Federal Relations

March 1, 2013

Sequestration Begins at Midnight Tonight

Sequestration officially starts today around midnight, though Obama could issue the order sooner that will direct federal agencies to make cuts of about 9 percent for most nondefense discretionary programs and 13 percent for defense programs. This represents $85 million is spending cuts over the remaining seven months of FY 2013. If kept in full, sequestration would total $1.2 trillion in spending cuts and savings over the next decade.

It should be noted that today’s sequestration deadline is just the first of two budgetary deadlines in March. The second is on March 27th when the continuing resolution is set to expire, meaning Congress must approve a budget for the remaining seven months of FY 2013 or face a government shutdown. We believe this is a much more significant date than today’s sequestration deadline because it is the next best (and last) opportunity for Congress to soften the blow of sequestration for FY 2013.

No one really knows for certain how sequestration will impact individual federal programs, but we are starting to learn about how the cuts will start to impact the federal government. There is a lot of speculation out there, but here’s what to expect according to one article in Politico.com this morning:

Today: Sequestration goes into effect around midnight when the Office of Management and Budget (OMB) issues a notice ordering agencies to make cuts. The first issue federal agencies will deal with are possible furloughs since they need to give 30 days notice to employees. Talks center on how the furloughs will be implemented, who’s covered, mandatory days off around holidays and whether to go in phases over the next seven months so budget officials can re-evaluate whether more or less time off is needed. Hiring freezes — used by some agencies to avert furloughs — will also go into effect

Next Week: The bulk of the furlough notices will start going out. Each agency and/or department will determine the number of days, but preliminary estimates include 13 days at the EPA and 15 days at USDA. Forced days off will mean cuts in annual pay of about 10 percent. Uniformed military personnel as well as employees at the Department of Veterans Affairs and the US Postal Service are exempt from the furloughs. States dependent on federal grants will most likely get word by next week about what’s happening to their money for the rest of the fiscal year. We should learn more information about Education Title I grants, HUD’s Community Development Block Grants, EPA Clean Water grants, and even some information on NIH grants.

March: Sequestration will begin to impact federally funding operations and services. For example, it will likely impact the opening of the commercial fishing season as NOAA will not have enough personnel to provide at-sea observers or resources to complete fisheries assessments. The Department of Education will immediately cut funds to states to help districts without large property tax bases, including students who live on military bases and Indian lands. And the US Forest Service will see immediate reductions just as they are gearing up for fire season.

April: This is the month that reality will set in. We won’t see closures or work stoppages, but rather a general slow down in federal government services. For example, furloughs will begin and are expected to impact everything from air traffic controllers, USDA inspections, and even the IRS just as tax season reaches its peak. And services like snow removal at Yellowstone National Park may delay the traditional opening of the tourist season there.

May and beyond: The cuts will continue to trickle down to states, municipalities, and other entities that rely on federal funds, like the University of Washington. This is likely when we will start to have a better sense of the direct impacts of sequestration.

The Office of Federal Relations continues to urge our Congressional delegation to do all they can to protect investments in research funding and preserve access to post-secondary education by protecting federal student aid programs.