Topics:

Sequestration will hit harder in 2014, CAP says

Tools

Sequestration will hit harder in fiscal 2014 than it did because cuts will be larger and one-time fixes that mitigated the impacts last year cannot be used again, a Nov. 21 Center for American Progress report says.

Sequestration will cut $24 billion more in 2014 than it did in 2013, because Congress partially repealed the 2013 sequester in the American Taxpayer Relief Act, the report notes. Sequestration is set to cut $109 billion every year, but the legislation reduced the 2013 cuts to $85 billion, CAP says. That means the full $109 billion in sequestration will take place for the first time in 2014.

Some of the tactics the government took to relieve agencies of the burden of cuts won't be available in fiscal 2014, the report adds.

"In some cases, agencies minimized their sequester cuts using budget gimmicks, but those gimmicks only work once. In other cases, agencies drained their reserve and investment accounts to sustain urgent needs, but those accounts need to be replenished later," CAP says.

Those responses work as long as sequestration is just a short-term problem, the report says, but if sequestration continues, the quick fixes will only make things worse down the road.

In one instance, Congress allowed the Federal Aviation Administration to shift funds from an account for airport maintenance to avoid having to furlough air traffic controllers.

"That makes sense for now, but airport infrastructure needs are piling up, and Congress will eventually have to pay the bill," CAP says.

At the Agriculture Department, sequestration meant furloughs for meat inspectors which would have closed slaughterhouses. Agriculture Secretary Tom Vilsack estimated that meat-industry workers would lose $400 million in wages when their plants closed and warned that beef and poultry would become scarcer for consumers, the report says.

To prevent the furloughs, Congress postponed maintenance on USDA facilities and cut one-time grants for school equipment in order to transfer extra money to the Food Safety and Inspection Service, the report says.

"For now, meat inspectors remain on the job, but one-time grants can only be cut once, and maintenance cannot be deferred forever," CAP says.

Those fixes came under the assumption that sequestration was a short term glitch, the report says.

 "But if sequestration becomes the new normal, all of these quick fixes will have only made things worse for the American people," CAP says.

For more:
- download the CBO report (.pdf)

Related Articles:
Government could hit debt limit by March, CBO projects
Appropriations leaders want discretionary topline from budget conference
Budget negotiations start, sequestration and entitlements focus of debate