FY2013 discretionary appropriations were considered in the context of the Budget Control Act of 2011 (BCA, P.L. 112-25 ), which established discretionary spending limits for FY2012-FY2021. The BCA also tasked a Joint Select Committee on Deficit Reduction to develop a federal deficit reduction plan for Congress and the President to enact by January 15, 2012. The failure of Congress and the President to enact deficit reduction legislation by that date triggered an automatic spending reduction process established by the BCA, consisting of a combination of sequestration and lower discretionary spending caps, to begin on January 2, 2013. The sequestration process for FY2013 required across-the-board spending cuts at the account and program level to achieve equal budget reductions from both defense and nondefense funding at a percentage to be determined, under terms specified in the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA, Title II of P.L. 99-177 , 2 U.S.C. 900-922), as amended by the BCA, by the Office of Management and Budget. However, certain programs were exempt from sequestration, and special rules governed the sequestration of others. For the most part, these provisions are found in Sections 255 and 256 of the Balanced Budget and Emergency Deficit Control Act (BBEDCA Title II of P.L. 99-177 , 2 U.S.C. 900-922), as amended. Section 255 of BBEDCA, as amended in 2010 ( P.L. 111-139 ), specifically excludes from sequestration, among other programs, appropriations for all programs administered by the VA. Nevertheless, Section 256(e) of BBEDCA appears to allow a maximum 2% reduction in budget authority for VA medical care for any fiscal year. This apparent discrepancy between the two sections of the law raised questions about whether VA would be totally exempt from sequestration or whether medical care would be subject to a maximum permissible 2% reduction in budget authority. On April 23, 2012, OMB issued a letter stating that "all programs administered by the VA, including Veterans' Medicare Care, are exempt from sequestration under Section 255(b)." The failure of Congress and the President to enact deficit reduction legislation by January 15, 2012, also triggered a re-defining of the "security" and "non-security" categories of discretionary spending. Under the new definitions, the "security" category is defined as spending in budget function 050, which effectively includes defense and military construction, and the "non-security" category is defined as all other spending. The impact of sequestration on the appropriations accounts covered in this report, as calculated by the Office of Management and Budget, are displayed in Table B-1 . On February 14, 2012, President Barack Obama submitted to Congress his request for military construction appropriations to support federal government operations during the fiscal year beginning on October 1, 2012 (FY2013). The House Committee on Appropriations introduced its Military Construction, Veterans Affairs, and Related Agencies Appropriations Act for 2013 ( H.R. 5854 , H.Rept. 112-491 ) on May 23, 2012. The House began debate on May 31 ( Congressional Record ( CR ) H3309-H3359) and passed the bill on the same day by the Yeas and Nays, 407-12 (Roll No. 305). H.R. 5854 was received in the Senate on June 5, 2012, read twice, and placed on the Legislative Calendar under General Orders (Calendar No. 421). Before the House took up debate on H.R. 5854 , the Office of Management and Budget (OMB) issued a Statement of Administration Policy (SAP) stating that the President's senior advisors would recommend a veto of the bill. Among the reasons cited relevant to military construction were the bill's incremental funding of the construction of an Aegis Ashore Missile Complex in Romania, and language governing the inclusion of Project Labor Agreements (PLAs) in federal construction projects. Issues cited in this SAP will be addressed later in this report. The Senate Committee on Appropriations introduced its own draft of the bill ( S. 3215 , S.Rept. 112-168 ) on May 22. The bill was placed on the Legislative Calendar under General Orders (Calendar No. 408). No further action was taken on either of these bills. Representative Harold Rogers, chair of the House Committee on Appropriations, introduced a continuing appropriations resolution ( H.J.Res. 117 ) to the House on September 10, 2012. After referral to the House Committees on Appropriations and Budget, the resolution was brought to the floor on September 13 for consideration under a closed rule ( H.Res. 778 ). The House passed the resolution that same day by recorded vote, 329-91 (Roll No. 579). The