White House Paints Bleak Picture Of S...

White House Paints Bleak Picture Of Sequestration Consequences

Posted in the Minneapolis Forum

Awful Truth

Saint Paul, MN

#1 Feb 11, 2013
If Congress fails to delay or turn off the sequester, the government and economy will be on highly uncertain terrain on March 1 — when nearly all government agencies will begin restructuring and curtailing their operations in ways that cut $85 billion from federal spending between then and the end of September.

At a White House briefing Friday afternoon, Danny Werfel, the federal controller of the Office of Management and Budget, and Jason Furman, the principal deputy director of the National Economic Council, provided reporters with the administration’s most detailed description yet of a sequestered government.

“If we go past this date, there’s no way to implement the sequester without significant furloughs of hundreds of thousands of federal employees,” said Werfer. That’s in large part because there’s no ways for departments and agencies to move money around to protect top-tier services and programs.

“What happens is, OMB, we take this amount, this $85 billion that we have to cut and apply it to every account in government,” he added.“Every account has to be cut by a certain percentage. It’s not like the agencies can move money amongst accounts. But it’s even worse than that; even at the sub-account, there’s something called Program Project and Activity which exists within each account. And the way the sequester law is written is that even underneath the account — even at the Program Project and Activity — they all need to be cut at that same percentage.”

That’s a fancy way of saying there will be disruptions in some scary places.

“So for example, FAA, they have to cut resources in a way that’s going to impact the air-traffic control workforce,” Werfer added.

If the administration is forced to order the sequester, all government agencies except those explicitly exempted, will have to cut their budgets across all programs by enough to total $85 billion by the end of the fiscal year. They have some latitude to determine how and when to execute those cuts, but they must have achieved them all by the end of September to comply with the law. And the administration is cautioning agencies not to act on the assumption that Congress will nullify the sequester in short order.

“I wouldn’t advise they rely on hope [for a deal],” Werfer added.“They need to execute plans that protect their mission, but as I mentioned, the legal requirement would be that when we get to September 30 … they will have to across government have spent $85 billion less.”

Furman reiterated that the final offer President Obama made to House Speaker John Boehner (R-OH) to avoid the sequester is still a live one, adjusted for the fact that Congress already banked about $620 billion in new tax revenues — which means the current version is significantly more spending cuts than new tax revenues.

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