VA exempt from sequestration, says OMB
The Veterans Affairs Department will be exempt from sequestration, the Office of Management and Budget says in an April 23 letter (.pdf) to the Government Accountability Office.
Unless Congress moves to reverse provisions of the Budget Control Act it approved in 2011, the federal government faces the likelihood of having to shave $98 billion from its fiscal 2013 budget this January. The uniform cuts--known as sequestration--kick in because Congress did not approve by its self-imposed deadline of Jan. 15, 2012 additional spending reductions worth $1.5 trillion over a 10 year period.
Social Security and Medicaid is exempt from sequestration--and so too is the VA, according to legal analysis conducted by Steven Aitken, OMB deputy general counsel.
In his letter, Aitken says the PAYGO Act of 2010 (P.L. 111-139) modified the Balanced Budget and Emergency Deficit Control Act of 1985 (more commonly known as Gramm-Rudman Hollings after its Senate sponsors and 2 USC. § 900 ) so that "all programs administered by the Department of Veterans Affairs" would be exempt from sequestration.
The Budget Control Act, while it modified Gramm-Rudman Hollings in many ways, left the PAYGO Act's earlier modification untouched, Aitken writes. The PAYGO modification of the 1985 law isn't perfect, since the earlier law still says that the maximum amount the Veterans Medical Care account could be sequestered would be 2 percent of its budget--but since 0 percent sequestration is indeed less than the 2 percent maximum threshold, there is in fact no conflict.
- download Aitken's April 23 letter (.pdf)