OMB plans for automatic cuts, urges Congress to find sequestration alternative

By Kedar Pavgi

July 11, 2012

Sequestration doesn’t threaten only national security. Critical infrastructure and domestic programs also face a budgetary “brick wall” early next year, according Jeff Zients, the acting head of the Office of Management and Budget.

The 2011 Budget Control Act is scheduled to trigger across-the-board cuts of nearly 8 percent off federal spending beginning January 2013 if lawmakers can’t agree on an alternative. The cuts will bring government outlays to their lowest levels since the Eisenhower administration, Zients wrote on Politico.com, emphasizing the upcoming budget sequester was intended to be a means to encourage responsible bipartisan deficit reduction, not to force “destructive” cuts to the federal government.

Some of the actions mandated by the law would result in cutting the number of FBI and Border Patrol agents, reducing Federal Aviation Administration safety operations and closing national parks, he said. Additionally, money set aside for children’s nutrition programs, teachers’ pay and federal research also would face key losses.

Top Obama administration officials, including Defense Secretary Leon Panetta, have warned Congress of the dire consequences the automatic cuts could have on national security.

“The truth is no amount of planning or reports will turn the sequester into anything other than the devastating cut in defense and domestic investments that it was meant to be,” Zients wrote.

Analysts at Goldman Sachs have warned that the cuts due to take place on Jan. 2, 2013, will contribute to a “fiscal cliff” that will throw the weak U.S. economy back into recession.

Zients said the automatic cuts “would be terrible for our country.”

In case Congress can’t break past its gridlock, agencies are planning for the worst. Zients said OMB is working on plans and analyses on how it would execute the sequester.

“As long as Congress fails to develop a balanced and meaningful deficit-reduction package, OMB will continue planning for the sequester,” he said. “We will answer further questions about its operation as time moves forward.”


By Kedar Pavgi

July 11, 2012

http://www.govexec.com/management/2012/07/omb-plans-automatic-cuts-urges-congress-find-sequestration-alternative/56728/