Budget Control Act unclear about how to make DoD sequestration cuts

Thursday - 4/12/2012, 9:59am EDT

Kevin Brancato, defense analyst, Bloomberg Government

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Without a deal to cut spending by $1.2 trillion over the next decade, automatic spending cuts — or sequestration — will go into effect per the Budget Control Act passed in August.

Half of the spending cuts — or $55 billion — would hit the Defense Department alone beginning Jan. 2, 2013.

BCA, however, does not specify how those cuts would be implemented. One interpretation is every program is cut by the same amount, which would be by about 13 percent. The other interpretation of the act is the overall spending would have to be reduced by 13 percent and the Pentagon could pick and choose the programs to cut, said Kevin Brancato, a defense analyst for Bloomberg Government, in an interview with The Federal Drive with Tom Temin and Emily Kopp.

"What really drew us to this is that the idea that you have to cut every single program means you basically have to cancel every single contract," Brancato said. "The feasibility of this, mid-year ... is highly impractical and it's a lot more costly to do it that way, to go after each and every contract, than it is to identify and target specific contracts."

BCA, based on the Gramm-Rudman-Hollings Balanced Budget Act of the 1980s, is ambiguous about the way to get to the target amount of cuts. "The current law says do it like they did before," Brancato said.

For now, Brancato said the discretion lies with the Office of Management and Budget. According to his story in Bloomberg Government, Brancato reported that an OMB spokesman refused to comment on the sequestration implementation plan.

In all likelihood, a resolution to avoid sequestration will not occur before the election, he said.

"The President, Congress, military leaders, industry — nobody wants sequestration," Brancato said. "They just haven't agreed on a way to avoid it."

(Read the full Bloomberg Government study, ""Pentagon May Protect Programs From Sequester Cuts: BGOV Insight". BGov.com is a paid site and requires a subscription for access.)

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