Revenue & Spending
OMB Watch Urges Agencies to Plan for Multiple Ways to Manage Effects of Automatic Spending Cuts
-For Immediate Release-
December 6, 2012
Contact: Brian Gumm, (202) 683-4812, firstname.lastname@example.org
OMB Watch Urges Agencies to Plan for Multiple Ways
to Manage Effects of Automatic Spending Cuts
Analysis Highlights Tools Available to Lessen Impacts of Sequestration
in Early 2013
WASHINGTON, Dec. 6, 2012—OMB Watch today urged federal agencies to consider multiple ways to manage the automatic spending cuts that will go into effect in January if federal budget talks continue into 2013. Earlier this week, the Office of Management and Budget (OMB) asked agencies to begin planning for the cuts, known as "sequestration." In a November analysis, OMB Watch showed that agencies have a number of tools available to temporarily postpone most of the impacts of the automatic cuts.
OMB's planning request comes amid ongoing budget negotiations between Congress and the president. So far, these talks have produced no agreement on how to move forward on federal spending and taxes. There are only a few weeks left before the congressional lame-duck session comes to an end, and the automatic spending cuts required by the 2011 Budget Control Act are scheduled to go into effect on Jan. 2, 2013.
In an analysis titled Mitigating the Impact of a Temporary Sequester, Patrick Lester, Director of Fiscal Policy at OMB Watch, argues that sequestration will not generate an immediate crisis. Agencies and the White House have a variety of tools to deal with the automatic cuts on a short-term basis. These include controlling the rate of federal spending during the first few weeks of the year, delaying the announcement of new federal contracts and grants until later in the year, redirecting funds to more urgent activities early in the year, and using spending options to prevent agency layoffs.
Lester also cautioned Congress and the White House against rushing into a bad agreement simply to avoid the automatic spending cuts. "If the administration uses all of the tools at its disposal, the president and Congress will have several weeks to negotiate a balanced budget deal – one that raises the revenue required to keep the recovery going, supports critical public programs, and reduces the debt over time," he said.
The full text of the analysis and a two-page summary sheet are available at http://www.ombwatch.org/mitigating-impact-of-automatic-spending-cuts.
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