OMB Sequester Report Shows Few Good Options for Lawmakers

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By Jonathan Nicholson

A White House report showing that across-the-board spending cuts would take place under either the House or Senate approaches to funding the government next year demonstrates how few good options lawmakers have, according to one anti-budget deficit group.

While no appropriations bills have yet reached President Donald Trump’s desk, the Office of Management and Budget found that approaches taken so far in both chambers of Congress would result in busting the annual discretionary spending caps put in place by the 2011 Budget Control Act (Pub. L. No. 112-25). The Office of Management and Budget issued its sequester update report Aug. 18.

“If the 2018 discretionary caps remain unchanged, this report estimates that, if enacted, the actions to date by the House of Representatives would result in a sequestration of $72.4 billion in the defense category,” the OMB said. “The report also finds that action or funding guidance in the Senate, if enacted, would result in a sequestration of $2.0 billion in the defense category and a sequestration of $3.8 billion in the non-defense category under the current 2018 spending limits.”

Lawmakers face a Sept. 30 deadline to pass legislation to fund the government when they return to Washington after their August break. The House passed a bill to fund the Defense Department, congressional operations, military construction, and energy and water programs (H.R. 3219). No bills have made it to the Senate floor yet. A temporary continuing resolution bill seems the most likely outcome to avoid a government shutdown.

Harder Than Understood

Ed Lorenzen, senior adviser for the bipartisan Committee for a Responsible Federal Budget, said the OMB report shows how difficult it will be for lawmakers to comply with the 2018 Budget Control Act caps of $549.1 billion for defense spending and $515.7 billion for non-defense.

“Complying with the non-defense discretionary caps for fiscal year 2018 will be harder than is generally understood,” he said.

House Republicans have sought to boost military funding beyond the defense cap, while Senate Republicans have taken a more cautious approach of hewing closer to fiscal 2017 appropriations levels in committee. But even the Senate approach would trigger small sequestrations in both the defense and non-defense categories, according to the OMB report.

A continuing resolution would present its own problems, Lorenzen said.

“A full-year CR would be even further above the caps, triggering a sequester of over $9 billion, after various technical factors are taken into account,” he said. A short-term CR would simply delay the pain of the spending cuts until later, and make them deeper as they would be spread out over a smaller portion of the fiscal year.

“A short term CR would not trigger a sequester, but Congress would have to cut spending below the cap levels for the rest of the year in full year appropriations to avoid a sequester,” Lorenzen said.

In the OMB report, the administration reiterated its desire to change the caps, something that would require the assent of Senate Democrats.

“While this report estimates that congressional action to date would trigger a sequestration, this does not reflect Administration policy. This Administration strongly supports restoring America’s investment in defense,” the OMB said. “To ensure that our military is not rebuilt on the backs of future generations of Americans, however, the Administration strongly supports fiscally responsible reductions to spending elsewhere in the Federal Budget, as outlined in the FY 2018 Budget request.”

To contact the reporter on this story: Jonathan Nicholson in Washington at jnicholson@bna.com

To contact the editor responsible for this story: Paul Hendrie at pHendrie@bna.com

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