On September 14, 2012, the White House released the congressionally mandated report on upcoming automatic ‘sequestration’ spending cuts.  The report provides the expected funding impact of sequestration cuts at the “program, project, and activity level based upon the enacted level of appropriations,” which are currently set to take effect on January 2, 2013.  The OMB report also includes a list identifying all exempt discretionary and mandatory spending accounts and estimates of budget cuts at the agency and agency office level.

The Budget Control Act’s sequestration procedures will apply "across-the-board" spending cuts, but certain federal spending is exempt, translating into larger cuts for non-exempt programs.  Exempt spending includes almost all mandatory spending such as Social Security, Medicaid, disability and veterans spending.  Non-exempt programs facing cuts include almost all federal research and development activities – amounting to roughly eight percent cuts for agencies like the National Science Foundation, National Institute of Standards and Technology, NASA, Department of Energy, and Department of Defense Science and Technology programs.  The OMB report provides only estimated cuts, as additional policy changes may still take place before the January 2013 deadline.  

According to the report, science and engineering agency cuts will include:

  • National Science Foundation: -$586 million
  • National Institute of Standards and Technology: -$62 million
  • Department of Energy Office of Science: -$400 million
  • National Aeronautics and Space Administration: -$1,458 million

The report also estimates that almost every program at the U.S. Department of Education would be cut by 8.2 percent, reducing the Department’s budget by around $5 billion. Even though the cuts are expected to begin on January 2, 2013 most school districts will not feel the full effects of the cuts until the 2013-2014 school year.

In order to achieve the full $1.2 trillion in cuts required by the Budget Control Act, budget cuts and spending caps will be enforced over a ten-year period, or through 2021, implying severely restricted program growth for discretionary spending programs over the next decade if Congress does not take action to address the budget deficit.  The White House report notes, “…the report leaves no question that the sequestration would be deeply destructive to national security, domestic investments, and core government functions.”

Read the full report here.