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GAO-14-177R 1 (2013-11-07)

handle is hein.gao/gaobaahkh0001 and id is 1 raw text is: cAO U.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Washington, DC 20548 November 7, 2013 The Honorable Paul Ryan Chairman Committee on the Budget House of Representatives The Honorable Michael Turner Chairman The Honorable Loretta Sanchez Ranking Member Subcommittee on Tactical Air and Land Forces Committee on Armed Services House of Representatives Sequestration: Observations on the Department of Defense's Approach in Fiscal Year 2013 The absence of legislation to reduce the federal budget deficit by at least $1.2 trillion triggered the sequestration process in section 251A of the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA), as amended. Pursuant to the BBEDCA, the President ordered sequestration of budgetary resources across non-exempt federal government accounts on March 1, 2013-five months into fiscal year 2013. In a March 2013 report to Congress, the Office of Management and Budget (OMB) calculated the overall reduction at $85.3 billion and estimated that the Department of Defense (DOD) would be required to take a 7.8 percent reduction in nonexempt defense discretionary funding, based on the continuing resolution in place at that time. Subsequent to the sequestration order, the Consolidated and Further Continuing Appropriations Act, 2013 provided DOD with a full appropriation for the remainder of fiscal year 2013.1 As a result, OMB determined the total federal government sequestration reduction for fiscal year 2013 to be approximately $80 billion. This figure included reductions to DOD's resources of about $37 billion in discretionary appropriations and about $37.4 million in direct spending. DOD was required to apply the reductions to all programs, projects, and activities2 within a budget account.3 Table 1 below shows the allocation of spending reductions in DOD's non-exempt discretionary resources. 1Pub. L. No. 113-6 (2013). 2Certain defense-related programs, projects, and activities were exempted from sequestration in fiscal year 2013. For example, BBEDCA permits the President (subject to certain requirements) to exempt military personnel accounts, and OMB notified Congress of the President's intent to do so for fiscal year 2013 on July 31, 2012. Other defense- related accounts exempted from sequestration included the Department of Defense Medicare-Eligible Retiree Health Care Fund as well as all programs administered by the Department of Veterans Affairs. 3For DOD, the amount subject to sequestration included the fiscal year 2013 appropriation plus any unobligated balances in multi-year accounts from prior fiscal years that remain available for new obligations. GAO-14-177R Sequestration

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