Without Action, Non-Defense Funds Set for Across-the-Board Cut

By Jonathan Nicholson

Across-the-board cuts to non-defense funding of less than 1 percent would go into effect if Congress doesn’t change its appropriations mix when it decides how to fund the government past the end of April, according to an Office of Management and Budget report.

The report, issued by the Obama administration Jan. 10, is a reminder to lawmakers and the new Donald Trump administration that they will have to decide how to deal with sequestration in the upcoming budget season. Sequestration refers to the across-the-board spending cuts used to enforce the two funding caps in the 2011 Budget Control Act (Pub. L. No. 112-25), one for defense and one for non-defense.

Under the 2011 law, the White House’s OMB is supposed to send to Congress a sequestration “preview” report soon after a session of Congress has ended in January. That report is to say whether the appropriations enacted kept below the caps, and what the annual caps will be for the remaining years of the BCA.

That report was pushed back by the temporary funding bill enacted in December 2016 to keep federal agencies operating through April 28 (Pub. L. No. 114-254). Now, that report won’t be released until 15 days after April 28, the deadline by which lawmakers expect to wrap up the fiscal 2017 appropriations process in another so-called continuing resolution or an omnibus catch-all bill.

Over Limit by $1.4 Billion

In lieu of the January report, though, the Obama OMB issued a one-page estimate of what would happen if the appropriations levels contained in the December bill were maintained past April. The answer: a 0.3 percent cut to non-defense programs not exempt from sequestration.

“Section 184 of the Continuing Appropriations Act, 2017 also requires OMB to report on whether a sequestration for either defense or non-defense programs would result if the current funding levels were left unchanged at the time OMB issues the final sequestration report for 2017. OMB estimates defense programs to be within the 2017 limit,” the OMB said.

“However, non-defense programs currently exceed the 2017 limit by $1.4 billion,” the OMB added. “If the current levels are left unchanged, OMB’s final sequestration report for 2017 would include an order to eliminate this breach of the spending limit through a sequestration of non-exempt programs in the non-defense category. OMB currently estimates that the uniform percentage reduction to non-exempt non-defense programs would be approximately 0.3 percent.”

A request for comment on the report from the OMB was not immediately returned. The Trump administration has said it wants to scrap sequestration for defense funding, a shift from the Obama White House’s stance that any sequestration relief apply equally to defense and non-defense spending.

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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