No sequestration cuts in 2015, OMB says

Agencies can let out a deep breath of relief for a second year in a row — there will be no budget cuts because of sequestration in fiscal 2015.

The Office of Management and Budget sent a letter and report to Congress Jan. 20, detailing why the reductions to agency discretionary budgets will not be necessary as called for under the Budget Control Act.

“OMB estimates that discretionary appropriations are at the defense cap, while non-Defense appropriations are nearly $3.7 billion below the budget authorizations set in the [Budget Control Act],” OMB wrote in the report.

OMB stated the defense discretionary budget for 2015 is $585.9 billion, down from $606.3 billion last year. For non-defense discretionary spending, agencies will have $514.1 billion, which is up from $504.8 billion in 2014.

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The Bipartisan Budget Act of 2013 called for smaller reductions in the spending caps in 2015 than previously expected. The law reduced the defense cap only by $44.7 billion and the non-defense cap only by $27.6 billion from the original Budget Control Act levels. In 2014, Congress restored $44.8 billion in total to the government’s discretionary spending.

The administration estimates the discretionary spending to increase in the out years for non-defense spending, and continue the defense budget’s decline in 2016, but slowly increase through 2021.

This is the second straight year that Congress and the White House approved a budget that will not require additional cuts. In 2014, discretionary budget allocations stayed under the Budget Control Act caps.

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.

Sequestration could return starting in 2016, OMB said, as the Budget Control Act requires reductions to the current discretionary spending rates. OMB told Congress in its August sequestration report that it was concerned about a limited sequester in 2015, but in the end it wasn’t needed.

President Barack Obama is expected to submit his 2016 budget request to Congress on Feb. 2. A report by Bloomberg on Jan. 15 said Obama is expected to ask for almost a 7 percent increase over the budget caps in discretionary spending for 2016. The Defense Department signaled its plans in November to ask for an increase in 2016 as part of its five-year budget plan. DoD projected that it would ask Congress for $535 billion in its base budget for 2016 — $35 billion more than what’s allowed for that year under the caps set three years ago by the Budget Control Act.

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