Agency discretionary spending in real dollars and as a percentage of the Gross Domestic Product (GDP) would be lower in fiscal 2013 than in prior decades.
It could also be reduced further if Congress and the administration don’t agree on deficit reduction before January 2013 when the sequestration cuts are triggered.
Support for sequestration from the White House and on Capitol Hill is non-existent, but that doesn’t mean agencies shouldn’t keep the potential for severe reductions in the back of their minds.
The White House wants Congress to take up its plan proposed in its fiscal 2013 budget request to reduce $4 trillion from the deficit. President Barack Obama submitted the request to Congress Monday.
“The sequester is bad policy,” said Jeff Zients, acting director of the Office of Management and Budget, Monday during a press briefing at the White House. “Just look on the Defense side alone, it would require $500 billion in further cuts, across the board. That is bad policy. We believe the sequester should be replaced. There is plenty of balanced deficit reduction to replace the sequester and get rid of it as bad policy and achieve the $1.2 trillion or more that is called for in the sequester.”
Zients said the President is not calling for sequester to be taken away.
“I want to be clear, the sequester is a very important forcing function to make sure we do that balanced deficit reduction,” he said. “The President is calling for the $1.2 trillion to be replaced by a balanced deficit reduction.”
Gene Sperling, the National Economic Council director in the White House, said the entire design of the sequester was to create an enforcement mechanism that was “mutually assured destruction for both sides” to force lawmakers and the administration to come together to come up with a compromise.
The balanced deficit reduction includes $1 trillion in reduced discretionary spending over the next 10 year, $362 billion in savings from improving Medicare, Medicaid and other entitlement programs and $269 billion for cutting agriculture subsidies and increasing the contributions by the federal workforce toward their retirement accounts — a total of 1.2 percent over three years.
In the 2013 request, the White House asked for $1.14 trillion in discretionary spending down from $1.19 trillion for 2012. The decrease means 11 of the major agencies would see less discretionary spending as compared to 2012 request, and the other 11 listed by the White House would see increases.