OMB: Time to get serious about sequester preparation

With barely two months before sequestration could kick in, the Office of Management and Budget is urging agencies to ramp up preparations to work under tighter fiscal conditions.

OMB’s Deputy Director of Management Jeffrey Zients on Jan. 14 sent federal leaders a memo about the “significant uncertainty”agencies will face in the second half of fiscal 2013. Unless Congress takes steps to amend current law, sequestration is slated to occur March 1, a situation aggravated further by the current continuing resolution that expires March 27, Zients wrote.

“Should Congress fail to act to avoid sequestration, there will be significant and harmful impacts on a wide variety of government services and operations,” he warned.

Defense Secretary Leon Panetta recently issued a similar warning to the Defense Department.

In the event of an extended sequester, “hundreds of thousands” of families would lose key education and wellness services, and slash services for military services and reduce readiness of non-deployed units, Zients wrote. Additionally, hundreds of thousands of federal employees could face furloughs.

In September, administration officials outlined in a 400-page report on how sequestration could be implemented. The document came after President Obama signed the Sequestration Transparency Act, which mandated he submit details within 30 days on how the $1.2 trillion across-the-board budget cuts would be implemented.

The sequester was originally scheduled to occur Jan. 2, 2013, but Congress reached a deal on Jan. 1 to postpone it until March.

Since news broke about the prospect of the budget cuts becoming reality, many questioned whether lawmakers would take steps to prevent them. The sequester was never meant as a policy but passed only to force Congress “to act in a serious, balanced way on deficit reduction,” White House Spokesman Jay Carney said in a July 26 press briefing.

That uncertainty is something Zients acknowledged in his latest memo as well.

“At this time, agencies do not have clarity regarding the manner in which Congress will address these issues or the amount of budgetary resources that will be available through the remainder of the fiscal year,” he wrote. “Until Congress acts, agencies must continue to prepare for the possibility that they will need to operate with reduced budgetary resources.”

The memo also highlighted guiding principles to which agencies should adhere when preparing to operate in a sequester, including:

•   Identify and address operational challenges that could adversely affect the agency's mission or otherwise raise life, safety or health concerns.
•  Find the most appropriate means to cut civilian workforce costs where necessary, including imposing hiring freezes, releasing temporary workers
or not renewing term or contract hires, or implementing administrative furloughs.
•  Review grants and contracts to decide where money could be saved in a way consistent with the applicable terms and conditions.
•  Consider funding flexibilities, including the availability of reprogramming and transfer authority.