Feds should plan for worst case scenario, expert says

Tuesday - 11/22/2011, 11:00am EST

Steve Bell, senior director, Bipartisan Policy Center's Economic Policy Project

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By Michael O'Connell
Web Editor
Federal News Radio

Members of the congressional supercommittee will not meet a Wednesday deadline to find more than $1 trillion in spending cuts.

That failure will trigger automatic cuts across government beginning in 2013, leaving many federal managers and employees wondering, "what's next?"

Assuming that the automatic cuts go into effect January 2013, they would be split - half for security and half for non-security programs. These would not include many of the entitlement and safety net programs, such as food stamps, child health care and Medicaid.

"Which means that the rest of government that's annually appropriated through the appropriations process will feel a much larger pain because they'll have to take up a lot of the savings that would normally have come from Medicare, Medicaid, Social Security and other entitlements," said Steve Bell, senior director of the Bipartisan Policy Center's Economic Policy Project. He spoke Tuesday morning on the Federal Drive with Tom Temin and Amy Morris.

Of course, in light of the upcoming elections, the possibility of these "doomsday" cuts going into effect is uncertain. Bell pointed to the failure of the Gramm-Rudman-Hollings Balanced Budget Act as historic precedent for too-tough legislation evaporating under the light of political reality.

"However, there is an important point here that people forget," he said. "The Budget Control Act is a law, signed by the President. To overturn statute law, you need to pass another law. You need to get a majority in the House and 60 votes in the Senate in all likelihood. The President has threatened last night to veto such a bill to change the sequestration, so you would have to have both chambers ... override his veto, which is an even more difficult vote standard."

Bell believes that it would be difficult to find enough Republican votes in the House to overturn budget cuts and to generate enough votes in the Senate to impose them.

"The tragedy of all this is that in each of the last two or three years, Congress had it within its power to do everything that we demanded from the so-called supercommittee," Bell said.

What about the 2012 budget?

"It is highly likely that the rest of the appropriation bills for this fiscal year will be contained in a continuing resolution, not in an omnibus," Bell said.

"We have a continuing resolution in place now, and it is very likely that we'll have a continuing resolution in place, certainly through next February and maybe for the entire fiscal year," Bell said, adding that managers should plan for a worst case scenario.

Bell recommends managers consider the money they have right now as the only money they will be receiving through the rest of this fiscal year. He said they should also expect 7 to 8 percent cuts below that starting in January 2013.

"I think that the prudent person would say, this is about as good as it's going to get for the next 13 months," Bell said.

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