Sequestration spending cuts will be in the billions unless caps lifted

The Office of Management and Budget warned that unless Congress gets rid of legislative spending caps, civilian agencies would need to cut $1.8 billion in 2016 funding under the House’s version of the appropriations bills.

In an update report sent to President Barack Obama on Thursday, OMB said spending caps under the Budget Control Act would remain in place unless Congress changes the law or delays enactment of sequestration in some way.

In the report, OMB said: “The pending cap reductions for 2016 and beyond lead to cap levels that do not provide sufficient resources for national security, domestic investments and the core Government functions,”  and that leaving them in place inhibits the country from “achieving its full potential in a growing economy.”

The House already has passed several appropriations bills for 2016,  but so far, the House sponsored bills have been met with a presidential veto threat if sequestration remains in place.

Under the House spending bills, the Defense budget would be virtually unaffected by a sequester, with a projected $3 million in cuts under House-passed bills, and $1 million in reductions under the bills approved by the Senate committees. That’s largely because appropriators in both houses chose to funnel a large proportion of the military’s 2016 expenses into overseas contingency operations accounts, which are exempt from sequestration.

For non-defense discretionary spending, agencies would need to reduce their budgets by $1.8 billion under the current House bills. The Senate’s appropriations bills come $145 million under the BCA caps for 2016 so no sequestration would be necessary.

Caps were lowered in 2014 and 2015 because of a budget deal that offset some required cuts, but those caps are scheduled to come back on Oct. 1 if nothing is done to remove them.

Once Congress returns from its August recess, many experts believe it will have to pass at least one continuing resolution to keep the government open when the new fiscal year begins Oct. 1.

If Congress fails to come to an agreement by Sept. 30, the sequester takes effect on Oct. 1.

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