WASHINGTON - The automatic budget reductions known as sequestration are cutting into the funding available for coastal restoration and economic recovery under the Restore Act, the 2012 legislation that funnels 80 percent of fines from the 2010 BP oil spill to the five Gulf States. The Office of Management and Budget announced it is withholding about $16 million in 2013...
WASHINGTON - The automatic budget reductions known as sequestration are cutting into the funding available for coastal restoration and economic recovery under the Restore Act, the 2012 legislation that funnels 80 percent of fines from the 2010 BP oil spill to the five Gulf States.
The Office of Management and Budget announced it is withholding about $16 million in 2013 Restore Act funding this year, or 5 percent, plus another $23 million, or 7.3 percent in the 2014 fiscal year, which begins Oct. 1. That's coming out of the Gulf States' share of $800 million in 2013 and 2014 due from Transoean for violations of the Clean Water Act connected to the massive 2010 spill.
The money isn't lost, the Office of Management and Budget says. But it can't be spent until Congress and President Barrack Obama reach a budget deal to end sequestration -- the automatic cuts mandated without a deal on deficit reduction.
When sequestration ends, either through a deal, or end of the program in 2021, all of the frozen Restore Act funds would be released, OMB says.
Garret Graves, chair of the Louisiana Coastal Restoration and Protection Authority, said there's little solace in knowing that eventually the sequestered funds will be released to Louisiana and the four other Gulf states.
"If I can't spend the money in my bank account, it might as well not be there," Graves said.
At issue is the money Transocean has agreed to settle its Clean Water Act liabilities -- $400 million in 2013, another $400 million in 2014 and $200 million in 2016. That's just a small fraction of the money expected to be generated from BP under the Clean Water Act. BP's fines are being determined in a lengthy federal court fight. It could be liable for up to $17 billion in Clean Water Act fines.
Graves said he doesn't buy the argument that the Obama administration has to hold up a percentage of the Restore Act funds until sequester is brought to an end.
"These are not tax dollars, they are fines being routed through the treasury," Graves said.
The Restore Act, passed last year with strong support from President Barack Obama, funneled 80 percent of the fines for the five Gulf States. The act is short for Recovering & Strengthening the Gulf Coast and the American Economy
Sen. Mary Landrieu, D-La, said the temporary freezing of some Restore Act funding is another reason Congress should get its act together and reach a deal on deficit reduction that would bring an end to sequestration, which has hit agencies from defense to housing with 5 percent cuts in 2013 and even larger ones projected next year,.
"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 said. "That is why I continue to call for a balanced approach of both smart cuts and additional revenues to close our budget deficit."
She said Republicans should stop blocking creation of a House-Senate committee to resolve budget differences between Democrats and Republicans.
Rep. Steve Scalise, R-Jefferson, blamed the Obama administration.
"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 said. "President Obama needs to abandon any attempt to hijack Restore Act funds that we worked so hard in a bipartisan way to secure."
Sen. David Vitter, R-La., also criticized the decision to use the sequester to freeze release of some Restore Act funds.
"The Restore Act was specifically dedicated to restoring the Gulf Coast from horrible environmental and economic devastation, and its outrageous that the Obama Administration would take money away from that," Vitter said. "The 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."