Funding news: President expected to sign six-month funding bill; White House releases report detailing potential sequestration cuts

Funding is steady — unless Congress allows sequestration to happen in January.

This month the House and the Senate passed a bill to fund the government from October 2012 through March 2013, and the president is expected to sign the bill into law soon. This Continuing Resolution (CR) adheres to spending levels in the Budget Control Act, passed last year. 

Most funding in the CR is held to 2012 levels, so spending is effectively frozen. Under continuing resolutions, the Office of Management and Budget (OMB) prescribes how agencies apportion their funding for the duration of the legislation. This usually means no new program starts and minimal spending, with agencies even more cautious because of the possibility of sequestration.

Meanwhile if you’ve been wondering what federal budgets would look like if the sequester should happen on Jan. 2, you aren’t alone. Congress passed a bill in July, the Sequestration Transparency Act, requiring the administration to report in detail how budgets would be affected if the large cuts cannot be superseded, and the White House Office of Management and Budget (OMB) released a report (PDF, 1.2MB) that outlines where and how cuts will be made if Congress does not act to avoid “sequestration.”

How did we reach this unenviable position? A provision in the Budget Control Act, passed last year, required that unless a congressional joint committee proposed a plan, and Congress enacted the plan, for $1.2 trillion in deficit reduction over a ten-year period, the same amount would be sequestered in across-the-board cuts to defense and nondefense discretionary accounts. The first round of cuts — $110 billion — is set to take effect on Jan. 2, 2013. The 394-page report from OMB stated that achieving the deficit reduction targets called for in the Budget Control Act would require an immediate 9.4 percent cut in defense programs and 8.2 percent reduction in domestic initiatives in January.

“The Administration does not support these cuts, but unless Congress acts responsibly, there will be no choice but to implement them,” the report says. “The Administration strongly believes that sequestration is bad policy and that Congress can and should take action to avoid it by passing a comprehensive and balanced deficit reduction package.”

Nondefense science agencies would sustain 8.2 percent cuts and nonexempt defense research would be cut 9.4 percent. For the National Institutes of Health, the amount sequestered would equal over $2.5 billion. For the National Science Foundation, the amount sequestered would be $586 million.

The American Psychological Association and other organizations are encouraging Congress to avoid sequestration by adopting a balanced approach to deficit reduction that does not rely solely on cuts to the small portion of the federal budget that is discretionary, that is, subject to annual appropriations.