Jamie Dupree's Washington Insider: Questions about automatic budget cuts

There are a lot of unknowns about the $85 billion in budget cuts known as the sequester which will kick in on March 1, and that's reflected in the questions coming in from readers and listeners, so let's go through a few that were in my inbox. ?One big issue, why do the cuts have to be across the board?

"Wouldn't it truly be up to the departments as to how to implement the cuts?" asked @soonertravis on Twitter.

That may make sense in the abstract, yes. The Congress would give the Pentagon a basket of money and the military would decide how to spend it, or it could be the Department of Transportation or Commerce.

But that's not how things work.

Instead, federal agencies must spend money as the Congress instructs, and these cuts are across the board in almost all spending areas, so everything must be cut by an equal amount.

Obviously, that means nothing is prioritized in terms of what is important and what can be chopped.

Some lawmakers have suggested approving a plan to give federal departments that kind of flexibility for the rest of this fiscal year, but it hasn't received a lot of support in the Obama Administration.

"I don't think it would help that much this far into the fiscal year," said Defense Undersecretary Robert Hale. "I think it's a bad deal, the flexibility."

Now on to one of the biggest stories of the past few days, the plans to furlough over 700,000 civilian defense workers at the Pentagon.

"Are the employees being furloughed with pay?" asked @upyouns.

As of now, no federal employees would be furloughed with pay, because the goal is to save money by furloughing them. ?For example, the Pentagon would save $4.86 billion by forcing civilian defense workers to take one furlough day a week from late April until the end of the fiscal year in September.

But - and this is important to note - in the past when federal employees have been subjected to furloughs because of budget fights or government shutdowns, often the employees got the days off and then were given retroactive pay, even though they didn't work.

"(A)re these real furloughs or are they being done for theatrics?" asked @code192man.

That is an issue for some in the Congress, who wonder if the they are hearing about a worst case scenario that won't really happen from some federal agencies, like the Pentagon. Soon enough, we should know the details of what will have to be cut by each agency.

Another oft-repeated question is, how can anyone know that $85 billion will be cut when the Congress hasn't passed a budget in four years?

"You're reporting from a "budget plan"- there's been no budget passed/approved for 4 years," said an aggravated @RufusKG on Twitter.

Sigh. This one almost needs its own page on snopes.com.

Please stick with me on this, because it is not really confusing.

What hasn't been passed for four years in Congress is a "budget resolution," which is a non-binding document that sets out the parameters of the budget. That resolution does not have the force of law. It is not signed by the President. ?It merely is a framework for the budget.

But, even if that budget resolution is not approved by the House and Senate, Congress can still vote on the spending bills for the federal budget, and that's what lawmakers have done, okaying omnibus budget bills and/or a stop-gap funding resolution to keep the government running.

But even when I tell people that, they tell me I'm still wrong.

Here is the omnibus budget bill that was approved in late 2011 - http://1.usa.gov/VvWADY?- read through it, and you will see that it funded the operations of the federal government for the Fiscal Year 2011.

And right now, the federal government is running on a temporary extension of what is basically that plan, funded at $1.047 trillion for the discretionary side of the budget (everything outside of Medicare and Social Security.)

So, yes Virginia, the budget has been approved by the Congress (it runs out on March 27). ?But, there is no non-binding budget resolution.

As for whether the sequester will mean $85 billion in cuts, it depends on who crunches the numbers as to how much is really cut this year, but there will be cuts.

Here is what the Congressional Budget Office has said about how much would be saved:

?

The provisions of the Budget Control Act that established automatic procedures to restrain discretionary and mandatory spending are set to take effect on March 1; if fully implemented, they will reduce total funding in 2013 by $85 billion. (The American Taxpayer Relief Act delayed the reduction by two months and reduced it by $24 billion.) CBO estimates that, in 2013, discretionary funding (which is provided through annual appropriations) will decline by $71 billion and funding for mandatory programs (which is not subject to annual appropriations) will be reduced by $14 billion, as a result of those procedures. By CBO?s estimate, budgetary resources for defense (other than spending for military personnel) will be cut by around 8 percent across the board, and nondefense funding that is subject to the automatic reductions will be cut by between 5 percent and 6 percent. ?According to that estimate, discretionary outlays will drop by $35 billion and mandatory spending will be reduced by $9 billion this year as a direct result of those procedures."

?

In other words, while the budget will drop by $85 billion overall, actual spending (outlays) will only go down by $35 billion on the discretionary budget and $9 billion on Medicare/Social Security because of previous spending decisions by the Congress.

We have time for one more question, and it's on a lot of minds.

"How about Congress? Do they get furloughed?" asked one of my listeners.

The answer is - no.

Elected officials and senior administration officials who had their nomination confirmed by the U.S. Senate cannot have their pay docked during a furlough.

One top defense officizal said last week that he would give up part of his check if furloughs go into effect; for Rep. Darrell Issa (R-CA), it won't matter, as he already gives his entire salary to charity.

As for cuts in staff at the congressional level, the details would be different for every lawmaker and each committee in the House and Senate, depending on how much was being spent so far this year.

We will find out more on that subject next week.

Source: http://www.wsbradio.com/weblogs/jamie-dupree/2013/feb/21/questions-about-automatic-budget-cuts/

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