Sequestration

As I posted on March 1, the sequester -- the across-the-board spending cuts ordered by the Budget Control Act-- would only become real for most voters when the predictions of the impact of the reductions actually started to have a effect on their lives.

Although some people felt it almost immediately, any budget analyst worth his or her salt knew that the real pain was always going to come when federal programs that were labor intensive started to implement furloughs, layoffs and hiring freezes and the services they provided had to be curtailed. That was always going to take a month or more because of the process that needs to be followed to notify employees.

But the fact that labor-intensive programs didn't reduce services immediately when the sequester began on March 1 never meant that it wasn't coming. It always was and the protests that the White House was playing fiscal chicken little were simply wrong.

As I expected and warned everyone when legislation was enacted requiring it in early August, the report released by the Office of Management and Budget last Friday with the details of the spending cuts that will occur if the sequester actually happens on January 2 was a nonevent that provided little, if any, actual new information or guidance. It was barely a one-day story that may provide all sides in the debate, that is, those who want the across-the-board spending cuts to occur and those who think they're a tool of the devil, with some fodder for arguing their position but no real additional ammunition to make their case.

If what I'm saying isn't plain enough...The OMB report that some thought could be a game-changer, actually changed nothing.

The question I've been getting most often since House Speaker John Boehner (R-OH) and Senate Majority Leader Harry Reid (D-NV) sort of announced an agreement on a six-month continuing resolution for fiscal 2013 is whether that CR can be used to stop the sequester from occurring on January 2.

The answer is yes, and it's happened before.

First, some quick background for anyone who isn't a complete budget process geek and doesn't repeat this hourly.

1. The sequester is the across-the-board spending cut that was triggered when the anything-but-super committee failed to come up with a deficit reduction plan last November.

2. The sequester will occur on January 2, 2013, unless Congress and the president legislatively agree to a change in the Budget Control Act, the law that created the anything-but-super committee and the fall back automatic spending cut if it failed.

You would think that Phil Gramm -- the former Republican Texas senator who was one of the authors of the Gramm-Rudman-Hollings budget process from the late 1980s -- would know how the law bearing his name works.

At the very least you would expect that he'd do some homework to make sure he was right if he bylined an op-ed in the Wall Street Journal that said his old law from 27 years ago gave Congress mystical and previously unknown powers that no one else knew existed to come up with an alternative to the sequester that was triggered when the anything-but-super committee failed.

But Gramm either doesn't remember how his law works or didn't take the time to check out the facts.

As expected, President Obama signed the "Sequestration Transparency Act" (H.R.5872) on Tuesday, so the report to Congress that supposedly details what will be cut by how much if the sequester occurs on January 2, 2013, is required to be sent to the Hill by September 6,

This is likely to be a far more valuable event for the White House than the House and Senate. If the recent testimony by OMB Acting Director Jeff Zients before the House Armed Services Committee is any indication, the report will simply apply the sequestration rules in the Budget Control Act -- the law that provided for the sequester if the inevitable happened and the anything-but-super committee failed to agree on a deficit reduction plan -- in as bureaucratic a manner as possible. With the likely exception of excepting uniformed military personnel as the president is allowed to do, the report is very likely to apply the rules in a straight forward manner with no gimmicks or side comments about preferences.