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Sequester Not All It’s Cracked Up to Be

Based on some insights from some deep-in-the-weeds budget geeks several weeks ago, I have been waiting for some sort of public acknowledgement like the important article below from Emelie Rutherford of Defense Daily.

Part of the “Doomsday Mechanism” hysteria spread by Defense Secretary Panetta and his comrade in the budget wars, Cong. Buck McKeon, has been the automaticity of the across-the-boards cuts that sequester would impose on the defense budget next January–in the likely event that the lame duck Congress and its successor next year will both be as dysfunctional as the can of red and blue worms we have now.  (The other part of the hysteria is the “horror” of returning to 2007 levels of base budget defense spending.)

It seems (see below) that the president has existing statutory authority to modify the sequester mechanism–but not the amount of cuts required.  It’s murky and complex, but see below.

As indicated below also, there is a second avenue of relief from the automatic nature of the cuts in the form of massive reprogramming actions to adjust the impact of the sequester cuts among DOD accounts.  That, however, would require a minimal level of functionality in Congress to approve the reprogrammings in the four so-called “defense” committees of Congress.  (Their behavior in recent years shows they have little to do with actual defense as opposed to pork and politics.)  It would also require that massive reprogramming request to be prepared inside the Department of Defense–presumably by a Secretary of Defense other than Leon Panetta, who–if he is to be believed–would consider such a level of defense budget cutting to be beyond his ability to contemplate–let alone request and implement.  (I’ll take him at his word.)

Hopefully, one of the congressional research or budget agencies (CBO, CRS or GAO) or OMB will soon release a paper explaining the president’s sequester powers in more detail for us all.

Such an analysis would be useful fodder for a House or Senate defense policy committee to prepare for a smoother period of budget adjustment next January in the (likely) event even more rational and effective sequester adjustment procedures are needed.  But, alas, that would require that such a defense policy committee in Congress be functional–rather to exist.

See Rutherford/Defense Daily article below:

Defense Daily

January 18, 2012

Admin Would Have Flexibility In Applying DoD Sequestration Cuts

Emelie Rutherford

The administration would have flexibility in doling out potential Pentagon budget cuts that could kick in next January, a former White House official said.

John Cooney, previous general counsel at the Office of Management and Budget (OMB), joined other federal budget experts at a conference yesterday in explaining to contractors how the so-called sequestration cuts to defense and non-defense spending could be addressed by the White House and Congress this year.

Those cuts, which total $1.2 trillion, could come in January 2013 under the Budget Control Act of 2011. The law cut the Pentagon’s long-term spending plans by nearly $500 billion and said if a special congressional committee could not craft a plan last year to make further government-wide cuts, which they did not, a sequestration process would trigger an additional $1.2 trillion in cuts starting next year–with half coming from the Pentagon. Those second wave of cuts to the Pentagon, which would be on top of the initial cuts, could work out to be $492 billion from 2013 to 2021.

Cooney said those sequestration cuts–which some lawmakers are trying to prevent–would not necessarily result in across-the-board reductions to defense contracts.

“While the (sequestration) cuts are required across the board at the line-item level, the president does have some ability to influence exactly what does get funded in a sequestration year,” he said at the “Surviving Sequestration” event arranged by the Professional Services Council (PSC).

Cooney explained that if the sequestration cuts stand, closer to the Jan. 3, 2013 start date OMB will implement the spending reductions by formally “impounding” the sequestered funds and issuing an “apportionment” to each agency. An apportionment, he said, is a legally binding order that bans agencies from spending more than allowed by OMB.

President Barack Obama could issue the apportionments as soon as September, but could also wait closer to the start date of the cuts to give Congress time to stop the sequestration cuts, which Obama opposes.

Cooney discussed how the president could issue so-called policy apportionments, a controversial move that could help promote his priorities.

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