Agencies will not face any budget cuts from sequestration this year.
The Office of Management and Budget told Congress in a Feb. 7 report that it estimates the enacted fiscal 2014 discretionary appropriations are within the spending limits under the Budget Control Act.
The Balanced Budget and Emergency Deficit Control Act of 1985 requires OMB to issue a report to Congress 15 days after appropriations bills are signed into law detailing any spending limits that are more than the allowed caps and would trigger across-the-board cuts.
OMB determined the Bipartisan Budget Act of 2013 restored $44.8 billion to defense and non-defense discretionary spending totals for 2014. The law also canceled the need for further mandatory cuts next year. Instead, spending caps for defense will drop by $44.7 billion and non-defense discretionary spending will be automatically reduced by $27.6 billion from original Budget Control Act levels.
So the discretionary budget allocations in the Consolidated Appropriations Act of 2014, signed into law Jan. 17, stayed under the caps and therefore sequestration is a non-factor this year. OMB said this is because the 2014 enacted levels of discretionary funding are the same as the 2013 levels and Congress added no additional funding.
Overall, the defense discretionary spending will be $606 billion, which is at the cap level, while the non-defense discretionary spending will be $502.8 billion, which is $2 billion below the cap limits.
Over the next seven years — through 2021 — OMB estimates discretionary spending will drop in 2015, but quickly grow the rest of the out years. The defense spending will drop to $521.2 billion next year and then grow to $644 billion by 2021.
The non-defense spending will drop to $492.3 billion in 2015, but increase to $590 billion by 2021.
In 2013, agencies faced an $85 billion budget cut under sequestration, which amounted to a 7.8 percent reduction to Defense agencies and a 5 percent decrease to civilian agencies.