OMB Confirms There Will be a Second Sequester

Late last week, David Rogers of Politico reported that there will indeed be a "second sequester," or a $1 billion scorekeeping adjustment due to OMB's determination that the continuing resolution exceeded the post-sequester discretionary caps. Congress was unaware of this magnitude of cut, caused by differences between CBO and OMB estimates of Federal Housing Administration receipts and by an error in a late amendment that prevented cuts to the Department of Agriculture's Food Safety and Inspection Program. The $30 million adjustment for the Food Safety and Inspection Program is made up for with across-the-board cuts throughout the domestic budget, instead of only affecting agricultural appropriations.

A White House report shows that budget authority for the Defense Department will be cut by $164 million for the remainder of FY 2014. Nondefense spending will also be cut further, including additional reductions to Labor, Health and Human Services, and Education appropriations ($325 million) and Transportation and Housing and Urban Development appropriations ($232 million), among others.

Additional Reductions Under the "Second Sequester"
Appropriations Category Reductions to Budget Authority
Defense $164 million
Military Construction and Veteran Affairs $23 million
State and Foreign Operations $14 million
Other $18 million
Total $219 million
Labor, Health and Human Services, and Education $325 million
Transportation and Housing and Urban Development $232 million
Commerce, Justice, and Science $120 million
Other $199 million
Total $876 million

Source: OMB

These additional cuts are small when compared to the overall reductions under sequestration or the needed $2.4 trillion in deficit reduction that would put debt on a clear downward path. But it does show that the sequester is not a smart way to achieve savings. Instead of identifying measures that could lead to greater efficiency, the sequestration mechanism simply cuts accounts across-the-board.  As Rogers explains in his article:

Altogether, the adjustments are surprisingly large and leave Washington still fiddling with the last six months of this fiscal year—just days before President Barack Obama rolls out an entirely new set of numbers next week for 2014.

The process illustrates how much power was shifted away from Congress under the Budget Control Act.