resolution was received in the Senate on September 19 and was placed on the Senate Legislative Calendar under General Orders (Calendar No. 511). The resolution was laid before the Senate on September 20, 2012. Cloture on the resolution was invoked in the Senate on September 22 by Yea-Nay vote, 62-30 (Record Vote No. 198). The measure passed the Senate without amendment by Yea-Nay vote, 62-30 (Record Vote No. 199) that same day. The resolution was presented to the President on September 25, and became P.L. 112-175 when he signed it on September 28, 2012. In general, a continuing resolution permits department operations to continue at the same monthly rate as in previous enacted appropriations, though Section 101(c) of H.J.Res. 117 allowed that rate to be increased over that of 2012 by 0.612%. Nevertheless, Section 102(a) of the Continuing Appropriations Resolution stated No appropriation or funds made available or authority granted pursuant to section 101 for the Department of Defense shall be used for: (1) the new production of items not funded for production in fiscal year 2012 or prior years; (2) the increase in production rates above those sustained with fiscal year 2012 funds; or (3) the initiation, resumption, or continuation of any project, activity, operation, or organization (defined as any project, subproject, activity, budget activity, program element, and subprogram within a program element, and for any investment items defined as a P-1 line item in a budget activity within an appropriation account and an R-1 line item that includes a program element and subprogram element within an appropriation account) for which appropriations, funds, or other authority were not available during fiscal year 2012. The resolution expired on March 27, 2013. On March 26, 2013, the day prior to the expiration of the continuing resolution then in effect, the President enacted the Consolidated and Further Continuing Appropriations Act, 2013 ( H.R. 933 , P.L. 113-6 ), which funded the government through the remainder of FY2013. Division E of that act constituted the Military Construction and Veterans Affairs, and Related Agencies Appropriations Act, 2013. Amounts appropriated to various accounts in P.L. 113-6 are displayed in Table 5 , Table 6 , Table 7 , Table A-1 , and Table A-2 . Table B-1 indicates the subsequent impact of sequestration on these appropriations accounts. A House explanatory statement for the bill was printed in the March 6, 2013, Congressional Record , beginning on page H1029. A Senate explanatory statement was printed in the March 11, 2013, Congressional Record , beginning on page S1287. In the wake of Hurricane Sandy, a Category 2 storm that struck the East Coast of the United States during late October 2012, the President requested $47.4 billion in emergency supplemental appropriations, including $259.9 million in military construction and veterans affairs funding. The Senate has drafted a supplemental appropriations bill that could provide as much as $60.4 billion, of which $259.8 million would be devoted to military construction and veterans affairs. Table 3 provides some detail on the funding requested. The measure eventually enacted as P.L. 113-2 , the Disaster Relief Appropriations Act, 2013, was introduced in the House on January 4, 2013, and passed by the Yeas and Nays: 241-180 (Roll No. 23) on January 15. The Senate agreed on January 28 without amendment by Yea-Nay vote: 62-36 (Record Vote No. 4). The President enacted the bill on January 29, 2013, as P.L. 113-2 . Section 114 of Title 10, United States Code , requires that Congress authorize the appropriation of funding to the Department of Defense (DOD) for certain purposes, including military construction, as part of the annual appropriations cycle. This authorization is effected through the enactment of the annual National Defense Authorization Act (NDAA), of which one division constitutes the Military Construction Authorization Act. While appropriations bills fall within the jurisdiction of the two chambers' Committees on Appropriations, writing the NDAA is the responsibility of the Committees on Armed Services. The House version of the NDAA for FY2013 ( H.R. 4310 ) was introduced in the House on March 29, 2012. The House Committee on Armed Services reported its amendment of the bill on May 11 ( H.Rept. 112-479 , with a supplemental report, H.Rept. 112-479 , Part 2, submitted on May 15). The House began debate of the bill on May 16 and passed it by recorded vote, 299-120 (Roll no. 291), on May 18. H.R. 4310 was received in the Senate on June 19 and referred to the Committee on Armed Services. In its SAP on H.R.