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Shows & Panels
Is sequestration a paper tiger?
Friday - 11/18/2011, 9:41am EST
Federal News Radio
Many in the federal community fear the word "sequestration."
That's the technical term for the across-the-board cuts — half from defense, half from civilian agencies — that would be triggered if the Congressional supercommittee fails to come up with a deficit-cutting plan by next week.
But at least one budget expert says sequestration's bark is worse than its bite.
For one thing, the cuts wouldn't even go into effect until Jan. 2, 2013, notes Stan Collender, a budget expert and partner at Qorvis Communications.
"So, they're not immediate. And nobody should panic that their budget, which they may not even have received yet, will be cut further immediately," he said in an interview on the Federal Drive with Tom Temin and Amy Morris
Sequestration was built into the legislation that increased the federal government's borrowing limit in this past summer's debt ceiling showdown. That law set up the 12-member supercommittee. The automatic cuts were supposed to act as an incentive to compromise.
But Collender said vagaries in the bill have made its effect less than clear.
For example, what exactly does "across the board" even mean?
"Does this mean every single program gets cut by the same amount?" Collender said. "And the answer is: We don't know because the legislation is silent."
If the supercommittee fails to agree on recommendations to cut the deficit by at least $1.2 trillion over 10 years, even before the automatic cuts take effect, lawmakers will likely attempt an end run around them.
"Most of next year will be about the budget ... Most of it will be about avoiding a sequester," Collender said. There may even be efforts to reverse a sequester in a particular area, such as defense, he said.
That is one of the ironies of the supposedly airtight sequestration.
Collender likened it it to "pulling the wool over everyone's eyes": The supercommittee could come up with nothing, Congress could wiggle out of automatic cuts and the deficit would continue to grow.
That's what the financial sector is worried about, Collender, who represents many Wall Street clients, said.
"They don't much care whether the supercommittee comes up with a $1.2 trillion deficit-reduction plan or whether a sequester occurs, as long as it's one or the other," he added. "But if neither happens, Wall Street's not going to really happy."
Collender's message for federal managers was not optimistic.
"We're going to be into a period ... where agency budgets are going to be constrained, where federal workers are going to be asked to do more with less and to be more innovative than they've ever been before," he said. "Don't expect ... that there's going to be big increases anytime soon."
Follow Jack on Twitter at @Jack_WFED.