Sequestration would mean 12.1 percent cut to agency spending

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Sequestration would mean 12.1 percent cut to agency spending

Agencies could see a budget cut of 12.1 percent starting Jan. 2, 2013, if Congress does not come up with an alternative to sequestration. The estimated reductio...

Jolie Lee

May 2, 2012 5:30 am

< a min read

Agencies could see spending cuts of 12.1 percent starting Jan. 2, 2013, if Congress does not come up with an alternative to sequestration.

The estimated reduction is based on agencies’ fiscal 2012 discretionary budgets, according to the new report from the Congressional Research Service.

The Budget Control Act passed last August called for reducing federal spending by $1.2 trillion over the next decade with half of the cuts come from defense spending.

CRS found the largest decline would occur in fiscal 2013, and starting in fiscal 2014, “discretionary spending subject to the caps increases annually at a rate that is slightly higher than the projected rate of inflation,” according to the report.

Spending in real terms would not reach fiscal 2011 levels at any point in the 10-year sequestration period, CRS said.

Some mandatory spending programs — like Social Security, disaster spending and veterans programs — would be exempt from sequestration.

The Office of Management and Budget said this month that it is not offering any contingency plans to agencies in the expectation that Congress will hash out their political differences to avoid sequestration.

Sequestration may hit defense industry harder than troops