OMB Releases New Sequester Guidance to Federal Agencies

This week, the Office of Management and Budget (OMB) issued guidance to federal agencies outlining their responsibility for implementing the March 1, 2013 sequester. While the guidance does not indicate how OMB will carry out the sequester, it does provide a framework for agency actions.

The guidance does not provide the final across-the-board (ATB) percentage reductions for fiscal year (FY) 2013. However, OMB indicates an effective percentage reduction of approximately 9% for nondefense programs. The effective reduction takes into account that the cuts must be absorbed over seven months of the fiscal year, rather than the entire fiscal year. However, the cuts are calculated by multiplying the annual ATB percentage reduction, which is around 5% for nondefense programs, by annualized funding levels in the current continuing resolution (CR).

Unless Congress and the president enact legislation to amend the sequester, the president must issue a sequester order by midnight tonight to cancel $85 billion in budgetary resources.