March 6, 2013

The Sequester Begins

Last Friday, OMB released its sequestration report. The appendix details the cuts required to each budget account. The report does not detail cuts at the “program, project, and activity” (PPA) level as required by the Budget Control Act and the 1985 Gramm-Rudman-Hollings law. So the report does not resolve the question of how much discretion the Administration has in implementing the cuts.

The report does detail the cuts at the account level and it also gives the percentage and amount cuts for Defense discretionary, Defense mandatory, non-Defense discretionary, Medicare, and other mandatory spending.

omb sequester

This follows a September 14 OMB report to Congress under the Sequestration Transparency Act (STA). In that report, OMB claimed that it could not comply with the requirement to detail cuts at the PPA level. It said, “because of the STA’s reporting deadline of just 30 days, the large number of PPAs across all agencies and budget accounts, and inconsistencies in the way PPAs are defined, additional time is necessary to identify, review, and resolve issues associated with providing information at this level of detail.”

OMB implied that agencies had sent PPA information, but in the five and a half months since it issued that report -- and 15 months since the Joint Committee failed to reach an agreement -- OMB still has not been able to identify PPAs and calculate reductions.

Sequester Timeline

sequester timeline

A Sampling of FY 2013 Sequester Cuts – Good and Bad

Consumer Financial Protection Bureau

  • $23 million reduction, even though the CFPB’s funding comes from the Federal Reserve 

Department of Defense:

  • $4.635 billion for Army Operation and Maintenance
  • $3.467 billion for Air Force Operation and Maintenance
  • $3.455 billion for Navy Operation and Maintenance
  • $2.808 billion for the Defense Health Program
  • $1.753 billion for Navy shipbuilding and conversion
  • $79 million from Embassy Security, Construction, and Maintenance
  • $78 million in U.S. contributions to international organizations  
  • $57 million reduction to the Cooperative Threat Reduction account, designed to reduce the threat from loose nuclear material and other weapons of mass destruction
  • $47 million from Mine Resistant Ambush Protection Vehicle procurement fund
  • $29 million from Navy and Marine Corps Family Housing Operation and Maintenance
  • $17 million from National Guard and Reserve Equipment procurement
  • $9 million from the U.S. contribution to the World/Regional Development Bank Clean Technology Fund
  • $3 million from the U.S. contribution to the World/Regional Development Bank Strategic Climate Fund

Department of Education

  • $789 million from education of disadvantaged, low-income K-12 students
  • $633 million from special education
  • $116 million from higher education
  • $65 million from the Impact Aid account
  • $12 million from Howard University
  • $6 million from Gallaudet University
  • Pell Grants are exempt from sequestration

Department of Energy

  • $604 million from Nuclear Weapons Activities, which affects the nuclear modernization agreement that secured Senate ratification of New START
  • $194 million from the Strategic Petroleum Reserve
  • $91 million from the Energy Efficiency and Renewable Energy program  
  • $38 million from the Innovative Technology Loan Guarantee Program, which wasted billions of tax dollars on Solyndra and other companies
    • $21 million combined from the four power marketing administrations
    • $5 million from the Energy Information Administration

Environmental Protection Agency

  • $210 million from state and tribal assistance grants
  • $135 million from environmental programs and management
  • $2 million from the inspector general’s office

Department of Health and Human Services

  • $5.6 billion from payments to Medicare “Part A” providers
  • $5.15 billion from payments to Medicare “Part B” providers
  • $1.55 billion from the National Institutes of Health
  • $568 million from payments to Medicare “Part D” plans
  • $289 million from the Centers for Disease Control and Prevention
  • $209 million from the Food and Drug Administration
  • $198 million from the Indian Health Service
  • $168 million from the Substance Abuse and Mental Health Services Administration 
  • $44 million from the Health Care Law Insurance Exchange Grants
  • $13 million from the Consumer Operated and Oriented Plan Program Contingency Fund
  • $10 million from the World Trade Center Health Program Fund

Department of Homeland Security

  • $512 million from Customs and Border Protection
  • $276 million from the Transportation Security Administration’s Aviation Security budget
  • $151 million from Citizenship and Immigration Services ($5 million discretionary)
  • $84 million from Secret Service

Department of Housing and Urban Development

  • $965 million from the Community Development Fund

Interior Department

  • $204 million from “Departmental administration and department-wide programs” -- about a tenth of this would have gone to counties containing federal land as part of the “payment in lieu of taxes” program
  • $153 million from the National Park Service
  • $127 million from the Fish and Wildlife Service
  • $75 million from the Bureau of Land Management
  • $54 million from the U.S. Geological Survey
  • $8 million from the Bureau of Ocean Energy Management

Department of Justice

  • $166 million from the Federal Bureau of Investigation (non-defense)
  • $102 million from the Drug Enforcement Administration
  • $99 million from U.S. Attorney Offices
  • $20 million from Violence Against Women programs
  • $16 million from the September 11th Victim Compensation Fund
  • $8 million from Community Oriented Policing Services

Department of Labor

  • $2.675 billion to the federal-state unemployment program
  • $10 million to the administrative expenses of the Energy Employees Occupational Illness Compensation Fund, which the Administration chose to classify as a defense program, subjecting it to the defense mandatory percentage reduction of 7.9 percent
  • Bureau of Labor Statistics program tracking ‘Green Jobs’ 

Department of Transportation

  • $646 million from Hurricane Sandy aid
  • $637 million from the Federal Aviation Administration
  • $545 million from transit agencies
  • $77 million from Amtrak

Continuing Resolution

The House of Representatives passed 267-151 a Continuing Resolution (H.R. 933) to fund the government until the end of the fiscal year. Top line overall spending in the bill with sequestration is $984 billion.

The bill funds government agencies, except for the Department of Defense and the Department of Veterans Affairs, at last year’s levels minus sequestration cuts (DoD is funded equal to last year and VA funding is increased). It also provides the Pentagon relief by providing spending flexibility that Democrats voted against last week.

There remains exactly three weeks until the current funding resolution expires.

Issue Tag: Economy