Spending Cuts Hit Building, Highway Construction The biggest federal budget cut in history appears to fall more heavily on grant programs than contractors, according to a summary released by the House Appropriations Committee. The bipartisan agreement on a budget for fiscal 2011 was awaiting final congressional approval at press time. It cuts nearly $40 billion from spending that was scheduled to take place in the last five-and-a-half months of the fiscal year. Every department would take a hit except Defense and Veterans Affairs. But the Defense Department does lose funding for the alternative engine for Lockheed’s joint strike fighter and for production and modification of Boeing’s C-17 transport plane. Construction contractors stand to lose the most. The military construction budget was reduced by $6 billion from last year’s level. GSA’s spending on construction, repair and alteration of federal buildings sees a cut of nearly $1 billion. And highway projects would lose more than $3 billion. In addition, some unused money for road building left over from 2010 would not be spent. IT projects in many agencies will get less money than last year. More than half the total cuts will come from education, labor and health programs, including major reductions in grant programs. The EPA budget was slashed 16% from 2010 levels. “Our bill targets wasteful and duplicative spending, makes strides to rein in out-of-control federal bureaucracies and will help bring our nation one step closer to eliminating our job-crushing level of debt,” House Appropriations Chairman Hal Rogers said. President Obama and leaders of the House Republican majority and the Senate Democratic majority agreed to the cuts less than two hours before the government’s spending authority ran out on Aug. 8. The agreement, if accepted by both houses, would fund the government through the end of the fiscal year on Sept. 30. Budget analysts said some the cuts are accounting gimmicks— funds that Congress had already prohibited agencies from spending. For example, $4.9 billion was cut from the Justice Department’s Crime Victims Fund that, by law, is part of a reserve that could not be spent anyway. When the 2011 budget is settled, the next big fight is over increasing the federal debt limit, with a deadline looming no later than July. More spending cuts are possible in that process. And Congress will begin considering the 2012 budget, with House Republicans insisting on additional cuts.