By Ken Gold, Director of the Government Affairs Institute at Georgetown University
President Obama’s reelection means that a major assault on federal pay and benefits, which many feared would be a part of a Romney-Ryan administration, will not occur. Nevertheless, there will continue to be long-term pressures to reduce federal spending, and agency budgets and federal personnel will undoubtedly be a part of that for some time to come.
The fiscal cliff and sequestration
In the short term, the main concern is the fiscal cliff and the impact of sequestration, should no agreement be reached to avoid the across-the-board budget cuts scheduled for January 2, 2013. If implemented, the sequestration would cut $109 billion for FY13, divided equally between domestic and defense discretionary spending.
Chances that a comprehensive deficit reduction plan will be agreed to in the upcoming lame duck session are extremely slim. If any agreement at all is reached, it’s likely to be some sort of limited agreement that delays both sequestration and expiration of the Bush era tax cuts into the spring. Even that, however, is far from a done deal, so what was intended to never happen may well happen.
It’s unclear whether the Republican House leadership or the president have softened their positions at all from the failed “grand bargain” effort of the summer. Republicans still have the majority in the House, and the vast majority of them were signers of the Norquist pledge on never raising taxes in the 112th. However, it appears that fewer incoming House freshmen have signed the pledge. About a dozen of them reportedly refused to sign it during the campaign, and a number of returning members have disavowed the pledge.
While most of the current analysis focuses on whether sequestration will occur or not, there are a number of ways that the impact of sequestration can, and likely would be mitigated. It’s possible, for example, that sequestration could be triggered on January 2, but canceled a short time later, or even canceled retroactively.
In addition, the Budget Control Act (BCA), which mandates sequestration, allows the president to exempt military personnel accounts, which he has already agreed to do. While there is no provision in the BCA for excluding civilian personnel accounts, the continuing resolution under which the federal government is currently operating specifically permits the administration to accelerate spending in order to avoid furloughs. (see H.J. Res. 117, Sec. 112)
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