Critical Read

Report: Sequester cuts worse the second time around

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What: "How Sequestration Gets Worse in 2014," a report by Harry Stein, associate director for fiscal policy at the Center for American Progress.

Why: Sequestration was felt far and wide in the federal government in 2013, but the second round of cuts will trim $109 billion in 2014, $24 billion more than last year's cuts. The larger across-the-board reductions will affect education, research, infrastructure, public safety, national security, scientific research and IT beginning in March 2014.

Many agencies dealt with the 2013 cuts by dipping into contingency funds or using one-time fixes. Traditional IT services at many agencies are likely to feel the pressure, and IT leaders, who are already challenged because three-quarters of their IT budgets fund legacy systems, will be forced to make tougher decisions with fewer dollars on hand. IT upgrades could be delayed, and research and innovative pilot projects could be shelved, with every available dollar going to keep mission-critical systems operational.

The cuts will show up not only as line items in budgets, but front and center at agencies. In addition, the Congressional Budget Office predicts that prolonged sequestration lasting through 2014 would lead to 800,000 lost jobs, with some federal employees certainly among them.

Stein said the quick fixes that succeeded to varying degrees in 2013 won't work with the larger cuts and given the depletion of contingency funds.

Verbatim: "The federal government is responding to sequestration with the assumption that it is a short-term budget crisis. While sequestration is generally an automatic across-the-board cut, Congress and the Obama administration have allowed some flexibility to ameliorate the worst short-term problems. These fixes have focused on funding immediate needs to minimize sequestration's impacts, but that approach cannot be sustained. In some cases, agencies minimized their sequester cuts using budget gimmicks, but those gimmicks only work once.

"In other cases, agencies drained their reserve and investment accounts to sustain urgent needs, but those accounts need to be replenished later. These responses are appropriate as long as sequestration is just a short-term problem -- meaning that Congress acts quickly to repeal it. But if sequestration continues, these quick fixes will only make things worse down the road."

Full report: AmericanProgress.org

About the Author

Frank Konkel is a former staff writer for FCW.

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