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Sequestration may not mean immediate cuts

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Sequestration's impacts could be mitigated even after it goes into effect, says advocacy group OMB Watch.

In a report (.pdf) dated Nov. 2, OMB Watch says a 2013 deal between the president and Congress could retroactively cancel the automatic cuts so that "there would be minimal or no damage to most affected federal defense and non-defense programs."

Still, this action would need to be one of the first things the winner of the Nov. 6 election would do, since sequestration goes into effect Jan 2. but the inauguration isn't until Jan. 20.

Efforts to minimize sequestration's impact and buy time could include delays to new contracts or grants, an acceleration or delay of the dispersal of funds, and having agencies use any funds carried over from 2012 first since they lay beyond sequestration's reach.

Both the current and next administrations have direct options to avoid layoffs. "The Budget Control Act gave the president authority to exempt spending on military personnel, which he has chosen to do," and civilian personnel can be saved through an administration's "power to accelerate spending as necessary to avoid furloughs," says the report.

"Taking an extra month to reach a balanced deal, one that includes revenues, spending cuts, and investments, will not create an immediate crisis, even if sequestration takes effect," says author and OMB Watch Director of Fiscal Policy Patrick Lester.

A lame-duck session budget deal unlikely, Lester contends, due to the highly partisan nature of the current Congress. 

For more:
- download the full OMB Watch report (.pdf)
- read the announcement with Lester's statement

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