2013 United States federal budget

The combination of sudden spending cuts and tax increases has led to concerns about significant negative effects on the economy in the wake of the weak recovery from the recession that began in 2007.

Instead of lowering our standards and our sights, we need to win a race to the top for good jobs that pay well and offer security for the middle class.

To succeed and thrive in the global, high-tech economy, we need America to be a place with the highest-skilled, highest-educated workers; the most advanced transportation and communication networks; and the strongest commitment to research and technology in the world.

This Budget makes investments that can help America win this race, create good jobs, and lead in the world economy.

[17] On July 31, 2012, a tentative deal was announced to fund the government from October 2012 through March 2013 through a continuing resolution, with spending rates slightly higher than the FY2012 levels.

The deal was reached because Republicans were eager to avoid a prolonged dispute that could threaten a government shutdown just before the upcoming 2012 general elections.

The passage of the bills was reported as being intended as political cover; progress on tax legislation was not expected until after the November elections.

[22] In late December, the Republican House leadership proposed legislation that would allow tax cuts to rise relative to 2012 levels only for annual income over $1,000,000.

The proposal was known as "Plan B", and was intended to force the Senate and the Obama administration to pass it and delay further negotiations until the following month, when Republicans were expected to use the reaching of the federal debt limit as leverage.

[23] On December 28, 2012, the Senate passed the Disaster Relief Appropriations Act, 2013 to provide for $60.4 billion in additional spending to cover recovery costs from Hurricane Sandy, which had hit the northeastern United States in late October.

[34] The planned cuts include reductions in troop levels, a modest limit in pay raises for soldiers starting in 2015, an increase in health fees for veterans, delays in the construction of new naval ships and in the purchasing of new fighter aircraft such as the F-35, and the possibility of a round of base closings within the United States, but cuts to special operations, cyberwarfare, and intelligence programs were avoided.

[11][37] According to the Center for American Progress, several Presidents have significantly reduced defense spending after wars, without compromising national security.

[38] The Budget Control Act also specifies automatic cuts of 7.8% to domestic programs and 2% to Medicare, while Medicaid and Social Security will be unaffected.

It is anticipated that this could cause federal grant acceptance levels to fall into the single digits, a consequence which has been called catastrophic for academic institutions by Michael Lubell of the American Physical Society.

[44] Defense and non-defense discretionary expenses are essentially frozen in real dollar terms for the 2013-2022 period, growing at or below the rate of inflation.