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9-21-12

OMB Report on Sequestration

The White House Office of Management and Budget (OMB) released a report detailing the impact of the automatic budget cuts (sequestration) that may go into effect January 1, 2013, unless Congress takes action to stop them. The cuts are mandated by the Budget Control Act (BCA) and the White House referred to them as “deeply destructive … to core government functions, but [we] will be forced to make these cuts unless Congress acts responsibly.”

The nearly 400-page report confirms that “military personnel accounts” are exempt from sequestration cuts and clearly states that active duty/Reserve pay, military retired pay, the Department of Veterans Affairs (VA), and Medicare-eligible health care (TRICARE-for-Life) are exempt from the automatic cuts. The report cites potentially deep cuts ($3.27 billion) to the Defense Health Program, but does not detail the impact, if any, on TRICARE Prime and Standard.

The OMB report fulfills requirements of the “Sequestration Transparency Act of 2012” (P.L.-112-155) and includes a disclaimer that “the estimates are preliminary.” If sequestration occurs, results could be different from OMB predictions. Rep. Howard “Buck” McKeon (Calif.), chairman of the House Armed Services Committee, criticized the report stating that it shows a lack of planning and “failed to comply with both the letter and the spirit of the law.”