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Available options can save more than sequestration, says CRS

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Other budget cutting plans beside sequestration can save more money than the automatic cuts set to come into effect Jan. 2, says the Congressional Research Service.

In a report (.pdf) dated Nov. 9 posted online by Secrecy News, CRS looks at alternatives, those that have already been proposed or partially passed, and says these directed cuts will often provide deeper savings.

President Obama's fiscal 2013 budget proposal would produce $2.2 trillion more in deficit reductions than what would be achieved by the Budget Control Act's sequester, says CRS. It eliminates the automatic spending reduction for all nine years as well as the 2001, 2003, and 2010 tax cuts for individuals making more than $200,000 and households making over $250,000. The president's proposal uses savings generated from changes mandatory program changes as well as those to Medicare, Medicaid, agricultural programs and new caps on spending on overseas contingency operations.

In May, the House passed the Sequester Replacement Reconciliation Act of 2012 (H.R. 5652), which would reduce the deficit by $262 billion more than the cuts made by the BCA across all nine years. The House plan does this by cancelling the $98 billion in defense-related sequestration that goes into effect Jan. 2013, lowering the fiscal 2013 discretionary budget cap to $1.028 trillion and with cuts to other mandatory non-defense programs. Sequestration of non-defense funding would remain in place.

Some of the House plan's gains would come from reductions and modifications to housing and financial authorities, changes to Medicaid and medical assistance programs, and alternations to the health insurance exchanges established in the Affordable Care Act.

There was a substitute amendment to H.R. 5652 offered by Rep. Chris Van Hollen (D-MD) that would replace the entire sequester with a set of revenue increases and spending reductions. The main effort in the amendment, writes the CRS, would be an end to direct payment programs for agricultural producers. It would reduce the deficit by $30 billion more than the BCA's automatic cuts, but the measure was not made in order by the House Rules Committee and therefore was not offered.

Plans in the Van Hollen amendment may come up during current sequester negotiations.

For more:
- download the report, R42675 (.pdf)
- go to H.R. 5625 on THOMAS

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