf Coast Restoration Trust Fund and that increases to 7.2 percent beginning Oct. 1 for the 2014 fiscal year.

The federal government is estimating setting aside $23 million in the fund for the upcoming fiscal year. But the concern is that if the sequester continues, well more than $1 billion could be halted from going to the affected Gulf Coast states once all of the BP civil penalties are determined.

The next phase of the BP oil leak trial begins on Sept. 30, and the outcome could determine how much Louisiana and four other states get.

The government is not taking the dollars out of the fund, but instead keeping a percentage from being spent for now.

The 7.2 percent being set aside is the standard percentage being applied to other U.S. Treasury trust funds and other governmental departments.

The trust fund came from the RESTORE Act legislation signed into law last year, which directs 80 percent of the Clean Water Act fines to the five Gulf of Mexico states affected by the disaster. The amount could reach nearly $18 billion once the BP penalties are concluded.

Garret Graves, chairman of the Coastal Protection and Restoration Authority of Louisiana, argued that the federal government should do more to ensure the trust fund is excluded from the sequester cuts.

“This is just a real travesty that the feds are trying to balance their books on the backs of our recovery from the oil spill and other disasters,” Graves said Monday. “Setting this precedent is incredibly dangerous.”

The 2010 Deepwater Horizon explosion killed 11 men, and resulted in a three-month discharge of 4.9 million barrels of oil into the Gulf of Mexico off the coast of Louisiana.

“This is for recovery,” Graves said of the trust fund dollars. “It’s not like we’re out there putting bows on things. These are fundamental needs.”

The sequester cuts came as a compromise in 2011 when House Republicans forced a standoff over the federal debt ceiling in a fight that could have forced the federal government to default on its payments.

Sequestration — a White House idea approved by Congress — was set up as a poison pill to force compromise, which never came. The cuts were supposed to go into effect on Jan. 1, but the fiscal cliff compromise on New Year’s Day delayed the cuts until March 1.

Congress remains mired in gridlock over how to address federal spending and how to either undo sequestration or to apply the budget cuts in more practical ways. Both the GOP-led House and Democrat-controlled Senate have approved their versions of federal budget proposals, but the plans are far enough apart that compromise has not yet entered the picture.

Senate Republicans are blocking a budget conference committee from being formed that would try to reach a compromise agreement between the two budget bills.

Sen. Mary Landrieu, D-La., and other members of the congressional delegation did not respond to interview requests Monday, but she and others did reply in prepared statements.

“The RESTORE Act, along with many important federal programs that invest in Louisiana, will be hurt if we do not do away with the sequester,” Landrieu stated. “That is why I continue to call for a balanced approach of both smart cuts and additional revenues to close our budget deficit.

“To begin erasing the sequester, we must roll up our sleeves and do the hard work necessary, which requires going to a budget conference, but unfortunately, a few Republicans in the Senate have objected more than 38 times over 100 days since both the Senate and the House passed their budgets.”

Sen. David Vitter, R-La., said in a prepared statement that the Obama administration “exacerbated Louisiana’s economic challenges with the moratorium, and this new game of taking money from the states intended for restoration is a poor decision.”

Rep. Cedric Richmond, D-New Orleans, noted that the issue will not affect the dollars in the trust fund “long term” at least.

“Unfortunately, it will delay access to a small portion of these funds during the upcoming fiscal year,” Richmond added. “This is extremely frustrating because Louisiana needs this money now, which is another reason why the sequester must be fixed.”

Rep. Steve Scalise, R-Jefferson, directed his criticism at President Barack Obama.

“Congress made it clear that RESTORE Act funds will be dedicated to coastal restoration and recovery from the Deepwater Horizon disaster, and those funds should not be held hostage by the whims of the Obama Administration,” Scalise stated.

“President Obama needs to abandon any attempt to hijack RESTORE Act funds that we worked so hard in a bipartisan way to secure.”